A slump in magazine sales and advertising in the US sliced 39 per cent off adjusted pre-tax profit at publisher Future, the company behind titles including Guitar World and the T3 gadget magazine. If that wasn't bad enough, the decision to write down the value of the group's US assets by £17m plunged the business into a huge loss and prompted a 19 per cent collapse in the share price. Add in 59 per cent increase in net debt to £11.8m, and a dividend 'holiday' is the price for keeping the banks onside. Shareholders will now have to wait until at least 2013 for their next payout having only just received the interim dividend announced in May.
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.