A ‘pre-close trading update‘ from Future provides a few interesting snippets, amongst which are:
- revenues expected to be 6% down year on year
- UK revenue expected to be 2% down
- £3.5million cash cost of axing 10% of workforce
- £1.4 million provision for having empty offices because they’ve axed 10% of workforce
A possible significant paragraph is in the middle of the release:
In July the Group announced steps to accelerate the transition of Future US into a primarily digital business. However, with trading conditions in the US reflecting ongoing weakness and decreasing visibility at newsstand, and an acceleration in the year-on-year growth rate in digital revenues, the Board is now considering a wider range of strategic options in respect of its US operations.
Does this mean that Future are considering either a) closing all magazines immediately (perhaps operating websites with a skeleton US staff and UK feeds) or even b) flogging off the whole operation to a
mug punter US publisher.
Look at the first two points from Future’s statement again – overall revenue down 6%, UK down 2%. The UK is 70% of Future’s business, so if Private Frazer’s abacus is correct, that means that US revenues are down 15% or more on last year – a significant deterioration in their trading performance.