“In forming our opinion … we have considered the adequacy of the disclosure made … within the consolidated interim financial information concerning the company’s ability to continue as a going concern. The company incurred a net loss of £30.0m during the six months ended 31 March 2014 and … had net current liabilities of £21.6m. These conditions … indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern.” PricewaterhouseCoopers, Report on the consolidated interim financial statements Futureplc
Even by their own high standards, this has been a rough few months for Future. Profit warnings, redundancies, the departure of a CEO, the sale of their (profitable) cycling and craft titles as they attempt to patch (another) hole in their balance sheet and now yet more redundancies. Once these sales and lay offs have happened, Future will be down to fewer than 500 staff in the UK – as recently as 2011 the company employed more than 1,200.
Future’s shares, which were worth 29p in 2011 are now down to around 9p. They’ve lost 90% of their value since 2005. When the sale to Immediate was announced the shares rose by a penny, an indication perhaps that the banks see more value in the dismemberment of the company than in its long term survival.
Because make no mistake, despite throwing passengers off the sleigh to the pursuing pack, the wolves are still gaining. The rump of the motoring portfolio will be next into the snow, and if the staff on what’s left of the music and entertainment titles aren’t looking for the exits it’s only because they’re clinging on for a sale.
With his strict Calvinist upbringing Private Frazer abhors the use of bad language and profanity, but let’s face facts – Future as we have come to know it, is f*cked.
Remember that the whole ‘digital’ scheme was not some carefully considered strategy but a hurriedly devised smokescreen as revenues tanked in 2011, particularly in the US. It didn’t save the blessed Stevie or John Bowman the finance director, but as the board had bought into the ‘plan’ they were faced with either continuing with the botch job or resigning en masse. I believe our colonial cousins call this “doubling down”, or even “betting the farm”.
Remember too that years of penny-pinching to please shareholders and pay directors’ bonuses left Future with a huge portfolio of poorly-selling magazines. And while starving the products of investment, Future kept raising the cover price; again, class short-termism, boosting this year’s margins while sacrificing longer-term profitability.
And what’s left of the staff are now living with the consequences. Demoralised, underpaid, overstretched – and with a ‘consultation’ hanging over all of them.
Future’s future apparently lies in “the virtuous circle of engagement in two core content areas: reviews (when consumers are looking to make product purchase decisions and where we can derive ecommerce revenues) and ‘how to’ opportunities (when consumers want to learn more and are prepared to pay us to help them do so)”.
Take your pick as to whether the latest twist is the start of the”virtuous circle” or just another turn in the death spiral, but whatever happens, Future won’t be in the ‘print’ business in five years time. It will either be broken up and sold, or will be a completely different type of company.
Because perhaps Private Frazer is being unfair (hard to believe, I know) as this could well be a completely different strategy to that which was previously being followed. The current CEO was at Autotrader which successfully transitioned from dead tree, and the bits of the portfolio that she has pledged to keep – tech and games – are precisely those that have least future as ink on paper (or even as digital editions). So if Future survives it will be solely as TechRadar, with individual brands subsumed as ‘channels’ and the print products swiftly forgotten.
See you soon.