Future Publishing reports £19m loss

Magazine publisher Future cancels dividend until 2013 after £19.3m loss

Future, publisher of titles including Fast Car and Metal Hammer, has cancelled all dividends until 2013 after slumping to a £19.3m loss for the year to the end of September.

The company, which dramatically axed chief executive Stevie Spring last month, saw a £5.5m profit in 2010 slump to a £19.3m loss as the publisher was hit by a torrid performance in its US operation.

The publisher said that it is introducing a dividend "holiday" after being forced to significantly increase loans from £7.4m to £11.8m.

"The board recommends a dividend holiday until group borrowings have reverted to less than two times bank EBITDA [earnings before, interest, tax, depreciation and amortisation], which we anticipate happening at the beginning of the 2013 financial year," the company said.

Adjusted earnings per share slumped 71% from 2.4p to 0.7p. Future paid an interim dividend of 0.5p on 3 October.

"Future delivered disappointing results for the past year," said Mark Wood, chief executive of Future Publishing. "While the UK business showed resilience in challenging conditions, the US operations tipped back into loss, pulling down the group's overall final results."

The US operation crashed to a $5.6m loss – in 2010 it had been $300,000 in the black – as circulation revenues slumped 25% and ad revenues fell 9%.

The company said that measures were in place to reduce scale of exposure and return US to profitability by 2013.

"We are migrating the US business to a predominantly digital model and have taken steps to de-risk remaining print properties," the company said.

The UK operation, which accounts for 73% of total revenues, has proved to be "resilient" with digital revenue growth of 36% offsetting the ongoing decline of income from print.

Revenues fell just 2% to £103.4m with profits down 3% to £12.5m.

Circulation revenue fell 3% to £64.6m, while ad revenues grew by 1% to £28.1m.

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Mark Sweney

The GuardianTramp

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