Future Plc Annual Report and Accounts 2017 Annual Report and Accounts 2017
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Future plc AR17 Future plc Annual Report and Accounts 2017 Annual Report and Accounts Annual Report and 2017 1 Future plc Group overview Future plc is an international media group, listed on the London Stock Exchange (symbol: FUTR). These highlights refer to the Group’s annual results for the year ended 30 September 2017. Strategic Report Continuing Revenue Net Debt 01 Group overview 02 Chairman’s statement 03 Chief Executive’s review £84.4m £(10.0)m 05 Strategic overview 2016: £59.0m 2016: Net cash £0.5m 07 What we do 09 Risks and uncertainties 11 Corporate responsibility Continuing Adjusted EBITDA Continuing Exceptional items Financial Review £11.0m £(3.7)m 13 Financial review 2016: £5.2m 2016: £(16.5)m Corporate Governance Continuing Adjusted Operating Profit Continuing Profit Before Tax 17 Board of Directors 19 Directors’ report 23 Corporate Governance report 29 Directors’ remuneration report £8.9m £0.2m 2016: £2.8m 2016: Loss £(14.9)m 43 Independent auditors’ report Financial Statements Continuing Digital Advertising Unique Users 49 Financial statements 87 Notice of Annual General Meeting 92 Investor information 76% 53.3m of total continuing advertising a month (Q4 up 18% on Q3) revenues (2016: 78%) - Adjusted EBITDA - Recurring revenues represents earnings encompass eCommerce Continuing Recurring Revenues before share based and subscriptions. payments and related social security costs, - Exceptional items for interest, tax, depreciation, 2016 above includes amortisation, impairment, impairment of intangible and exceptional items. assets of £13.0m. £23.0m - Adjusted operating 2016: £15.0m profit represents adjusted EBITDA less depreciation and amortisation of acquired intangibles. Annual Report and Accounts 2017 2 Strategic Report Chairman’s statement A global specialist media platform with diversified revenue streams I am pleased to report that the Group has had an outstanding year and the business has gained strong momentum. Over the past year, the Group has made material progress in expanding the business. There has been significant growth, both organically and through acquisition, which has resulted in a fantastic set of results. The Group’s full year results are extremely of Future for over six years. During that time The Group’s focus on positive, with year-on-year growth in revenue the Company has had to confront a hugely of 43% and exceptional growth in adjusted challenging market place and has now “ its strategy has operating profit of 218%. In addition there come through as a significantly changed produced clear has been strong cash conversion business, well positioned to offer value throughout the year. growth to shareholders. With the acquisitions momentum, with strong over the last 18 months and the executive Last year the Group launched its strategy management leadership, the Company is progress in both to be a global specialist media platform entering a new phase. I believe the time revenue diversification business with diversified revenue streams. has come for a new Chairman to take over, This year has produced clear momentum on to ensure stability and continuity during this and development of this strategy, with strong progress in both exciting next phase. I have every confidence revenue diversification and development of that Future will prosper in the coming years. the platform. the platform. ” After a rigorous search for my successor, and Both Media and Magazine divisions are on the recommendation of the Nomination performing well with fast revenue growth Committee, the Board has appointed Richard Peter Allen in Media revenue streams, particularly in Huntingford as my replacement. Richard Chairman eCommerce and events, and significant brings extensive media industry and public added scale and operational efficiencies in company experience from his CEO role the Magazine division from acquisitions. at Chrysalis plc and his Chairman roles at Virgin Radio, Wireless Group plc (formerly The Group has made a number of acquisitions UTV Media plc) and Creston plc. Richard will during the year, having completed the initially serve as acting Chairman of the Audit acquisition of Imagine Publishing in October and Remuneration Committees and will take 2016, acquired Team Rock at the beginning over from me as Chairman of the Board on 1 of 2017 and acquired the home interest February. division of Centaur Media in August 2017. The integration of home interest is well on track. The hard work and professionalism of Future’s employees has been the driver behind the The Board and I were shocked by the amazing results this year. On behalf of the tragic news that Manjit Wolstenholme, the Board, I would like to thank everyone for their Group’s senior independent non-executive commitment this year. Director and Chairman of the Audit and Remuneration Committees, passed away suddenly on 23 November 2017. Manjit was a tower of strength and support to me and my colleagues, both personally and professionally, for many years and she will be sadly missed. Peter Allen I will be stepping down from the Future Board Chairman on 1 February 2018. I have been Chairman 3 Future plc Chief Executive’s Strategic report review Future is a global platform for specialist media with scalable, diversified brands. We have made significant progress against our strategic objectives this year and have delivered some strong results, with revenue growth of 43% year-on-year and adjusted operating profit growth of 218% year-on-year. The acquisitions we have made this year have added significant scale and operational efficiencies. Future has delivered another year of growth, The Magazine division has benefited from We have delivered with revenue up 43% year-on-year to £84.4m added scale and operational efficiencies (2016: £59.0m), driven by organic growth of through the acquisitions of Imagine “ significant growth in both 8% and acquisitions, adjusted EBITDA up Publishing, Team Rock and the home operating profitability and 112% year-on-year to £11.0m (2016: £5.2m), interest portfolio. with adjusted EPS up 144%. In addition, cash conversion, driven by adjusted free cash flows totalled £15.3m The growth in revenues and operating (2016: £4.6m) and reported EPS increased to profitability and resulting strong cash strong revenue growth in 4.3p (2016: loss of 59.6p). conversion in the period led to year-end net eCommerce and events. debt of less than 1x adjusted EBITDA. The Group has delivered growth in both The three acquisitions we operating profitability and cash generation, In light of the continued focus on debt driven by strong revenue growth in reduction, confidence in the Group’s growth have made this financial year eCommerce, digital advertising and events. strategy and the continued development of the have further strengthened business leading to more consistent cash Future has seen clear benefits in operational flows and diversified revenue streams, the and diversified our revenue gearing from the investment in central Board is now in a position to consider functions and technology infrastructure, returning to paying a dividend to streams. evident in the significant improvement in shareholders, whilst maintaining ” adjusted EBITDA margin to 13% (2016: 9%). sufficient resources to continue investing The investment has also allowed a number of in the business. Zillah Byng-Thorne new brand launches to be delivered quickly Chief Executive with minimal incremental investment cost. Global platform business for The Media division is performing well with fast specialist media revenue growth in all areas; eCommerce revenue has more than doubled year-on-year, In 2016 Future outlined its strategy of while events have grown 58% year-on-year. In becoming a global platform business for addition, digital display advertising revenue specialist media with diversified revenue has increased by 21% year-on-year as a result streams. Clear momentum on this strategy of valuing the quality of our audience, gained throughout the year is reflected in the combined with the investment we have made Group’s financial performance. in a technology stack that capitalises on the growth in programmatic advertising while The Group continues to diversify its revenue maximising digital yields. streams; eCommerce revenues continue to Annual Report and Accounts 2017 4 Strategic Report We reach 53.3m users through our websites grow well organically and growth in events increase in our market share, particularly has been bolstered by the acquisitions of in technology. Team Rock and the home interest portfolio. With the introduction of a new content vertical through the home interest acquisition, Acquisitions audience diversification has increased to seven audience communities. Future has made three acquisitions this year, in line with the Group’s strategy to expand Investment in digital assets and the continued global reach through acquisitions. These tight management of costs has increased acquisitions have added significant scale to operating margins and helped deliver on the business and we have benefited from the this strategy. resulting operational efficiencies. 75.6k people attend The acquisitions have further diversified our events Loyal communities revenue streams by adding new verticals including knowledge, music listening and Future attracts a large passionate audience home interest. across online, events and print of 85 million; the Group’s influential and market-leading brands offer our audiences the opportunity to Current trading and outlook do the things they love, through