TIDMFUTR
RNS Number : 8619W
Future PLC
13 December 2019
Future plc
PUBLICATION OF ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 AND
NOTICE OF ANNUAL GENERAL MEETING 2020
Future plc (LSE: FUTR; the "Group"), the global platform for
specialist media, has today, in accordance with LR 9.6.1 R of the
Listing Rules, submitted to the Financial Conduct Authority's
National Storage Mechanism copies of the following:
-- Annual Report and Financial Statements 2019
-- Form of Proxy for the 2020 Annual General Meeting
The Notice of Annual General Meeting 2020 is set out on pages
149 to 153 of the Annual Report and Financial Statements 2019. The
Annual General Meeting will be held at Future's London office 1-10
Praed Mews, London W2 1QY on 5 February 2020 at 10.30 a.m.
The documents will shortly be available for inspection at
www.morningstar.co.uk/uk/NSM
The Annual Report and Financial Statements and Notice of Annual
General Meeting are also available on the Future plc website at
www.futureplc.com/resources/#results
A condensed set of the Group's financial statements and
information on important events that have occurred during the
financial year and their impact on the financial statements were
included in Future plc's Full Year Results Announcement on 15
November 2019. That information together with the information set
out below which is extracted from the Annual Report and Financial
Statements 2019 constitute the material required by DTR 6.3.5 of
the Disclosure Guidance and Transparency Rules which is required to
be communicated to the media in full unedited text through a
Regulatory Information Service. This announcement is not a
substitute for reading the full Annual Report and Financial
Statements 2019. Page and note references in the text below refer
to page numbers and note references in the Annual Report and
Financial Statements 2019. To view the results announcement, slides
of the results presentation and the results webcast please visit
www.futureplc.com/resources/#results
Enquiries
Future plc 01225 442244
Zillah Byng-Thorne, Chief Executive Officer
Penny Ladkin-Brand, Chief Financial Officer
Instinctif Partners 020 7457 2020
Kay Larsen, Chantal Woolcock, Hannah Campbell
About Future
Future is a global platform business for specialist media with
diversified revenue streams.
The Media division is high-growth with three complementary
revenue streams: eCommerce, events and digital advertising
including advertising within newsletters. It operates in a number
of sectors including technology, games, music, home interest,
hobbies and B2B and its brands include TechRadar, PC Gamer, Tom's
Guide, Android Central, Homebuilding & Renovating Show,
GamesRadar+, The Photography Show, Top Ten Reviews, Live Science,
Guitar World, MusicRadar, Space.com and Tom's Hardware.
The Magazine division focuses on publishing specialist content,
with over 75 publications and over 568 bookazines published per
year, totalling global circulation of 1.5 million. The Magazine
portfolio spans technology, games and entertainment, music,
creative and photography, hobbies, home interest and B2B. Its
titles include Classic Rock, Guitar Player, FourFourTwo,
Homebuilding & Renovating, Digital Camera, Guitarist, How It
Works, Total Film, What Hi-Fi? and Music Week.
Appendices
Appendix A: Directors' responsibility statement
The following directors' responsibility statement is extracted
from the Annual Report and Accounts (page 57):
Directors' responsibility statement required by DTR 4.1.12R
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the Group financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union, and Company financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted
by the European Union. Under company law the Directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group
and Company, and of the profit or loss of the Group and Company for
that period. In preparing the financial statements, the Directors
are required to:
-- select suitable accounting policies and then apply them consistently;
-- state whether applicable IFRSs as adopted by the European
Union have been followed for the Group financial statements, and
IFRSs as adopted by the European Union have been followed for the
Company financial statements, subject to any material departures
disclosed and explained in the financial statements;
-- make judgements and accounting estimates that are reasonable and prudent; and
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business.
The Directors are also responsible for safeguarding the assets
of the Group and Company, and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company, and enable
them to ensure that the financial statements and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as
regards the Group financial statements, Article 4 of the IAS
Regulation.
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Directors' confirmations
Each of the Directors, whose names and functions are listed in
the Board of Directors section on pages 51 and 52, confirm that, to
the best of their knowledge:
-- the Company financial statements, which have been prepared in
accordance with IFRS as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the Company;
-- the Group financial statements, which have been prepared in
accordance with IFRS as adopted by the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the Group;
-- they consider the Annual Report and financial statements,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group's
position and performance, business model and strategy; and
-- the Directors' report includes a fair review of the
development and performance of the business and the position of the
Group and Company, together with a description of the Principal
Risks and uncertainties that it faces.
In the case of each Director in office at the date the
Directors' report is approved:
-- so far as the Director is aware, there is no relevant audit
information of which the Group and Company's auditors are unaware;
and
-- they have taken all the steps that they ought to have taken
as a Director in order to make themselves aware of any relevant
audit information and to establish that the Group and Company's
auditors are aware of that information.
Appendix B: Risks and uncertainties
The following description of the principal risks and
uncertainties that the Company faces is extracted from the Annual
Report and Accounts (pages 35 to 38):
RISKS AND UNCERTAINTIES
Effective risk management is essential to support the
achievement of our strategic and operational objectives as we
address the challenges and uncertainties facing businesses
today.
The Board has overall responsibility for the risk management
framework and for ensuring that we manage risks appropriately.
Future takes its approach to the identification, evaluation and
mitigation of risk and uncertainty extremely seriously, and applies
a robust framework that embeds risk management throughout its
organisation and across its operations. Whilst it is accepted that
risk forms a part of operating in business, delivering its
strategic objectives whilst mitigating those risks is a fundamental
objective for Future's Board and its executive management
teams.
Approach to risk
The Board
-- Sets the Group's risk appetite taking into account its strategic objectives
-- Identifies principal Group risks
-- Conducts 'deep dives' into specific Principal Risks
-- Carries out a robust assessment of any emerging risks
-- Assesses the impact of Principal Risks when analysing the
Group's long-term viability and sustainability
-- Considers views from management and the Audit Committee as
part of its review of the effectiveness of the system of internal
controls
The Audit Committee
-- Monitors the adequacy and effectiveness of internal control and risk management systems
-- Ensures that a robust assessment of the Principal Risks facing the Group has been undertaken
-- Includes an update on risk as a standing agenda item for every meeting
Executive Leadership Team
-- Prioritises Principal Risks through a formal bi-annual review process
-- Allocates resources to manage risks according to potential impact
-- Communicates priorities to the business
-- Reviews detailed risk registers to agree Principal Risks
-- Identifies any emerging actions where Group-wide action is required
-- Reviews effectiveness of risk management procedures
-- Reports to the Audit Committee and Board on a regular basis
The Executive Leadership Team (ELT) is responsible for
identifying risks and working with the Group Financial Controller
to capture them in the Group's risk register. All risks identified
by the ELT are scored out of 5 (with 5 being the highest) in
respect of three areas: the likelihood of the risk crystallising,
the impact if the risk does crystallise, and the strength of any
mitigation in place (in respect of mitigation, a score of 1
represents strong mitigation). A combined score is then calculated
by multiplying each of these scores together (with 125 being the
highest possible score).
Whilst Future operates in an evolving environment with several
clear risks, it takes a pro-active and robust approach to
identifying any new risks, and evaluating and mitigating all known
risks through a regular review process.
Our internal controls seek to minimise the impact of risks,
either by reducing their likelihood or mitigating their impact, as
explained further in the Corporate Governance report on pages 63 to
64, and during the year we have continued to develop those
controls. The more granular approach to risk that was introduced in
the prior year has ensured that effective risk management remains
at the core of the Group's strategy, which includes a formal,
six-monthly review by the ELT and the addition of risk management
to the Audit Committee as a standard agenda item for every meeting.
There have been no significant control failings or weaknesses
identified during the year in respect of risk management.
Our Principal Risks
The output from the above process is a summary of Principal
Risks that is set out in the table on pages 37 to 38 and summarised
in the heat map opposite. The heat map sets out the relative
likelihood of the risk crystallising and the impact on the Group if
the risk did crystallise - effectively the 'gross' risk score
before considering the strength of any mitigation. The relative
strength of the mitigation available to the Group to combat each
risk is depicted in the colour of the risk on the heat map (green
being strong, amber being average and red being low mitigation)
with arrows detailing the movement of the gross risk from the prior
year. The symbol E has been included in the Summary of Principal
Risks table overleaf to indicate risks emerging in FY19.
Each Principal Risk has been analysed according to its impact on
both the Group's existing business model, as set out in the 'Future
Strategy Wheel', and the core elements of the Group's strategy as
set out in the 'Future Playbook'. More information on the Future
Strategy Wheel and the Future Playbook can be found on pages 13 and
14. Considering both the existing business model together with the
strategic direction of the Group, the Board carried out a robust
assessment of long term viability, which included performing
sensitivity analysis and reverse stress-testing.
The symbol V has been included in the Summary of Principal Risks
table overleaf to indicate those that have been taken into account
when performing the viability testing.
Changes to the Group's risk assessment in the year
As a result of the risk review undertaken during the year,
several risks identified as Principal Risks in prior years are no
longer considered to be as significant and are therefore not
included in the Summary of Principal Risks table overleaf, with the
reasons for the reduction in the perceived level of risk set out
below:
FY18 principal risks not included Reason for reduction in risk
in FY19 assessment rating
Operating environment - the The acquisitions of Purch, Mobile
structural change in our operating Nations and SmartBrief, together
environment and the pace of with underlying organic growth
transition from print. in digital revenues, mean that
the Magazine division is a much
smaller proportion of the Group's
revenues which has reduced the
impact of this risk.
--------------------------------------
Changes in advertising models Ad blocking has not had a significant
- the increasing trends towards impact on the Group's ability
ad blocking and privacy could to monetise its websites as
result in Future being unable we have to date effectively
to monetise online advertising mitigated this through the use
inventory to the same extent of technology and working with
it does currently. the Coalition for Better Ads
to ensure that we are at the
forefront of market best-practice.
--------------------------------------
Intellectual property - as a Intellectual property infringement
publisher, Future is responsible and management continues to
for any intellectual property be a vitally important area,
infringement or legal issue. however, with the growth experienced
by the Group in the year the
materiality of this risk in
the context of the overall Group
has reduced.
--------------------------------------
Risks Description Mitigation
Personal data The collection, storage and The Data Protection
V use of personal data by the Officer oversees all
Business Model Group presents a risk of data protection matters
link: i, ii, misuse, loss of personal and works with stakeholders
vi data, or cyber-attack which within the Group to
Strategy link: could result in high penalties review, develop and
3 from the Information Commissioner's improve its data practices
Office (ICO) or claims from and procedures.
data subjects. Future may The Group has implemented
suffer reputational risk, a process to respond
as well as a significant to subject access
financial penalty, if it requests in a proper
is responsible for the breach. and timely fashion
Future (and the third parties and uses a Consent
it relies on) is required Management Platform
to comply with strict data on its websites within
protection and privacy legislation, the IAB's Consent
including the General Data and Transparency Framework.
Protection Regulation (GDPR). Controls and contract
Such laws restrict Future's provisions are in
ability to collect and use place to ensure compliance
personal information and with data protection
place significant transparency legislation and confirmation
and accountability obligations is sought from all
on Future. The need to comply 3rd parties who might
with data protection legislation be involved in providing
is a significant control, or processing data
operational and reputational to ensure they are
risk which can affect the also in compliance
Group. with such legislation.
------------------------------------- ------------------------------
Staff - Key The Group is heavily dependent The Board has undertaken
person risk on its CEO and her absence a detailed succession
Business Model would have a significant planning and talent
link: i-vii impact on the Group. There review exercise in
Strategy link: is not currently an obvious the year to ensure
1-5 candidate within the organisation (wherever possible)
who could step up to replace that the Group is
her as CEO, and the Board not overly exposed
would therefore most likely to any one employee.
have to undertake an external This exercise highlights
search for a successor. how each of the executive
team could be covered
in an emergency and
who were the obvious
successors within
the organisation.
The Group has also
recruited several
new senior roles within
the year to provide
additional strength
in experience and
expertise to the senior
management team.
In order to attract
and retain top talent
and ensure that Future
remains an attractive
place to work, appropriate
reward packages (including
long term incentive
schemes) are in place
for key individuals.
------------------------------------- ------------------------------
Cyber security With the further transition Future seeks to ensure
and IT away from print and growth all of its systems
E in digital revenues the Group and public owned and
Business Model is increasingly reliant on operated infrastructure
link: i, ii, technology. complies with best
iii, vi Strategy Hacking of the Group's websites practice as regards
link: 1 or any hacking or infiltration to security, by continually
of the Group's public owned investing in and upgrading
and operated infrastructure IT systems and processes.
resulting in loss of data, The Group's core network
could result in significant is protected by Two-Factor
interruption to trading, authentication security
disruption to the Group's and firewall restrictions,
operations and damage to with a plan in place
its reputation along with to mitigate the effects
further heavy investment of any hack.
being required. To protect against
The data protection elements system/network outages
of this risk have been considered (caused by fraud or
in the Personal Data risk other issues), Future's
set out above. network has multiple
back-up facilities
held in different
locations that minimises
any single point of
failure. Servers are
distributed across
two main data centre
locations and several
controlled server
rooms in different
buildings in Bath,
Bournemouth and New
York.
Following the completion
of acquisitions, assets
are quickly moved
onto the Group's existing
infrastructure (data
centres and Cloud
based providers) except
where not possible
or practicable. Websites
acquired by the Group
are usually transitioned
to the Group's platform
to ensure they meet
the required security
and best-practice
standards.
------------------------------------- ------------------------------
Economic Political and economic instability This risk is mitigated
downturn / and uncertainty in the UK by keeping abreast
Brexit or US could have an adverse of macro-economic
V impact on the Group's operations. developments and ensuring
Business Model We do not expect Brexit to that the Group responds
link: ii-vi have a significant impact swiftly to any as
Strategy link: on the business however a they materialise.
2 high degree of economic uncertainty The Group is diverse,
still remains which could both geographically
reduce consumer spending, and through its large
resulting in loss of revenue number of revenue
and impact on advertisers. streams. This insulates
it from political
or economic instability
in any particular
country or region.
In addition, the Group
has focused on being
the market leader
wherever possible,
which should make
it more durable in
a recession as historically
advertisers are more
likely to continue
to spend with the
market leader in any
particular sector.
------------------------------------- ------------------------------
Advertising The continued industry shift The Group seeks to
V E in the advertising model mitigate this risk
Business Model from 1st Party advertising by ensuring that its
Link: i, iii-vi to Premium Programmatic advertising sales teams are trained
Strategy link: exposes the Group to commercial to sell the benefits
2 risk as this is likely to associated with working
result in a reduction in with Future (rather
yield. than acquiring advertising
programmatically)
and by ensuring that
we continue to maintain
and develop deep direct
client relationships.
This risk is further
mitigated by the Group's
expansion of its video
offering which further
diversifies its revenue
streams, and through
the use of its Hybrid
technology which ensures
that Future drives
the best yields available
in the market.
------------------------------------- ------------------------------
Reliance on Future is very exposed to Future has a dedicated
'search' Google to the extent that audience development
V its websites are reliant team who work to ensure
Business Model on 'search' (i.e. a user Future embeds best
Link: ii-iv, navigating to one of Future's practice within its
vi, vii websites via a search engine editorial and technical
Strategy link: such as Google). teams.
3 Any unforeseen change to In addition, Future
the Google algorithm, its continues to invest
nature or business model in the creation of
could significantly impact top quality content,
the that follows best
Group's revenues. practice to meet the
needs of audiences
and therefore mitigate
as much as possible
its reliance on 'search'.
The Group's recent
diversification into
B2B drives a direct
relationship with
the end customer and
the Group continues
to invest in other
direct sources to
drive direct traffic
and reduce its reliance
on Google.
------------------------------------- ------------------------------
Acquisitions The Group continues to search The Group has successfully
V for opportunities to grow completed and integrated
Business Model through acquisition. There eight acquisitions
link: i-vii is a risk that any such acquisition over the last 36 months.
Strategy link: or its subsequent integration The management team
5 fails to create value for is highly experienced
shareholders. and adept at identifying
suitable acquisition
opportunities, executing
the deal and integrating
the acquired business
into the wider Group.
The risk is further
mitigated through
the performance of
due diligence appropriate
to the size and scale
of the acquisition,
and the preparation
of a clear and detailed
integration plan which
is carefully managed.
------------------------------------- ------------------------------
The Directors do not see the impact of climate change as one of
the Group's Principal Risks. For more information on Group
initiatives to minimise and mitigate its environmental impact,
please refer to the Corporate Responsibility Report on pages 41 and
42.
Key:
Link to Future's Business Model:
i. Email newsletters
ii. Membership and subscriptions
iii. Advertising
iv. Events & experiential
v. Newstrade
vi. eCommerce and lead gen
vii. Content publishing & licensing
Link to our vision and strategy:
1. A global specialist media platform
2. We create fans of brands
3. Our loyal communities
4. Diversifying monetisation
5. Expanding global reach
Long-term viability:
V: Risk taken into account as part of the Company's long term
viability assessment (see page 39)
E: Emerging risk for FY19
Appendix C: Related Party transactions
The following related party transactions are extracted from the
Annual Report and Accounts (page 143):
The Group had no material transactions with related parties in
2019 or 2018 which might reasonably be expected to influence
decisions made by users of these financial statements.
During the year, the Company had management charges payable of
GBP1.4m (2018: GBP0.9m) to subsidiary undertakings. The outstanding
balance owed at 30 September 2019 was GBP1.4m (2018: GBP0.9m). See
note 21 for details.
No individuals other than the Directors meet the definition of
key management personnel. Details of key management personnel
compensation are set out in the Directors' Remuneration Report on
page 88.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACSFFDFEDFUSEDE
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December 13, 2019 07:45 ET (12:45 GMT)
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