UK publisher Future warns drop in readers and ads will hit full-year results

Future, the UK-listed publisher of magazines such as Country Life and Marie Claire, has warned that falling reader numbers and digital advertising will push its full-year results to the bottom end of market expectations.

Shares in the group dropped more than 15 per cent on Thursday, less than a quarter of their value two years ago when investors backed the group as a pandemic winner, leaving the company valued at close to £1bn.

In its first set of results since Jon Steinberg took over from Zillah Byng-Thorne as chief executive in April, Future said that “challenging market conditions” for consumers would now hit its audience numbers in the second half of the year as well as the first.

Analysts at Jefferies said that these were a “challenging set of results”, adding that “pressure will be on the new CEO . . . to articulate a strategy for a return to growth and the nature of the US investments that have been called out”.

Byng-Thorne was credited by analysts for turning round the fortunes of the once debt-laden publisher. She oversaw an acquisition-fuelled expansion strategy that shifted the business away from a reliance on traditional print to become a digital media group better able to exploit ecommerce and online advertising.

More than £300mn was wiped off its market value after Byng-Thorne announced her resignation after almost a decade.

On Thursday, Steinberg said that “the macroeconomic environment remains tough, but we are well positioned to continue to outperform the industry”.

Pre-tax profits for the six months to the end of March dropped almost a fifth to £66.4mn. Revenues remained flat, given the contribution from acquisitions and favourable foreign exchange.

But after these factors were stripped out, revenues fell by a tenth, reflecting the audience decline and a drop of almost a fifth in digital advertising in the first six months of the year.

Peel Hunt cut its estimates on operating profit, warning there would need to be signs of a reversal in the trend of falling audiences to achieve “a revitalisation in the stock”.

Its analysts added: “While we continue to believe the Future model is strong, audience trends can be unpredictable, and until we see a sustained change, there is no guarantee we are at the bottom of the downgrade cycle.”

The company owns more than 100 magazines, which have increasingly been turned into digital brands. Its strategy to use growing online audiences attracted to specialist publications — such as film, gaming and photography — has helped advertisers target users based on their interests.

The group has pursued a US-first strategy that has aimed its core titles at the larger markets of North America. Future bought Dennis, the publisher of titles including The Week and Minecraft World, for £300mn in 2021. It also spent almost £600mn to buy comparison website GoCompare in 2020 and £140mn for TI Media, which published Horse & Hound and Wallpaper.