UK publisher Future warns that declining readership and ads will match the full year’s results

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Future, the publisher of UK-listed magazines such as Country Life and Marie Claire, warned that declining readership and digital advertising will push its full-year results to bottom of market expectations.

Shares of the group fell more than 15% on Thursday, less than a quarter of their value two years ago, as investors backed the group as a winner from the pandemic, leaving the company valued at nearly £1bn.

In his first streak since Jon Steinberg took over from Zillah Byng-Thorne as CEO in April, Future said “tough market conditions” for consumers would now hit its viewership in the second half of the year as well as the first.

Jefferies analysts said it was a “challenging series of results,” adding that “the pressure will be on the new CEO. . . articulating a strategy for the return to growth and the nature of the US investments that have been recalled.”

Byng-Thorne has been credited by analysts for turning the tide of the once indebted publisher. He oversaw an acquisition-fueled expansion strategy that moved the business from reliance on traditional print to become a digital media group better able to take advantage of e-commerce and online advertising.

More than £300m has been written off his market value after Byng-Thorne announced his resignation after nearly a decade.

On Thursday, Steinberg said that “the macroeconomic environment remains challenging, but we are well positioned to continue to outperform the sector.”

Pre-tax earnings for the six months to the end of March fell by nearly a fifth to £66.4m. Revenues remained stable, thanks to the contribution of the acquisitions and the favorable exchange rate.

But after those factors were eliminated, revenues fell by a tenth, reflecting declining audiences and a nearly one-fifth drop in digital advertising in the first six months of the year.

Peel Hunt cut its operating profit estimates, warning that signs of a reversal in the declining audience trend would be needed to achieve “a revitalization of the stock”.

Its analysts added: “Even if we continue to believe that the Future model is strong, audience trends can be unpredictable and until we see lasting change, there is no guarantee that we are at the end of the downgrade cycle.” “.

The company owns more than 100 magazines, which have increasingly been transformed into digital brands. Its strategy of using a growing online audience drawn to specialist publications, such as movies, games and photography, has helped advertisers target users based on their interests.

The group pursued a US-first strategy that staked its core stocks on the largest markets in North America. Future bought Dennisthe publisher of titles including The Week and Minecraft World, for £300m in 2021. It also spent nearly £600m to buy comparison website GoCompare in 2020 and £140m for TI Media, which published Horse & Hounds and Wallpaper.

However Steinberg added that the business would be “lost” if it tried to move its listing to New York. “It’s not on the agenda,” he said.