A slump in magazine sales and advertising in the US sliced 39 per cent off adjusted pre-tax profit at publisher
There will be further restructuring costs in the current period which is a worry given that cash generated from operations fell from £12m to just £3.8m. Last month’s shock decision to replace chief executive Stevie Spring and finance director John Bowman with UK heads Mark Wood, the former ITN boss, and Graham Harding will save money, but there is more to do. Around £4.5m of operating costs will be taken out of the business in the current financial year, and it is hoped changes to production and a drive to digital will return the US arm to profitability by 2013.
Broker Peel Hunt has kept its 2012 adjusted pre-tax profit forecast unchanged for now at £5.4m, giving adjusted EPS of 1.2p.
|ORD PRICE:||8.5p||MARKET VALUE:||£27.9m|
|TOUCH:||8.5-8.75p||12-MONTH HIGH:||30.5p||LOW: 7p|
|DIVIDEND YIELD:||na||PE RATIO:||na|
|NET ASSET VALUE||19p*||NET DEBT:||19%|
Future's UK business has been fairly resilient and digital revenue is growing. However, with print still responsible for 80 per cent of sales and no dividend support, the shares are high enough.
Last IC view: Fairly priced, 18p, 23 May 2011