Future: Digital ads grow 15% as rising dollar softens revenue decline

Specialist interest magazine publisher Future reported a year-on-year climb in digital ad revenue of 15 per cent in the nine months to the end of June as the rising US dollar helped it continue to weather the economic downturn well.

The company reported today, in an interim management statement, that as a result of the strengthening dollar overall revenue had fallen just two per cent in the period as chief executive Stevie Spring said the company was in the best shape it could be, given the exceptionally tough market conditions.

Advertising revenue across the group, which publishes a range of titles including T3, Total Film, Classic Rock and Official Xbox Magazine, was down just four per cent overall, with digital gains off-setting a fall of eight per cent in print ad revenue.

The company said online advertising now comprised 22 per cent of its total ad revenue.

The group’s customer publishing wing recorded revenue growth of four per cent while its licensing and events businesses grew 12 per cent during the period.

The company said revenue had been helped by a beneficial exchange rate between the US and the UK as the dollar strengthened by 24 per cent in the nine months to the end of June.

Total revenue was down nine per cent when the effects of currency exchange were removed, the company said. Ad revenue declined 14 per cent on a constant currency basis, while circulation revenue down 8 per cent if the beneficial effect of the rising dollar were removed.

A third of Future’s revenue is generated by its US business with the remainder coming from the UK.

In the UK, Future said revenue had been resilient across the business, with the exception of PC gaming, personal computing and automotive sectors.

It said it had successfully mitigated a revenue shortfall of six per cent through ‘active and aggressive’management of costs.

Its US business recorded revenue declined of 13 per cent during the period which was offset by reducing operating costs.

The three newsstand magazines Future launched this year were all currently performing above expectations, it said.

Spring said: “We have continued to focus on navigating through exceptionally tough market conditions and thanks to the underlying strength of our specialist business, our cost flexibility and our hardworking teams; we remain on course to meet market expectations for the full year.

“While it is premature to talk about a market recovery, there has been no deterioration in trading conditions since the half year.

“And I am confident that when recovery comes, Future is well-positioned to benefit. Every action we’ve taken to mitigate revenue shortfalls has been proportionate; we’ve continued to invest in both new products and new people and, more broadly, our strategy remains firmly on track. We are in the best shape we can be in for the mid-term.”

Future said it was operating comfortably within all bank covenants with debt standing at just £23.6m

The company’s full year results would be published on 26 November.

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