Future Publishing continues digital shift
UPDATE: Share price falls over 20%; "reduced headcount" expected at magazine publisher
Update
Future's share price has now dropped by over twenty per cent since the announcement, and further rumours are circulating about the extent of job losses and closures at the company.
Original story
Future Publishing has issued an interim management statement which shows print business continuing to decline on both sides of the Atlantic, shored up by an improved performance from the group's digital holdings.
The report covers the nine months ending June 30, 2011 and gives some indication of where the company will be focusing in coming years.
Group revenues for that period are estimated to have dropped by five per cent since the same span a year ago, continuing the company's internal expectations. As part of that trend, UK circulation revenues fell by 3 per cent, but increased digital advertising income has made up that shortfall by performing above expectations.
In May 2011 the group's UK digital revenues topped £1 million for the first time.
However, US print sales have been disappointing, suffering from decreased retail opportunities and shrinking advertising budgets. Future is "actively discontinuing subsidised magazine subscriptions" in the US and has had to delay a digital product launch worldwide.
"As a result," reads the report, "the Board has decided to accelerate transition of Future US into a primarily digital business. This process may take 12 to 15 months, to allow time for existing subscriptions and other contractual obligations to be fulfilled."
Also included as guidance in the paper is the expectation of job losses as a result of re-structuring and increased efficiencies.
"The benefit of these steps will be to improve efficiency, reduce headcount, reduce property requirements, and help accelerate the most promising areas of digital product development, " reads a paragraph on "re-structuring and exceptional costs".
The report follows the announcement last month that the group would be "streamlining" UK operations after profits dropped by almost half.