The magazine industry is supposed to be under pressure at the moment – with print sales and advertising in decline.
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In the winter, when many publishers including Immediate Media and The Economist, were taking UK government furlough cash – Future gave all its staff £1,000 to help with the cost of home-working.
Chief executive Zillah Byng-Thorne spoke to Press Gazette as Future announced more than doubling of pre-tax profits for the Covid-hit six months to the end of March.
Future, whose top two brands are Tech Radar and Games Radar, revealed on Wednesday it had grown revenue by 89% to £272.6m in the six months to the end of March, with pre-tax profit up 110% to £56.9m.
Digital advertising was one of the major drivers of this growth, with on-platform display revenue up 30%.
Future also claimed record audience engagement, reaching 419m people a month across its brands including their social platforms and events. It grew its online users by almost a third (31%) year-on-year to 311m and has said it now reaches 33% and 48% of internet users in the US and UK respectively.
Byng-Thorne, who was named chief executive in April 2014 and subsequently launched an acquisitions drive, told Press Gazette that all revenue growth within the business hangs on the quality of its content.
The half-year results and audience growth show this strategy, which saw 150 jobs created in the half-year period and £35m investment in content creation, paying off, she said.
However, although many publishers have reported audience growth during the Covid-19 pandemic amid demand for both trusted news and entertainment, not all have been able to grow revenues at the same rate.
And now there are concerns that Google’s planned Privacy Sandbox roll-out, which will replace the third-party cookies that help publishers sell personalised advertising, could cut their revenues by around two-thirds.
Byng-Thorne said these changes to the web would suit “premium publishers with quality audiences” and specialist subjects, so she expects further digital advertising yields and revenue growth at Future.
But she added that more general mass publishers would be unable to monetise their growing audiences in the same way.
“I think it’s a real testament to the fact that we’re creating the content that advertising partners want to be around,” she said.
The other biggest driver of Future’s half-year growth has been its readiness to make the most of the online shopping trend during the pandemic, with organic e-commerce affiliate growth of 56%.
Both e-commerce and digital advertising had “exceptional” performance during Black Friday in November and Christmas, Byng-Thorne said.
She told Press Gazette the business saw an estimated one-off £5m benefit to e-commerce revenues from Covid-19 in the half-year, with non-essential shops in the UK closed from the start of January and the US government’s stimulus cheques leading to a spike in online spending in March.
Excluding the £5m one-off sum, Future estimates its e-commerce revenues still grew by 49% with further double-digit growth expected to come next year.
At the former TI Media titles, Future recorded 277% year-on-year e-commerce revenue growth in March 2021 with online users up 54% due to an increased focus on North American audiences.
Future completed its £140m takeover of TI Media, with brands including Country Life, Wallpaper* and Cycling Weekly, in April last year.
The increased appreciation from retailers for online shopping opportunities will be one of the lasting impacts of the pandemic, Byng-Thorne predicted.
“I don’t think that reverses and so I think at Future we’re well-positioned to help those retailers find customers by essentially acting as a virtual high street online writing content about the things that you might want to buy,” she said.
Exhibitors ‘desperate’ for events to return
Another legacy of the pandemic, Byng-Thorne predicts, will be continuing to run some smaller B2B events virtually, although Future’s flagship exhibitions like The Photography Show and the National Homebuilding & Renovating Show will return in-person when they can as people want to see and touch what’s on offer.
Byng-Thorne said: “I’m sure that when we look back at this period in a few years’ time we will see that some things changed permanently and some things were just entirely because of the situation we found ourselves in.
Future’s organic events revenue declined by 81% year-on-year in the six months to March and Byng-Thorne said exhibitors are “desperate” to get back and “the pipeline is very strong because of the huge demand”, but that the company is still waiting for more Government guidance before making any firm plans.
Although newsstand sales were hit by the continuing pandemic, Future’s magazine subscription revenue was up 2% on an organic basis and 8% once TI Media brands are included.
Byng-Thorne said this was “testament to the fact people still love magazines” and that although newsstand sales may show growth in the next six months: “We know that’s not real so I think what we’ve just got to do is make sure that we write the best content we can and make it available on as many channels as we can, and then see where we get to this time next year.”
Asked for standout brands, Byng-Thorne said there had been a “really strong performance” across the board but pointed to GamesRadar which has benefited from audience and monetisation growth during the recent “renaissance” in gaming.
She also pointed to strong performances from Tom’s Guide in the US, home interest brands Real Homes, Livingetc and Woman & Home, while Gardeningetc, which launched online last summer, reached 1m users in March.
That launch, she said, showed Future has “absolutely got the zeitgeist around what was popular right now” while the diversity of its entire portfolio has had something for everyone during the pandemic “whether people are outside or inside”.
‘Office needed for collaboration to flourish’
Another legacy of the pandemic will be the increased flexibility for employees: Future revealed it will be requiring staff to return to the office but allowing them to continue working from home for up to two days each week.
The company said on Wednesday: “While our business has continued to perform during the pandemic we believe that for collaboration to flourish we do require a return to office-based working, in particular, to ensure that our most junior colleagues have the opportunity to learn through observation.”
Future initially used the UK furlough scheme and closed six magazines in early damage control – but it soon paid the Government cash back after its financial outlook stayed “strong” despite lockdown.
During the winter it paid all employees up to a £1,000 stipend “due to the increased complexity in their lives as a result of the ongoing pandemic restrictions”.
Asked her biggest learning as a chief executive leading a growing business during the pandemic, Byng-Thorne said: “You cannot communicate enough – I know it sounds really trite but if I’m not sick of my own voice I’m not talking to enough people… unless you have that conversation five or six times it is not truly aligned… and when you’re growing at the rate we’re growing alignment is critical.”
In 2020 Future tripled its pre-tax profits for the second year running and announced plans to buy GoCo, the owner of price comparison site Go Compare for £594m. Now the integration is “well advanced” it expects cost synergies to be £15m per year, more than the £10m originally expected.
Earlier this month Future announced it had acquired Marie Claire US (it already owned the women’s brand in the UK) to strengthen its position in the women’s lifestyle market in North America.
Additional data reporting by Aisha Majid