Private Frazer’s Doomed Magazines

June 3, 2014

Back to Future

Filed under: Chair by the door,consumer magazines,Future Publishing — privatefraser @ 11:38 am
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“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.

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12 Comments »

  1. Not a bad assessment on the whole. As you don’t work for Future you don’t have the full story/facts of our activities. Certainly the sports and craft titles don’t fit the long term agenda (and the business was shit out of money and then some) of the mighty Godzillah, and neither do the Auto titles (they’d be sold off is the right offer came up). TechRadar isn’t quite the ultimate plan, but it’s up at the top with a few other things.

    There is an atmosphere that pretty much the entire company is up for grabs if the right price came along. Sadly the terrible mismanagement of past CEO’s has brought the company to it’s knees and making us look like a industry-wide joke on the verge of collapse. Obviously that doesn’t help in the bargaining stakes for a decent price, so the goal to me looks like to sort out all the central problems (finally), and transform this in a profitable business with perceived prospects….. Then sell the shit out of it…. Boom!

    The overarching theme coming through form our overlord being the stakeholders would actually like make some money for once!

    Comment by Future Fail — June 3, 2014 @ 9:24 pm | Reply

  2. Who would buy Future?

    Comment by Mark — June 4, 2014 @ 6:39 pm | Reply

    • It’s a poorly managed business with some good assets. It not really about selling Future as Future, but selling off those assets once stability has been achieved. I don’t believe the new CEO and her newly appointed hand picked cronies are there to make the company a long term prospect. There is definitely something sinister about how things are playing out. The changes being proposed look like it’s designed to make the company completely modular for an easier dissection sell off later down the line.

      Future lost it’s soul when it went public, and probably true for most floated businesses. The faceless investors just want to get a financial return. Future is hardly going to be missed beyond nostalgic afterthought.

      Comment by Future Fail — June 5, 2014 @ 9:15 pm | Reply

  3. 9p a share! I remember when they floated at about £3, and soared skywards over the next year or so. For the Christmas party they made a music video – “tonight we’re gonna party like it’s nine pounds ninety nine”. Very nearly got there, too.

    I’ve still got over 1,000 of them left. Ten grand’s worth at one time. This is why I don’t gamble.

    Comment by Martin — June 4, 2014 @ 7:30 pm | Reply

    • Lets not forget this was a very successful business at one time. For example Official Playstation was selling over 200K issues a month, and many other titles were easily hitting 50-80k copy sales. Look now, some of those very same magazines are lucky to manage 30% of that.

      Comment by Future Fail — June 5, 2014 @ 9:26 pm | Reply

      • Yup – whatever its state now, back in its heyday Future really was a consumer publishing power-house. The fact that it’s been brutally squeezed between the internet and some terrible management decisions in the years since doesn’t change that.

        Comment by Adam Tinworth — June 6, 2014 @ 10:57 am

  4. I bought 30,000 shares at 6.39p. It’s still undervalued, should come up to say 15p over the next 12 months. It may do £100m in revenue, but profit has rarely been over £5m. It’s valuation should be £35m-£45m.

    Comment by Wendy Bendy — July 3, 2014 @ 3:03 pm | Reply

  5. Problem is the big wigs believed their own bullshit about digital saving the world. When the CEO doesn’t even want to hear about orient revenues of any kind in a budget sign off meeting you know things are going to end badly. Even the ex finance director couldn’t stomach the digital lie and left.. Used to be a lovely company too. So long Future, been nice knowing you.

    Comment by BD666 — July 25, 2014 @ 10:25 pm | Reply

  6. Kelsey have bought the auto titles (and Triathlon Plus): http://www.bikebiz.com/news/read/future-sells-triathlon-plus-to-kelsey-media/016689

    Comment by Former Fewtch Freelancer — August 19, 2014 @ 10:37 am | Reply

  7. Apparently, they made a profit in the last quarter. Perhaps the company will come back from the brink after all.

    Comment by Ex-employee — March 31, 2015 @ 8:47 am | Reply

  8. The latest chapter in ‘Future tales of Woe’ – for the 100 staff left at the company who joined pre 2005 they are now trying to change the redundancy policy to statutory terms so 1 weeks pay for every year capped at 12 weeks. The reason they’re giving is ‘harmonising the policy to make it fair’. The real reason we all think they’re doing this is, Godzillah has been made an offer and she wants to sell the company. But don’t worry while she shafts the long suffering, sorry, long serving staff she’ll walk away with a handsome pay off.

    Comment by Disgruntled of Future — November 7, 2015 @ 9:42 am | Reply

    • Does Future really have 100 staff on the old contract? They can’t have more than a few hundred employees in total now, and all the old guard seem to be leaving, and being replaced by enthusiastic but inexperienced juniors.

      Who do you think has made an offer for the company?

      Comment by Ex-employee — November 9, 2015 @ 10:27 pm | Reply


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