Future plc CFO stepping down as company reports revenue declines and new two-year investment plan

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Future plc’s chief financial and strategy officer Penny Ladkin-Brand announced yesterday that she is stepping down from the company’s board next year, after eight years at the media company.

Her announcement comes as the U.K.-based media company reported $993.3 million (or £788.9 million) of overall revenue in 2023, down 4% year over year, according to its full-year earnings announced on Thursday.

As a result, CEO Jon Steinberg unveiled a new plan to get the company back on track, by investing about $31.5 million to $37.8 million (or £25 million to £30 million) into Future over the course of the next two years.

Future’s U.S. business was particularly hit hard, with overall organic revenue for the division falling 19% year over year. The company defines overall organic revenue as the “like for like portfolio in the period, including the impact of closures and new launches,” but excluding acquisitions that weren’t acquired for a full financial year. Future acquired Shortlist Media, ActualTech and Gardening KnowHow in this fiscal year.

Despite the revenue decreases — which Future also reported in its mid-year earnings in May — Steinberg, who became CEO in April, shared his plans to continue investing in the U.S. market during an earnings call on Thursday.

“We’ve witnessed multiple changes in the Google algorithm, a tough macro [sic] and the rise of AI,” Steinberg said during the earnings call. Despite these challenges, the company is “trying to call a turn in the market” in 2024, he added.

“We’re trying to look at the fact that consumer confidence … in the U.S. and in the U.K. is up quite substantially,” Steinberg said. “We’re trying to say that — combined with audience stabilization — are the two factors that we’ve used in our assessment of the fact that we think that we’re going to see improvement in the back half of the year.”

Steinberg also noted that revenue from Black Friday sales were “definitely soft for us,” due to challenges in the technology commerce category despite growth in homes and sports.

Ladkin-Brand is subject to a 12-month notice period of her departure, according to Future plc’s statement released on Thursday. The company’s board has begun an external search for her successor.

By the numbers:

  • Future plc’s total revenues were about $993.3 million (or £788.9 million) in its 2023 fiscal year (which ended Sept. 30). That’s down 4.5% year over year, compared to the $1.04 billion (£825.4 million) brought in during fiscal year 2022.
  • Overall U.S. revenue at Future plc declined by 19% on an organic basis, and U.K. revenue declined by 4%.
  • Total ad revenue was $309.7 million (£246.0 million), down 6% from $330.5 million (£262.5 million) year over year — and a 19% organic decline. Advertising represented 31% of the company’s revenue.
  • U.S. ad revenue was $200.3 million (£159.1 million), down 8% year over year and U.K. ad revenue was $109.4 million (£86.9 million), a 3% decrease year over year.
  • Affiliate revenue was $244.1 million (£193.9 million), roughly flat year over year but an 8% organic decline.
  • U.S. affiliate revenue was $94.4 million (£75 million), down 4% year over year and U.K. affiliate revenue was $244.1 million (£193.9 million), roughly flat from the same period last year.

Future’s new investment strategy, with U.S. focus

Called “Growth Acceleration Strategy” or “GAS,” Future’s initiative announced on Thursday will invest millions in its U.S. business, marketing costs for a new operating model and new editorial heads to beef up content and content creators to grow social branded content to monetize audiences on those platforms, Steinberg said.

Roughly $8.2 million (£6.5 million) will go towards bringing “the U.S. digital advertising at parity with the U.K.,” according to the company’s presentation on Thursday.

The new operating model will divide Future’s titles into three categories: “hero” brands, “halo” brands and “cash generators.” The 12 hero brands — such as Tom’s Guide, Livingetc and Go.Compare — currently make up half of Future’s revenue and will be the focus for future investment in content and sales. Halo brands — such as Space.com and SmartBrief — which bring in about 30% of the company’s revenue, will “add scale” to the hero brands in growing markets by “enabling sales activations for larger media buys,” Steinberg said. Meanwhile, cash generators — like What’s on Tv — in “low to declining markets” will receive the least investment, he added.

Future plans to hire 200 people — including 150 editorial staff — over the next two years to support its initiative, particularly in areas of buying guides, product reviews and video, Steinberg said. The company also aims to hire 40 people in sales roles in the U.S.

And Future has signed nine partnerships with agencies and holding companies in the U.S., Steinberg said, and hired 13 sales heads since May.

“What’s striking is the difference between the U.K. and the U.S. performance in digital advertising with much greater resilience in the U.K.” Ladkin-Brand said on Thursday. The U.K. business has more established brands, direct sales and sales teams, she added. More than five-times the number of active clients compared to the U.S., said Ladkin-Brand.

However, “the outlook for the U.K. is more challenging over the next year. And that’s reflected in our outlook. Our focus on the U.S. will provide a mitigator to this and offers significant untapped opportunities,” she said. Ladkin-Brand did not expand on Future’s outlook for its U.K. business.

2024 outlook

Steinberg said the “GAS” initiative will drive mid-single digit organic revenue growth, with adjusted operating margin in the range of 28% to 30%. Overall, the company expects low single-digit revenue growth in 2024, according to its earnings report. Its new “GAS” plan will translate into $25.2 million (£20 million) worth of incremental costs in 2024. 

“We enter the year in a solid position with a clear stabilization of the audience trend, providing a foundation for future growth,” Ladkin-Brand said. “As a result, we’re planning for a return to revenue growth in [2024], which we expect to come through in the second half. Over the next three years, we expect an acceleration of revenue growth.”

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