A strong performance by its UK price comparison business Go.Compare helped Bath-headquartered global media group Future overcome tougher market conditions for its core magazine and website businesses.
The group, whose titles include Country Life, Marie Claire UK and Classic Rock, reported a 30% slump in pre-tax profits to £46.6m for the half-year to 31 March on revenue down 3% at £391.5m.
It blamed most of the decline in revenue on adverse foreign exchange rates, mainly US dollars, which it said would have been worse without the benefits from the impact of its most recent acquisitions and disposals.
The London Stock Exchange-listed group, which grew exponentially for almost a decade, mainly through a raft of strategic takeovers, said 30% expansion at Go.Compare and “good growth” in its B2B division meant UK revenue was up by 3%.
Go.Compare, which Future snapped up three years ago for £594m, has been a star performer in recent years, helping offset tougher market conditions for digital advertising, affiliate products and events, which combined suffered a 9% fall in revenue.
Future also said profitability had been hit by spending on its Growth Acceleration Strategy, a two-year investment programme of £25m-£30m launched last December to ensure the group was well-positioned to capitalise on future opportunities in its attractive and growing markets.
Future said it was confident this would pay off in the longer term by “accelerating organic revenue growth of mid-single digit compound annual growth over the next three years”.
That confidence was underpinned by a return to group organic revenue growth in the second quarter and more stable markets.
Future chief executive Jon Steinberg, who joined a year ago from New York-based cable TV provider Altice USA’s news & advertising division, has spent most of the time since then calming investors amid pressure on revenue triggered by tougher trading conditions.
This was not helped by comparisons with Future’s previous CEO Zillah Byng-Thorne, who spent nine years in the job transforming the group from a loss-making, mainly UK business into an international concern worth around £2bn and with 250 titles.
In comments accompanying the half-year results Mr Steinberg said: “In December we set out plans to ensure that Future is best positioned to capitalise on opportunities in our markets.
“These plans are centred on growing a highly engaged audience, diversifying and increasing revenue per user and optimising our portfolio.
“I'm pleased to report that in the early stages of this two-year plan we have made good progress, which will enable us to drive accelerating revenue growth.”
He said overall trading in the first half had been in line with the group’s expectations.
“Whilst the market environment remains challenging, we are encouraged by a return to organic revenue growth in Q2, progress which has continued into Q3,” he added.
“Our focus for the balance of the year is on continued implementation of the Growth Acceleration Strategy, with a particular focus on optimising the portfolio and accelerating value creation for shareholders.”
