We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Future Plc | LSE:FUTR | London | Ordinary Share | GB00BYZN9041 | ORD 15P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -6.50 | -1.06% | 609.00 | 609.50 | 610.50 | 628.50 | 605.50 | 617.00 | 737,324 | 16:35:24 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Miscellaneous Publishing | 788.9M | 113.4M | 0.9782 | 6.24 | 707.17M |
From Apr 2021 to Apr 2024
TIDMFUTR
RNS Number : 0620Z
Future PLC
19 May 2021
19 May 2021
FUTURE plc
2021 HALF YEAR RESULTS
Strategic momentum continues: record HY results, materially ahead of market expectations, with strong organic growth and margin progression
Future plc (LSE: FUTR, "Future", "the Group"), the global platform for specialist media, today publishes its results for the six months ended 31 March 2021.
Highlights
Financial results for the six months ended 31 March 2021
Hot Features
Premium
Adjusted results HY 2021 HY 2020 Var
-------- -------- ------
Revenue (GBPm) 272.6 144.3 +89%
Adjusted operating profit (GBPm)(1) 89.2 39.9 +124%
-------- -------- ------
Adjusted operating profit margin (%) 33% 28% +5ppt
-------- -------- ------
Adjusted diluted EPS (p) 65.4 32.9 +99%
--------------------------------------- -------- -------- ------
Statutory results HY 2021 HY 2020 Var
--------------------------------------- -------- -------- ------
Revenue (GBPm) 272.6 144.3 +89%
Operating profit (GBPm) 59.7 24.7 +142%
-------- -------- ------
Profit before tax (GBPm) 56.9 27.1 +110%
-------- -------- ------
Cash generated from operations (GBPm) 85.9 35.7 +141%
-------- -------- ------
Diluted EPS (p) 40.7 21.8 +87%
--------------------------------------- -------- -------- ------
Financial highlights
Robust first-half performance extending our track record of growth in revenue, operating profit and cash flow:
-- An exceptionally strong first half, with revenue up 89% to GBP272.6m (HY 2020: GBP144.3m). Revenue ahead of last year by 21% on an organic(2) basis, driven by the Media division's organic(2) growth of 30% and in particular digital advertising on-platform organic(2) growth of 30% and eCommerce affiliates' organic(2) growth of 56%. US achieved revenue growth of 31% on an organic(2) basis and UK revenues grew by 5% organically (UK has a higher mix of events and magazines revenues which were impacted more materially by the pandemic). Management estimates that COVID-19 related one-off revenue benefit for eCommerce is in the region of GBP5m in the period.
-- Improved quality of earnings, resulting from favourable revenue mix, scalability of the model, and platform effect: reflected by the strong adjusted operating profit(1) margin of 33%, up 5ppt year-on-year (HY 2020: 28%). Adjusted operating profit(1) up 124% to GBP89.2m (HY 2020: GBP39.9m), and statutory operating profit up 142% to GBP59.7m (HY 2020: GBP24.7m)
-- The Group remains highly cash generative with strong adjusted free cash flow(3) of GBP93.9m (HY 2020: GBP40.0m), representing 105% of adjusted operating profit (HY 2020: 100%).
-- Leverage(4) of 1.3x (FY 2020: 0.6x) reflecting rapid de-levering of the Group following the acquisition of GoCo, resulting in net debt at half year of GBP241.3m (FY 2020: GBP62.1m).
Operational and Strategic Highlights
Future's strategy is to be a global platform for intent-led specialist media underpinned by technology, and enabled by data; with material, scalable, diversified brands. Over the last 6 months the execution of our strategy continued to deliver exceptional results:
-- Record engagement as we meet our audiences' needs, with total reach(5) of 419m a month, and online user(6) growth of 31% yoy to 311m (HY 2020: 237m).
-- Our high quality of audiences and data has resulted in a 19% increase in direct advertising campaigns which has underpinned digital advertising display yield mix growth of 34%.
-- Future's ability to deliver audiences with intent to retailers resulted in 95% yoy increase in merchants achieving sales from Future sites.
-- Platform effect continues to deliver; even with significant investment in editorial, including the creation of around 150 new roles and around 37 new roles in the technology team in HY 2021, while costs per head reduced 10% yoy.
-- Our successful strategy of accelerating growth through acquisitions continues to deliver:
o Ongoing delivery of benefits from TI Media - acquired in April 2020; performance has been ahead of expectations with online user growth of 54% in March 2021 vs prior year, while eCommerce revenues grew 277% in March 2021 vs prior year.
o Integration of GoCo - acquired in February 2021 - well advanced with a very strong performance in the period. Cost synergies arising from the transaction are now expected to be GBP15m per annum (versus earlier forecasts of GBP10m per annum).
o Post-period end, in May 2021 we announced the acquisition of Marie Claire US which strengthens our position in the women's lifestyle vertical in North America, in line with the Group's strategy to achieve brand vertical leadership with a North America-first approach.
Outlook
-- Expect full-year results to be materially ahead of market expectations, underpinned by exceptional H1 performance.
-- While we remain cautious around the wider macroeconomic uncertainties associated with COVID-19, Q3 has started ahead of management expectations
Zillah Byng-Thorne, Future's Chief Executive, said:
"I am delighted to report the ongoing successful execution of our strategy with record revenue and profit in this half, materially ahead of market expectations. Following an exceptional eCommerce and digital advertising performance during Black Friday and Christmas in Q1, we have carried this strong trading momentum through to the end of the first half.
"The progress we continue to make is testament to the diversity of our revenue streams, the agility of our people, and the scalable operating model we have built over time, which generates long-term sustainable growth.
"Content and data sit at the heart of our business; the depth of our market-leading, specialist brands m eans that today we reach one in three people online in the US and UK. Thanks to our expert content, combined with our scalable proprietary technology, we continue to increase our reach; the recent acquisition of Marie Claire US is another enabler of our ongoing focus on vertical leadership.
"We know our audiences increasingly seek intent-driven content and authoritative advice to inform their purchasing decisions. We were therefore delighted to acquire GoCo Group and Mozo during the period, accelerating our strategy by extending our eCommerce proposition beyond products into services, further diversifying our revenue streams.
"Looking ahead, we are well positioned to sustain the growth momentum we have built over recent years. Whilst we remain cautious about the wider macroeconomic uncertainties associated with COVID-19, we are confident in the outlook for the Group and expect the full year to be materially ahead of market expectations, underpinned by an exceptional H1 performance."
Presentation
A live webcast of the analyst presentation will be available at 08.30 am (UK time) today at https://webcasting.brrmedia.co.uk/broadcast/6087e9640386285386ccb4ae
A copy of the presentation will be available on our website at https://investor.futureplc.com/results-home/
A recording of the webcast will also be made available.
The definitions below apply throughout the document.
1) Adjusted operating profit represents profit after tax adjusted for share-based payments (relating to equity settled awards with vesting periods longer than 12 months) and related social security costs, interest, tax, amortisation of acquired intangible assets, fair value movements on contingent consideration (and unwinding of associated discount) and currency option, exceptional items and any related tax effects.
2) Organic growth defined as the like for like portfolio excluding acquisitions and disposals made during FY 2020 and FY 2021 at constant FX rates.
3) Adjusted free cash flow is defined as adjusted operating cash inflow less capital expenditure. Adjusted operating cash inflow represents cash generated from operations adjusted to exclude cash flows relating to exceptional items and settlement of employer's taxes on share based payments, and to include lease repayments following adoption of IFRS 16 Leases.
4) Leverage is defined as debt as a proportion of EBITDA adjusted for the impact of IFRS 16 and including the 12 month trailing impact of acquired businesses (in line with the Group's bank covenants definition).
5) Audience reach includes: online users (excluding forums), print and digital magazine and bookazines circulation, email newsletter subscribers, social media followers and event attendees.
6) Online users defined as monthly online users from Google Analytics and, unless otherwise stated, is the monthly average over the financial period. Forums are excluded as they are non-commercial websites for which Future does not write content, and are not actively managed or monetised. HY 2020 online users has been restated to exclude forums.
7) Proforma numbers compare at constant exchange rates the performance of acquisitions on a like for like basis.
Enquiries:
Future plc +44 (0)122 544 2244
Zillah Byng-Thorne, Chief Executive Officer
Rachel Addison, Chief Financial Officer
Marion Le Bot, Head of Investor Relations
+44 (0)777 564 1509
Media
Headland
+44 (0)203 805 4822
Stephen Malthouse, Rob Walker, Charlie Twigg
future@headlandconsultancy.com
About Future
Future is a global platform business for specialist media with diversified revenue streams. Its content reaches over 1 in 3 adults online in both the UK and the US.
The Media division is high-growth with complementary revenue streams including eCommerce for products and services, events, and digital advertising (including advertising within newsletters). It operates in a number of sectors including technology, games & entertainment, music, home & gardens, sports, TV & film, real life, women's lifestyle and B2B. Its brands include TechRadar, PC Gamer, Tom's Guide, Android Central, Truly, Digital Camera World, Homebuilding & Renovating Show, GamesRadar+, The Photography Show, Top Ten Reviews, Marie Claire, Live Science, Guitar World, MusicRadar, Space.com, What to Watch, Gardening Etc, Adventure and Tom's Hardware.
The Magazine division focuses on publishing specialist content, with a combined global circulation of over 3 million delivered through more than 115 magazines, and 410 bookazines published a year. The portfolio spans technology, games & entertainment, sports, music, photography & design, homes & garden, country lifestyle, TV & film and B2B. Its titles include Country Life, Wallpaper, Woman & Home, Classic Rock, Decanter, Guitar Player, FourFourTwo, Homebuilding & Renovating, Digital Camera, Guitarist, How It Works, Total Film, What Hi-Fi? and Music Week.
Strategic and operational update
We have a relentless focus on the sustainable execution of our strategy - to be a leading global platform for intent-led specialist media underpinned by technology, enabled by data with scalable, diversified revenue streams. Our legacy media brands are the fuel that drives our engine, while releasing the benefit of our platform from previous acquisitions. We are focussed on organic growth across all key metrics, delivered as a result of our global approach to our audience reach, and using our operating model to enable a digitally-led publishing strategy.
Our strategy has continued to deliver during the last six months, as we made considerable progress and continued to drive strong organic growth alongside the acquisitions of GoCo, Mozo and the recently announced acquisition of Marie Claire US. This progress helped not only to deliver record results, but also ensure that Future is well placed for continued growth and success.
Growing our audience
Our strategy is centred around meeting our audience's needs, ensuring we continue to be the trusted expert that helps them do the things they love, and make the decisions that matter most to them. As a result of our continued focus on creating the best quality content and experiences for our audiences, our overall audience has grown to 419m (FY 2020: 394m) underpinned by our online users, which have grown 31% year-on-year to 311m (HY 2020: 237m).
The first six months of last year (2020) saw unusual audience spikes associated with the pandemic, while much of this traffic looked for advice from our sites, it was not typical of the normal intent traffic we would expect to see. As we anniversary this period we are seeing some slowdown in our organic audience growth, at 8% in H1, largely driven by declines in LiveScience (30% decline in H1) which was a key area of growth last year.
Our legacy Future sites continue to perform strongly with stand-out performances from our Tech and Gaming sites, with Gaming online users up 27% in the half. The acquired TI Media brands are benefiting from the Future operating model and centre's of excellence approach, with revised editorial strategies and significantly enhanced SEO skills, coupled with a North America first mindset. This has resulted in online users for TI Media brands growing by 54% in March 2021 on a proforma basis, translating into an increase in eCommerce revenue of 277% against proforma.
Our new launches have gained good traction, with Fit&Well reaching 586k online users in March 2021 since launch last July and ranking top position in the UK and US for targeted search terms. My Imperfect Life has achieved 360k online users in March 2021 since launch in September last year, whilst Gardening Etc, launched in the summer of last year, is well positioned to capitalise on the peak gardening season, reaching over 1m sessions in March of this year.
Our significant scale and relevant content in B2C means we now reach 33% and 48% of internet users in the US and UK respectively. In addition, our social reach has grown to over 114m followers.
Effective and diversified monetisation
Our world-class content is delivered by our editorial teams who have excelled in responding to audience demands for relevant, useful and engaging content (both online and in print), all whilst largely working from home.
This relevant content, delivering high-intent audiences at scale, together with our data and analytics capability has enabled us to respond to advertisers' needs and capitalise on eCommerce demand. Media revenues grew 30% organically in the period, driven by organic digital advertising growth (on and off-platform) of 26% and eCommerce affiliate organic revenue growth of 56%, while the impact of COVID-19 restrictions on in-person events resulted in revenue from events declining by 81% on an organic basis.
Whilst the backdrop of the last six months has been highly unusual, management believes that the trends noted above are largely reflective of the ongoing momentum in the business. It is our view that the impact of the prolonged UK lockdown in January-March, coupled with the US Government stimulus checks in the US resulted in an estimated GBP5m of one-off COVID-19 related benefit to eCommerce revenues but we do not believe that the digital advertising performance was materially affected. The Group's magazines and in-person events performance has been adversely impacted by the pandemic.
Future's endemic brands and global scale coupled with our proprietary data platform (Aperture) has enabled us to leverage the knowledge of our audience's interests, preferences and intent to deliver a strong fundamental offering for advertisers. This has translated into a 19% increase in direct sold advertising campaigns which are typically the highest yielding digital advertising inventory and 34% growth in advertising yields partly due to this change in advertising mix.
Our content and industry expertise in the B2B market is translating into a growing and targeted email newsletter subscriber base, driving revenue growth across a number of key categories, with SmartBrief revenue growing 22% underpinned by a number of initiatives including SmartSummits, SmartStudio (delivering growth of 300% in March 2021 vs last year) and key new partner wins.
The mastery of our video creative team has engaged over 80 million followers on social media over the past six months, with 500m average monthly views, delivering AVOD (Advertising-based Video On Demand) revenue growth of 36% (vs proforma) on social channels. Following the acquisition of Barcroft (November 2019) we have created Future Studios, a centre of excellence for video across the Group which has resulted in an increase in the video content distributed across the verticals. Highlights over the period have included launching a new programme of shows, including "Totally Game Season 2" within the gaming vertical, "Totally Rated", a weekly review show across technology and gaming verticals, and "Seriously", a debate show about evergreen topics across our verticals.
In our eCommerce business, our data insight based on real time trading data has enhanced our ability to help our customers on their intent to purchase journey, seamlessly facilitated by our technology and retail partner network. We have continued to focus on ensuring that our content and technology meets our audiences' needs, helping them to make buying decisions. This work has included the continued optimisation of our eCommerce page templates and making improvements to our technology (Hawk) user experience by providing even clearer price comparison to users. The benefit of our proprietary technology platform has meant we were able to test and scale these learnings quickly. This work has been more timely than ever in a world that has seen an increased propensity for consumers to buy online.
Whilst the pandemic has continued to test some parts of our business due to restrictions in distribution and physical access (namely our magazine newsstand, physical events and TV production businesses), the business has continued to innovate with the launch of a number of new products. These range from the launch of 80 new first edition bookazines, 47 virtual events and commissions for new TV shows in the pipeline, greenlit for when filming restrictions are lifted. It has been amazing to see the determination of our teams to bring our content to our audiences, despite the challenges faced.
In addition, our broad portfolio of well-known and well-loved brands has delivered growth in magazine subscriptions, with revenue up 2% on an organic basis and 8% inorganically (TI brands) on a proforma basis, highlighting the resilience of this portfolio. Our magazine subscription business growth during this period is testament to how many of our customers value the time they spend reading their favourite magazine, and despite the challenges posed by retail closures, still sought to enjoy this content via a subscription.
Our financial results evidence our successful and diversified monetisation model, a key contributory factor to our continued operating profit growth.
Continued investment
The success that Future has seen in the last six months and over the last few years has resulted from creating a scalable business model, with targeted ongoing investment to drive growth, while ensuring centres of excellence reduce redundancy and low cost locations deliver efficiency of spend. A core part of our strategy is ensuring we deliver growth and returns over the long term and critical to enabling this is continued investment in our technology and people, a capital allocation priority.
Our proprietary tech platform continues to be a business enabler and we now have a total of 40 sites on the Vanilla website platform. In addition, we have been rapidly deploying new ad format functionality and eCommerce improvements to all our sites to unlock further potential for our brands. During the period we launched Kiosq, a new proprietary reusable paywall service for monetising gated editorial content, a strategic priority to enable longer term growth. We also made continued investments within our data science teams including the launch of Aperture, our customer audience data platform. Which when combined with our scale and the high-intent of our audiences, positions us very well in an environment with increased focus on first party data and consumer privacy.
Our team of talented technologists are key to our successful development programme. We have continued to invest in our people to ensure we deliver on our agreed business priorities and headcount has increased by 45% across the technology function in the period, whilst we are targeting growing the total headcount to 133 by the end of the year, a 90% increase vs last year.
While our technology and business model are a core part of our strategy, creating leading content is at our heart and we continue to have a strong commitment to investing in the content that grabs our users' attention and engages audiences like no other.
We have invested in our editorial teams and increased our headcount to extend and deepen our content coverage across our brand portfolio on our legacy and newly acquired brands as well as new launches. During the first half of the year we invested over GBP35m in the creation of content, with editorial headcount (inclusive of TI colleague transfers) nearly doubling year-on-year to over 1,000.
High-quality operating leverage
Whilst continuing to invest in our business and our people, our scalable operating model and disciplined approach to the integration of our acquisitions has driven exceptional profit results. Our sales, marketing, editorial and overhead costs have reduced year-on-year as a percentage of sales, while we have continued to invest across the board in these areas.
The completion of the TI Media integration in the period, ahead of schedule, has resulted in the delivery of TI Media cost synergy savings in the period of GBP4m, adding to the recognition of GBP3m savings in FY 2020. We remain on track to realise the full benefit of GBP20m cost synergies by FY 2022 which, as previously announced, is GBP5m higher than we originally estimated at the time of the acquisition.
We are delighted to have delivered a record adjusted operating profit margin of 33%, a 5 percentage point improvement on the prior period, which demonstrates the power of our platform.
Acquisitions
CinemaBlend - Strengthening our position in TV and film vertical
On 2 October 2020, Future US, Inc. acquired CinemaBlend, a premium digital entertainment publisher based in the US. CinemaBlend is a high-growth digital brand focused on the TV, film and entertainment market. Through its website, podcast series, social media channels and newsletters, CinemaBlend provides a platform for enthusiasts and casual fans to discover, explore and discuss films and TV shows, both on streaming services such as Netflix and linear TV such as HBO.
The acquisition of CinemaBlend further strengthened our TV and film vertical whilst continuing to diversify our reach in the US, and is in line with our strategy to hold podium positions across our verticals. Following this acquisition Future was number 4 in Comscore in the US in the Entertainment and Movies vertical in March 2021. Total consideration paid was $12.75m, 9.9x historic EBITDA.
We are delighted with the performance of this business which has added value from day one with its high audience growth that reached 24m in HY 2021, which has been capitalised upon by our sales teams.
Mozo and GoCo Group - Further diversifying our business model - eCommerce services
Future's diversification strategy continued, with the acquisitions of Mozo and GoCo in February 2021. We now have more opportunity to champion the needs of our customers. Leveraging industry leading technology and knowledge, these businesses provide customers with an expert service of clear and impartial advice, providing comparison services across the products that meet their needs. The acquisitions provide the opportunity to combine leading financial services insight with Future's expertise in customer acquisition and content creation, creating an enhanced brand proposition and monetisation opportunities through Future's revenue diversification strategy. Additionally, these acquisitions enable us to enter a new attractive content vertical - Personal & Home Wealth. This new vertical is in line with the high-intent characteristic of our audiences and our purpose of sharing our knowledge and expertise with others, helping them make important decisions about their homes and their finances.
Mozo
On 2 February 2021, the Group completed the acquisition of Mozo for a consideration of AUD$31.0m, 11.1x EBITDA. Mozo is a fast-growing Australian price comparison website focused on personal finance products such as home loans, credit, personal loans, banking and insurance. The Mozo business has been integrated into the existing Future operations in Australia, with a new strengthened local leadership team. Mozo is also collaborating with the GoCo teams and launched a broadband comparison proposition in May, amongst a number of initiatives.
GoCo Group ("GoCo")
The Group completed the acquisition of GoCo on the 17th February 2021. The introduction of GoCo to our business brings with it an already strong performance base across its three key business areas of price comparison, auto switching and voucher codes. The Future and GoCo teams have already started to work together on opportunities to leverage performance for the new combined business and we have seen early signs of success. For example, we have run successful trials for GoCompare on display ads to lower customer acquisition costs by reducing ad wastage. In addition, our SEO expertise has already delivered improvement: SEO is now the biggest source of revenue for MyVoucherCodes, translating into strong revenue growth of 82% on a proforma basis and GoCompare has seen ranking improvements from the no.4 slot on car insurance prior to acquisition to no.1 during May.
Having completed the organisational design and majority of the integration work we are now confident in our ability to exceed the previously announced cost synergies. We therefore increase our estimate of cost saving opportunities by 50% to GBP15m from GBP10m previously reported. The cost to deliver these changes are expected to be in the region of 31% (as a % of savings realised) vs the 47% previously indicated. This initiative is well underway with GBP0.5m of realised savings recognised in these reported results since acquisition.
Execution underpinned by values
Future operates as a purpose-driven organisation creating value for all stakeholders. Our strategy is clear that we will operate as a responsible business and everything we do is underpinned by our purpose and values which fosters an aligned culture across the organisation.
During the last six months one of the key priorities for our business has been the health and safety of our colleagues and we have continued to work from home in line with local government guidelines. A small number of our offices are open for those members of the team who currently need to work from a physical location due to personal or business reasons. During the winter we paid all colleagues up to a GBP1,000 stipend due to the increased complexity in their lives as a result of the ongoing pandemic restrictions. In addition we have continued to make hardship payments to any colleagues who may find themselves in financial duress. Over the last 6 months we have paid out in the region of GBP1.5m to colleagues as a combination of stipend and hardship awards.
Results matter, success feels good and communication is ever more important during this extended period of working from home. We remain focussed on strong communication to ensure that our colleagues are connected and supported. The frequent communication programme, including weekly CEO updates and monthly virtual town halls for all staff continues, as does our focus on mental health support with 50 trained mental health first aiders.
As we commence the return to office working we are ensuring we follow all government guidelines, and that everything that we can do to ensure the return to offices is as stress free for colleagues as possible, which includes the introduction of lateral flow testing protocols.
While our business has continued to perform during the pandemic we believe that for collaboration to flourish we do require a return to office-based working, in particular to ensure that our most junior colleagues have the opportunity to learn through observation. We also realise that many colleagues have enjoyed the flexibility of working from home, and we are delighted to be able to offer to the majority of our colleagues the flexibility to continue to work from home for up to two days a week, with the balance of their time spent back in one of our offices.
All employees share in our success, with our Value Creation Plan, as approved by shareholders, launched to our staff in April of this year.
We remain proud of and thankful to our colleagues for their ongoing support in what has been an extended period of difficulty for many.
Current trading and outlook
The strength of our performance to date is evidence of the successful execution of our growth strategy and as we look to the second half, we expect continued momentum in organic revenues and are confident that the recent acquisitions will deliver value for the Group. While we remain cautious about the wider macroeconomic uncertainties associated with COVID-19, we are confident in the outlook for the Group and expect the full year to be materially ahead of market expectations, underpinned by an exceptional H1 performance.
Financial summary
HY 2021 HY 2020
GBPm GBPm
--------------------------------------------- --------- ---------
Revenue 272.6 144.3
--------------------------------------------- --------- ---------
Adjusted operating profit(1) 89.2 39.9
Adjusted net finance costs(4) (2.8) (0.8)
--------------------------------------------- --------- ---------
Adjusted profit before tax(1) 86.4 39.1
--------------------------------------------- --------- ---------
Operating profit 59.7 24.7
Net finance (costs)/income (2.8) 2.4
--------------------------------------------- --------- ---------
Profit before tax 56.9 27.1
--------------------------------------------- --------- ---------
Basic earnings per share (p) 41.3 22.3
Adjusted basic earnings per share (p)(1) 66.4 33.7
--------------------------------------------- --------- ---------
Diluted earnings per share (p) 40.7 21.8
Adjusted diluted earnings per share (p)(1) 65.4 32.9
--------------------------------------------- --------- ---------
1) Adjusted operating profit represents profit after tax adjusted for share-based payments (relating to equity settled awards with vesting periods longer than 12 months) and related social security costs, interest, tax, amortisation of acquired intangible assets, fair value movements on contingent consideration (and unwinding of associated discount) and currency option, exceptional items and any related tax effects. Adjusted profit before tax represents adjusted operating profit less adjusted net finance costs.
2) Adjusted free cash flow is defined as adjusted operating cash inflow less capital expenditure. Adjusted operating cash inflow represents cash generated from operations adjusted to exclude cash flows relating to exceptional items and settlement of employer's taxes on share based payments, and to include lease repayments following adoption of IFRS 16 Leases.
3) Organic growth defined as the like for like portfolio excluding acquisitions and disposals made during FY 2020 and FY 2021 at constant FX rates.
4) Adjusted net finance costs represent net finance costs before fair value movements on contingent consideration (and unwinding of associated discount) and currency option.
Items described as adjusted in the table above exclude the items detailed as 'adjusting' in the 'Reconciliation of non-statutory measures' section below. Adjusted items are non-GAAP measures.
Reconciliation of non-statutory measures
Adjusted operating profit reconciles to statutory profit before tax as follows:
HY 2021 HY 2020
GBPm GBPm
--------------------------------------------------------------------------- ---------
Adjusted operating profit 89.2 39.9
------------------------------------------------------------------ -------- ---------
Adjusted net finance costs (2.8) (0.8)
------------------------------------------------------------------ -------- ---------
Adjusted profit before tax 86.4 39.1
------------------------------------------------------------------ -------- ---------
Adjusting items:
Share based payments (including related social security costs) (2.7) (1.7)
Exceptional items (11.5) (4.4)
Amortisation of acquired intangibles (15.3) (9.1)
------------------------------------------------------------------ -------- ---------
Unwinding of discount on contingent consideration - (0.8)
------------------------------------------------------------------ -------- ---------
Fair value gain on contingent consideration - 5.2
------------------------------------------------------------------ -------- ---------
Fair value loss on currency option - (1.2)
------------------------------------------------------------------ -------- ---------
Statutory profit before tax 56.9 27.1
------------------------------------------------------------------ -------- ---------
The financial review is based primarily on a comparison of adjusted results for the six months ended 31 March 2021 with those for the six months ended 31 March 2020. Unless otherwise stated, change percentages relate to a comparison of these two periods.
The Group furthered its diversification strategy in the first half with the acquisition of GoCo and Mozo during the period, which accelerated the strategy by extending the Group's eCommerce proposition beyond products into services.
Revenue Sub-segment HY 2021 Sub-segment HY 2020
GBPm GBPm
--------------------------------------- -------------- -------- -------------- -------- -------- ---------------
UK US Total UK US Total
GBPm GBPm GBPm GBPm GBPm GBPm YoY Var 2020 Full Year
--------------------------------------- ------ ------ -------- ------ ------ -------- -------- ---------------
Digital display advertising on
platform 23.9 45.6 69.5 14.1 33.7 47.8 45% 99.6
Digital display advertising off
platform 5.7 16.2 21.9 3.8 14.5 18.3 20% 40.6
--------------------------------------- ------ ------ -------- ------ ------ -------- -------- ---------------
eCommerce affiliates 41.3 43.9 85.2 11.4 28.0 39.4 116% 79.3
--------------------------------------- ------ ------ -------- ------ ------ -------- -------- ---------------
Events, digital licensing, other
online 4.4 1.6 6.0 6.1 3.4 9.5 (37%) 17.8
--------------------------------------- ------ ------ -------- ------ ------ -------- -------- ---------------
Total Media 75.3 107.3 182.6 35.4 79.6 115.0 59% 237.3
--------------------------------------- ------ ------ -------- ------ ------ -------- -------- ---------------
Print & digital content 63.5 1.5 65.0 16.8 2.0 18.8 246% 73.7
--------------------------------------- ------ ------ -------- ------ ------ -------- -------- ---------------
Print advertising, licensing,
publisher services and other print 22.7 2.3 25.0 6.2 4.3 10.5 138% 28.6
--------------------------------------- ------ ------ -------- ------ ------ -------- -------- ---------------
Total Magazines 86.2 3.8 90.0 23.0 6.3 29.3 207% 102.3
--------------------------------------- ------ ------ -------- ------ ------ -------- -------- ---------------
Total revenue 161.5 111.1 272.6 58.4 85.9 144.3 89% 339.6
--------------------------------------- ------ ------ -------- ------ ------ -------- -------- ---------------
Group revenue was GBP272.6m (HY 2020: GBP144.3m), reflecting the impact of FY 2020 and HY 2021 acquisitions which contributed GBP107.8m of revenue.
In the period, UK revenue increased by 177% to GBP161.5m (HY 2020: GBP58.4m) and US revenue increased by 29% to GBP111.1m (HY 2020: GBP85.9m). The US achieved revenue growth of 31% on an organic(3) basis at constant currency (25% at actual currency). 41% of Group revenue is derived from the US (HY 2020: 60%). UK revenues grew by 5% organically(3) (UK has a higher revenue mix of events and magazines revenues which were impacted more materially by the pandemic) and reported revenues include the acquisition of TI Media in April 2020.
Media revenue grew very robustly on an organic(3) basis by 30%. The strong growth was mainly driven by digital advertising on platform which was up 30% and eCommerce affiliate growth of 56% year-on-year.
The Magazine division demonstrated an improving trend against pre-pandemic comparators with revenue decreasing on an organic(3) basis by 15%.
Included below is a reconciliation between statutory revenue and organic(3) revenue:
HY 2021 HY 2020
--------- ---------
Total revenue 272.6 144.3
Revenue from FY 2021 and FY 2020 acquisitions (107.8) (4.1)
------------------------------------------------ --------- ---------
Organic revenue 164.8 140.2
------------------------------------------------ --------- ---------
Currency translation differences 5.3 0.6
------------------------------------------------ --------- ---------
Organic revenue at constant currency 170.1 140.8
------------------------------------------------ --------- ---------
Operating profit
Statutory operating profit increased by GBP35.0m to GBP59.7m (HY 2020: GBP24.7m). Statutory operating margin increased by 5ppt to 22% (HY 2020: 17%). The Group's adjusted operating profit increased to GBP89.2m (HY 2020: GBP39.9m), reflecting the strong growth of the Media division and the operating leverage provided by the increased scale of the Group.
Earnings per share
HY 2021 HY 2020
-------- ---------
Adjusted basic earnings per share (p) 66.4 33.7
Basic earnings per share (p) 41.3 22.3
Adjusted diluted earnings per share (p) 65.4 32.9
Diluted earnings per share (p) 40.7 21.8
------------------------------------------ -------- ---------
Adjusted earnings per share is based on profit after taxation which is then adjusted to exclude share-based payments (relating to equity-settled share awards with vesting periods longer than 12 months) and associated social security costs, fair value movements on contingent consideration (and unwinding of associated discount) and currency option, exceptional items, amortisation of acquired intangible assets and any related tax effects.
Adjusted profit after tax amounted to GBP68.3m (HY 2020: GBP31.7m) and the weighted average diluted number of shares in issue was 104.4m (HY 2020: 96.4m), the increase reflecting the issue of 22.6m shares in February 2021 to part-fund the GoCo acquisition.
Exceptional items
Exceptional costs amounted to GBP11.5m (HY 2020: GBP4.4m) and relate largely to deal fees in respect of the GoCo acquisition (GBP10.2m) and subsequent integration and restructuring of GoCo (GBP1.8m), as well as a GBP0.5m write off of a GoCo onerous property liability, offset by a release of GBP1.0m on surrender of an existing lease liability on which an exceptional charge was previously recognised. Exceptional costs relating to the GoCo acquisition total GBP12.5m.
Net finance costs and refinancing
In order to fund the acquisition of GoCo the Group agreed a new GBP215m term loan in November 2020 which amortises at GBP20m per quarter from June 2021 with a bullet of GBP95m payable in November 2022. The Group's GBP30m short dated COVID-19 facility was cancelled as it was no longer required.
The term loan is being provided by the existing members of the Group's banking syndicate which provide the RCF (HSBC, Natwest and Bank of Ireland) as well as the Group's new banking partners; Barclays, Citibank, Fifth Third Bank and Silicon Valley Bank.
Adjusted finance costs increased to GBP2.8m (HY 2020: GBP0.8m), reflecting the costs associated with the GBP215m term loan used to fund the acquisition of GoCo and interest associated with the RCF that has been rapidly paid down following the acquisition of TI Media in April 2020. The Group has continued to focus on efficient management of its cash position.
At 31 March 2021 the Group was in a net debt position of GBP241.3m and had headroom of GBP104.1m on its available bank facilities and cash on hand. This equates to leverage of 1.3x (FY 2020: 0.6x) (defined as debt as a proportion of EBITDA adjusted for the impact of IFRS 16 and including the 12-month trailing impact of the acquired businesses, in line with the Group's bank covenants definition).
Taxation
The tax amount for the six months ended 31 March 2021 is based on the effective tax rate, estimated on a full year basis, being applied to the statutory profit for the six months ended 31 March 2021. The Group's adjusted effective tax rate is 21% (HY 2020: 19%).
The Group's statutory effective tax rate is 26% (HY 2020: 23%) with the difference between the statutory rate and adjusted effective rate being the impact of certain exceptional items not being deductible for tax purposes offset by the impact of share based payment deductions.
In the March 2021 Budget the UK Government announced that legislation will be introduced in Finance Bill 2021 to increase the main rate of UK corporation tax from 19% to 25%, effective 1 April 2023. Then, in April the US Treasury announced their intent to increase the Federal rate of Corporate Income Tax from 21% to 28%. As neither of these changes had been substantively enacted at the balance sheet date, the deferred tax balances as at 31 March 2021 continue to be measured at a UK rate of 19% and a US Federal rate of 21%. If the 25% UK tax rate had been used at the balance sheet date, the deferred tax liability would have been GBP20.0m higher. If the 28% US Federal tax rate had been used the deferred tax liability would have been GBP0.4m higher.
Cash flow and net debt
Net debt at 31 March 2021 was GBP241.3m (FY 2020: GBP62.1m, HY 2020: net cash of GBP52.7m).
Adjusted operating cash inflow was GBP98.0m (HY 2020: GBP42.2m). Adjusting items are shown in the table below. Exceptional cash flows of GBP15.3m represent deal fees associated with the acquisition of GoCo (GBP10.1m), restructuring and redundancy costs associated with TI Media (GBP2.6m) and GoCo (GBP1.3m) and vacant property lease payments (GBP1.3m). Lease payments have been included in adjusted operating cash flows to ensure consistency with operating profit following adoption of IFRS 16 Leases.
Capital expenditure was GBP4.1m (HY 2020: GBP2.2m) in the period.
A reconciliation of cash generated from operations to adjusted free cash flow is included below:
HY 2021 GBPm HY 2020 GBPm
--------------------------------------------------------- ------------- -------------
Cash generated from operations 85.9 35.7
--------------------------------------------------------- ------------- -------------
Cash flows related to exceptional items 15.3 2.8
---------------------------------------------------------
Settlement of employer's taxes on share based payments 0.1 5.5
---------------------------------------------------------
Lease payments (3.3) (1.8)
--------------------------------------------------------- ------------- -------------
Adjusted operating cash inflow 98.0 42.2
--------------------------------------------------------- ------------- -------------
Cash flows related to capital expenditure (4.1) (2.2)
--------------------------------------------------------- ------------- -------------
Adjusted free cash flow 93.9 40.0
--------------------------------------------------------- ------------- -------------
Going concern
The Group has produced forecasts which have been modelled for different plausible downside scenarios (considering any potential downsides associated with the COVID-19 pandemic). These scenarios confirm that even in the most severe but plausible downside scenarios, the Group is able to generate profits and positive cash flows. As a result, the Directors have a reasonable expectation that the Group has adequate resources to meet its obligations as they fall due for a period of at least 12 months from the date of these results. Accordingly they continue to adopt the going concern basis in preparing the HY 2021 results.
Principal risks and uncertainties
Other than the addition of 'Legal and Regulatory Risk' following the acquisition of GoCo in February 2021 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 2020. Reference should be made to pages 38 to 42 of the 2020 Annual Report and Accounts for more detail on the potential impact of risks and examples of mitigation. Following the acquisition of GoCo, set out below is the Group's assessment of the impact of Legal and Regulatory risk:
Risk and impact Mitigation
-------------------------------------------------------- ------------------------------------------------------------
The Group operates in a number of regulated markets
(insurance, lending and energy comparison * Open and transparent culture
services) and is also subject to competition and data
protection laws. Failure to comply with
existing regulatory requirements or adapt to changes in * Maintain and foster good working relationships with
the regulatory environment may have regulators
a fundamental impact on the Group's reputation,
business model and performance.
* Skilled in-house Legal, Data Protection and
Compliance teams with access to specialist external
advice, when required
* Comprehensive regulatory training and development for
Board members, senior managers and employees
* Outsourced internal audit programme to provide
assurance on compliance with key regulatory
requirements
-------------------------------------------------------- ------------------------------------------------------------
Condensed consolidated interim financial statements
Consolidated income statement
for the six months ended 31 March 2021
6 months to 31 March 6 months to 31 March 2020
2021
Non-GAAP Non-GAAP
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
Note GBPm GBPm GBPm GBPm GBPm GBPm
Revenue 1,2 272.6 - 272.6 144.3 - 144.3
Net operating
expenses 3 (183.4) (29.5) (212.9) (104.4) (15.2) (119.6)
----------------------- ---- ---------- ---------- ---------- ------------- ---------- -----------------
Operating profit 1 89.2 (29.5) 59.7 39.9 (15.2) 24.7
Finance income 6 - - - - 5.2 5.2
Finance costs 6 (2.8) - (2.8) (0.8) (2.0) (2.8)
----------------------- ---- ---------- ---------- ---------- ------------- ---------- -----------------
Net finance costs 6 (2.8) - (2.8) (0.8) 3.2 2.4
----------------------- ---- ---------- ---------- ---------- ------------- ---------- -----------------
Profit before
tax 1 86.4 (29.5) 56.9 39.1 (12.0) 27.1
Tax on profit/(loss) 7 (18.1) 3.7 (14.4) (7.4) 1.3 (6.1)
----------------------- ---- ---------- ---------- ---------- ------------- ---------- -----------------
Profit for the
period attributable
to owners of
the parent 68.3 (25.8) 42.5 31.7 (10.7) 21.0
----------------------- ---- ---------- ---------- ---------- ------------- ---------- -----------------
Earnings per 15p Ordinary share
6 months to 31 March 2021 6 months to 31 March 2020
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
Note pence pence pence pence pence pence
Basic earnings
per share 9 66.4 (25.1) 41.3 33.7 (11.4) 22.3
Diluted earnings
per share 9 65.4 (24.7) 40.7 32.9 (11.1) 21.8
------------------ ----- --------- ---------- ---------- --------- ---------- ----------
Consolidated statement of comprehensive income
for the six months ended 31 March 2021
6 months 6 months
to 31 March to 31 March
2021 2020
GBPm GBPm
---------------------------------------------------- ------------- -------------
Profit for the period 42.5 21.0
----------------------------------------------------- ------------- -------------
Items that may be reclassified to the consolidated
income statement
Currency translation differences (16.1) 2.3
----------------------------------------------------- ------------- -------------
Other comprehensive (expense)/income for
the period (16.1) 2.3
----------------------------------------------------- ------------- -------------
Total comprehensive income for the period
attributable to owners of the parent 26.4 23.3
----------------------------------------------------- ------------- -------------
Consolidated statement of changes in equity
for the six months ended 31 March 2021
Issued Share
share premium Merger Treasury Retained Total
capital account reserve reserve earnings equity
Note GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- --------- --------- --------- --------- ---------- --------
Balance at 1 October
2020 14.7 197.0 170.9 (8.8) 7.5 381.3
------------------------ ------ --------- --------- --------- --------- ---------- --------
Profit for the period - - - - 42.5 42.5
------------------------ ------ --------- --------- --------- --------- ---------- --------
Currency translation
differences - - - - (16.1) (16.1)
Other comprehensive
expense for the
period - - - - (16.1) (16.1)
Total comprehensive
income for the period - - - - 26.4 26.4
Share capital issued
during the period 12,13 3.4 - 411.0 - - 414.4
Acquisition of own
shares 13 - - - (4.9) - (4.9)
Share schemes
- Issue of treasury
shares to employees 13 1.2 (1.2) -
- Value of employees'
services 5 - - - - 2.8 2.8
- Deferred tax on
share options - - - - 0.8 0.8
Dividends paid to
shareholders - - - - (1.6) (1.6)
Balance at 31 March
2021 18.1 197.0 581.9 (12.5) 34.7 819.2
------------------------ ------ --------- --------- --------- --------- ---------- --------
Balance at 1 October
2019 12.5 97.2 140.4 (0.3) (36.4) 213.4
------------------------ ------ --------- --------- --------- --------- ---------- --------
Retained earnings
impact of adopting
IFRS 16 - - - - (0.8) (0.8)
------------------------ ------ --------- --------- --------- --------- ---------- --------
Restated balance
at 1 October 2019 12.5 97.2 140.4 (0.3) (37.2) 212.6
------------------------ ------ --------- --------- --------- --------- ---------- --------
Profit for the period - - - - 21.0 21.0
------------------------ ------ --------- --------- --------- --------- ---------- --------
Currency translation
differences - - - - 2.3 2.3
Other comprehensive
income for the period - - - - 2.3 2.3
Total comprehensive
income for the period - - - - 23.3 23.3
Share capital issued
during the period 12 2.2 99.8 30.5 - - 132.5
Acquisition of own
shares - - - (4.3) - (4.3)
Share schemes
- Issue of treasury
shares to employees 0.5 (0.5) -
- Value of employees'
services 5 - - - - 2.7 2.7
- Deferred tax on
share options - - - - 1.7 1.7
Dividends paid to
shareholders - - - - (1.0) (1.0)
Balance at 31 March
2020 14.7 197.0 170.9 (4.1) (11.0) 367.5
------------------------ ------ --------- --------- --------- --------- ---------- --------
Consolidated balance sheet
as at 31 March 2021
31 March 31 March 30 September
2021 2020 2020
Note GBPm GBPm GBPm
------------------------------------------ ----- --------- --------- -------------
Assets
Non-current assets
Property, plant and equipment 22.6 14.3 20.9
Intangible assets - goodwill 10 679.3 231.6 309.7
Intangible assets - other 10 494.2 112.5 183.9
Investments - 0.2 -
Deferred tax - 2.4 1.0
------------------------------------------ ----- --------- --------- -------------
Total non-current assets 1,196.1 361.0 515.5
------------------------------------------ ----- --------- --------- -------------
Current assets
Inventories 0.9 - 0.7
Corporation tax recoverable - 0.5 1.7
Trade and other receivables 105.6 47.7 72.4
Cash and cash equivalents 22.9 181.8 19.3
Finance lease receivable 1.2 1.8 1.6
Total current assets 130.6 231.8 95.7
------------------------------------------ ----- --------- --------- -------------
Total assets 1,326.7 592.8 611.2
------------------------------------------ ----- --------- --------- -------------
Equity and liabilities
Equity
Issued share capital 12 18.1 14.7 14.7
Share premium account 197.0 197.0 197.0
Merger reserve 581.9 170.9 170.9
Treasury reserve (12.5) (4.1) (8.8)
Retained earnings/(losses) 34.7 (11.0) 7.5
Total equity 819.2 367.5 381.3
------------------------------------------ ----- --------- --------- -------------
Non-current liabilities
Financial liabilities - interest-bearing
loans and borrowings 182.8 129.1 73.6
Lease liability due in more than
one year 17.6 11.1 18.7
Deferred tax 65.8 4.8 2.5
Provisions 11 5.5 1.8 5.1
Total non-current liabilities 271.7 146.8 99.9
------------------------------------------ ----- --------- --------- -------------
Current liabilities
Financial liabilities - interest-bearing
loans and borrowings 81.4 - 7.8
Trade and other payables 145.8 64.6 116.2
Corporation tax payable 1.9 3.2 -
Lease liability due within one
year 5.9 4.5 6.0
Contingent consideration - 6.2 -
Deferred consideration 0.8 - -
Total current liabilities 235.8 78.5 130.0
------------------------------------------ ----- --------- --------- -------------
Total liabilities 507.5 225.3 229.9
------------------------------------------ ----- --------- --------- -------------
Total equity and liabilities 1,326.7 592.8 611.2
------------------------------------------ ----- --------- --------- -------------
Consolidated cash flow statement
for the six months ended 31 March 2021
6 months
6 months to to
31 March 31 March
2021 2020
GBPm GBPm
---------------------------------------------- ---- ------------ --------------------
Cash flows from operating activities
Cash generated from operations 85.9 35.7
Interest paid (1.7) (0.5)
Interest paid on lease liabilities (0.5) (0.3)
Tax paid (6.2) (2.2)
---------------------------------------------------- ------------ --------------------
Net cash generated from operating activities 77.5 32.7
---------------------------------------------------- ------------ --------------------
Cash flows from investing activities
Purchase of property, plant and equipment (1.0) (0.5)
Purchase of computer software and website
development (3.1) (1.7)
Purchase of subsidiary undertakings, net
of cash acquired (156.1) (33.6)
Net cash used in investing activities (160.2) (35.8)
---------------------------------------------------- ------------ --------------------
Cash flows from financing activities
Proceeds from share issue - 104.4
Cost of share issue (0.7) (3.2)
Acquisition of own shares (4.9) (3.8)
Dividends paid (1.6) (1.0)
Draw down of bank loans 241.1 133.5
Repayment of bank loans (139.2) (50.1)
Bank arrangement fees (2.7) (0.3)
Repayment of principal element of lease
liabilities (3.3) (1.8)
Settlement of derivative - 0.3
---------------------------------------------------- ------------ --------------------
Net cash generated from financing activities 88.7 178.0
---------------------------------------------------- ------------ --------------------
Net increase in cash and cash equivalents 6.0 174.9
Cash and cash equivalents at beginning of 19.3 6.6
period
Exchange adjustments (2.4) 0.3
Cash and cash equivalents at end of period 22.9 181.8
---------------------------------------------------- ------------ --------------------
Notes to the consolidated cash flow statement
for the six months ended 31 March 2021
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 6 months
31 March to 31 March
2021 2020
GBPm GBPm
------------------------------------------------- ---- ---------- -------------
Profit for the period 42.5 21.0
Adjustments for:
Depreciation charge 4.8 2.4
Amortisation of intangible assets 18.8 10.1
Share schemes
- Value of employees' services 2.8 2.7
- National insurance costs on share schemes - 0.4
Net finance costs/(income) 2.8 (2.4)
Tax charge 14.4 6.1
Cash generated before changes in working
capital and provisions 86.1 40.3
Movement in provisions (1.0) (0.2)
Increase in inventories (0.2) -
Increase in trade and other receivables (1.1) (3.0)
Increase/(decrease) in trade and other payables 2.1 (1.4)
Cash generated from operations 85.9 35.7
------------------------------------------------------- ---------- -------------
B. Analysis of net debt
30 September Other non-cash 31 March
2020 Cash changes Exchange 2021
flows On acquisition movements
GBPm GBPm GBPm GBPm GBPm GBPm
----------------- ------------- -------- --------------- --------------- ----------------------- ---------
Cash and cash
equivalents 19.3 (6.4) 12.4 - (2.4) 22.9
Debt due within
one year (7.8) (70.1) (3.2) (0.3) - (81.4)
Debt due after
more than one
year (73.6) (29.1) (80.0) (0.3) 0.2 (182.8)
----------------- ------------- -------- --------------- --------------- ----------------------- ---------
Net debt (62.1) (105.6) (70.8) (0.6) (2.2) (241.3)
----------------- ------------- -------- --------------- --------------- ----------------------- ---------
On 25 November 2020 the Group announced a recommended offer for GoCo Group plc ("GoCo"). The transaction completed on 17 February 2021 for consideration of GBP557.2m comprising GBP415.1m in equity (via the issue of 22.6m Future plc shares), and GBP142.1m in cash. In addition, GoCo's existing net debt of GBP72.0m was settled on acquisition (being debt of GBP83.2m net of GBP11.2m cash acquired). The acquisition was funded by increasing the Group's debt facilities through a GBP215m two year term loan which amortises at GBP20m per quarter from June 2021 with a bullet of GBP95m payable in November 2022. The Group's GBP30m short dated COVID-19 facility was cancelled on the same date as was no longer required.
C. Reconciliation of movement in net debt
6 months 6 months
to to
31 March 31 March
2021 2020
GBPm GBPm
--------------------------------------- ---------- ----------
Net debt at start of period (62.1) (40.3)
Increase in cash and cash equivalents 6.0 174.9
Movement in borrowings (182.4) (83.1)
Other non-cash changes (0.6) (0.1)
Exchange movements (2.2) 1.3
Net (debt)/cash at end of period (241.3) 52.7
--------------------------------------- ---------- ----------
Basis of preparation
This unaudited condensed consolidated interim financial information for the six months ended 31 March 2021 has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting in conformity with the requirements of the Companies Act 2006, and in accordance with the Disclosure Guidance 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 2020.
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 2020 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 2020 the following amendments to existing standards have been applied where applicable: amendment to IFRS 3 Clarifying the definition of a business, amendment to IAS 1 and IAS 8 Definition of material, and amendment to IFRS 7 and IFRS 9 Amendments regarding pre-replacement issues in the context of the IBOR reform. 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 2020.
There has been no material impact from the adoption of new standards, amendments to standards or interpretations which are relevant to the Group.
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 (relating to equity-settled share awards with vesting periods longer than 12 months), together with 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 not related to the core underlying trading of the Group so as to assist the users of the financial statements to better understand the results of the Group. Details of exceptional items are shown in note 4.
Amortisation of acquired intangible assets - the amortisation charge for those acquired intangible assets recognised on business combinations as defined in note 10 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 to be reflective of the core trading performance of the Group.
Change in the fair value of contingent consideration - the Group excludes the remeasurement of these acquisition-related liabilities from its adjusted results as the impact of remeasurement can vary significantly depending on the underlying acquisition's performance. The unwinding of the discount on contingent consideration is also excluded from the Group's adjusted results on the basis that it is non-cash and the balance is driven by the Group's assessment of the relevant
discount rate to apply. Excluding these items ensures comparability between periods.
Changes in the fair value of currency option - the Group has excluded this from its adjusted results as the option was acquired in order to hedge USD exposure to acquisition related contingent consideration and does not relate to the core underlying trading performance of the Group.
The tax related to adjusting items is the tax effect of the items above 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
2021 2020
GBPm GBPm
--------------------------------------------------- ------------ ------------
Adjusted operating profit 89.2 39.9
Adjusted net finance costs (2.8) (0.8)
--------------------------------------------------- ------------ ------------
Adjusted profit before tax 86.4 39.1
Adjusting items:
Share based payments (including social
security costs) (2.7) (1.7)
Exceptional items (11.5) (4.4)
Amortisation of acquired intangibles (15.3) (9.1)
Unwinding of discount on contingent consideration - (0.8)
Fair value gain on contingent consideration - 5.2
Fair value loss on currency option - (1.2)
Profit before tax 56.9 27.1
--------------------------------------------------- ------------ ------------
A reconciliation of cash generated from operations to adjusted free cash flow is shown below:
6 months to 6 months to
31 March 31 March
2021 2020
GBPm GBPm
------------------------------------------- ------------ ------------
Cash generated from operations 85.9 35.7
Cash flows related to exceptional items 15.3 2.8
Settlement of employer's taxes on share
based payments 0.1 5.5
Lease payments (3.3) (1.8)
Adjusted operating cash inflow 98.0 42.2
Cash flows related to capital expenditure (4.1) (2.2)
------------------------------------------- ------------ ------------
Adjusted free cash flow 93.9 40.0
------------------------------------------- ------------ ------------
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 2021
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. The Group also uses a sub-segment split of Media and Magazines for further analysis.
Segment revenue
6 months 6 months
to to
31 March 31 March
2021 2020
Sub-segment GBPm Sub-segment GBPm
------- ------------------ ---------- ------------------ ----------
Media Magazines Total Media Magazines Total
GBPm GBPm GBPm GBPm GBPm GBPm
------- ------ ---------- ---------- ------ ---------- ----------
UK 75.3 86.2 161.5 35.4 23.0 58.4
US 107.3 3.8 111.1 79.6 6.3 85.9
Total 182.6 90.0 272.6 115.0 29.3 144.3
------- ------ ---------- ---------- ------ ---------- ----------
Transactions between segments are carried out at arm's length.
Segment adjusted operating profit
6 months to 6 months to
31 March 31 March
2021 2020
GBPm GBPm
------- --------------------------------------- ---------------------------------------
Underlying Underlying
adjusted Adjusted adjusted Adjusted
operating Intragroup operating operating Intragroup operating
profit adjustments profit profit adjustments profit
GBPm GBPm GBPm GBPm GBPm GBPm
------- ----------- ------------- ----------- ----------- ------------- -----------
UK 19.3 34.2 53.5 1.6 18.4 20.0
US 69.9 (34.2) 35.7 38.3 (18.4) 19.9
Total 89.2 - 89.2 39.9 - 39.9
------- ----------- ------------- ----------- ----------- ------------- -----------
Operating profit is used by the Executive Directors to assess the performance of each segment.
A reconciliation of total segment adjusted operating profit to profit before tax is provided as follows:
6 months
6 months to to
31 March 31 March
2021 2020
GBPm GBPm
----------------------------------------- ------------ ----------
Total segment adjusted operating profit 89.2 39.9
Share based payments (including social
security costs) (2.7) (1.7)
Amortisation of acquired intangibles (15.3) (9.1)
Exceptional items (note 4) (11.5) (4.4)
Net finance (costs)/income (note 6) (2.8) 2.4
Profit before tax 56.9 27.1
----------------------------------------- ------------ ----------
2. Revenue
The table below disaggregates revenue according to the timing of satisfaction of performance obligations:
6 months 6 months
Over Point in to 31 March Point to 31 March
time time 2021 Over time in time 2020
GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ------ --------- ------------- ---------- --------- -------------
Total revenue 6.6 266.0 272.6 2.8 141.5 144.3
--------------- ------ --------- ------------- ---------- --------- -------------
See note 1 for disaggregation of revenue by geography.
3. Net operating expenses
Operating profit is stated after charging:
6 months to 31 March 2021 6 months to 31 March 2020
Adjusted Adjusting Statutory Adjusted Adjusting Statutory
results items results results items results
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------- --------- ---------- ---------- --------- ---------- ----------
Cost of sales (119.5) - (119.5) (66.1) - (66.1)
Distribution
expenses (10.8) - (10.8) (3.2) - (3.2)
Share based payments
(including social
security costs) - (2.7) (2.7) - (1.7) (1.7)
Exceptional items
(note 4) - (11.5) (11.5) - (4.4) (4.4)
Depreciation (4.3) - (4.3) (2.4) - (2.4)
Amortisation (3.5) (15.3) (18.8) (1.0) (9.1) (10.1)
Other administration
expenses (45.3) - (45.3) (31.7) - (31.7)
Total (183.4) (29.5) (212.9) (104.4) (15.2) (119.6)
---------------------- --------- ---------- ---------- --------- ---------- ----------
4. Exceptional items
6 months to 6 months to
31 March 31 March
2021 2020
GBPm GBPm
------------------------------------- ------------ ------------
Acquisition and integration related
costs 12.5 4.6
Vacant property liability movement (1.0) (0.2)
------------------------------------- ------------ ------------
Total 11.5 4.4
------------------------------------- ------------ ------------
Acquisition and integration related costs include deal fees in respect of the GoCo acquisition of GBP10.2m (HY 2020: GBP4.3m relating to the acquisitions of Barcroft and TI Media), integration and restructuring costs of GBP1.8m relating to GoCo (HY 2020: other acquisition-related costs of GBP0.3m), as well as a GBP0.5m write off of a GoCo onerous property liability.
5. Employee costs
6 months 6 months
to to
31 March 31 March
2021 2020
GBPm GBPm
--------------------------------- ---------- ----------
Wages and salaries 68.9 46.1
Social security costs 6.3 3.9
Other pension costs 1.8 0.8
Share schemes
- Value of employees' services 2.8 2.7
--------------------------------- ---------- ----------
Total employee costs 79.8 53.5
--------------------------------- ---------- ----------
The table above includes the all-employee profit pool bonus.
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 6 months
to to
31 March 31 March
2021 2020
GBPm GBPm
Salaries and other short-term employee benefits 1.3 1.2
Share schemes
- Value of employees' services 1.9 1.6
Total 3.2 2.8
------------------------------------------------- ---------- ----------
Key management personnel are deemed to be the members of the Board of Future plc.
6. Finance income and costs
6 months 6 months
to to
31 March 31 March
2021 2020
GBPm GBPm
Interest payable on interest-bearing
loans and borrowings (1.7) (0.4)
Amortisation of bank loan arrangement
fees (0.6) (0.1)
Interest payable on lease liabilities (0.5) (0.3)
---------------------------------------------------- -------------- ----------
Adjusted finance costs (2.8) (0.8)
---------------------------------------------------- -------------- ----------
Unwinding of discount on contingent consideration - (0.8)
Fair value loss on currency option - (1.2)
---------------------------------------------------- -------------- ----------
Total reported finance costs (2.8) (2.8)
---------------------------------------------------- -------------- ----------
Fair value gain on contingent consideration - 5.2
---------------------------------------------------- -------------- ----------
Total reported finance income - 5.2
---------------------------------------------------- -------------- ----------
Net finance (costs)/income (2.8) 2.4
---------------------------------------------------- -------------- ----------
During the period the Group increased its debt facilities to fund the acquisition of GoCo through a GBP215m two-year term loan which amortises at GBP20m per quarter from June 2021 with a bullet of GBP95m payable in November 2022. The Group's GBP30m short dated COVID-19 facility was cancelled as it was no longer required. See note B to the cash flow statement for further detail.
7. Tax on profit
The tax amount for the six months ended 31 March 2021 is based on the effective tax rate, estimated on a full year basis, being applied to the statutory profit for the six months ended 31 March 2021. The Group's adjusted effective tax rate is 21% (HY 2020: 19%).
The Group's statutory effective tax rate is 26% (HY 2020: 23%) with the difference between the statutory rate and adjusted effective rate being the impact of certain exceptional items not being deductible for tax purposes offset by the impact of share based payment deductions.
In the March 2021 Budget the UK Government announced that legislation will be introduced in Finance Bill 2021 to increase the main rate of UK corporation tax from 19% to 25%, effective 1 April 2023. Then, in April the US Treasury announced their intent to increase the Federal rate of Corporate Income Tax from 21% to 28%. As neither of these changes had been substantively enacted at the balance sheet date, the deferred tax balances as at 31 March 2021 continue to be measured at a UK rate of 19% and a US Federal rate of 21%. If the 25% UK tax rate had been used at the balance sheet date, the deferred tax liability would have been GBP20.0m higher. If the 28% US Federal tax rate had been used the deferred tax liability would have been GBP0.4m higher.
8. Dividends
6 months 6 months
to to
Equity dividends 31 March 31 March
2021 2020
--------------------------------------------- -------------------- ----------
Number of shares in issue at end of period
(million) 120.6 98.0
Dividends paid and payable in period (pence
per share) 1.6 1.0
Dividends paid and payable in period (GBPm) (1.6) (1.0)
--------------------------------------------- -------------------- ----------
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 2020 was paid on 16 February 2021. The Board has not proposed a dividend for the six months ended 31 March 2021.
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 (note 4), amortisation of intangible assets arising on business combinations, changes in fair value and unwinding of discount on contingent consideration, changes in fair value on currency option, and any related tax effects from the calculation.
6 months
to 6 months to
31 March 31 March
2021 2020
--------------------------------------------------- ------------ ------------
Adjustments to profit after tax:
Profit after tax (GBPm) 42.5 21.0
Share based payments (including social security
costs) (GBPm) 2.7 1.7
Exceptional items (GBPm) 11.5 4.4
Amortisation of acquired intangibles (GBPm) 15.3 9.1
Fair value gain on contingent consideration
(GBPm) - (5.2)
Unwinding of discount on contingent consideration
(GBPm) - 0.8
Fair value loss on currency option (GBPm) - 1.2
Tax effect of the above adjustments (GBPm) (3.7) (1.3)
Adjusted profit after tax (GBPm) 68.3 31.7
--------------------------------------------------- ------------ ------------
Weighted average number of shares in issue
during the period:
- Basic 102,791,476 94,011,413
- Dilutive effect of share options 1,591,646 2,438,143
- Diluted 104,383,122 96,449,556
Basic earnings per share (pence) 41.3 22.3
Adjusted basic earnings per share (pence) 66.4 33.7
Diluted earnings per share (pence) 40.7 21.8
Adjusted diluted earnings per share (pence) 65.4 32.9
--------------------------------------------------- ------------ ------------
The adjustments to profit after tax have
the following effect:
Basic earnings per share (pence) 41.3 22.3
Share based payments (including social security
costs) (pence) 2.6 1.8
Exceptional items (pence) 11.2 4.7
Amortisation of acquired intangibles (pence) 14.9 9.7
Fair value gain on contingent consideration
(pence) - (5.5)
Unwinding of discount on contingent consideration
(pence) - 0.9
Fair value loss on currency option (pence) - 1.3
Tax effect of the above adjustments (pence) (3.6) (1.5)
--------------------------------------------------- ------------ ------------
Adjusted basic earnings per share (pence) 66.4 33.7
--------------------------------------------------- ------------ ------------
Diluted earnings per share (pence) 40.7 21.8
Share based payments (including social security
costs) (pence) 2.6 1.8
Exceptional items (pence) 11.0 4.6
Amortisation of acquired intangibles (pence) 14.7 9.4
Fair value gain on contingent consideration
(pence) - (5.4)
Unwinding of discount on contingent consideration
(pence) - 0.8
Fair value loss on currency option (pence) - 1.2
Tax effect of the above adjustments (pence) (3.6) (1.3)
--------------------------------------------------- ------ ------
Adjusted diluted earnings per share (pence) 65.4 32.9
--------------------------------------------------- ------ ------
10. Intangible assets
Acquired
Goodwill intangibles Other Total
GBPm GBPm GBPm GBPm
----------------------------------------- --------- ------------- ------- --------
Cost
At 1 October 2019 484.7 140.5 23.2 648.4
Additions through business combinations 97.2 94.3 4.2 195.7
Other additions - - 3.1 3.1
Exchange adjustments (7.6) (4.3) (0.5) (12.4)
At 30 September 2020 574.3 230.5 30.0 834.8
----------------------------------------- --------- ------------- ------- --------
Additions through business combinations 378.5 321.1 10.1 709.7
Other additions - - 3.1 3.1
Exchange adjustments (11.0) (6.7) (0.9) (18.6)
At 31 March 2021 941.8 544.9 42.3 1,529.0
----------------------------------------- --------- ------------- ------- --------
Accumulated amortisation and impairment
At 1 October 2019 (266.0) (33.6) (19.8) (319.4)
Charge for the period - (21.6) (2.7) (24.3)
Impairment - - (0.8) (0.8)
Exchange adjustments 1.4 1.5 0.4 3.3
----------------------------------------- --------- ------------- ------- --------
At 30 September 2020 (264.6) (53.7) (22.9) (341.2)
----------------------------------------- --------- ------------- ------- --------
Charge for the period - (15.3) (3.5) (18.8)
Exchange adjustments 2.1 1.7 0.7 4.5
----------------------------------------- --------- ------------- ------- --------
At 31 March 2021 (262.5) (67.3) (25.7) (355.5)
----------------------------------------- --------- ------------- ------- --------
Net book value at 31 March 2021 679.3 477.6 16.6 1,173.5
----------------------------------------- --------- ------------- ------- --------
Net book value at 30 September 2020 309.7 176.8 7.1 493.6
----------------------------------------- --------- ------------- ------- --------
Acquired intangibles relate mainly to brands, subscriber databases, trademarks, advertising relationships, creative services relationships, customer relationships, publishing rights, content, non-compete agreements and customer lists. These assets are amortised over their estimated economic lives, typically ranging between one and fifteen 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 period through business combinations are set out in note 15.
Other intangibles relate to capitalised software costs and website development costs.
Amortisation is included within administration expenses in the consolidated income statement.
11. Provisions
6 months 6 months
to to
31 March 31 March
2021 2020
---------- ---------------------- ----------
Property 4.6 1.8
Other 0.9 -
---------- ---------------------- ----------
Total 5.5 1.8
---------- ---------------------- ----------
The provision for property relates to dilapidations and obligations under short leasehold agreements on vacant property. The majority of the vacant property provision is expected to be utilised over the next five years.
12. Issued share capital
During the period no Ordinary shares were issued by the Company pursuant to share scheme exercises throughout the period (31 March 2020: 3,755,148 with a nominal value of GBP563,272). 442 Ordinary shares were issued under the Share Incentive Plan for a combined total cash commitment of GBPnil.
22,608,736 Ordinary shares were issued on the acquisition of GoCo Group plc, with a value of GBP415.1m (share price of GBP18.36).
As at 31 March 2021 there were 120,624,133 Ordinary shares in issue (31 March 2020: 98,014,506; 30 September 2020: 98,014,955).
13. Reserves
Merger reserve
The merger reserve has increased in the period by GBP411.0m, consisting of GBP411.7m relating to the premium on shares issued as consideration for the acquisition of GoCo Group plc, offset by GBP0.7m of related share issuance costs. See note 15 for further details of the acquisition.
Treasury reserve
The treasury reserve represents the cost of shares in Future plc held by the Employee Benefit Trust ('EBT') to satisfy awards made by the trustees. During the period, 0.3m shares were purchased in the market at a total value of GBP4.9m, and 0.3m shares were transferred out of the treasury reserve to satisfy the issue of share option exercises in the period, at a value of GBP1.2m.
14. Contingent assets, contingent liabilities and deferred liabilities
At 31 March 2021 there were no material contingent assets or liabilities (31 March 2020: contingent liability of GBP6.2m relating to variable deferred contingent consideration on the acquisition of SmartBrief, LLC).
The Group has a deferred liability of GBP0.8m recognised on the balance sheet at 31 March 2021 for deferred consideration on the acquisition of Mozo, which was settled in May 2021 (see note 15).
15. Acquisitions
Acquisition of CinemaBlend
On 2 October 2020, Future US, Inc. (a wholly owned subsidiary of Future plc) acquired CinemaBlend, a premium digital entertainment publisher based in the US, for total consideration of $12.75m. CinemaBlend is a high-growth digital brand focused on the TV, film and entertainment market. Through its website, podcast series, social media channels and newsletters, CinemaBlend provides a platform for enthusiasts and casual fans to discover, explore and discuss films and TV shows, both on streaming services such as Netflix and linear TV such as HBO.
The impact of the acquisition on the consolidated balance sheet was:
Fair value
GBPm
--------------------------- -----------
Intangible assets
- Brand 4.8
- Partner relationships 0.2
--------------------------- -----------
Net assets acquired 5.0
--------------------------- -----------
Goodwill 4.9
--------------------------- -----------
9.9
--------------------------- -----------
Consideration:
Cash 9.9
--------------------------- -----------
Total consideration 9.9
--------------------------- -----------
The acquisition has further diversified the Group's revenues by expanding the Group's US presence and audience. Goodwill is attributable to the opportunities that exist to further monetise the Group's brands and audience. The intangibles recognised, including goodwill, are expected to be deductible for tax purposes.
Included within the Group's results for the period are revenues of GBP2.8m and a profit before tax of GBP1.7m from CinemaBlend (excluding acquired intangible amortisation). This is equal to the revenue and profit before tax that would have been contributed if the acquisition had completed on the first day of the financial year.
Acquisition of Mozo Pty Limited
On 2 February 2021, Future Publishing (Overseas) Limited (a wholly owned subsidiary of Future plc) acquired 100% of the equity in Mozo Pty Limited ("Mozo"), a price comparison site focused on personal finance products, based in Australia. Total consideration was AUD$31.0m in cash, of which AUD$29.5m was paid on completion, with a further AUD$1.5m deferred consideration which was settled in May 2021.
The impact of the acquisition on the consolidated balance sheet was:
Provisional fair
value
GBPm
---------------------------------------------- -----------------
Tangible assets
- Right-of-use lease asset 0.4
- Other tangible assets 0.1
Intangible assets
- Brand 3.2
- Partner relationships 2.4
- Subscriber relationships 0.1
- Content 0.1
- Software 0.9
Cash and cash equivalents 1.2
Trade and other receivables 0.6
Trade and other payables (0.8)
Corporation tax payable (0.5)
Lease liability due within one year (0.1)
Non-current liabilities
- Provision (0.1)
- Lease liability due in more than one year (0.3)
Deferred tax (2.4)
---------------------------------------------- -----------------
Net assets acquired 4.8
---------------------------------------------- -----------------
Goodwill 12.4
---------------------------------------------- -----------------
17.2
---------------------------------------------- -----------------
Consideration:
Cash 16.4
Deferred consideration 0.8
---------------------------------------------- -----------------
Total consideration 17.2
---------------------------------------------- -----------------
The acquisition has further diversified the Group's revenues by expanding the Group's price comparison offering and goodwill is attributable to the opportunities that exist to further monetise the Group's brands and extend the Group's eCommerce proposition beyond products into services. The intangibles recognised, including goodwill, are not expected to be deductible for tax purposes.
Included within the Group's results for the period are revenues of GBP0.9m and a profit before tax of GBP0.2m from Mozo (excluding acquired intangible amortisation).
If the acquisition had been completed on the first day of the financial year, it would have contributed GBP2.4m of revenue and a profit before tax of GBP0.5m (excluding acquired intangible amortisation) during the period.
Gross trade receivables were GBP0.6m on acquisition, of which GBP0.6m were expected to be recovered.
The fair values included for the Mozo acquisition are described as 'provisional' as the acquisition occurred within three months of the balance sheet date and so further time is required in order to fully ascertain the fair value of assets and liabilities acquired.
Acquisition of GoCo Group plc
On 17 February 2021, Future plc acquired 100% of the equity in GoCo Group plc ("GoCo"), a provider of price comparison and auto-switching services. Consideration was GBP557.2m, of which GBP142.1m was paid in cash and GBP415.1m settled via the issue of 22.6m equity shares in Future plc. In addition, GoCo's existing net debt of GBP72.0m was settled on acquisition (being debt of GBP83.2m net of GBP11.2m cash acquired). The acquisition was funded by increasing the Group's debt facilities through a GBP215m two year term loan.
The impact of the acquisition on the consolidated balance sheet was:
Provisional fair
value
GBPm
--------------------------------------------------- -----------------
Tangible assets 3.0
- Right-of-use lease assets 1.7
- Other tangible assets
Intangible assets
- Brand 279.8
- Customer relationships 30.5
- Software 9.2
Cash and cash equivalents 11.2
Trade and other receivables 32.6
Corporation tax receivable 3.1
Trade and other payables (27.3)
Lease liability due within one year (0.7)
Financial liabilities - interest bearing loans (3.2)
and borrowings due in less than one year
Non-current liabilities
- Provisions (0.8)
- Lease liability due in more than one year (2.4)
- Financial liabilities - interest bearing loans (80.0)
and borrowings due in more than one year
Deferred tax (60.7)
--------------------------------------------------- -----------------
Net assets acquired 196.0
--------------------------------------------------- -----------------
Goodwill 361.2
--------------------------------------------------- -----------------
557.2
--------------------------------------------------- -----------------
Consideration:
Equity shares 415.1
Cash 142.1
--------------------------------------------------- -----------------
Consideration 557.2
--------------------------------------------------- -----------------
In addition to the GBP557.2m consideration in the table above, GoCo's existing net debt of GBP72.0m was settled on acquisition (being debt of GBP83.2m net of GBP11.2m cash acquired). Total consideration therefore amounted to GBP629.2m. The acquisition has significantly strengthened the Group's proposition of seeking to address the growing consumer demand for informed and value driven purchasing decisions enabled by intent driven content, and provides a unique opportunity to capitalise on the combination of the Group's deep audience insight with GoCo's expertise in price comparison and the proprietary technology of both the Future Group and the GoCo Group. Goodwill is attributable to the synergies of the combined Group and the opportunities that exist to extend the Group's eCommerce proposition beyond products into services. The intangibles recognised, including goodwill, are not expected to be deductible for tax purposes.
Included within the Group's results for the period are revenues of GBP22.7m and a profit before tax of GBP3.9m from GoCo (excluding deal fees, associated integration costs, acquired intangible amortisation and interest).
If the acquisition had been completed on the first day of the financial year, it would have contributed GBP85.0m of revenue and a profit before tax of GBP18.2m (excluding deal fees, associated integration costs, acquired intangible amortisation and interest) during the period.
Gross trade receivables were GBP15.4m on acquisition, of which GBP14.6m were expected to be recovered.
The fair values included for the GoCo acquisition are described as 'provisional' as the acquisition occurred within three months of the balance sheet date and so further time is required in order to fully ascertain the fair value of assets and liabilities acquired.
16. Post balance sheet events
Acquisition of Marie Claire US
On 12 May 2021 Future US, Inc. acquired 100% of Marie Claire US, a former joint venture between Marie Claire Album S.A.S. ("MCA") and Hearst Magazines Media Inc. Future has entered into a five year license agreement with MCA to operate in the US and Canada. Marie Claire US reached 17.5 million monthly online users in 2020 with revenue of $19.1m of which approximately half represents digital media revenue.
The acquisition follows the Group's acquisition of Marie Claire UK in 2020 and builds on the ongoing success of the MarieClaire.co.uk brand. It strengthens the Group's position in the women's lifestyle vertical in North America in line with the Group's strategy to achieve brand vertical leadership across English speaking markets.
Statement of Directors' responsibilities
We confirm that to the best of our knowledge:
-- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting in conformity with the requirements of the Companies Act 2006;
-- the interim management report includes a fair review of the information required by:
a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
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 Officer
Rachel Addison
Chief Financial Officer
Hugo Drayton
Senior Independent Non-Executive
Alan Newman
Independent Non-Executive
Rob Hattrell
Independent Non-Executive
Meredith Amdur
Independent Non-Executive
Mark Brooker
Independent Non-Executive
Angela Seymour-Jackson
Independent Non-Executive
19 May 2021
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
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2021 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated balance sheet, the consolidated statement of changes in equity, the consolidated statement of cash flows and related notes 1 to 16. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" in conformity with the requirement of the Companies Act 2006 and as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of review
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 Financial Reporting Council for use in the United Kingdom. A review of interim financial information consists of making inquiries, 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.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 March 2021 is not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting" in conformity with the requirement of the Companies Act 2006 and as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Use of our report
This report is made solely to the company 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 Financial Reporting Council. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
Reading, United Kingdom
19 May 2021
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.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
END
IR GZGMKGRLGMZZ
(END) Dow Jones Newswires
May 19, 2021 02:00 ET (06:00 GMT)
1 Year Future Chart |
1 Month Future Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
