The reversal of fortunes at Future Publishing continued this week with the publication of the group’s six month financial results, covering the half-year ended June 30 2002 and revealing a move back into profitability as well as increased turnover.
The results follow the publication of the most recent ABC circulation figures, which showed Future controlling a record percentage of the UK videogames magazine market along with almost universally raised circulation on its titles.
In the half-year covered by the figures, turnover raised 14 per cent to £74 million, thanks to a 24 per cent rise in circulation revenues; advertising revenues, however, were down slightly, showing a drop of 4 per cent. Operating profits more than doubled, year on year, rising to £4.7 million from a 2001 figure of £2.2 million.
Most importantly for the group, however, was a pre-tax profit figure of £0.9 million, revealing an astonishing swing into the black for the company. In the same period last year, Future lost £106.8 million, causing speculation about the future of the company – much of which has been answered in recent months, with the group bouncing back impressively from what was considered by many to be an impossible position only a year ago.
The group is also free of bank debt, with cash in hand of £5 million – a particularly important figure, given that many companies reporting reasonably good results of late have been quietly hiding gigantic debt figures – in some cases, mounting to the best part of a billion euros.
The first half-year has been a period of important progress, stated chief executive Greg Ingham. The business is debt-free, profitable and stable, having benefited from the restructuring actions we took in 2001. All four of our businesses have performed better in the first half of 2002 than they did in the first half of 2001. Future has reported a modest profit and that it is free of bank debt, ahead of our traditionally much stronger second half.
Interestingly, the figures reflect a trend away from advertising as a key source of revenue for the company, with 70 per cent of turnover coming from circulation. Circulation revenue growth in computing and entertainment has substantially offset advertising declines in these areas, according to Ingham. We expect advertising income in 2002 to be flat year-on-year.
During the first half of the year, Future launched nine new magazines in Europe, including the Official Xbox titles in the UK, France and Italy. All of the launches are described as performing satisfactorily by Ingham, who confirmed that a further four new launches are planned by the end of the year.