Future H1 profit drops 70%

Future Publishing has revealed a year-on-year drop of 70 per cent in pre-tax Group profits for the first six months of its fiscal year.

However, the UK office enjoyed a three per cent profit rise in the period, as the firm faced tough market conditions in the US.

The Group posted a 1.2 million pre-tax profit for the six-months to March 31st, 2009, compared to a 4.1 million figure a year before. Revenue for the period dropped two per cent to 76.6m.

Results were affected by weaker advertising revenue in the US and disruption to distribution of US newsstand magazines following a dispute among wholesalers and distributors in the US magazine market, the firm said – especially in February and March 2009. It added that the problem was now largely behind us”.

Future’s UK business, which comprises 68% of group revenue, reported improved EBITA of 7.4m in the first six months of 2009 and the three per cent rise in profits – but revenues dropped by six per cent.

Future also revealed that its net debt now stands at 22.8 million, and that it had secured a new 42 million bank facility in place until November 2012, ‘with significant headroom’.

The firm said that EBITA was on track for its full year, despite the two percent H1 revenue decline (or 11 per cent in constant currency).

Our focus in the first half has been on navigating through some exceptionally tough market conditions, especially in the US. Stripping out our prudent receivables provision and the exceptional US newsstand disruption, EBITA for the half is broadly flat: a good performance in a turbulent media sector.

The underlying strength of our special-interest business; our ability to mitigate revenue disappointment swiftly; and continuing progress in our strategy all give me confidence that when the economic storm does finally clear, Future will be well-positioned to benefit.

We’ve taken proportionate actions to mitigate revenue shortfalls. We also continue to invest in new products, ensuring that we do not limit the Group’s prospects or its ability to benefit from the market recovery in the mid-term. More broadly, our strategy remains on track and we continue to make real progress in the development of our digital network.

While our outlook for the second half must remain cautious, we are still on course to meet expectations for the full year.”

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