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Future PLC Half Year Results

17/05/2019 7:00am

UK Regulatory (RNS & others)


Future (NEX:FUTR.GB)
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1 Month : From Apr 2019 to May 2019

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RNS Number : 3376Z

Future PLC

17 May 2019

17 May 2019

FUTURE plc

HALF YEAR RESULTS 2019

Record half year results

Future plc (LSE: FUTR, "Future", "the Group"), the global platform for specialist media, today publishes results for the six months ended 31 March 2019.

Highlights

Financial results for the six months ended 31 March 2019

 
 Adjusted results               2019      2018    Var 
 Revenue (GBP'm)               108.7   53.6(1)   103% 
                              ------  --------  ----- 
 Adjusted EBITDA(3) (GBP'm)     23.7       8.8   169% 
                              ------  --------  ----- 
 Adjusted EBITDA margin %        22%       16%    38% 
                              ------  --------  ----- 
 Adjusted diluted EPS (p)       20.5   10.7(2)    92% 
                              ------  --------  ----- 
 
 Statutory results 
                              ------  --------  ----- 
 Operating profit (GBPm)        10.0       3.8   163% 
                              ------  --------  ----- 
 Diluted EPS (p)                 8.7    5.9(2)    47% 
                              ------  --------  ----- 
 

-- Strong start to year achieving a step change in scale, with adjusted EBITDA(3) increasing by 169% to GBP23.7m (2018: GBP8.8m), following significant acquisition of Purch in September 2018

-- Continuing strong organic(6) growth whilst significantly expanding scale of group reflected in adjusted diluted EPS growth of 92%

-- Significant growth in audience across the Group, with overall online audience up 188% year-on-year, and organic sites up 25%

-- Total revenue up 103% to GBP108.7m; Media revenue up 180%, now accounting for 70% of Group revenues, underpinned by organic(6) Media revenue growth of 38% at constant currency (42% at actual currency)

-- Stated ambition to diversify revenue geographically into US is progressing well with 52%(5) of Group revenue now coming from the US (2018: 20%); market leader in consumer technology in US

-- Ongoing improvements to operating leverage resulting in EBITDA margin increase to 22% from 16% in 2018

-- Highly cash generative business with adjusted free cashflows(4) up 172% to GBP27.5m (2018: GBP10.1m)

-- New GBP135m financing package (GBP90m Revolving Credit Facility with GBP45m accordion) to underpin growth strategy

   --     Company returns to Premium Segment of Official List of London Stock Exchange 

Zillah Byng-Thorne, Future's Chief Executive, said:

"We have delivered a record breaking first half of the financial year and the continued execution of our strategy to deliver growth through audience engagement and technology innovation is generating clear value across the business.

"In addition, we continue our ambition to expand the scale and diversification of the Group. This was accelerated in the first half through two acquisitions: Mobile Nations increases our presence and positioning in the technology sector in the US, whilst ProCycling and Cyclingnews.com give us a credible foothold in a new specialist community.

"We have seen the strong momentum continue as we enter the second half of this financial year, with acquisitions performing well and continued positive organic(6) growth in the Media division. Going forward we will continue to drive scale and value through the successful execution of our strategy as a global platform business, driven by technology with diversified revenue streams."

(1) Restated for the impact of adopting IFRS 15 Revenue from contracts with customers. Revenue and net operating expenses have both increased by GBP2.5m with a net nil impact on operating profit.

(2) 2018 figures have been restated to reflect the bonus element of the rights issue that took place in August 2018.

(3) Earnings before share based payments and associated social security costs, interest, tax, depreciation, amortisation and exceptional items (adjusting items, in aggregate, of GBP12.6m (2018: GBP3.7m)).

(4) Adjusted free cashflows defined as operating cashflows excluding exceptional items less capex

(5) Net of revenue between segments

(6) Organic revenue defined as performance of the like-for-like portfolio (i.e. an asset owned for a full financial year in the comparative period).

Enquiries:

 
 Future plc                             01225 442244 
 Zillah Byng-Thorne, Chief Executive 
                                       -------------- 
 Penny Ladkin-Brand, Chief Financial 
  Officer 
                                       -------------- 
 
 Instinctif Partners                    020 7457 2020 
                                       -------------- 
 Kay Larsen/Chantal Woolcock 
                                       -------------- 
 

Certain information contained in this announcement would have constituted inside information (as defined by Article 7 of Regulation (EU) No 596/2014) prior to its release as part of this announcement.

Note to editors

Future is a global platform business for specialist media, driven by technology, with diversified revenue streams.

The Media division has three complementary high-growth revenue streams: eCommerce, events and digital advertising. It operates in a number of sectors including technology, gaming and entertainment, creative and photography, music, home interest, hobbies and B2B and its brands include TechRadar, PC Gamer, Tom's Guide, Homebuilding & Renovating Show, GamesRadar+, The Photography Show, Top Ten Reviews, Live Science, Android Central, Guitar World, MusicRadar, Space.com, NY TV Week, Tom's Hardware and Cyclingnews.com.

The Magazine division focuses on publishing specialist content, with 80 publications and over 537 bookazines published per year, totalling global circulation of 1.2m. The Magazine portfolio spans technology, gaming and entertainment, music, creative and photography, hobbies, home interest and B2B. Its titles include Classic Rock, Guitar Player, FourFourTwo, Homebuilding & Renovating, Digital Camera, Guitarist, How It Works, Total Film, What Hi-Fi?, ProCycling and Music Week.

Strategic overview

Record half year results

Future made major progress in the execution of the strategy to build a technology enabled global specialist media platform. In the six months to 31 March 2019, the Group has achieved a significant step change in scale, particularly in the US, through the acquisition of the consumer division of Purch in September 2018 and the acquisition of Mobile Nations in March 2019. Revenue increased 103% to GBP108.7m with 70% of Group revenues from the Media division (2018: 50%). Adjusted EBITDA has increased by 169% to GBP23.7m (2018: GBP8.8m), a record result for the Group.

Alongside this, the core business has continued to perform well with strong organic(6) revenue growth of 14% at constant currency (16% at actual currency). The adjusted EBITDA margin increased to 22% (2018: 16%) as a result of the increasing scale of the Group and the shifting revenue mix. Cash conversion has also been pleasing with cash from operations of GBP26.7m.

During the period, the Group returned to the Premium Segment of the Official List of the London Stock Exchange, reflecting the ambition of the Group to broaden and strengthen its shareholder base.

In addition a significant refinancing was undertaken, with a GBP90m RCF now in place and an additional uncommitted GBP45m accordion facility providing additional balance sheet strength to support the Group's next phase of growth.

Progress on building a scalable media platform

The Purch integration has progressed well with back office operations now fully embedded into Future and the combined businesses operating as one new organisation. As a direct benefit, Future has achieved market leadership in the consumer technology category in the US with comScore now recognising Future as the largest digital network for consumer tech news.

Future has enhanced its technology platform through the addition of "RAMP" advertising technology which was acquired as part of Purch. Considerable testing was undertaken during the first half to identify the optimal combination of Future's advertising technology solutions, "Bordeaux" and RAMP, resulting in the creation of "Hybrid" a best of breed advertising technology solution. In line with the Group's focus on developing a simplified and scalable technology stack, the new ad tech solution Hybrid was migrated to all organic(6) Future sites during April. Migration of the Purch sites to Hybrid will happen concurrently with the migration to the Vanilla website platform.

The first of the Purch websites, Space.com, was migrated during February onto Future's Vanilla website platform, with the remaining websites to be migrated during the rest of the calendar year. Space.com has had a double digit audience uplift following the migration. In addition, the User Forum technology that drives engagement with forum members on the Purch sites was migrated onto a new fully GDPR compliant solution during the first half of the year. The Group now has 18 sites on the Vanilla platform in total, with three migrated in the last six months.

Some of the benefits of Future best practice have been realised in advance of the website migrations including the sharing of SEO best practice to support audience growth, and the introduction of new eCommerce processes. Since the acquisition, a number of brands have achieved significant audience growth: Laptop audience has risen 14% year-on-year and Livescience is up 11% year-on-year. In addition, Tom's Guide's 2018 Black Friday weekend revenue was its largest ever, up 155% on the prior year, and its audience has risen by 28% year-on-year (excluding forums).

Acquisitions

Future continued its commitment to expand in the US by acquiring Mobile Nations in March 2019. Mobile Nations is a fast-growing digital technology media company which reinforces Future's status as a leading consumer technology publisher. Mobile Nations' key brands include consumer technology websites Android Central, iMore, Windows Central and Thrifter. Mobile Nations' focus, supporting its consumers in making better-informed buying decisions, is aligned with Future's strategy of combining content, community and commerce. Mobile Nations has a total audience of 39m, and delivered EBITDA of GBP6.2m in the 12 months prior to the acquisition. Whilst still early days, the business is performing well and is trading in line with expectations.

In February 2019 the Group also acquired two cycling brands from Immediate Media - ProCycling magazine and Cyclingnews.com. These long-established and profitable brands in the professional cycling market have strong digital subscriptions, export and licensing revenues. Cyclingnews has 2.3m podcast downloads, a testament to its strong audience engagement. Total audience reach is 2.1m, and revenues in the last 12 months prior to the acquisition were GBP2.0m. This acquisition enables Future to reach a new community of cycling enthusiasts to add to its other specialist communities, further diversifying its reach within outdoor leisure.

Operational review

A key objective of the Group is the diversification of revenues and the first half results show good progress on the achievement of this objective with a significant increase in the revenue mix from Media and also the US.

Revenue by geography

 
 GBPm              HY19   HY18(i)   YoY Var   2018 Full Year 
---------------  ------  --------  --------  --------------- 
 US(ii)            56.2      10.6      430%             39.0 
 UK(ii)            52.5      43.0       22%             85.6 
---------------  ------  --------  --------  --------------- 
 Total revenue    108.7      53.6      103%            124.6 
---------------  ------  --------  --------  --------------- 
 

(i) Restated for the impact of adopting IFRS 15 Revenue from contracts with customers. UK segment revenue has increased by GBP2.0m and US segment revenue by GBP0.5m.

(ii) Net of revenue between segments.

Revenue by division

 
 GBPm              HY19   HY18(iii)   YoY Var   2018 Full Year 
---------------  ------  ----------  --------  --------------- 
 Media             75.7        27.0      180%             64.2 
 Magazine          33.0        26.6       24%             60.4 
---------------  ------  ----------  --------  --------------- 
 Total revenue    108.7        53.6      103%            124.6 
---------------  ------  ----------  --------  --------------- 
 

(iii) Restated for the impact of adopting IFRS 15 Revenue from contracts with customers. Media revenue has increased by GBP0.8m and Magazine revenue by GBP1.7m.

Both Future's UK and US operations have performed well in H1, with UK revenue up 22% to GBP52.5m (2018: GBP43.0m) and US revenue up 430% to GBP56.2m (2018: GBP10.6m), of which 54% is organic(6) at constant currency (62% at actual currency). As a result, 52% of Group revenue (net of revenue between segments) is now derived from the US. This US growth has been significantly boosted by acquisitions of NewBay and Purch's consumer division in 2018.

As a pure-play digital business, the acquisition of Purch's consumer division has had a significantly positive impact on Media revenues. Underlying Media revenue organic(6) growth of 38% at constant currency (42% at actual currency) has also been very strong over this period. Growth in Media has been driven by both digital advertising, which has seen a particularly strong performance in programmatic revenues, and by eCommerce.

The acquisition of NewBay brought a large number of B2B events, particularly in the US, which has driven a 53% increase in events revenue to GBP11.2m (2018: GBP7.3m).

In the Magazine division, revenue increased by 24% to GBP33.0m (2018: GBP26.6m). This growth was driven by the acquisitions of NewBay and the four specialist brands from Haymarket in 2018 H2.

As a content-led business Future seeks to meet the needs of its specialist communities which it measures through the strength of its audience and the effective monetisation of that audience.

In the first half of the year Future saw its online audience reach increase to 192m through the increased scale of the Group.

Current trading and outlook

We have seen the strong momentum continue as we enter the second half of the financial year, with acquisitions performing well and continued positive organic growth in the Media division. While the backdrop of an uncertain economic outlook remains, the Board anticipates the Group's performance for the full year to be ahead of its previous expectations.

Financial summary

 
                                 HY19        HY18 
                                 GBPm    GBPm(iv) 
-----------------------------  ------  ---------- 
 Revenue                        108.7        53.6 
-----------------------------  ------  ---------- 
 Adjusted EBITDA                 23.7         8.8 
 Depreciation                   (0.4)       (0.3) 
 Adjusted amortisation          (0.7)       (1.0) 
-----------------------------  ------  ---------- 
 Adjusted operating profit       22.6         7.5 
-----------------------------  ------  ---------- 
 Finance costs                  (1.1)       (0.5) 
-----------------------------  ------  ---------- 
 Adjusted profit before tax      21.5         7.0 
-----------------------------  ------  ---------- 
 Statutory operating profit      10.0         3.8 
-----------------------------  ------  ---------- 
 Statutory profit before tax      8.9         3.3 
-----------------------------  ------  ---------- 
 

(iv) Restated for the impact of adopting IFRS 15 Revenue from contracts with customers. Revenue and net operating expenses have both increased by GBP2.5m with a net nil impact on operating profit.

Items described as adjusted in the table above exclude the items detailed as 'adjusting' in the reconciliation below. Adjusted items are a non-GAAP measure. For further details refer to the section on the reconciliation of non-statutory measures.

Earnings per share

 
                                            HY19    HY18(v) 
                                           -----  --------- 
 Adjusted basic earnings per share (p)      21.5       11.5 
 Basic earnings per share (p)                9.2        6.3 
 Adjusted diluted earnings per share (p)    20.5       10.7 
 Diluted earnings per share (p)              8.7        5.9 
-----------------------------------------  -----  --------- 
 

(v) 2018 figures have been restated to reflect the bonus element of the 2018 rights issue.

Adjusted earnings per share is based on profit after taxation which is then adjusted to exclude share based payments including related social security costs, exceptional items, amortisation of intangible assets arising on acquisitions and related tax effects.

The adjusted profit after tax amounted to GBP17.6m (2018: GBP6.1m) and the weighted average diluted number of shares in issue was 85.9m (2018: restated 57.5m), the increase reflecting the impact of the rights issue that was completed in August 2018 to fund the Purch acquisition and the issue of 0.6m shares in the period for the acquisition of Mobile Nations.

Reconciliation of non-statutory measures

Statutory profit before tax reconciles to adjusted operating profit as follows:

 
                                                                       HY19     HY18 
                                                                       GBPm     GBPm 
-----------------------------------------------------------------  --------  ------- 
  Adjusted operating profit                                            22.6      7.5 
-----------------------------------------------------------------  --------  ------- 
  Finance costs                                                       (1.1)    (0.5) 
-----------------------------------------------------------------  --------  ------- 
  Adjusted profit before tax                                           21.5      7.0 
-----------------------------------------------------------------  --------  ------- 
  Adjusting items: 
  Share based payments (including related social security costs)      (5.2)    (1.4) 
  Exceptional costs                                                   (2.3)    (0.3) 
  Amortisation of acquired intangibles                                (5.1)    (2.0) 
-----------------------------------------------------------------  --------  ------- 
  Statutory profit before tax                                           8.9      3.3 
-----------------------------------------------------------------  --------  ------- 
 

The financial review is based primarily on a comparison of adjusted results for the six months ended 31 March 2019 with those for the six months ended 31 March 2018. Unless otherwise stated, change percentages relate to a comparison of these two periods and all comparatives have been adjusted to reflect the adoption of IFRS 15 Revenue from contracts with customers.

Revenue

Group revenue was GBP108.7m which includes a GBP3.7m uplift as a result of adopting IFRS 15 (2018: GBP53.6m with GBP2.5m uplift), reflecting the acquisitions during the period and in 2018, which contributed GBP46.5m of revenue, and the strong growth of Media revenues.

The adjustment for IFRS 15 relates principally to revenues which have previously been shown net of agents' commission and have therefore now been grossed up, with an equal and opposite adjustment in cost of sales. The impact of the IFRS 15 adjustment has increased in the period due to the change in revenue mix.

EBITDA

The Group's adjusted EBITDA increased to GBP23.7m (2018: GBP8.8m), reflecting the strong growth of the Media division and the US business and the operating leverage provided by the increased scale of the Group.

Statutory exceptional items

Exceptional costs amounted to GBP2.3m (2018: GBP0.3m) and relate to the costs of returning to the Premium Segment of the Official List (GBP0.8m), the acquisition of Mobile Nations (GBP1.1m) and the integration of Purch (GBP0.4m).

Finance costs and refinancing

During the period the Group agreed a new GBP90m multi-currency Revolving Credit Facility ("RCF"). The RCF, which replaces Future's existing debt facilities, has an initial maturity of February 2023 and includes an incremental uncommitted GBP45m accordion, providing additional flexibility. The RCF has improved terms on the existing debt facilities and is being provided by HSBC, Natwest and Bank of Ireland.

Finance costs increased to GBP1.1m (2018: GBP0.5m), reflecting the draw-down of the RCF to fund the Mobile Nations acquisition and the release of prepaid arrangement fees on the Group's previous bank facility. The Group has continued to focus on efficient management of its cash position.

Taxation

The tax amount for the six months ended 31 March 2019 is based on the effective rate, estimated on a full year basis, being applied to the statutory profit for the six months ended 31 March 2019. The deferred tax asset as at 31 March 2019 primarily relates to historic US losses which we expect to be able to use against future profits generated in the US.

Cashflow and net debt

Net debt at 31 March 2019 was GBP38.8m (2018: GBP2.0m).

Cash inflow from operations before exceptional items was GBP29.2m (2018: GBP11.1m). Exceptional cashflows of GBP2.5m represent the cost of returning to the Premium Segment of the Official List, the acquisition of Mobile Nations, the integration of Purch and vacant property lease costs.

Capital expenditure was GBP1.7m (2018: GBP1.0m) in the period.

A reconciliation of adjusted operating cash inflow to cash inflow from operations is included below:

 
                                             HY19    HY18 
                                             GBPm    GBPm 
-----------------------------------------  ------  ------ 
 Adjusted operating cash inflow              29.2    11.1 
 Cash flows related to exceptional items    (2.5)   (0.7) 
-----------------------------------------  ------  ------ 
 Cash inflow from operations                 26.7    10.4 
-----------------------------------------  ------  ------ 
 

Principal risks and uncertainties

The principal risks and uncertainties for the six months are largely unchanged from those detailed in the Group's Annual Report and Accounts for the year ended 30 September 2018. Reference should be made to pages 28 to 30 of the 2018 Annual Report and Accounts for more detail on the potential impact of risks and examples of mitigation.

The nature of the Group's business means there are no specific risks to the Group associated with Brexit other than the impact of general economic uncertainty on consumer sentiment.

Condensed consolidated interim financial statements

Consolidated income statement

for the six months ended 31 March 2019

 
                                  6 months to 31 March 2019                    6 months to 31 March 2018(1) 
                             Adjusted       Adjusting      Statutory        Adjusted       Adjusting      Statutory 
                              results           items        results         results           items        results 
  Note                           GBPm            GBPm           GBPm            GBPm            GBPm           GBPm 
 
 Revenue           1,2          108.7               -          108.7            53.6               -           53.6 
 Net operating 
  expenses          3          (86.1)          (12.6)         (98.7)          (46.1)           (3.7)         (49.8) 
----------------  ----  -------------  --------------  -------------  --------------  --------------  ------------- 
 Operating 
  profit                         22.6          (12.6)           10.0             7.5           (3.7)            3.8 
 Finance costs      6           (1.1)               -          (1.1)           (0.5)               -          (0.5) 
----------------  ----  -------------  --------------  -------------  --------------  --------------  ------------- 
 Profit before 
  tax               1            21.5          (12.6)            8.9             7.0           (3.7)            3.3 
 Tax on 
  profit/(loss)     7           (3.9)             2.5          (1.4)           (0.9)             1.0            0.1 
----------------  ----  -------------  --------------  -------------  --------------  --------------  ------------- 
 Profit for the 
  period 
  attributable 
  to owners of 
  the parent                     17.6          (10.1)            7.5             6.1           (2.7)            3.4 
----------------  ----  -------------  --------------  -------------  --------------  --------------  ------------- 
 
 

(1) Restated for the impact of adopting IFRS 15 Revenue from contracts with customers. Revenue and net operating expenses have both increased by GBP2.5m with a net nil impact on operating profit.

Earnings per 15p Ordinary share

 
                                   6 months to 31 March 2019                     6 months to 31 March 2018(1) 
                              Adjusted       Adjusting       Statutory        Adjusted       Adjusting       Statutory 
                               results           items         results         results           items         results 
                  Note           pence           pence           pence           pence           pence           pence 
 Basic earnings 
  per share        9              21.5          (12.3)             9.2            11.5           (5.2)             6.3 
 Diluted 
  earnings per 
  share            9              20.5          (11.8)             8.7            10.7           (4.8)             5.9 
---------------  -----  --------------  --------------  --------------  --------------  --------------  -------------- 
 

(1) 2018 figures have been restated to reflect the bonus element of the rights issue that took place in August 2018.

Consolidated statement of comprehensive income

for the six months ended 31 March 2019

 
                                                                                                6 months to 31 March 
                                                                    6 months to 31 March 2019                   2018 
                                                                                         GBPm                   GBPm 
----------------------------------------------------------------   --------------------------  --------------------- 
 Profit for the period                                                                    7.5                    3.4 
-----------------------------------------------------------------  --------------------------  --------------------- 
 Items that may be reclassified to the consolidated income 
 statement 
 Currency translation differences                                                       (0.8)                  (0.4) 
-----------------------------------------------------------------  --------------------------  --------------------- 
 Other comprehensive expense for the period                                             (0.8)                  (0.4) 
-----------------------------------------------------------------  --------------------------  --------------------- 
 Total comprehensive income for the period attributable to owners 
  of the parent                                                                           6.7                    3.0 
-----------------------------------------------------------------  --------------------------  --------------------- 
 

Consolidated statement of changes in equity

for the six months ended 31 March 2019

 
                                              Share 
                            Issued share    premium                           Treasury      Accumulated 
                                 capital    account   Merger reserve           reserve           losses   Total equity 
                   Note             GBPm       GBPm             GBPm              GBPm             GBPm           GBPm 
----------------  -----  ---------------  ---------  ---------------  ----------------  ---------------  ------------- 
 Balance at 1 
  October 2018                      12.2       97.2            124.9             (0.3)           (61.4)          172.6 
----------------  -----  ---------------  ---------  ---------------  ----------------  ---------------  ------------- 
 Profit for the 
  period                               -          -                -                 -              7.5            7.5 
----------------  -----  ---------------  ---------  ---------------  ----------------  ---------------  ------------- 
 Currency 
  translation 
  differences                          -          -                -                 -            (0.8)          (0.8) 
 Other 
  comprehensive 
  expense for 
  the period                           -          -                -                 -            (0.8)          (0.8) 
 Total 
  comprehensive 
  income for the 
  period                               -          -                -                 -              6.7            6.7 
 Share capital 
  issued during 
  the period                         0.2          -              4.1                 -                -            4.3 
 Share schemes 
 - Value of 
  employees' 
  services          5                  -          -                -                 -              1.9            1.9 
 - Deferred tax 
  on share 
  options                              -          -                -                 -              1.5            1.5 
 Dividends paid 
  to 
  shareholders                         -          -                -                 -            (0.4)          (0.4) 
 Balance at 31 
  March 2019                        12.4       97.2            129.0             (0.3)           (51.7)          186.6 
----------------  -----  ---------------  ---------  ---------------  ----------------  ---------------  ------------- 
 
 Balance at 1 
  October 2017                       6.8       47.4            122.5             (0.3)          (115.1)           61.3 
----------------  -----  ---------------  ---------  ---------------  ----------------  ---------------  ------------- 
 Profit for the 
  period                               -          -                -                 -              3.4            3.4 
----------------  -----  ---------------  ---------  ---------------  ----------------  ---------------  ------------- 
 Currency 
  translation 
  differences                          -          -                -                 -            (0.4)          (0.4) 
 Other 
  comprehensive 
  expense for 
  the period                           -          -                -                 -            (0.4)          (0.4) 
 Total 
  comprehensive 
  income for the 
  period                               -          -                -                 -              3.0            3.0 
 Share schemes 
 - Value of 
  employees' 
  services          5                  -          -                -                 -              1.2            1.2 
 - Deferred tax 
  on share 
  options                              -          -                -                 -              0.5            0.5 
 Balance at 31 
  March 2018                         6.8       47.4            122.5             (0.3)          (110.4)           66.0 
----------------  -----  ---------------  ---------  ---------------  ----------------  ---------------  ------------- 
 
 

Consolidated balance sheet

as at 31 March 2019

 
                                                                                                          30 September 
                                                                          31 March 2019   31 March 2018           2018 
                                                                  Note             GBPm            GBPm           GBPm 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 Assets 
 Non-current assets 
 Property, plant and equipment                                                      1.7             1.1            1.7 
 Intangible assets - goodwill                                      10             205.5            65.7           99.8 
 Intangible assets - other                                         10              68.9            24.1          103.6 
 Investments                                                                        0.2             0.2            0.2 
 Financial asset - derivative                                      11               0.6               -              - 
 Deferred tax                                                                       2.3             4.7            5.3 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 Total non-current assets                                                         279.2            95.8          210.6 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 
 Current assets 
 Inventories                                                                          -             0.8              - 
 Corporation tax recoverable                                                        0.1             0.2            0.1 
 Trade and other receivables                                                       35.4            16.2           37.6 
 Cash and cash equivalents                                                          5.7            17.5            6.4 
 Total current assets                                                              41.2            34.7           44.1 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 Total assets                                                                     320.4           130.5          254.7 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 
 Equity and liabilities 
 Equity 
 Issued share capital                                              12              12.4             6.8           12.2 
 Share premium account                                                             97.2            47.4           97.2 
 Merger reserve                                                                   129.0           122.5          124.9 
 Treasury reserve                                                                 (0.3)           (0.3)          (0.3) 
 Accumulated losses                                                              (51.7)         (110.4)         (61.4) 
 Total equity                                                                     186.6            66.0          172.6 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 
 Non-current liabilities 
 Financial liabilities - interest-bearing loans and borrowings                     44.5            17.0           15.7 
 Deferred tax                                                                         -             4.4            5.1 
 Provisions                                                                         2.4             2.3            2.8 
 Contingent consideration                                         11,13            29.3               -              - 
 Other non-current liabilities                                                      0.5             0.5            0.5 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 Total non-current liabilities                                                     76.7            24.2           24.1 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 
 Current liabilities 
 Financial liabilities - interest-bearing loans and borrowings                        -             2.5            8.5 
 Financial liabilities - derivatives                                                  -             0.1              - 
 Trade and other payables                                                          54.7            35.2           48.4 
 Corporation tax payable                                                            2.4             2.5            1.1 
 Total current liabilities                                                         57.1            40.3           58.0 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 Total liabilities                                                                133.8            64.5           82.1 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 Total equity and liabilities                                                     320.4           130.5          254.7 
---------------------------------------------------------------  ------  --------------  --------------  ------------- 
 

Consolidated cash flow statement

for the six months ended 31 March 2019

 
                                                                     6 months to   6 months to 
                                                                        31 March      31 March 
                                                                            2019          2018 
                                                                            GBPm          GBPm 
------------------------------------------------------------  ----  ------------  ------------ 
 Cash flows from operating activities 
 Cash generated from operations                                             26.7          10.4 
 Interest paid                                                             (0.4)         (0.4) 
 Tax paid                                                                  (1.0)         (0.9) 
------------------------------------------------------------------  ------------  ------------ 
 Net cash generated from operating activities                               25.3           9.1 
------------------------------------------------------------------  ------------  ------------ 
 
 Cash flows from investing activities 
 Purchase of property, plant and equipment                                 (0.4)         (0.4) 
 Purchase of computer software and website development                     (1.3)         (0.6) 
 Purchase of magazine titles and events                                    (1.7)             - 
  Purchase of subsidiary undertakings, net of cash acquired               (41.1)           0.3 
 Disposal of magazine titles and trademarks                                  0.5             - 
 Purchase of derivative                                                    (0.7)             - 
 Net cash used in investing activities                                    (44.7)         (0.7) 
------------------------------------------------------------------  ------------  ------------ 
 
 Cash flows from financing activities 
 Dividends paid                                                            (0.4)             - 
 Draw down of bank loans                                                    52.2             - 
 Repayment of bank loans                                                  (32.4)         (0.6) 
 Bank arrangement fees                                                     (0.7)             - 
 Net cash generated/(used) from financing activities                        18.7         (0.6) 
------------------------------------------------------------------  ------------  ------------ 
 
 Net (decrease)/increase in cash and cash equivalents                      (0.7)           7.8 
 Cash and cash equivalents at beginning of period                            6.4          10.1 
  Exchange adjustments                                                         -         (0.4) 
 Cash and cash equivalents at end of period                                  5.7          17.5 
------------------------------------------------------------------  ------------  ------------ 
 

Notes to the consolidated cash flow statement

for the six months ended 31 March 2019

A. Cash generated from operations

The reconciliation of profit for the period to cash flows generated from operations is set out below:

 
                                                                          6 months to 
                                                                             31 March   6 months to 31 March 
                                                                                 2019                   2018 
                                                                                 GBPm                   GBPm 
-----------------------------------------------------------------  ----  ------------  --------------------- 
 Profit for the period                                                            7.5                    3.4 
 Adjustments for: 
 Depreciation charge                                                              0.4                    0.3 
 Amortisation of intangible assets                                                5.8                    3.0 
 Share schemes 
  - Value of employees' services                                                  1.9                    1.2 
  - National insurance costs on share schemes                                     3.3                    0.2 
 Net finance costs                                                                1.1                    0.5 
 Tax charge/(credit)                                                              1.4                  (0.1) 
 Cash generated before changes in working capital and provisions                 21.4                    8.5 
 Movement in provisions                                                         (0.4)                  (0.3) 
 Decrease/(increase) in trade and other receivables                               1.4                  (2.8) 
 Increase in trade and other payables                                             4.3                    5.0 
 Cash generated from operations                                                  26.7                   10.4 
-----------------------------------------------------------------------  ------------  --------------------- 
 

B. Analysis of net debt

 
                                     31 September     Cash   Other non- cash changes   Exchange movements   31 March 
                                             2018    flows                                                      2019 
                                             GBPm     GBPm                      GBPm                 GBPm       GBPm 
----------------------------------  -------------  -------  ------------------------  -------------------  --------- 
 Cash and cash equivalents                    6.4    (0.7)                         -                    -        5.7 
 Debt due within one year                   (8.5)      8.5                         -                    -          - 
 Debt due after more than one year         (15.7)   (28.3)                       0.4                (0.9)     (44.5) 
----------------------------------  -------------  -------  ------------------------  -------------------  --------- 
 Net debt                                  (17.8)   (20.5)                       0.4                (0.9)     (38.8) 
----------------------------------  -------------  -------  ------------------------  -------------------  --------- 
 
 

On 14 February 2019 the Group signed a new GBP90 million multicurrency Revolving Credit Facility ("RCF"). The RCF, which replaces the Group's existing debt facilities, which were repaid in full, has an initial maturity of February 2023 and includes an incremental uncommitted GBP45 million accordion, providing additional flexibility. The RCF has improved terms on the existing debt facilities and is being provided by HSBC, Natwest and Bank of Ireland.

C. Reconciliation of movement in net debt

 
                                                     6 months to 
                                                        31 March      6 months to 
                                                            2019    31 March 2018 
                                                            GBPm             GBPm 
--------------------------------------------------  ------------  --------------- 
 Net debt at start of period                              (17.8)           (10.0) 
 (Decrease)/increase in cash and cash equivalents          (0.7)              7.8 
 Movement in borrowings                                   (19.8)              0.6 
 Other non-cash changes                                      0.4                - 
 Exchange movements                                        (0.9)            (0.4) 
 Net debt at end of period                                (38.8)            (2.0) 
--------------------------------------------------  ------------  --------------- 
 

Basis of preparation

This unaudited condensed consolidated interim financial information for the six months ended 31 March 2019 has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting as adopted by the European Union, and in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority.

The interim financial information contained in the Interim Report should be read in conjunction with the Annual Report for the year ended 30 September 2018.

The Interim Report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006 and has not been audited. A copy of the statutory financial statements for the year ended 30 September 2018 has been filed with the Registrar of Companies. The auditors' report on those accounts was unqualified, and it did not contain any statements under section 498(2) or section 498(3) of the Companies Act 2006. The auditors have carried out a review of the Interim Report and their review report is included at the back of this report.

Having considered the Group's funding position and latest forecasts, the Directors believe that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Directors continue to adopt the going concern basis in preparing the condensed interim financial information.

As stated in the financial statements for the year ended 30 September 2018 the following amendments to existing standards have been applied where applicable: amendments as a result of Annual Improvements 2014-2016 Cycle; and amendments to IFRS 2 Classification and measurement of share-based payment transactions. The Group has adopted IFRS 9 Financial instruments and IFRS 15 Revenue from contracts with customers from 1 October 2018. The accounting policies adopted, methods of computation and presentation are otherwise consistent with those set out in the Group's statutory accounts for the financial year ended 30 September 2018.

There has been no material impact from the adoption of new standards, amendments to standards or interpretations which are relevant to the Group, other than as set out below.

Applying IFRS 9 has resulted in changes to the measurement and disclosure of financial instruments and introduces a new expected loss impairment model. The Group has adopted the simplified approach to recognise lifetime credit losses for trade receivables. The adoption of the standard has not had a significant impact on the Group's consolidated results or financial position.

The Group's accounting policy for trade receivables under IFRS 9 is as follows:

Trade and other receivables are initially recognised at their transaction price and subsequently measured at amortised cost. The provision for impairment is calculated based on lifetime expected credit losses in accordance with IFRS 9.

IFRS 15 replaces the risk and reward approach of IAS 18 Revenue with a contract based five-step model. The Group has elected to apply the fully retrospective method for initial application, applying IFRS 15 retrospectively (and restating comparatives) from the period beginning 1 October 2017.

As part of the implementation, the Group has conducted a thorough analysis of all material revenue streams and customer contracts and reviewed sales and accounting processes. Print and digital magazine newstrade and subscription revenue, and digital advertising revenues and expenses have changed as a result of the new standard. Based on the enhanced guidance around the principal/agent approach, revenue is recognised as the amount paid by the end consumer, rather than the amount remitted by the agent. Related commissions paid to agents are recognised as an expense within cost of sales. There has been no material impact on transition relating to any other revenue streams within the Group.

The adoption of IFRS 15 has resulted in an increase in revenue of GBP3.7m for the six months ending 31 March 2019, along with an increase in cost of sales of GBP3.7m, compared to what would have been reported under IAS 18. The comparative period income statement for the six months ending 31 March 2018 has been restated for an increase in revenue of GBP2.5m and an increase in cost of sales of GBP2.5m. There has been no impact on retained earnings at the date of transition or subsequently.

The group's accounting policy for revenue under IFRS 15 is as follows:

Revenue from contracts with customers is recognised in the income statement in line with the five-step model in IFRS 15, to reflect the pattern of transfer of goods and services to the customer. Revenue is recognised in the income statement when control passes to the customer. If the customer simultaneously receives and consumes the benefits of the contract, revenue is recognised over time. Otherwise, revenue is recognised at a point in time.

Revenue comprises the transaction price of the contract, being consideration received or receivable for the sale of goods and services in the ordinary course of the Group's activities. Revenue is shown net of value-added tax, estimated returns, rebates and discounts and after eliminating sales within the Group.

For print and digital magazine newstrade and subscription revenue, and digital advertising revenues and expenses, revenue is recognised as the amount paid by the end consumer, rather than the amount remitted by the agent. Related commissions paid to agents are recognised as an expense within cost of sales.

The following recognition criteria also apply:

-- Magazine newsstand circulation and advertising revenue is recognised according to the date that the related publication goes on sale

-- Online advertising revenue is recognised over the period during which the advertisements are served

-- Revenue from the sale of digital magazine subscriptions is recognised uniformly over the term of the subscription

   --      Event income is recognised when the event has taken place 
   --      Licensing revenue is recognised on the supply of the licensed content 
   --      Other revenue is recognised at the time of sale or provision of service 

The Group is continuing to assess the impact of IFRS 16 Leases, which will be effective for the year ending 30 September 2020. Adoption of this standard will result in the recognition on balance sheet of assets and liabilities relating to leases which are currently being accounted for as operating leases. The Group anticipates a material increase in reported assets and liabilities, as well as additional disclosures.

Presentation of non-statutory measures

The Directors believe that adjusted results and adjusted earnings per share provide additional useful information on the core operational performance of the Group to shareholders, and review the results of the Group on an adjusted basis internally. The term 'adjusted' is not a defined term under IFRS and may not therefore be comparable with similarly titled profit measurements reported by other companies. It is not intended to be a substitute for, or superior to, IFRS measurements of profit. Adjustments are made in respect of:

Share-based payments - share-based payment expenses or credits, together with the associated social security costs, are excluded from the adjusted results of the Group as the Directors believe they result in a level of charge that would distort the user's view of the core trading performance of the Group.

Exceptional items - the Group considers items of income and expense as exceptional and excludes them from the adjusted results where the nature of the item, or its size, is material and likely to be non-recurring in nature (in the medium term) so as to assist the user of the financial statements to better understand the results of the core operations of the Group. Details of exceptional items are shown in note 4.

Amortisation of acquired intangible assets - the amortisation charge for those intangible assets recognised on business combinations is excluded from the adjusted results of the Group since they are non-cash charges arising from non-trading investment activities. As such, they are not considered reflective of the core trading performance of the Group.

The tax related to adjusting items is the tax effect of the items above that are allowable deductions for tax purposes calculated using the standard rate of corporation tax in the relevant jurisdiction.

A reconciliation of adjusted operating profit to profit before tax is shown below:

 
                                                           6 months to   6 months to 
                                                              31 March      31 March 
                                                                  2019          2018 
                                                                  GBPm          GBPm 
--------------------------------------------------------  ------------  ------------ 
 Adjusted operating profit                                        22.6           7.5 
 Finance costs                                                   (1.1)         (0.5) 
--------------------------------------------------------  ------------  ------------ 
 Adjusted profit before tax                                       21.5           7.0 
 
   Adjusting items: 
 Share based payments (including social security costs)          (5.2)         (1.4) 
 Exceptional items                                               (2.3)         (0.3) 
 Amortisation of acquired intangibles                            (5.1)         (2.0) 
 Profit before tax                                                 8.9           3.3 
--------------------------------------------------------  ------------  ------------ 
 

A reconciliation between adjusted and statutory earnings per share measures is shown in note 9.

Notes to the financial information

for the six months ended 31 March 2019

   1.    Segmental reporting 

The Group is organised and arranged primarily by reportable segment. The Executive Directors consider the performance of the business from a geographical perspective, namely the UK and the US. The Australian business is considered to be part of the UK segment and is not reported separately due to its size.

Segment revenue

 
                                6 months to         6 months to 
                              31 March 2019    31 March 2018(1) 
                                       GBPm                GBPm 
--------------------------  ---------------  ------------------ 
 UK                                    58.2                44.0 
 US                                    57.1                10.9 
 Revenue between segments             (6.6)               (1.3) 
 Total                                108.7                53.6 
--------------------------  ---------------  ------------------ 
 

(1) Restated for the impact of adopting IFRS 15 Revenue from contracts with customers. UK segment revenue has increased by GBP2.0m and US segment revenue by GBP0.5m.

Transactions between segments are carried out at arm's length.

Segment adjusted EBITDA

 
                                  6 months to 
                                     31 March      6 months to 
                                         2019    31 March 2018 
                                         GBPm             GBPm 
-------------------------------  ------------  --------------- 
 UK                                      13.0              4.2 
 US                                      10.7              4.6 
 Total segment adjusted EBITDA           23.7              8.8 
-------------------------------  ------------  --------------- 
 

EBITDA is used by the Executive Directors to assess the performance of each segment.

A reconciliation of total segment EBITDA to profit before tax is provided as follows:

 
                                                              6 months to      6 months to 
                                                            31 March 2019    31 March 2018 
                                                                     GBPm             GBPm 
--------------------------------------------------------  ---------------  --------------- 
 Total segment adjusted EBITDA                                       23.7              8.8 
 Share based payments (including social security costs)             (5.2)            (1.4) 
 Depreciation                                                       (0.4)            (0.3) 
 Amortisation                                                       (5.8)            (3.0) 
 Exceptional items                                                  (2.3)            (0.3) 
 Net finance costs                                                  (1.1)            (0.5) 
 Profit before tax                                                    8.9              3.3 
--------------------------------------------------------  ---------------  --------------- 
 
   2.    Revenue 

An additional analysis of the Group's revenue is shown below:

 
             6 months to 31 March 2019   6 months to 31 March 2018(1) 
                                  GBPm                           GBPm 
----------  --------------------------  ----------------------------- 
 Media                            75.7                           27.0 
 Magazine                         33.0                           26.6 
 Total                           108.7                           53.6 
----------  --------------------------  ----------------------------- 
 

(1) Restated for the impact of adopting IFRS 15 Revenue from contracts with customers. Media revenue has increased by GBP0.8m and Magazine revenue by GBP1.7m.

The Group has applied IFRS 15 from 1 October 2018, using the fully retrospective method for initial application, meaning comparative periods have been restated from 1 October 2017.

Under the principal/agent requirements of IFRS 15, revenue is recognised as the amount paid by the end consumer, rather than the amount remitted by the agent. Related commissions paid to agents will be recognised as an expense within cost of sales. There has been no material impact on transition relating to any other revenue streams within the Group.

The adoption of IFRS 15 has resulted in an increase in revenue of GBP3.7m for the six months ending 31 March 2019, along with an increase in cost of sales of GBP3.7m, compared to what would have been reported under IAS 18. The comparative period income statement for the six months ending 31 March 2018 has been restated for an increase in revenue of GBP2.5m and an increase in cost of sales of GBP2.5m. There has been no impact on retained earnings at the date of transition or subsequently.

See note 1 for disaggregation of revenue by geography.

   3.    Net operating expenses 

Operating profit is stated after charging:

 
                                   6 months to 31 March 2019             6 months to 31 March 
                                                                                 2018 
                                Adjusted   Adjusting   Statutory   Adjusted   Adjusting   Statutory 
                                 results       items     results    results       items     results 
                                    GBPm        GBPm        GBPm       GBPm        GBPm        GBPm 
-----------------------------  ---------  ----------  ----------  ---------  ----------  ---------- 
 Cost of sales                    (60.4)           -      (60.4)     (33.3)           -      (33.3) 
 Share based payments 
  (including social security 
  costs)                               -       (5.2)       (5.2)          -       (1.4)       (1.4) 
 Exceptional items (note 
  4)                                   -       (2.3)       (2.3)          -       (0.3)       (0.3) 
 Depreciation                      (0.4)           -       (0.4)      (0.3)           -       (0.3) 
 Amortisation                      (0.7)       (5.1)       (5.8)      (1.0)       (2.0)       (3.0) 
 Other administration 
  expenses                        (24.6)           -      (24.6)     (11.5)           -      (11.5) 
 Total                            (86.1)      (12.6)      (98.7)     (46.1)       (3.7)      (49.8) 
-----------------------------  ---------  ----------  ----------  ---------  ----------  ---------- 
 
 
   4.    Exceptional items 
 
                                              6 months to   6 months to 
                                                 31 March      31 March 
                                                     2019          2018 
                                                     GBPm          GBPm 
-------------------------------------------  ------------  ------------ 
 Premium listing costs                                0.8             - 
 Acquisition and integration related costs            1.5             - 
 Restructuring and redundancy costs                     -           0.3 
 Total                                                2.3           0.3 
-------------------------------------------  ------------  ------------ 
 

5. Employee costs

 
                                       6 months to      6 months to 
                                     31 March 2019    31 March 2018 
                                              GBPm             GBPm 
---------------------------------  ---------------  --------------- 
 Wages and salaries                           23.8             12.9 
 Social security costs                         5.8              1.5 
 Other pension costs                           0.6              0.3 
 Share schemes 
  - Value of employees' services               1.9              1.2 
---------------------------------  ---------------  --------------- 
 Total employee costs                         32.1             15.9 
---------------------------------  ---------------  --------------- 
 

IFRS 2 Share-based Payment requires an expense for equity instruments granted to be recognised over the appropriate vesting period, measured at their fair value at the date of grant.

The fair value has been calculated using the Monte Carlo and Black-Scholes models, using the most appropriate model for each scheme. Assumptions have been made in these models for expected volatility, risk-free rates and dividend yields.

Key management personnel compensation

 
                                                       6 months to      6 months to 
                                                     31 March 2019    31 March 2018 
                                                              GBPm             GBPm 
 Salaries and other short-term employee benefits               1.2              0.8 
 Share schemes 
  - Value of employees' services                               0.9              0.7 
 Total                                                         2.1              1.5 
-------------------------------------------------  ---------------  --------------- 
 

Key management personnel are deemed to be the members of the Board of Future plc. It is this Board which has responsibility for planning, directing and controlling the activities of the Group.

   6.       Finance costs 
 
                                                                                  6 months to 
                                                                 6 months to         31 March 
                                                               31 March 2019             2018 
                                                                        GBPm             GBPm 
 Interest payable on interest-bearing loans and borrowings               0.6              0.3 
  Amortisation of bank loan arrangement fees                             0.5              0.1 
  Other finance costs                                                      -              0.1 
                                                                         1.1              0.5 
-----------------------------------------------------------  ---------------  --------------- 
 

On 14 February 2019 the Group signed a GBP90 million multicurrency Revolving Credit Facility ("RCF"), including an incremental uncommitted GBP45 million accordion, providing additional flexibility. Included within amortisation of bank loan arrangement fees is the release of prepaid costs in relation to the previous loan facility.

   7.        Tax on profit 

The tax amount for the six months ended 31 March 2019 is based on the effective rate, estimated on a full year basis by territory, being applied to the taxable profits or losses of each territory for the six months ended 31 March 2019.

   8.    Dividends 
 
                                                                            6 months to 
                                                              6 months to      31 March 
   Equity dividends                                         31 March 2019          2018 
--------------------------------------------------------  ---------------  ------------ 
 Number of shares in issue at end of period (million)                82.5          45.7 
 Dividends paid and payable in period (pence per share)              0.05             - 
 Dividends paid and payable in period (GBPm)                        (0.4)             - 
--------------------------------------------------------  ---------------  ------------ 
 

Interim dividends are recognised in the period in which they are paid and final dividends are recognised in the period in which they are approved. The dividend in respect of the year ended 30 September 2018 was paid on 15 February 2019. The Board has not proposed a dividend for the six months ended 31 March 2019.

   9.    Earnings per share 

Basic earnings per share are calculated using the weighted average number of Ordinary shares in issue during the period. Diluted earnings per share have been calculated by taking into account the dilutive effect of shares that would be issued on conversion into Ordinary shares of awards held under employee share schemes.

Adjusted earnings per share remove the effect of share based payments, exceptional items, amortisation of intangible assets arising on business combinations and any related tax effects from the calculation.

 
                                                                      6 months to       6 months to 
                                                                         31 March          31 March 
                                                                             2019           2018(1) 
-------------------------------------------------------------------  ------------  ---------------- 
 Adjustments to profit after tax: 
 Profit after tax (GBPm)                                                      7.5               3.4 
 Share based payments (including social security costs) (GBPm)                5.2               1.4 
 Exceptional items (GBPm)                                                     2.3               0.3 
 Amortisation of intangible assets arising on acquisitions (GBPm)             5.1               2.0 
 Tax effect of the above adjustments (GBPm)                                 (2.5)             (1.0) 
 Adjusted profit after tax (GBPm)                                            17.6               6.1 
-------------------------------------------------------------------  ------------  ---------------- 
 
   Weighted average number of shares in issue during the period: 
 - Basic                                                               81,719,444        53,503,698 
 - Dilutive effect of share options                                     4,132,152         4,037,666 
 - Diluted                                                             85,851,596        57,541,364 
 Basic earnings per share (in pence)                                          9.2               6.3 
 Adjusted basic earnings per share (in pence)                                21.5              11.5 
 Diluted earnings per share (in pence)                                        8.7               5.9 
 Adjusted diluted earnings per share (in pence)                              20.5              10.7 
-------------------------------------------------------------------  ------------  ---------------- 
 
 The adjustments to profit after tax have the following effect: 
 Basic earnings per share (pence)                                             9.2               6.3 
 Share based payments (including social security costs) (pence)               6.4               2.6 
 Exceptional items (pence)                                                    2.8               0.6 
 Amortisation of intangible assets arising on acquisitions (pence)            6.2               3.7 
 Tax effect of the above adjustments (pence)                                (3.1)             (1.7) 
-------------------------------------------------------------------  ------------  ---------------- 
 Adjusted basic earnings per share (pence)                                   21.5              11.5 
-------------------------------------------------------------------  ------------  ---------------- 
 
 
 Diluted earnings per share (pence)                                     8.7               5.9 
 Share based payments (including social security costs) (pence)         6.1               2.4 
 Exceptional items (pence)                                              2.7               0.5 
 Amortisation of intangible assets arising on acquisitions (pence)      5.9               3.5 
 Tax effect of the above adjustments (pence)                          (2.9)             (1.6) 
-------------------------------------------------------------------  ------  ---------------- 
 Adjusted diluted earnings per share (pence)                           20.5              10.7 
-------------------------------------------------------------------  ------  ---------------- 
 

(1) 2018 figures have been restated to reflect the bonus element of the rights issue that took place in August 2018.

   10.   Intangible assets 
 
                                                            Magazine 
                                             Goodwill    and website     Other      Total 
 Group                                           GBPm           GBPm      GBPm       GBPm 
------------------------------------------  ---------  -------------  --------  --------- 
 Cost 
  At 1 October 2017                             329.2           38.2      18.8      386.2 
  Additions through business combinations        34.1           83.3         -      117.4 
  Other additions                                   -              -       1.2        1.2 
  Adjustments to fair value on prior            (0.2)              -         -      (0.2) 
   year acquisitions 
  Exchange adjustments                            0.9            0.1         -        1.0 
------------------------------------------  ---------  -------------  --------  --------- 
 At 30 September 2018                           364.0          121.6      20.0      505.6 
  Additions through business combinations        74.4            0.4         -       74.8 
  Other additions                                   -              -       1.3        1.3 
  Adjustments to fair value on prior             31.5         (30.6)         -        0.9 
   year acquisitions 
  Disposal                                      (0.2)              -         -      (0.2) 
------------------------------------------  ---------  -------------  --------  --------- 
 At 31 March 2019                               469.7           91.4      21.3      582.4 
------------------------------------------  ---------  -------------  --------  --------- 
 
  Accumulated amortisation and impairment 
   At 1 October 2017                          (263.4)         (14.2)    (16.3)    (293.9) 
   Charge for the year                              -          (5.7)     (1.6)      (7.3) 
   Exchange adjustments                         (0.8)          (0.2)         -      (1.0) 
------------------------------------------  ---------  -------------  --------  --------- 
 At 30 September 2018                         (264.2)         (20.1)    (17.9)    (302.2) 
  Charge for the year                               -          (5.1)     (0.7)      (5.8) 
  Exchange adjustments                              -              -         -          - 
------------------------------------------  ---------  -------------  --------  --------- 
 At 31 March 2019                             (264.2)         (25.2)    (18.6)    (308.0) 
------------------------------------------  ---------  -------------  --------  --------- 
 
 Net book value at 31 March 2019                205.5           66.2       2.7      274.4 
------------------------------------------  ---------  -------------  --------  --------- 
 Net book value at 30 September 
  2018                                           99.8          101.5       2.1      203.4 
------------------------------------------  ---------  -------------  --------  --------- 
 Net book value at 1 October 2017                65.8           24.0       2.5       92.3 
------------------------------------------  ---------  -------------  --------  --------- 
 

Acquired intangibles relate mainly to trademarks, advertising relationships, publishing rights and customer lists. These assets are amortised over their estimated economic lives, typically ranging between one and ten years.

Any residual amount arising as a result of the purchase consideration being in excess of the value of acquired assets is recorded as goodwill.

Further details regarding the intangible assets acquired during the year through business combinations are set out in note 14.

Other intangibles relate to capitalised software costs and website development costs which are internally generated.

Amortisation is included within administration expenses in the consolidated income statement.

   11.   Financial instruments 

Adoption of IFRS 9 Financial Instruments

IFRS 9 Financial Instruments became effective for the Group from 1 October 2018. The standard has been applied fully retrospectively, as required by IFRS 9, but the designation of financial assets and liabilities has been taken at the date of initial application. The Group has adopted the simplified approach to recognise lifetime credit losses for trade receivables. The change in approach has not had a material impact on the provision for bad debt.

IFRS 9 largely retains the existing classifications for financial liabilities. For the Group's financial assets, the following table shows the new measurement categories under IFRS 9:

 
 Financial asset                 IFRS 9 classification               Previous classification under IAS 39 
------------------------------  ----------------------------------  ------------------------------------- 
 Cash and cash equivalents       Amortised cost                      Loans and receivables 
 Trade and other receivables     Amortised cost                      Loans and receivables 
 Derivative - purchased option   Fair value through profit or loss   N/a 
------------------------------  ----------------------------------  ------------------------------------- 
 

There has not been a significant impact on the carrying amounts of assets held.

The following table presents the Group's financial assets and liabilities that are measured at fair value at 31 March 2019:

 
                                      Level 2       Level 3 
                                   Fair value    Fair value 
                                         GBPm          GBPm 
------------------------------  -------------  ------------ 
 Assets 
 Financial asset - derivative             0.6             - 
 Liabilities 
 Contingent consideration                   -          29.3 
------------------------------  -------------  ------------ 
 

The contingent consideration relates to the acquisition of MoNa Mobile Nations, LLC (see note 14 for further details). A derivative foreign currency option to buy $30m in June 2020 was acquired in order to hedge the currency exposure arising on the contingent consideration. In the comparative period no financial assets or liabilities were measured at fair value. There were no transfers between levels in the current or prior period.

The derivative option has been valued using rates available from publicly-quoted sources.

The contingent consideration has been valued using a scenario-based approach drawing from internal EBITDAE projections and forecasts and weighting them according to the perceived probability of being achieved. The outcome is then discounted to reflect the market risk related to the earn outs and underlying achievement of the EBITDAE targets. The discount rate of 9% was determined using a Capital Asset Pricing Model (CAPM) approach.

The main level 3 inputs used in valuing the contingent consideration are EBITDAE and the discount rate, as shown in the table below.

 
 Assumption 
---------------   --------------- 
 Discount rate                 9% 
 EBITDAE           $7.1m - $12.5m 
----------------  --------------- 
 

The table below sets out the sensitivity of level 3 inputs to a 10% change in the assumptions, which is considered to be a reasonably possible alternative assumption:

 
 Assumption      Increase/(decrease)   Increase/(decrease) in liability 
--------------  --------------------  --------------------------------- 
 Discount rate                   10%                          GBP(0.3)m 
 Discount rate                 (10)%                            GBP0.3m 
 EBITDAE                         10%                            GBP7.4m 
 EBITDAE                       (10)%                         GBP(13.1)m 
--------------  --------------------  --------------------------------- 
 
   12.   Issued share capital 

During the period 353,350 Ordinary shares (31 March 2018: 350,380) with a nominal value of GBP53,003 (31 March 2018: GBP52,557) were issued by the Company pursuant to share scheme exercises throughout the period.

Additionally, 615,166 Ordinary shares were issued as consideration for the acquisition of MoNa Mobile Nations, LLC, with a nominal value of $5 million.

As at 31 March 2019 there were 82,487,107 Ordinary shares in issue (31 March 2018: 45,743,194).

   13.   Contingent assets and contingent liabilities 

At 31 March 2019 there were no material contingent assets (31 March 2018: GBPnil). During the period, a contingent liability of GBP29.3m was recognised for variable deferred contingent consideration on the acquisition of MoNa Mobile Nations, LLC (31 March 2018: GBPnil). See note 14 for further details regarding the acquisition.

   14.   Acquisitions 

Immediate Media titles

On 13 February 2019 Future plc acquired two specialist consumer brands from Immediate Media, CyclingNews.com and Procycling Magazine, for consideration of GBP1.65 million. Cycling News is the leading cycling news website in the UK, while Procycling is the market-leading magazine within the professional cycling arena. Fair values of assets relating to this acquisition are provisional.

MoNa Mobile Nations, LLC

On 1 March 2019 Future plc acquired MoNa Mobile Nations, LLC ("Mobile Nations"), a leading global digital publisher focused on consumer electronics and based in the US. The initial cash consideration paid was $55 million with a further $5 million satisfied through the issue of 615,166 new ordinary shares. In addition, a further variable deferred contingent consideration up to a total value of $60 million will be paid, subject to meeting certain financial targets based on the year ending 31 March 2020. 100% of the voting equity interest was acquired.

The impact of the acquisition on the consolidated balance sheet was:

 
                                 Provisional 
                                  fair value 
                                        GBPm 
------------------------------  ------------ 
 Intangible assets                       0.4 
  Trade and other receivables            2.6 
  Trade and other payables             (0.1) 
------------------------------  ------------ 
 Net assets acquired                     2.9 
------------------------------  ------------ 
 Goodwill                               72.7 
------------------------------  ------------ 
                                        75.6 
------------------------------  ------------ 
 Consideration: 
  Cash                                  42.0 
  Equity shares                          4.3 
------------------------------  ------------ 
 Total consideration paid               46.3 
------------------------------  ------------ 
 Contingent consideration               29.3 
------------------------------  ------------ 
 Total consideration                    75.6 
------------------------------  ------------ 
 

Included within the Group's results for the period are revenues of GBP1.1m and a profit before tax of GBP0.5m (excluding deal fees, associated integration costs and acquired intangible amortisation) from Mobile Nations.

If the acquisition had been completed on the first day of the financial year, it would have contributed GBP7.7m of revenue and a profit before tax of GBP3.7m (excluding deal fees, associated integration costs and acquired intangible amortisation) during the period.

The fair values are described as 'provisional' as the acquisition occurred within one month of the balance sheet date and so further time is required in order to fully ascertain the fair value of assets and liabilities acquired.

See note 11 for the assumptions used in determining the fair value of the contingent consideration and sensitivities of these assumptions to a reasonably possible change.

Acquisition of Purch Group LLC - update to fair values

On 4 September 2018, Future US Inc. acquired 100% of the share capital of Purch Group LLC, as disclosed in the Annual Report for the year ended 30 September 2018. An update to the fair value of the assets has been performed, as detailed below:

 
                                 Fair value 
                                       GBPm 
------------------------------  ----------- 
 Intangible assets 
   - Customer relationships            17.3 
   - Brands                            21.9 
   - Software                           2.8 
  Trade and other receivables          10.9 
  Trade and other payables            (4.8) 
------------------------------  ----------- 
 Net assets acquired                   48.1 
------------------------------  ----------- 
 Goodwill                              51.7 
------------------------------  ----------- 
                                       99.8 
------------------------------  ----------- 
 Consideration: 
  Cash                                 99.8 
------------------------------  ----------- 
 Total consideration                   99.8 
------------------------------  ----------- 
 

The Purch acquisition occurred within one month of the FY18 balance sheet date and following the passage of time further information has become available to the Directors which has enabled the calculation of the fair value of the assets and liabilities acquired to be refined. As part of this exercise, assets previously identified as websites have been re-categorised as brands to better reflect the underlying nature of the intangible assets acquired.

Statement of Directors' responsibilities in respect of the financial statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial 6 month period. Under that law the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the Group financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and of the profit or loss of the Group for that period. In preparing the financial statements, the Directors are required to:

   --      select suitable accounting policies and then apply them consistently; 

-- state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements;

   --      make judgements and accounting estimates that are reasonable and prudent; and 

-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation.

The Directors are responsible for the maintenance and integrity of the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' confirmations

The Directors consider that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the Statement of Directors' Responsibilities confirm that, to the best of their knowledge:

-- the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

-- the Operational Review includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the Directors' Report is approved:

-- so far as the Director is aware, there is no relevant audit information of which the Group's auditors are unaware; and

-- they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group's auditors are aware of that information.

A list of current Directors is maintained on the Future plc website, www.futureplc.com.

By order of the Board

Directors

Richard Huntingford

Independent Non-Executive Chairman

Zillah Byng-Thorne

Chief Executive

Penny Ladkin-Brand

Chief Financial Officer and Company Secretary

Hugo Drayton

Independent Non-Executive

Alan Newman

Independent Non-Executive

Rob Hattrell

Independent Non-Executive

17 May 2019

The maintenance and integrity of the Future plc website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Independent review report to Future plc

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed Future plc's condensed consolidated interim financial statements (the "interim financial statements") in the half-year results announcement of Future plc for the 6 month period ended 31 March 2019. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The interim financial statements comprise:

   --       the consolidated balance sheet as at 31 March 2019; 

-- the consolidated income statement and consolidated statement of comprehensive income for the period then ended;

   --       the consolidated cash flow statement for the period then ended; 
   --       the consolidated statement of changes in equity for the period then ended; and 
   --       the explanatory notes to the interim financial statements. 

The interim financial statements included in the half year results have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

As disclosed in the basis of preparation to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the Directors

The half-year results announcement, including the interim financial statements, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-year results announcement in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the interim financial statements in the half-year results announcement based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the half-year results announcement and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

Bristol

17 May 2019

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

IR MMGMKRVGGLZM

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May 17, 2019 02:00 ET (06:00 GMT)

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