Sunshine around the big cloud of Future
There are some rays of sunshine around the cloud of Future Publishing’s preliminary annual results. But the cloud is big: an £18 million pre-tax loss and no second dividend payment. Plus a £17.1 million impairment cost for the US business.
$1 million a month from apps
The largest ray of sunshine is the $1 million revenue Future made from Apple Newsstand apps in a month. My bet in October that the vast majority of its apps business was for free content was right. But that revenue stream is very handy and larger than I expected.
Apps are not cannibalising the print business, a Future speaker said at the Apps World Conference on Tuesday, The Guardian reports.
Social media boosts print
Another ray of sunshine is that Future is learning to use social media to boost its print magazines. Its Mollie Makes craft magazine on paper went into the black in 4 months after launch because of a campaign in social media before the launch. And its N Photo magazine for Nikon gained 40,000 followers on Facebook before its launch.
Digital income is growing faster than print income is falling. Future claims that no other consumer magazine publisher can claim that.
Print 80% of business
But print is still 80% of Future’s turnover with digital at 11% and contract at 9%. The new strategy is to have the same products in the USA as in the UK.
The market’s reaction to all of this at lunch today? Shares down 0.11 to 8.89p from a year high of 30p. This values Future at only £29.2 million for a company which at the end of the previous year had net assets of £87 million or so. Don’t be surprised if there is a bid from somebody which will satisfy the 7 biggest shareholders who own 68.4% of the business.