29th Nov 2005 07:03
Future PLC29 November 2005 Section 2 - Financial statements for the 12 months ended 30 September 2005 and 9 months ended 30 September 2004 Group profit and loss accountfor the year ended 30 September 2005--------------------- ----- --------- --------- --------- --------- 12 months 9 months ended ended 30 30 September September 2005 2004 Note Con- Acqui- Total Total tinuing sitions opera- tions £m £m £m £m--------------------- ----- --------- --------- --------- --------- Turnover 2,22 194.6 17.7 212.3 133.0--------------------- ----- --------- --------- --------- ------------------------------ ----- --------- --------- --------- ---------Operating profit/(loss) 3,22 --------- --------- --------- ---------Operating profit beforeexceptionalitems and amortisation and impairmentof intangible assets 19.1 1.6 20.7 13.1Exceptional items 4 (4.8) (2.4) (7.2) -Amortisation and impairment ofintangible assets 10 (17.3) (6.2) (23.5) (12.7) --------- --------- --------- ------------------------------ ----- --------- --------- --------- ---------Operating (loss)/profit (3.0) (7.0) (10.0) 0.4Profit on disposal of 4 subsidiaries 2.1 0.2--------------------- ----- --------- --------- --------- ---------(Loss)/profit on ordinaryactivities before interest (7.9) 0.6--------------------- ----- --------- --------- --------- ---------Net interest payable and similarcharges 6 (1.0) ---------------------- ----- --------- --------- --------- ---------(Loss)/profit on ordinaryactivities before tax 2 (8.9) 0.6Tax on (loss)/profit on ordinaryactivities 7 (2.1) (1.3)--------------------- ----- --------- --------- --------- ---------Loss for the financial period 20 (11.0) (0.7)--------------------- ----- --------- --------- --------- ------------------------------ ----- --------- --------- --------- ---------Dividends: - September 2005 proposed 8 (4.2) - - March 2005 paid (1.6) - - September 2004 paid - (4.9)--------------------- ----- --------- --------- --------- ---------Retained loss for the period 20 (16.8) (5.6)--------------------- ----- --------- --------- --------- --------- Earnings per 1p Ordinary share------------------------------ ---------- --------- --------- 12 months 9 months ended ended 30 September 30 September 2005 2004 Note pence pence------------------------------ ---------- --------- --------- Basic loss per share 9 (3.4) (0.2)Adjusted basic earnings per share 9 5.1 3.6Diluted loss per share 9 (3.4) (0.2)Adjusted diluted earnings per share 9 5.1 3.6------------------------------ ---------- --------- --------- Group statement of total recognised gains and lossesfor the year ended 30 September 2005------------------------------ --------- --------- --------- 12 months 9 months ended ended 30 30 September September 2005 2004 Note £m £m------------------------------ --------- --------- --------- Loss for the financial period 20 (11.0) (0.7)Dividend - September 2005 proposed 8 (4.2) -Dividend - March 2005 paid 8 (1.6) -Dividend - September 2004 paid 8 - (4.9)------------------------------ --------- --------- ---------Retained loss for the financial period (16.8) (5.6)Release of pre-acquisition loan - 1.0Tax on release of pre-acquisition loan - (0.4)Unwinding of licensing obligation - 0.1------------------------------ --------- --------- ---------Total recognised loss relating to the period (16.8) (4.9)------------------------------ --------- --------- --------- Group reconciliation of movements in shareholders' fundsfor the year ended 30 September 2005------------------------------- -------- --------- --------- 12 months 9 months ended ended 30 30 September September 2005 2004 Note £m £m------------------------------- -------- --------- --------- Loss for the financial period 20 (11.0) (0.7)Dividend - September 2005 proposed 8 (4.2) -Dividend - March 2005 paid 8 (1.6) -Dividend - September 2004 paid 8 - (4.9)------------------------------- -------- --------- ---------Retained loss for the financial period (16.8) (5.6)Issue of share capital during the period 18 0.1 -Premium on shares issued during the period 19 0.7 0.7Release of pre-acquisition loan - 1.0Tax on release of pre-acquisition loan - (0.4)Unwinding of licensing obligation - 0.1------------------------------- -------- --------- ---------Net movement in shareholders' funds (16.0) (4.2)Opening equity shareholders' funds 107.7 111.9------------------------------- -------- --------- ---------Closing equity shareholders' funds 91.7 107.7------------------------------- -------- --------- --------- Group balance sheetas at 30 September 2005---------------------------- -------- ------------ --------- 30 30 September September 2005 2004 Note £m £m---------------------------- -------- ------------ --------- Fixed assetsIntangible assets 10 135.8 108.4Tangible assets 11 3.9 3.5---------------------------- -------- ------------ --------- 139.7 111.9 Current assetsStocks 13 6.2 5.0Debtors 14 50.2 39.5Investments 12 - 2.5Cash at bank and in hand 10.7 12.0---------------------------- -------- ------------ --------- 67.1 59.0Creditors: amounts falling due within one year 15 (80.9) (62.3)---------------------------- -------- ------------ ---------Net current liabilities (13.8) (3.3)---------------------------- -------- ------------ ------------------------------------- -------- ------------ ---------Total assets less current liabilities 125.9 108.6---------------------------- -------- ------------ ---------Creditors: amounts falling due after more than one year 16 (32.0) -Provisions for liabilities and charges 17 (2.2) (0.9)---------------------------- -------- ------------ ---------Net assets 91.7 107.7---------------------------- -------- ------------ --------- Capital and reservesCalled-up share capital 18 3.3 3.2Share premium account 19 24.4 23.7Merger reserve 21 109.0 109.0Profit and loss account 20 (45.0) (28.2)---------------------------- -------- ------------ ---------Equity shareholders' funds 91.7 107.7---------------------------- -------- ------------ --------- Group cash flow statementfor the year ended 30 September 2005 ------------------------------- ---------- ---------- 12 months 9 months ended ended 30 30 September September 2005 2004 £m £m------------------------------- ---------- ---------- Net cash inflow from operating activities 9.8 7.4------------------------------- ---------- ----------Returns on investments and servicing of financeInterest received 0.5 0.5Issue costs of new bank loan (0.4) -Interest paid (0.8) (0.4)------------------------------- ---------- ----------Net cash (outflow)/inflow from returns on investments andservicing of finance (0.7) 0.1------------------------------- ---------- ----------TaxTax paid (5.5) (4.0)Tax received 1.4 0.7------------------------------- ---------- ----------Net tax paid (4.1) (3.3)------------------------------- ---------- ----------Capital expenditure and financial investmentPurchase of tangible fixed assets (1.8) (1.1)------------------------------- ---------- ----------Net cash outflow from capital expenditure and financialinvestment (1.8) (1.1)------------------------------- ---------- ----------Acquisitions and disposalsPurchase of subsidiary undertakings (33.6) -Net cash acquired with subsidiary undertakings 0.8 -Disposal of subsidiary undertaking 2.1 0.2Purchase of magazine titles (15.3) (4.0)Payment of deferred consideration (0.1) (0.7)------------------------------- ---------- ----------Net cash outflow for acquisitions and disposals (46.1) (4.5)------------------------------- ---------- ----------DividendsEquity dividends paid (6.5) (4.0)------------------------------- ---------- ----------Net cash outflow from payment of dividends (6.5) (4.0)------------------------------- ---------- ----------Management of liquid resourcesDecrease in short-term deposits with bank 2.5 6.3------------------------------- ---------- ----------Net cash inflow in management of liquid resources 2.5 6.3------------------------------- ---------- ----------Net cash (outflow)/inflow before financing (46.9) 0.9------------------------------- ---------- ----------FinancingProceeds from issue of Ordinary share capital 0.8 0.7Draw down of bank loans 53.6 -Movement in other loan - (0.5)Repayment of bank loans (8.7) (0.3)------------------------------- ---------- ----------Net cash inflow/(outflow) from financing 45.7 (0.1)------------------------------- ---------- ----------(Decrease)/increase in cash in the period (1.2) 0.8------------------------------- ---------- ---------- Notes to the Group cash flow statementfor the year ended 30 September 2005 A. Cash flow from operating activities The reconciliation of operating (loss)/profit to net cash inflow from operatingactivities is as follows:----------------------------------- ---------- ---------- 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m----------------------------------- ---------- ---------- Operating (loss)/profit (10.0) 0.4Depreciation charge 1.5 0.9Amortisation and impairment of intangible assets 23.5 12.7Movement in provisions 1.0 (0.9)Increase in stocks (1.0) (1.5)(Increase)/decrease in debtors (7.9) 3.3Increase/(decrease) in creditors 2.7 (7.5)----------------------------------- ---------- ----------Net cash inflow from operating activities 9.8 7.4----------------------------------- ---------- ---------- B. Analysis of net cash/(debt)------------- ---------- -------- -------- ------------ ----------- At 1 Cash Acqui- Exchange At 30 October flow sitions movements September 2004 2005 £m £m £m £m £m------------- ---------- -------- -------- ------------ ----------- Cash at bank and in hand 12.0 (2.4) 1.2 (0.1) 10.7Debt due within one year (4.7) (15.1) (0.4) (0.2) (20.4)Debt due after more than one year - (29.8) - - (29.8)Liquid resources 2.5 (2.5) - - -------------- ---------- -------- -------- ------------ -----------Net cash/(debt) 9.8 (49.8) 0.8 (0.3) (39.5)------------- ---------- -------- -------- ------------ ----------- C. Reconciliation of movement in net cash/(debt)-------------------------------- ----------- ----------- 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m-------------------------------- ----------- ----------- Net cash at beginning of period 9.8 13.4(Decrease)/increase in cash (1.2) 0.8Movement in deposits (2.5) (6.3)Movement in borrowings (44.9) 0.9Overdrafts acquired with subsidiaries (0.4) -Non-cash movements - 1.0Exchange movements (0.3) --------------------------------- ----------- -----------Net (debt)/cash at 30 September (39.5) 9.8-------------------------------- ----------- ----------- Notes to the financial statements 1. Basis of preparation of accounts This preliminary statement of annual results for the 12 months ended 30September 2005 is unaudited and does not comprise statutory accounts within themeaning of section 240 of the Companies Act 1985. Accounting policies The Group's accounting policies used in the preparation of this preliminarystatement of results are consistent with those detailed in the Group's AnnualReport 2004. 2. Segmental reporting The Group is involved in one class of business, the publication of magazines andrelated websites. The analysis of turnover by type, geographical analyses ofturnover, (loss)/profit before tax, and net assets by origin were as follows: a) Turnover by type ----------------------------- ----------- ----------- 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m----------------------------- ----------- ----------- Circulation1 139.0 92.4Advertising1 68.1 37.4Other 5.2 3.2----------------------------- ----------- -----------Total 212.3 133.0----------------------------- ----------- ----------- 1Included in the total circulation revenue for the 12 months ended 30 September2005 is £7.8m relating to acquisitions. Acquisitions provided £9.1m ofadvertising revenue. b) Turnover by origin----------------------------- ----------- ----------- 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m----------------------------- ----------- ----------- United Kingdom2 118.4 70.5United States2 55.5 36.0Mainland Europe 39.7 27.5Turnover between segments (1.3) (1.0)----------------------------- ----------- -----------Total 212.3 133.0----------------------------- ----------- ----------- 2Included in the UK turnover by origin for the 12 months ended 30 September 2005is £14.9m relating to acquisitions. Acquisitions provided £2.4m of revenue inthe US. Further information on the acquisitions during the year can be found innote 23. c) Turnover by destination----------------------------- ----------- ----------- 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m----------------------------- ----------- ----------- United Kingdom 99.4 59.0United States 57.0 37.6Mainland Europe 47.1 31.9Rest of the world 10.1 5.5Turnover between segments (1.3) (1.0)----------------------------- ----------- -----------Total 212.3 133.0----------------------------- ----------- ----------- d) (Loss)/profit on ordinary activities before tax by origin----------------------------- ----------- ----------- 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m----------------------------- ----------- ----------- United Kingdom (1.1) 5.3United States (2.8) (1.5)Mainland Europe (1.4) (1.4)Central costs (3.6) (1.8)----------------------------- ----------- -----------Total (8.9) 0.6----------------------------- ----------- ----------- e) Net assets by origin------------------------------- ----------- ----------- 30 September 30 September 2005 2004 £m £m------------------------------- ----------- ----------- United Kingdom 113.2 85.4United States 20.9 18.8Mainland Europe 7.8 8.2Interest-bearing liabilities (50.2) (4.7)------------------------------- ----------- -----------Total 91.7 107.7------------------------------- ----------- ----------- 3. Operating (loss)/profit----------------- ------------- --------- ---------- --------- 12 months 9 months ended ended 30 30 September September 2005 2004 Continuing Acqui- Total Total operations sitions £m £m £m £m----------------- ------------- --------- ---------- --------- Turnover 194.6 17.7 212.3 133.0Cost of sales (130.5) (14.2) (144.7) (89.2)----------------- ------------- --------- ---------- ---------Gross profit 64.1 3.5 67.6 43.8Distribution costs (14.0) (0.4) (14.4) (9.9) ------------- --------- ---------- ---------Administration expenses (31.0) (1.5) (32.5) (20.8)Exceptional items (4.8) (2.4) (7.2) -Amortisation and impairment ofintangible assets (17.3) (6.2) (23.5) (12.7) ------------- --------- ---------- ---------Total administration expenses (53.1) (10.1) (63.2) (33.5)----------------- ------------- --------- ---------- ---------Operating (loss)/profit (3.0) (7.0) (10.0) 0.4----------------- ------------- --------- ---------- --------- 4. (Loss)/profit on ordinary activities before tax------------------------------- ---------- ---------- 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m------------------------------- ---------- ---------- (Loss)/profit on ordinary activities before tax is statedafter charging:Staff costs (note 4) 50.2 29.7Depreciation of owned assets (note 10) 1.5 0.9Amortisation and impairment of intangible assets (note 9) 23.5 12.7Hire of machinery and equipment 0.3 0.2Other operating lease rentals 4.9 2.9Exceptional items (see below) 7.2 -Profit on disposal of subsidiary (see below) 2.1 0.2Net exchange loss on foreign currency borrowings less deposits - 0.3------------------------------- ---------- ---------- Included in administration expenses are the following exceptional items: ----------------- ------------- --------- ---------- --------- 12 months 9 months ended ended 30 30 September September 2005 2004 Continuing Acqui- Total Total operations sitions £m £m £m £m----------------- ------------- --------- ---------- --------- Aborted bid costs 2.2 - 2.2 -Restructuring costs 0.8 1.8 2.6 -Property costs 1.8 0.6 2.4 ------------------ ------------- --------- ---------- ---------Total exceptional items 4.8 2.4 7.2 ------------------ ------------- --------- ---------- --------- The aborted bid costs relate to the external professional fees and other costsof the aborted bid for the entire issued share capital of Highbury HouseCommunications plc during the first half of 2005. The restructuring costs relate to the costs incurred whilst integrating theacquisitions of Beach Magazines and Publishing Limited, A&S Publishing CompanyLimited and the various Highbury assets into the main Future businesses in theUK and the US. In addition there are some costs relating to subsequentrestructuring within Future's ongoing businesses. The property costs relate to the integration of the acquisitions and inparticular the move of Future UK's business in London to a larger single officefollowing the substantial increase in London-based employees as a result of theHighbury acquisition which is set to be completed by the end of the firstquarter of 2005. Profit on disposal of subsidiariesDuring the year the Group sold four wholly-owned subsidiary companies for atotal consideration of £2.1m. After accounting for associated costs of disposalthe profit on disposal of subsidiaries was £2.1m (2004:£0.2m). The companiesdisposed of contained capital tax losses which were surplus to Future'srequirements. 5. Employees and Directors-------------------------------- ----------- ----------Staff costs 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m-------------------------------- ----------- ---------- Wages and salaries 42.5 24.9Social security costs 6.9 4.3Other pension costs 0.8 0.5-------------------------------- ----------- ----------Total 50.2 29.7-------------------------------- ----------- ---------- Average monthly number of people (including executiveDirectors) ----------- ------------------------------------------Production 1,083 784Administration 331 274-------------------------------- ----------- ----------Total 1,414 1,058-------------------------------- ----------- ---------- At 30 September 2005 the actual number of people employed by the Group was 1,590(30 September 2004: 1,120). 6. Net interest payable and similar charges------------------------------- ---------- --------- 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m------------------------------- ---------- --------- Interest receivable 0.5 0.5Exchange losses - (0.3)------------------------------- ---------- ---------Total interest receivable and similar items 0.5 0.2------------------------------- ---------- ---------Interest payable on bank loans and overdrafts (1.1) (0.2)Write-off of debt issue costs (0.4) -------------------------------- ---------- ---------Total interest payable and similar charges (1.5) (0.2)------------------------------- ---------- ---------Net interest payable and similar charges (1.0) -------------------------------- ---------- --------- 7. Tax on (loss)/profit on ordinary activities (a) Analysis of tax charge in the period------------------------------- ---------- --------- 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m------------------------------- ---------- --------- UK corporation tax at 30% (2004: 30%) on (loss)/profit forthe period 1.5 2.1Adjustments in respect of previous years (0.2) (0.4) ---------- --------- 1.3 1.7Overseas taxes 1.1 0.7Adjustments in respect of previous years (0.4) (0.6) ---------- ---------Total current tax 2.0 1.8 Deferred tax origination and reversal of timingdifferences- Current period charge/(credit) 0.1 (0.5)- Prior year (credit)/charge - -------------------------------- ---------- ---------Tax on (loss)/profit on ordinary activities 2.1 1.3------------------------------- ---------- --------- (b) Factors affecting the tax charge for the periodThe tax assessed in each period differs from the standard rate of corporationtax in the UK for the relevant period. The differences are explained below:------------------------------- ----------- ---------- 12 months 9 months ended ended 30 September 30 September 2005 2004 £m £m------------------------------- ----------- ---------- (Loss)/profit on ordinary activities before tax (8.9) 0.6 (Loss)/profit on ordinary activities at the standard UKtax rate of 30% (2.7) 0.2 Different tax rate applicable overseas 0.1 0.1Profits relieved by capital losses (0.6) (0.1)Expenses not deductible for tax purposes 1.2 -Goodwill amortisation and impairment not deductible fortax purposes 3.9 2.5Timing differences relating to goodwill amortisationdeductible 0.7 0.5Overseas losses generated 0.6 0.5Capital allowances in excess of depreciation (0.1) (0.1)Other timing differences 0.3 0.1Utilisation of brought forward losses (0.8) (0.9)Impact of adjustment to prior year current tax (0.6) (1.0)------------------------------- ----------- ----------Current tax charge for the period 2.0 1.8------------------------------- ----------- ----------(c) Factors that may affect future tax chargesThe main factors that will impact future tax charges for the Group are:i) The relative profitability and the differential in taxrates between the UK and the US, the two main territories in which the Groupcurrently pays tax;ii) The profitability of Mainland Europe where there aresignificant unrecognised tax losses; andiii) The timing of any successful resolution of certain stepsthat the Group has taken to obtain value from historical tax losses. 8. Dividends Equity dividends September 2005 March 2005 September 2004------------------------ ------------ --------- -----------Number of shares in issue atend of period (million) 326.3 325.8 324.5Dividend proposed/paid (penceper share) 1.3 0.5 1.5------------------------ ------------ --------- -----------Dividend proposed/paid(£million) 4.2 1.6 4.9------------------------ ------------ --------- ----------- 9. Earnings per share Basic earnings per share are calculated using the weighted average number ofOrdinary shares outstanding during the period. Diluted earnings per share havebeen calculated by taking into account the dilutive effect of Ordinary sharesthat would be issued on conversion into Ordinary shares of options held underemployee share schemes. The adjusted earnings per share removes the effect of the amortisation andimpairment of intangible assets, exceptional items (including profit on disposalof subsidiaries) and any related tax effects of the exceptional items from thecalculation as follows: Adjustments to loss on ordinary activities after tax------------------------------- ----------- ---------- 12 months to 9 months 30 September ended 2005 30 September £m 2004 £m------------------------------- ----------- ---------- Loss on ordinary activities after tax (11.0) (0.7)Add: exceptional items 7.2 -Add: amortisation and impairment of intangible assets 23.5 12.7Less: profit on disposal of subsidiaries (2.1) (0.2)Less: tax effect of exceptional items (1.0) -------------------------------- ----------- ----------Adjusted profit on ordinary activities after tax 16.6 11.8------------------------------- ----------- ---------- In some territories the Group gains a tax deduction for the amortisation ofintangible assets. The calculation of adjusted earnings as above does not takethis into account. If a further adjustment is made for this effect the adjustedprofit after tax is £14.9m. On this basis, basic and diluted adjusted earningsper share are 4.6 pence (2004: 3.5 pence). Weighted average number of shares outstandingduring the period: 2005 2004--------------------------------- --------- ---------- basic 325,468,072 323,612,453- dilutive effect of share options 937,654 1,211,790- diluted 326,405,726 324,824,243Basic loss per share (in pence) (3.4) (0.2)Adjusted basic earnings per share (in pence) 5.1 3.6Diluted loss per share (in pence) (3.4) (0.2)Adjusted diluted earnings per share (in pence) 5.1 3.6--------------------------------- --------- --------- The adjustments to profit have the following effect:--------------------------------- --------- --------- 2005 2004 pence pence--------------------------------- --------- ---------Basic loss per share (3.4) (0.2)Exceptional items 2.2 -Amortisation and impairment of intangible assets 7.2 3.9Profit on disposal of subsidiaries (0.6) (0.1)Tax effect of exceptional items (0.3) - --------- ---------Adjusted basic earnings per share 5.1 3.6 --------- --------- Diluted loss per share (3.4) (0.2)Exceptional items 2.2 -Amortisation and impairment of intangible assets 7.2 3.9Profit on disposal of subsidiaries (0.6) (0.1)Tax effect of exceptional items (0.3) - --------- ---------Adjusted diluted earnings per share 5.1 3.6--------------------------------- --------- --------- 10. Intangible fixed assets--------------------------------------- -----------Group Goodwill £m--------------------------------------- -----------CostAt 1 October 2004 324.8Additions 50.3Adjustments to fair value on prior year acquisitions 0.2Exchange adjustments 0.7--------------------------------------- -----------At 30 September 2005 376.0--------------------------------------- ----------- --------------------------------------- -----------AmortisationAt 1 October 2004 (216.4)Charge for the period (23.5)Exchange adjustments (0.3)--------------------------------------- -----------At 30 September 2005 (240.2)--------------------------------------- ----------- Net book value at 30 September 2005 135.8--------------------------------------- -----------Net book value at 30 September 2004 108.4--------------------------------------- ----------- The goodwill arising on acquisitions is being amortised on a straight-line basisover the estimated useful economic lives of the acquired businesses, being inthe range one to 20 years. These periods are the periods over which theDirectors estimate that the values of the underlying businesses acquired areexpected to exceed the values of the underlying assets. During the year the Directors performed impairment reviews on certain intangibleassets within the Group. These reviews resulted in a provision being madeagainst the remaining carrying value of the goodwill (£0.7m) relating to SpanishHomes Magazine acquired in 2004. This was due to the poor trading conditionsexperienced by this magazine since acquisition. 11. Tangible fixed assets-------------- ---------- ---------- ---------- ----------Group Land and Plant and Equipment, Total buildings machinery fixtures and fittings £m £m £m £m-------------- ---------- ---------- ---------- ---------- CostAt 1 October 2004 2.4 6.8 1.3 10.5Additions - 1.5 0.3 1.8Exchange adjustments - 0.1 - 0.1-------------- ---------- ---------- ---------- ----------At 30 September 2005 2.4 8.4 1.6 12.4-------------- ---------- ---------- ---------- ------------------------ ---------- ---------- ---------- ----------DepreciationAt 1 October 2004 (0.8) (5.2) (1.0) (7.0)Charge for the period (0.1) (1.2) (0.2) (1.5)Exchange adjustments - (0.1) 0.1 --------------- ---------- ---------- ---------- ----------At 30 September 2005 (0.9) (6.5) (1.1) (8.5)-------------- ---------- ---------- ---------- ------------------------ ---------- ---------- ---------- ----------Net book value at 30 September 2005 1.5 1.9 0.5 3.9-------------- ---------- ---------- ---------- ----------Net book value at 30 September 2004 1.6 1.6 0.3 3.5-------------- ---------- ---------- ---------- ---------- Analysis of net book value of land and buildings----------------------------- ------------ ---------- Group Group 30 September 30 September 2005 2004 £m £m----------------------------- ------------ ----------Leasehold: 1.2 1.3Over 50 years unexpired 0.3 0.3Under 50 years unexpired----------------------------- ------------ ----------Total 1.5 1.6----------------------------- ------------ ---------- 12. Investments a) Current asset investments----------------------------- ------------ ---------- Group Group 30 September 30 September 2005 2004 £m £m ----------------------------- ------------ ---------- Short-term bank deposits - 2.5----------------------------- ------------ ----------Total - 2.5----------------------------- ------------ ---------- 13. Stocks------------------------------- ----------- ---------- Group Group 30 September 30 September 2005 2004 £m £m------------------------------- ----------- ---------- Raw materials 2.4 1.6Work in progress 2.6 2.8Finished goods 1.2 0.6------------------------------- ----------- ----------Total 6.2 5.0------------------------------- ----------- ---------- 14. Debtors Group Group-------------------------- --------------- ----------- 30 September 30 September-------------------------- --------------- ----------- 2005 2004 £m £m-------------------------- --------------- ----------- Amounts falling due within one year:Trade debtors 37.9 31.0Amounts owed by Group undertakings - -Corporation tax recoverable 2.3 2.0Other debtors 3.0 2.9Prepayments and accrued income 6.1 2.7-------------------------- --------------- ----------- 49.3 38.6Amounts falling due after more than one year:Other debtors 0.9 0.9-------------------------- --------------- -----------Total 50.2 39.5-------------------------- --------------- ----------- Deferred tax At 30 September 2005 a deferred tax asset has been recognised within otherdebtors as follows:---------------------------------- --------- ---------- Group Group 30 September 30 September 2005 2004 £m £m---------------------------------- --------- ---------- Amounts falling due within one year 0.9 0.9Amounts falling due after more than one year 0.8 0.9---------------------------------- --------- ---------- 15. Creditors: amounts falling due within one year---------------------------------- --------- ---------- Group Group 30 September 30 September 2005 2004 £m £m---------------------------------- --------- ---------- Bank and other borrowings 20.4 4.7Trade creditors 20.2 16.5Amounts owed to Group undertakings - -Corporation tax 0.3 2.1Taxation and social security 3.3 3.0Other creditors 7.1 6.3Accruals and deferred income 25.4 24.7Proposed dividend 4.2 4.9Deferred consideration for acquisitions - 0.1--------------------------------- --------- ----------Total 80.9 62.3--------------------------------- --------- ---------- The deferred consideration of £0.1m in the prior year related to the acquisitionof Spanish Homes Magazine in 2004 and was paid during 2005. 16. Creditors: amounts falling due after more than one year------------------------------- --------- --------- Group Group 30 September 30 September------------------------------- --------- --------- 2005 2004 £m £m------------------------------- --------- ---------Bank and other borrowings 29.8 -Other creditors 2.2 -------------------------------- --------- ---------Total 32.0 -------------------------------- --------- --------- Within creditors, the bank and other borrowings are repayable as follows:------------------------------- --------- ---------Bank loans: unsecured* Group Group 30 September 30 September 2005 2004 £m £m------------------------------- --------- ---------Due within one year 20.4 4.7Due after more than one year 29.8 -------------------------------- --------- ---------Total 50.2 4.7------------------------------- --------- --------- \* The borrowings and interest are guaranteed by Future plc, Future PublishingLimited and Future Network USA, Inc. 17. Provisions for liabilities and charges------------- ---------------- ------------- ------------- Property and Redundancy Total dilapidations provisions £m £m £m------------- ---------------- ------------- ------------- At 1 October 2004 0.9 - 0.9On acquisitions 0.1 0.2 0.3Charge in the year 1.6 - 1.6Utilised in year (0.4) (0.2) (0.6)------------- ---------------- ------------- -------------At 30 September 2005 2.2 - 2.2------------- ---------------- ------------- ------------- 18. Called up share capital---------------------------------- --------- ---------Authorised share capital 2005 2004Ordinary shares of 1 pence each £m £m---------------------------------- --------- --------- At beginning of period 6.0 6.0Increase in the period - ----------------------------------- --------- ---------At end of period 6.0 6.0---------------------------------- --------- --------- ---------------------------------- --------- ---------Allotted, issued and fully paid 2005Ordinary shares of 1 pence each No. of Shares £m---------------------------------- --------- ---------At 1 October 2004 324,476,926 3.2Share options exercised 1,850,766 0.1---------------------------------- --------- ---------At 30 September 2005 326,327,692 3.3---------------------------------- --------- --------- 19. Share premium account---------------------------------- --------- ---------Group 2005 2004 £m £m---------------------------------- --------- ---------At beginning of period 23.7 0.2Premium on shares issued during the period 0.7 0.7Transfer of premium on share options exercised - 22.8---------------------------------- --------- ---------At end of period 24.4 23.7---------------------------------- --------- --------- During the previous period there was a transfer of £22.8m from other reserves tothe share premium account. This amount represents the premium on shares issuedpursuant to the exercise of share options granted as part of the considerationfor the 1999 acquisition of the US business. All such options have now beenfully exercised and accordingly, the total premium was transferred to the sharepremium account. 20. Profit and loss account----------------------------------------- --------- Group £m----------------------------------------- ---------At 1 October 2004 - (deficit)/surplus (28.2)Loss for the financial period (11.0)Dividends paid and proposed (5.8)----------------------------------------- ---------At 30 September 2005 (45.0)----------------------------------------- --------- 21. Other reserves-------------------------------- ------------------ Group Merger reserve £m-------------------------------- ------------------At 1 October 2004 109.0-------------------------------- ------------------At 30 September 2005 109.0-------------------------------- ------------------ 22. Acquisitions The results for the year include the undernoted contribution from acquisitions:-------------- ------- --------- -------- -------- -------- What Beach A&S Snow Cheat Laptop Magazines Publishing board Planet & Company Journal Publishing Limited Limited £m £m £m £m £m-------------- ------- --------- -------- -------- -------- Date acquired 30.11.04 03.12.04 24.01.05 26.01.05 12.05.05 Turnover 0.7 2.9 4.8 0.1 0.3-------------- ------- --------- -------- -------- --------Operating profit/(loss)before exceptionalitems and amortisationof intangible assets 0.3 (0.6) 1.0 (0.3) 0.3Amortisation ofintangible assets (0.7) (0.6) (1.4) (0.3) (0.7)Exceptional items - (0.1) (0.8) - --------------- ------- --------- -------- -------- --------Operating loss (0.4) (1.3) (1.2) (0.6) (0.4)-------------- ------- --------- -------- -------- -------- -------------- -------- -------- -------- -------- -------- Highbury Consoles The Games Other Total titles Plus Machine £m £m £m £m £m-------------- -------- -------- -------- -------- ---------------------- -------- -------- -------- -------- --------Date acquired 21.06.05 16.08.05 13.09.05 Turnover 8.5 0.1 0.3 - 17.7-------------- -------- -------- -------- -------- --------Operating profit beforeexceptionalitems and amortisation of intangibleassets 0.8 - 0.1 - 1.6Amortisation of intangible assets (2.4) - - (0.1) (6.2)Exceptional items (1.5) - - - (2.4)-------------- -------- -------- -------- -------- --------Operating (loss)/profit (3.1) - 0.1 (0.1) (7.0)-------------- -------- -------- -------- -------- -------- The most recent pre-acquisition annual results of those acquisitions showed theundernoted estimated figures:------------- ------- --------- -------- -------- ------- What Beach A&S Snow Cheat Laptop Magazines Publishing board Planet & Company Journal Publishing Limited Limited £m £m £m £m £m------------- ------- --------- -------- -------- ------- Year ended: 31.09.04 31.12.03 31.12.03 31.12.04 31.12.04------------- ------- --------- -------- -------- -------Turnover 0.8 3.1 5.9 0.1 0.5Operating profit/(loss) 0.2 0.2 0.1 (0.2) 0.4------------- ------- --------- -------- -------- ------- ------------- -------- -------- -------- -------- ------- Highbury Consoles The Games Other Total titles Plus Machine £m £m £m £m £m------------- -------- -------- -------- -------- ------- Year ended: 31.12.04 31.03.05 31.12.04------------- -------- -------- -------- -------- -------Turnover 34.1 1.2 3.0 - 48.7Operating profit/(loss) 5.3 (0.4) 0.4 - 6.0------------- -------- -------- -------- -------- ------- The accounting polices applied by previous owners of acquired business differedfrom those applied by the Group and accordingly the pre-acquisition figures arenot strictly comparable with those set out above for the year ended 30 September2005. In addition, foreign exchange adjustments limit the comparability of thetables. The total consideration for acquisitions during the year ended 30 September 2005was as follows:------------- ------- --------- -------- -------- ------- What Beach A&S Snow Cheat Laptop Magazines Publishing board Planet & Company Journal Publishing Limited Limited £m £m £m £m £m------------- ------- --------- -------- -------- ------- Cash 0.7 1.5 6.7 0.2 4.6Associated costs - 0.1 0.2 - 0.1------------- ------- --------- -------- -------- -------Total consideration 0.7 1.6 6.9 0.2 4.7------------- ------- --------- -------- -------- ------- ------------- -------- -------- -------- -------- ------- Highbury Consoles The Games Other Total titles Plus Machine £m £m £m £m £m------------- -------- -------- -------- -------- ------- Cash 30.5 - 2.3 0.2 46.7Associated costs 1.8 - - - 2.2------------- -------- -------- -------- -------- -------Total consideration 32.3 - 2.3 0.2 48.9------------- -------- -------- -------- -------- ------- i) Acquisition of Highbury titles On 21 June 2005 the Group's wholly owned UK subsidiary Future Publishing Limitedacquired certain assets and liabilities relating to 38 magazine titles andrelated businesses from Highbury House Communications plc, Highbury LifestyleLimited and Highbury Entertainment Limited for a cash consideration of £30.5m.The consideration was funded by a combination of cash resources and bank debt.The purchase is being accounted for as an acquisition. The provisional fair values of the net liabilities acquired are set out below:------------------ -------- --------- ----------- ---------Assets and liabilities Book value Revaluations Accounting Fair valueacquired policy alignment £m £m £m £m------------------ -------- --------- ----------- --------- Intangible fixed assets 0.7 - (0.7)1 -Tangible fixed assets 0.5 (0.4)2 (0.1)3 -Debtors 1.4 - (0.2)4 1.2Cash at bank and in hand 0.1 - - 0.1Other creditors (2.0) (0.2)5 - (2.2)------------------ -------- --------- ----------- ---------Net assets/(liabilities) acquired 0.7 (0.6) (1.0) (0.9)------------------ -------- --------- ----------- ---------Goodwill 33.2------------------ -------- --------- ----------- ---------Consideration------------------ -------- --------- ----------- ---------Consideration satisfied by:Cash 30.5Associated costs 1.8------------------ -------- --------- ----------- ---------Total consideration 32.3------------------ -------- --------- ----------- --------- Notes:The fair value adjustments comprise:1. The write off of the capitalised value of publishing rights in line with theGroup's accounting policies2. The revaluation of fixed assets to reflect the market value at the date ofacquisition3. The revaluation of fixed assets to reflect the Group's accounting policies ondepreciation4. An additional provision for advertising debtors in line with the Group'saccounting policies5. An accrual relating to unrecorded liabilities at the date of acquisition inrespect of software licences. Prior to the acquisition of these titles, they were owned by Highbury HouseCommunications plc, Highbury Lifestyle Limited and Highbury EntertainmentLimited. In the year ended 31 December 2004 turnover for these titles was £34.1mand estimated trading profit attributable to these titles was £5.3m. This profitis presented before corporate charges, interest and taxation and any financingitems which were dealt with on a group basis by Highbury House Communicationsplc as a whole. As only certain assets and liabilities of the group wereacquired, it is not practical to provide any details of post-tax profits orrecognised gains or losses for the financial periods pre-acquisition. ii) Other acquisitions During the year, the following business combinations, which were all accountedfor as acquisitions, also occurred:a) On 30 November 2004, the acquisition of the title What Laptop in the UKfor a consideration of £0.7m.b) On 3 December 2004, the acquisition of 100% of the shares of BeachMagazines & Publishing Limited for a consideration of £1.5m.c) On 24 January 2005, the acquisition of 100% of the shares of A&SPublishing Company Limited for a consideration of £6.0m, plus an additionalpayment in respect of net assets acquired at the date of acquisition of £0.7m.d) On 26 January 2005, the acquisition of the title Snowboard Journal inthe US for a consideration of £0.2m.e) On 12 May 2005, the acquisition of the computer games website CheatPlanet for a consideration of £4.6m.f) On 16 August 2005, the acquisition of the title Consoles Plus inFrance for a consideration of £0.0mg) On 13 September 2005, the acquisition of the titles The Games Machineand PC Action in Italy for a consideration of £2.3mh) In October 2004, the purchase in the UK of a trademark for aconsideration of £0.2m. In addition, in relation to the acquisition of Beach Magazines and PublishingLimited, there is a deferred element of consideration up to a maximum of £1.5m,payable 12 months after the date of purchase, subject to the achievement ofcertain performance criteria. At 30 September 2005 it is considered unlikelythat these criteria will be met and therefore no provision has been made for anypayment of deferred consideration. The aggregate provisional fair values of the net assets acquired at the dates ofthese other acquisitions are shown below:------------------ -------- --------- --------- ------ --------Assets and Book value Revaluations Accounting Other Fair liabilities policy valueacquired alignment £m £m £m £m £m------------------ -------- --------- --------- ------ -------- Intangible fixed assets 0.2 - (0.2)1 - -Tangible fixed assets 0.3 (0.2)2 - - 0.1Stocks 0.4 - (0.2)3 - 0.2Debtors 1.6 (0.2)5 (0.2)4 - 1.2Cash at bank and in hand 1.1 - - - 1.1Bank overdraft (0.3) - - - (0.3)Other creditors (2.6) - - - (2.6)Provisions - - - (0.2)6 (0.2)------------------ -------- --------- --------- ------ --------Net assets acquired 0.7 (0.4) (0.6) (0.2) (0.5)------------------ -------- --------- --------- ------ --------Goodwill 17.1------------------ -------- --------- --------- ------ --------Consideration------------------ -------- --------- --------- ------ --------Consideration satisfied by:Cash 16.2Associated costs 0.4------------------ -------- --------- --------- ------ --------Total consideration 16.6------------------ -------- --------- --------- ------ -------- Notes: The fair value adjustments comprise:1. The write off of the capitalised value of publishing rights in line with theGroup's accounting policies2. The revaluation of fixed assets to reflect the market value at the date ofacquisition3. The revaluation of stock in line with the Group's accounting policies4. An additional provision for advertising debtors in line with the Group'saccounting policies5. The write off of irrecoverable other debtor balances at the date ofacquisition6. A provision of £0.2m to reflect onerous employee contracts on the acquisitionof Consoles Plus in France. Under French law certain classes of journalists havethe right on the change of control of a company to demand favourable redundancypackages for an unlimited period after the change of control. The provisionreflects the potential cost of those eligible to claim redundancy and as at 30September 2005 less than £0.1m of the provision remained, with the remainderhaving been fully utilised. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Future