26th Jan 2005 07:00
Future Network PLC26 January 2005 26 January 2005 THE FUTURE NETWORK PLC AGM Statement: Trading Update At today's Annual General Meeting of The Future Network plc, the internationalspecial-interest consumer magazine group, Chairman Roger Parry will give thefollowing update to shareholders. This trading update provides an overview of Future's revenues and generaltrading for the three months ended 31 December 2004 ('the first quarter'). Allrevenue growth figures are given year-on-year and in constant currency. Trading for October to December has been satisfactory with profits modestlyahead of the Board's expectation for this important quarter. Total Group revenue was up 3%, reflecting strong growth in the Group'sentertainment titles (up 17%), offset by declines in games and computingrevenues (both divisions down 1%). Like-for-like Group revenue (excluding acquisitions made during the 12 months to30 September 2004) declined by 1%, mostly attributable to the previouslyindicated weakness in US games advertising in the period, compounded by a weakerDollar. The Board continues to be confident of a satisfactory performance fromthe Group's games portfolio for the financial year 2005 as a whole. At the operating level, first quarter profitability (in terms of adjustedoperating profit as a percentage of turnover) was modestly ahead of that for thefirst quarter last year.Last year such profits represented approximately 44% of the total for the twelvemonths ended 30 September 2004. The Board expects that this strong seasonalquarter will account for a similarly significant portion of profitability forthe current financial year to 30 September 2005. Circulation revenue (which accounts for some 68% of Group revenues) grew by 7%and advertising revenue (30% of Group revenues) fell 4%. Revenue performance for the first quarter (October to December) can be analysedas follows: Territory Growth Growth (sterling) (constant currency) Proportion of Group UK - - 51%US + 1% + 10% 28%Mainland Europe + 1% + 1% 21%Total Group - + 3% 100% Sector Growth Growth (sterling) (constant currency) Proportion of Group Games - 4% - 1% 47%Computing -3 % - 1% 28%Entertainment + 15% + 17% 25%Total Group - + 3% 100% The average value of the Dollar against Sterling declined by 9% compared withthe first quarter last year, so that revenue growth in Dollar terms was muchstronger than that reported in sterling. The average value of the Euro againstSterling in the period weakened by less than 1%. UK business In the UK for the December quarter, both revenues and profits were at or abovebudgeted levels. Future UK turnover remained steady, with adjusted operatingprofits modestly above the same period in the previous year. The results for thequarter do not include the impact of the acquisition of three titles at the endof 2004, namely Junior, Junior Pregnancy & Baby and Wedding Day. These titles,together with the 11 motoring enthusiast titles acquired this week from A&SPublishing, will contribute to the financial year to 30 September 2005 andfollowing a period of integration, are expected to have a more significantpositive impact on the financial year to 30 September 2006. US business Future US turnover rose by 10% and operating profitability is slightly ahead ofthe same quarter last year. Our US business has continued its planning fordeveloping into the Action Sports area. In January 2005, Future US acquiredSnowboard Journal, which is an early-stage magazine serving thisspecial-interest area, at a cash cost of £0.2m. This acquisition will help ourlaunch of Future Snowboard in the late summer of 2005. Mainland Europe Turnover in Mainland Europe grew by 1% reflecting stable performance in Francebut a tough competitive market in Italy. However, operating profitability forMainland Europe overall was comfortably above its level for the first quarterlast year. Outlook Operating profitability for the important December quarter has modestly exceededthe prior year and the Board's expectation, providing a good start to thecurrent financial year. The Board expects to report the Group's results for the half-year to 31 March on14 June 2005.Enquiries: The Future Network plcGreg Ingham, Chief Executive Tel: 01225 442244John Bowman, Finance Director Tel: 01225 732281 Hogarth PartnershipJames Longfield/Georgina Briscoe Tel: 020 7357 9477 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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