22nd Nov 2013 12:11
LONDON (Alliance News) - Future PLC reinstated its dividend as it reported a five-fold increase in pretax profit Friday. Future said it reduced costs in the UK, and rising digital revenues offset declining traditional print revenues.
The digital publisher and media company posted a dividend of 0.2 pence per share. Future suspended dividend payments in 2011, but the company said that improvements in performance and encouraging trends now have justified the reinstatement of its dividend.
For the full year ended September 30 the company posted a pretax profit of GBP5.8 million, up from GBP1.1 million in the previous year. Revenue was GBP112.3 million, down from GBP123.5 million.
Digital revenues rose to GBP34.7 million from GBP29.0 million, boosted by increases in digital circulation and online advertising. However, traditional print revenues declined 3.2% to GBP72.2 million from GBP74.6 million in the previous year.
The company has been moving towards increasing its digital offering over the past two years as it seeks to reduce its dependence on traditional print. Digital revenues are now one third of the business.
"Digital revenues are now outstripping print declines," Chief Executive Mark Wood told Alliance News in an interview. Print revenues in the UK have stabilised somewhat, boosted by the sale of bookezines - one-off specials, such as guides for using an iPad or iPhone. "They're sort of timeless, and higher valued," Wood explained. "They sit on the shelves for longer."
As part of its digital transition, the company has reduced its costs in the UK by cutting its headcount 4%. Future said that second-half performance also benefited from the restructuring activities in the UK.
"Our big focus is to become a global digital content and services business," Wood said.
During the first three quarters of the year, a decline in the electronic games market, ahead of the launch of the next generation of games console, hampered the business. However by the fourth quarter, this market had recovered, and trading was stronger across all other sectors, Future said.
Microsoft's Xbox One launched Friday, and the late arrival of the new consoles, which caused Future troubles earlier in the year, provided a boost in the fourth quarter.
"Now that the Xbox One had launched and the Sony PlayStation 4 is launching we've seen an uplift in games advertising and games magazines," Wood said.
Wood expects to see that continue as more games launch, and said that the games side of the business was now "really showing it's in good shape."
The company posted exceptional items of GBP2.5 million, as profits from the sale of its UK assets and the subletting of office space in San Francisco offset restructuring costs of GBP1.4 million.
"Overall, these are good results after difficult trading conditions earlier in the year, thanks to stronger trading across all areas in the fourth quarter," said Wood said in the company's statement. "Looking forward, we see the encouraging Q4 trends continuing with forward advertising bookings up year-on-year, and revenue momentum across all sectors."
Wood told Alliance News that Future is focusing particularly on its Techradar technology website. Future is developing Techradar into a 24-hour technology news website, but also said it has expanded its scale by becoming a business-to-business service through its Techradar Pro site.
Sites like Techradar provide Future with routes for advertising. For example, in light of the Xbox One launch, Techradar currently sports Xbox green on its banners and logo instead of its usual colours, alongside adverts on the site.
"Big retail brands are looking for ways to communicate more effectively with consumers," Wood said. " We're in a good place because we have global reach, multimedia, storytelling and high-quality media content."
Shares in Future were trading up 3.6% at 16.57 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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