future plc ar17€¦ · 2016: £(16.5)m continuing profit before tax £0.2m 2016: loss £(14.9)m...

AR17Future plcAnnual Report and Accounts2017

Annual R

eport and Accounts 2017

Future plc

1 Future plc

Strategic Report

01 Group overview02 Chairman’sstatement03 ChiefExecutive’sreview 05 Strategicoverview07 Whatwedo09 Risksanduncertainties11 Corporateresponsibility

Financial Review 13 Financialreview

Corporate Governance

17 BoardofDirectors19 Directors’report23 CorporateGovernancereport29 Directors’remunerationreport43 Independentauditors’report

Financial Statements

49 Financialstatements 87 NoticeofAnnualGeneralMeeting92 Investorinformation

Continuing Adjusted Operating Profit

£8.9m 2016: £2.8m

Continuing Revenue

£84.4m 2016: £59.0m

Continuing Adjusted EBITDA

£11.0m 2016: £5.2m

Continuing Digital Advertising

76% of total continuing advertising revenues (2016: 78%)

-AdjustedEBITDArepresentsearningsbeforesharebasedpaymentsandrelatedsocialsecuritycosts,interest,tax,depreciation,amortisation,impairment,andexceptionalitems.

-AdjustedoperatingprofitrepresentsadjustedEBITDAlessdepreciationandamortisationofacquiredintangibles.

Net Debt

£(10.0)m 2016: Net cash £0.5m

Unique Users

53.3ma month (Q4 up 18% on Q3)

Continuing Exceptional items

£(3.7)m 2016: £(16.5)m

Continuing Profit Before Tax

£0.2m 2016: Loss £(14.9)m

Continuing Recurring Revenues

£23.0m 2016: £15.0m

-RecurringrevenuesencompasseCommerceandsubscriptions.

-Exceptionalitemsfor2016aboveincludesimpairmentofintangibleassetsof£13.0m.

Future plc is an international media group, listed on the London Stock Exchange (symbol: FUTR). These highlights refer to the Group’s annual results for the year ended 30 September 2017.

Group overview

2Annual Report and Accounts 2017Strategic R

eport

Chairman’s statement

IampleasedtoreportthattheGrouphashadanoutstandingyearandthebusinesshasgainedstrongmomentum.Overthepastyear,theGrouphasmadematerialprogressinexpandingthebusiness.Therehasbeensignificantgrowth,bothorganicallyandthroughacquisition,whichhasresultedinafantasticsetofresults.

A global specialist media platform with diversified revenue streams

TheGroup’sfullyearresultsareextremelypositive,withyear-on-yeargrowthinrevenueof43%andexceptionalgrowthinadjustedoperatingprofitof218%.Inadditionthere hasbeenstrongcashconversion throughouttheyear.

LastyeartheGrouplauncheditsstrategytobeaglobalspecialistmediaplatformbusinesswithdiversifiedrevenuestreams.Thisyearhasproducedclearmomentumonthisstrategy,withstrongprogressinbothrevenuediversificationanddevelopmentoftheplatform.

BothMediaandMagazinedivisionsareperformingwellwithfastrevenuegrowthinMediarevenuestreams,particularlyineCommerceandevents,andsignificantaddedscaleandoperationalefficienciesintheMagazinedivisionfromacquisitions.

TheGrouphasmadeanumberofacquisitionsduringtheyear,havingcompletedtheacquisitionofImaginePublishinginOctober2016,acquiredTeamRockatthebeginningof2017andacquiredthehomeinterestdivisionofCentaurMediainAugust2017.Theintegrationofhomeinterestiswellontrack.

TheBoardandIwereshockedbythetragicnewsthatManjitWolstenholme,theGroup’sseniorindependentnon-executiveDirectorandChairmanoftheAuditandRemunerationCommittees,passedawaysuddenlyon23November2017.Manjitwasatowerofstrengthandsupporttomeandmycolleagues,bothpersonallyandprofessionally,formanyyearsandshewillbesadlymissed.

IwillbesteppingdownfromtheFutureBoardon1February2018.IhavebeenChairman

ofFutureforoversixyears.DuringthattimetheCompanyhashadtoconfrontahugelychallengingmarketplaceandhasnowcomethroughasasignificantlychangedbusiness,wellpositionedtooffervaluegrowthtoshareholders.Withtheacquisitionsoverthelast18monthsandtheexecutivemanagementleadership,theCompanyisenteringanewphase.IbelievethetimehascomeforanewChairmantotakeover,toensurestabilityandcontinuityduringthisexcitingnextphase.IhaveeveryconfidencethatFuturewillprosperinthecomingyears.

Afterarigoroussearchformysuccessor,andontherecommendationoftheNominationCommittee,theBoardhasappointedRichardHuntingfordasmyreplacement.RichardbringsextensivemediaindustryandpubliccompanyexperiencefromhisCEOroleatChrysalisplcandhisChairmanrolesatVirginRadio,WirelessGroupplc(formerlyUTVMediaplc)andCrestonplc.RichardwillinitiallyserveasactingChairmanoftheAuditandRemunerationCommitteesandwilltakeoverfrommeasChairmanoftheBoardon1February.

ThehardworkandprofessionalismofFuture’semployeeshasbeenthedriverbehindtheamazingresultsthisyear.OnbehalfoftheBoard,Iwouldliketothankeveryonefortheircommitmentthisyear.

Peter Allen Chairman

“ TheGroup’sfocusonitsstrategyhasproducedclearmomentum,withstrongprogressinbothrevenuediversificationanddevelopmentof theplatform.”


3 Future plc

Strategic reportChief Executive’s review

Futureisaglobalplatformforspecialistmediawithscalable,diversifiedbrands.Wehavemadesignificantprogressagainstourstrategicobjectivesthisyearandhavedeliveredsomestrongresults,withrevenuegrowthof43%year-on-yearandadjustedoperatingprofitgrowthof218%year-on-year.Theacquisitionswehavemadethisyearhaveaddedsignificantscaleandoperationalefficiencies.

Futurehasdeliveredanotheryearofgrowth,withrevenueup43%year-on-yearto£84.4m(2016:£59.0m),drivenbyorganicgrowthof8%andacquisitions,adjustedEBITDAup112%year-on-yearto£11.0m(2016:£5.2m),withadjustedEPSup144%.Inaddition,adjustedfreecashflowstotalled£15.3m(2016:£4.6m)andreportedEPSincreasedto4.3p(2016:lossof59.6p). TheGrouphasdeliveredgrowthinbothoperatingprofitabilityandcashgeneration,drivenbystrongrevenuegrowthineCommerce,digitaladvertisingandevents.

Futurehasseenclearbenefitsinoperationalgearingfromtheinvestmentincentralfunctionsandtechnologyinfrastructure,evidentinthesignificantimprovementinadjustedEBITDAmarginto13%(2016:9%).Theinvestmenthasalsoallowedanumberofnewbrandlaunchestobedeliveredquicklywithminimalincrementalinvestmentcost.

TheMediadivisionisperformingwellwithfastrevenuegrowthinallareas;eCommercerevenuehasmorethandoubledyear-on-year,whileeventshavegrown58%year-on-year.Inaddition,digitaldisplayadvertisingrevenuehasincreasedby21%year-on-yearasaresultofvaluingthequalityofouraudience,combinedwiththeinvestmentwehavemadeinatechnologystackthatcapitalisesonthegrowthinprogrammaticadvertisingwhilemaximisingdigitalyields.

TheMagazinedivisionhasbenefitedfromaddedscaleandoperationalefficienciesthroughtheacquisitionsofImaginePublishing,TeamRockandthehome interestportfolio.

Thegrowthinrevenuesandoperatingprofitabilityandresultingstrongcashconversionintheperiodledtoyear-endnetdebtoflessthan1xadjustedEBITDA.

Inlightofthecontinuedfocusondebtreduction,confidenceintheGroup’sgrowthstrategyandthecontinueddevelopmentofthebusinessleadingtomoreconsistentcashflowsanddiversifiedrevenuestreams,theBoardisnowinapositiontoconsiderreturningtopayingadividendtoshareholders,whilstmaintaining sufficientresourcestocontinueinvesting inthebusiness.

Global platform business for specialist media

In2016Futureoutlineditsstrategyofbecomingaglobalplatformbusinessforspecialistmediawithdiversifiedrevenuestreams.ClearmomentumonthisstrategygainedthroughouttheyearisreflectedintheGroup’sfinancialperformance.

TheGroupcontinuestodiversifyitsrevenuestreams;eCommercerevenuescontinueto

“ Wehavedeliveredsignificantgrowthinbothoperatingprofitabilityandcashconversion,drivenbystrongrevenuegrowthineCommerceandevents.Thethreeacquisitionswehavemadethisfinancialyearhavefurtherstrengthenedanddiversifiedourrevenuestreams.”

Zillah Byng-Thorne ChiefExecutive


eport

Wehave31msocialmediafollowers

75.6kpeopleattend ourevents

growwellorganicallyandgrowthineventshasbeenbolsteredbytheacquisitionsofTeamRockandthehomeinterestportfolio.Withtheintroductionofanewcontentverticalthroughthehomeinterestacquisition,audiencediversificationhasincreasedtosevenaudiencecommunities.

Investmentindigitalassetsandthecontinuedtightmanagementofcostshasincreasedoperatingmarginsandhelpeddeliveron thisstrategy.

Loyal communities

Futureattractsalargepassionateaudienceacrossonline,eventsandprintof85million;theGroup’sinfluentialandmarket-leadingbrandsofferouraudiencestheopportunitytodothethingstheylove,throughanexcitingcombinationofexperiences,uniquecontentandeCommerceofferings.

Futureisfocusedonmeetingitsaudience’sneedswithspecialisedandhigh-qualitycontentandexperiences.Thisconnectioncanoccurwherevertheaudienceis,withstrongengagementwithusersthroughalargesocialmediareachof31millionfollowersacrossFacebook,TwitterandYouTubeandgeneratingsevenmillionsessionstothedigitalpropertiesfromsocialmedia.

HighengagementwasevidentatThePCGamingShowatE3inJune,whichwaswatchedliveonspecialistgamingchannelTwitchbyanaudienceofindustry-leadingscale,withovertwomillionuniqueviewersand630,000concurrentvideoviewersacrossallplatforms.

Thebrandsaremarket-leadingandhaveseensignificantaudiencegrowthof18%year-on-year,reaching53.3milliononlineusers.IntheUS,the10%year-on-yeargrowthinonlineusersto20.4millionhasresultedinan

increaseinourmarketshare,particularly intechnology.

Acquisitions

Futurehasmadethreeacquisitionsthisyear,inlinewiththeGroup’sstrategytoexpandglobalreachthroughacquisitions.Theseacquisitionshaveaddedsignificantscaletothebusinessandwehavebenefitedfromtheresultingoperationalefficiencies.

Theacquisitionshavefurtherdiversifiedrevenuestreamsbyaddingnewverticalsincludingknowledge,musiclisteningandhomeinterest.

Current trading and outlook

Tradinginthecurrentfinancialyearhasstartedwelland,atthisearlystage,isperforminginlinewiththeBoard’sexpectations.

TheintegrationsofbothImagineandTeamRockhavebeencompletedwithsynergiesdeliveredinlinewithexpectationsandbotharetradinginlinewithexpectations.

Theintegrationofthehomeinterestportfolio,acquiredinearlyAugust,isprogressingwellandisexpectedtobefullycompletedbytheendofthiscalendaryear,withthelaunchofRealhomes.cominNovember2017akeypartoftheacquisitionstrategy.

Zillah Byng-ThorneChiefExecutive

Wesell960kmagazinesandbookazines permonth

Wereach53.3musersthroughourwebsites

Keydetailsoftheacquisitionswehavemadein2017areincludedbelow:

Acquisition Revenue*

ImaginePublishing £16.4m

TeamRock £2.8m

CentaurMedia’shomeinterestdivision** £12.8m

*Revenuefiguresobtainedfrommostrecentannualfinancialinformationor,inthecaseofCentaurMedia’shomeinterestdivision,financialinformationrelatingtotheacquiredassets**CentaurMedia’shomeinterestdivisioncomprisedAscentPublishingLtdandCentaurConsumerExhibitionsLtd

5 Future plc

Our strategy

Lastyearwelaunchedourstrategywhichisfocusedonbecomingaglobalplatformbusinesswithscalable,diversifiedbrands.Buildingaplatformbusinessallowsustounlockandcreatesignificantnewrevenuestreams,expandingourbrandsandreachingouraudienceindifferentways.

Thisyearwehaveclearmomentumonthisstrategywithstrongprogressinbothrevenuediversificationanddevelopmentoftheplatform.Wehaveachievedthisthroughorganicgrowth,acquisitionsandstrategicpartnershipswhichhavealsoexpandedourglobalreach.

Theinvestmentwehavemadeoverthelastcoupleofyearshascreatedaninfrastructurethatwecanscaleandthatisunderpinnedbymarket-leadingglobalbrandsindiversifiedverticals.Wehavescalabletechnologywhichwecombinewithdatainsighttosupportorganicgrowth.

Wecontinuetoinnovatewithourmagazinebrands,withre-launchesofAirgunShooterandTotalGuitarin2017andT3magazineinthecurrentfinancialyear.Wehavefocusedongrowingouronlineandprintsubscriptionsandclubsinordertodriverecurringrevenuestreamsandfurtherengagewithourpassionateaudiences.

Our highly-engaged audience

Weareproudofourpurposewhichissimple;changingpeople’slivesthroughsharingourknowledgeandexpertisewithotherstomakeiteasierandmorefunforthemtodowhattheywant.Ouraudienceiskeytoeverythingwedo;weunderstandtheimportanceandvalueofourhighlyengagedaudienceandourcontentandexperiencesarespecificallytailoredtothesecommunities.

Reachingaglobalaudienceof85millionthroughourwebsites,events,socialmediaandmagazines,wecontinuetocreateloyalcommunitiesbygivingthemaplacetheywanttospendtheirtimeandwheretheygotomeettheirneeds.

Wearefocusedonenhancingandbuildingtherecurringrevenuestreamsofonlineandprintsubscriptionsandmemberships,suchasTeamRock+,PCGamerClubandphotographypremiumsubscriptions.Membershipgivesusersaccesstoexclusivemembercontentandoffers.Acrossouronlineandprintproductswehaveover500,000subscribers,up26%year-on-year.

A global platform for specialist media

Strategic overview

AtFuture,weprideourselvesontheheritageofourbrandsandloyaltyofourcommunities.Offeringcoreexpertise,wehelpdedicatedenthusiastsfollowtheirpassionthroughhigh-qualitycontent,uniqueexperiencesandinnovativetechnology.

Our brands

Futuretodayboastsaportfolioofover120brandsacrossonline,magazinesandevents.OurspecialistmediabrandscoverabroadrangeofsectorsenablingtheGrouptomitigateriskandlessenitscyclicalexposuretoanyonevertical.

Oureventsconnectourcommunitiesthroughmeaningfulexperiences;smallandintimatetotrulynationalevents.Wenowhave24annualeventsacrosstwocountries,10ofwhichweacquiredthisyear.

Wehavealsoseenstrongorganicrevenuegrowthfromourcoreglobalsuperbrands–TechRadarrevenueisup37%year-on-year,PCGamer.comrevenueisup52%year-on-year,GamesRadarrevenueisup33%year-on-yearandT3.comrevenueisup88%year-on-year.

Ourbrandscontinuetobemarketleaders,holdingthenumberonemarketpositionsintheUKinonlineconsumertechnology,onlinecreative&designandtheglobalnumberonepositioninPCgaming.

Inadditionwearecapitalisingonemergingopportunitiesthroughbookazines,whichisalowcostinnovationmodel,withover430bookazinesproducedintheyeartotallingrevenueof£10.1m.

Data-led innovation through content and technology

Ourglobalplatformbusinessenablesustofacilitateandaccelerategrowthopportunitiesandunlocksignificantnewsourcesofrevenue.

Thisyearwehaveseenstrongorganicgrowth,particularlyfromeCommerceandevents.Thishasbeendrivenbyanumberofnewinitiatives,includingnewcontentgenreswithinthecurrentbrandssuchasbroadbandorT3Homeandusingdatatooptimiseconversionrates.

FollowingthesuccessfultestlaunchofT3Babyduringthecourseof2017,wehavelaunchedanumberofnewsitesincludingDigitalCameraWorldandTheRadar.LaunchedinOctober2017,TheRadarisaneCommerce-ledwebsiteaimedatallowinguserstofind,reviewandbuyproductsacrossanumberofcategoriesincludingtech,homeware andbeauty.

Followingtherecentacquisitionofthehomeinterestportfoliowelaunched Realhomes.comduringNovember2017,ahomeinteriorswebsiteaccompaniedbybuyingguidestotakeadvantageofcurrenttrendsinouraudience’sonlinesearchandpurchaseintent.


eport

Byscalinginvestmentinourplatformbusinesscoupledwithourleadingcontent,weareexpandingourglobalreachthroughdigitalandprintlicensing.Thesestrategicpartnershipsleverageouruniqueplatformpropositionbyofferinghigh-marginlicensingandfranchisingofkeybrands.Wehavesignedatotalof10newlicensingpartnersthisyearincludingPaniniinSpain,BeijingMuchuanCultureDevelopmentinChinaandTbreakintheMiddleEast.

Thedigitallicensingopportunitiesthatweofferenableglobalpartnerstooptimisetheirlocalofferingbyaccessingtrustedbrandsandauthoritativecontent,andleveragingauniquecommercialmodeldevelopedbyFuture.Twoofthe10licensingpartnerssignedthisyear,oneinIndiaandtheotherintheMiddleEast,arestrategicinnature,whereourpartnerislicensingourdigitalcontentand technologyplatform.

Acquisitions

Ourinvestmentsthisyearinourplatformanddata-leddecisionmakingtoolsunderpinourbuyandbuildstrategy,aswecreateadditionaldiversifiedrevenuestreamsfortheseacquiredbrandstogeneratefurtherorganicgrowth.

InOctober2016,wecompletedtheacquisitionofImaginePublishing,theintegrationofwhichisnowcomplete.TheacquisitionofImaginehasresultedinsignificantcostsynergiesandcashgeneration.IthasalsoaddedsignificantscaletoourMagazinedivisionandintroducedanothervertical,knowledge,toourportfolio.Theknowledgeverticalprovidesspecialistcontentonscience,history,wildlifeandcrime.

InJanuary2017,FutureacquiredTeamRock,aportfolioofmusiclisteningmagazines,websiteandevents.Thenewmusiclisteningvertical

complementsourexistingmusicmakingassetsaswellasexpandingoureventsportfolio.TheacquisitionofTeamRockbringsscalablebrandswithaloyalfanbase.

InAugust2017,weacquiredthehomeinterestdivisionfromCentaurMedia.Theacquisitionhassignificantlyenhancedthescaleofoureventsbusiness,withtheadditionofmarket-leading,nationalhomeinterestshows,andhaspresenteduswithgrowthopportunitiesacrossourplatformbusinesswiththelaunchofanewdigitalbrandtomaximisedigitaladvertisingandeCommerceopportunities.

Theseacquisitionshaveallowedustoexpandoureventsprofiles,whilststrengtheningtheMagazinedivisionandcontinuingtoprovidesynergisticbenefits.

7 Future plc

Media

TheMediadivisionfocusesonbeingattheforefrontofdigitalinnovationwiththreecomplementaryrevenuestreams:eCommerce,eventsanddigitaladvertising.Itoperatesinanumberofsectors,includingthegrowingtechnologyandgamesmarkets,andhasanumberofleadingbrands,includingTechRadar,PCGamer,GamesRadar+,ThePhotographyShow,GenerateandGoldenJoysticks.

Ourflagshiptechnologywebsite,TechRadar,istheUK’slargestconsumertechnologywebsiteandaleadingauthorityonproducts.Ourtechnologybrandscombinedreachover30millionusersaswellasahugereachof4.3millionacrosssocialmedia.

LeveragingdataandSEOexpertisemeansthatwecanprovidecontentandeCommercefunctionalitysuitedtoouraudience’sneeds.

InOctober2017welaunchedTheRadar,aneCommerce-ledtechnologycontentwebsiteaimedatallowinguserstofind,reviewandbuyproducts.InNovember2017welaunchedRealhomes.com,ahomeinteriorsandhomebuildingwebsite.

Ourgamingportfolioisthevoiceofauthorityforgamersacrosstheglobe,guidingplayersandinfluencingcultureforover30years.OurtwocoregamingbrandsareGamesRadar+andPCGamer.Theportfoliocoversthegames,filmsandTVourmediaaudienceloveandhasanengagedsocialmediaaudienceof23.8millionandreached18.5millionmonthlyusersthisyear,itslargestevermonth.

PCGameristhebiggestPCgamingbrandintheworld,includingtwosuccessfulevents,ThePCGamingShowandPCGamerWeekender.InJune2017ThePCGamingShowwaswatchedby630,000concurrentviewersharnessingourvideoexpertiseformulti-channelforclientsandlivestreaming.

OneofourcorephotographybrandsisThePhotographyShow,whichistheUK’slargestlivephotographyexhibition.Theaward-winningshowtookplaceagaininMarchandattracted32,000visitors.

InJulywelaunchedDigitalCameraWorld,aglobalphotographywebsitededicatedtohelpingphotographersofallskilllevelsimprovetheirimages,buythebestgearandgetinspiredbyotherphotographers.

Ourcreativeanddesignwebsite,CreativeBloq,isthenumberonecreativeanddesigncontentwebsiteintheUKandtheUS,reachinganaudienceofover2.9million.WealsohosttheGenerateconferences,theeventforwebdesignersanddevelopers,whichtakeplaceinLondonandNewYork.

Theacquisitionsmadethisyearhaveaddedanumberofneweventstoourportfolio,includingthenationalHomebuilding&RenovatingShow,aswellasanumberofmusiceventsfromTeamRock,includingMetalHammerGoldenGods.

Magazine

TheMagazinedivisioncreatesspecialistmagazinesandbookazines,with60magazinesandover430bookazinespublishedayear,withatotalglobalcirculationofoveronemillion.TheMagazineportfoliospanstechnology,gamesandentertainment,music,creativeandphotography,fieldsports,knowledgeandhomeinterestverticals.ItstitlesincludeT3,TotalFilm,HowItWorks,EdgeandAllAboutHistory.

WeareoneofthelargestspecialistmagazineandbookazinepublishersintheUK,apositionthathasbeenstrengthenedbytheImaginePublishing,TeamRockandhomeinterestacquisitionsthisyear.Theacquisitionsalsointroducedthenewverticalsofknowledge,musiclisteningandhomeinterest.

Ourgamingmagazinesandbookazinesare aleadingauthorityonalltypesofvideo gaming,includingourofficialPlayStation andXboxtitles.

Future’stechnologytitlescoverallaspectsofconsumertechnologyfromtheverybesttechproductsinT3magazinetospecialistareascoveredbyMacFormatandLinuxFormat.

OurfilmandTVtitles,TotalFilmandSFX,takeapassionateandauthoritativelookateverypartofthefilmandTVworld,fromallthelatestblockbusters,comicbooksandsci-fiextravaganzastotheverybestOscarbaiters,arthousemasterpieces,hiddengemsandfestivalhits.

FutureistheUK’sleadingpublisherofphotographymagazines.Ourportfolioofspecialisedphotographybrandsallowsleadingbrandstoaccessandtosimultaneouslyengagevaluablein-marketconsumers.

OurmusicportfolioistheUK’sleadingandmostinfluentialmusicnetworkreachingpassionateconsumersthroughtheworld’sfavouritemusicmakingbrands.

Ourextensivecreativeanddesignportfolioismarket-leading,providingcreativeinspirationfortheglobaldesigncommunity.

Our divisionsWhat we do

Futureplcisaninternationalmediabusinessorganisedintotwodivisions,MediaandMagazine.


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Brands

Technology brandsTechRadarT3TheRadarGizmodoUKLifehackerUKITProPortalMobileIndustryAwardsMacFormatMaximumPCLinuxFormatMacLife

Games & entertainment brandsGamesRadar+PCGamerKotakuUKGoldenJoysticksOfficialPlayStationSFXTotalFilmOfficialXboxGamesTMEdge

Creative & photography brandsCreativeBloqDigitalCameraWorldThePhotographyShowGenerateconferencesDigitalCameraN-PhotoPhotoPlusDigitalPhotographerComputerArtsNetImagineFXPhotoshopCreative

Music brandsMusicRadarTeamRockTheLondonAcousticShowTheLondonDrumShowMetalHammerGoldenGodsAwardsProgressiveMusicAwardsClassicRockMetalHammerProgGuitaristTotalGuitarGuitarTechniquesRhythmComputerMusicBassGuitarMagazine

Home interest brandsHomebuilding&RenovatingHomebuilding&RenovatingShowRealHomesPeriodLiving

Field sports brandsAirgunShooterSportingRifleBowInternationalClayShooting

Knowledge brandsHowItWorksAllAboutHistoryHistoryofWarWorldofAnimalsAllAboutSpace

Business review

Business review

Key Performance IndicatorsThekeyperformanceindicatorsarepresentedonacontinuingbasis.

2017 2016

Corporate KPIsAdjustedEBITDA(£m): 11.0 5.2Adjustedoperatingprofit(£m): 8.9 2.8Media Division KPIsNumberofusersvisitingourwebsites(monthly) 53.3m 45.2mNumberofeventattendees(thousands) 75.6 38.3NumberofeCommercetransactions(thousands) 1,982 1,128Magazine Division KPIsNumberofcopiessoldpermonth(thousands) 961 739Subscriberbase(thousands) 461 399Copiessoldasapercentageofcopiesprinted (includingsubscriptions)

40% 45%

9 Future plc

Risks and uncertainties

Likeallbusinesses,ourbusinessfacesrisksanduncertaintiesthatcouldimpacttheGroup’sachievementofitsobjectives.Riskisacceptedasbeingapartofoperatinganybusinessandwehavethereforeestablishedacontinuousprocessofidentifying,evaluatingandmanagingrisk.

Risks and uncertainties

Risk management

Risks Description Mitigation

Operating environment Thestructuralchangeinouroperatingenvironmentandthepaceofthetransitionfromprintremainarealrisk.Thereisariskthatprintcirculationvolumesandprintadvertisingrevenuesdeclineatafasterratethananticipatedanddigitalrevenuesdonotgrowataratetooffsetthedecline.

Futurecontinuestoinnovate,makingavailableitsspecial-interestcontenttoconsumersinanumberofformats,inprint,onlineandatevents.Thediversificationofrevenueshelpsprotectagainstrapidchangesinoperatingenviroment.Wecreatebest-in-classcontenttocreateanemotionalconnectionwithouraudiencesofengagedenthusiasts,whorepresentanattractiveaudienceforadvertisers.WehavebecomeanintegralpartofthepurchasecyclewhichcanbemonetisedviaeCommerce.

Intellectual property Futureuses,andgrantslicencestoitslicenseesallowingthemtouse,varioustypesofthird-partycontentincludingmusic,audiovisualmaterial,photos,imagesandtext.Asapublisher,Futureisresponsibleforanyintellectualpropertyorotherinfringementrelatingtothesameandaslicensor,Futureisresponsibletoitslicensees.

Futureproducesguidanceandin-housetrainingtoeducateitsstaffontheimportanceofobtainingappropriaterightsorlicencesandhasadedicatedin-houserightsmanagementteam.Future’slegalteamreviewsallsignificantlicencesrelatingtothird-partycontentand,whereappropriate,seekswarrantiesandindemnitiesrelatingtothesame.FuturelicensescontenttothirdpartiesbasedonstandardcontractswhichseektolimitFuture’sliability.

Financial Thelonglagtimeforreportingonsalesofexportedprintedcopiescontinuestobeanareaofforecastinguncertainty.

Forecastingremainsdifficultinallconsumermarkets.Aswediversifyourrevenuestreams,newactivitiesareinherentlymoredifficulttoforecastaccurately.

Advertisingpipelinescanbesubjecttoslippage,withtheriskthatresultingrevenueispushedintolateraccountingperiods.

Futurehasavailablebankfacilitiestotalling£25.4mat30September2017.Failuretocomplywiththefinancialcovenantsofthesefacilitiescouldresultinadditionalfinancecostsandthepossiblewithdrawalofthefacilities.

Thesignificantissuesconsideredinrelationtothefinancialstatementsfortheyearended30September2017aresetoutintheAuditCommitteesectionoftheCorporateGovernancereportonpages26to28.

Onprintedproducts,inparticularbookazines,amoreconservativeinitialviewonsalesestimatescontinues,withemergingtrendsbecomingmoreapparent.

Future’sforecastinginrespectofinnovativeproductswillbecomeeasierasthoseproductsdevelopamoreconsistentcustomerbaseandstablebusinessmodel.

Carefulmonitoringoftheadvertisingpipelineandbookingstoclosethegapintheeventofanyshortfall.

Futurecontinuallymonitorsitscashflowsandcovenantsandhasoperatedwithinallitscovenantsthroughouttheyear.TheGroupnegotiatedincreasedfacilities(upfrom£5.0min2016)followingtheacquisitionsofImagineandthehomeinterestdivisionwhichexpireinJune2021.Thereiscurrentlysignificantheadroomonthesefacilities.Seenote18tothefinancialstatementsformoredetail.

ReviewbyAuditCommitteewithexternalauditors.

IT Thebusinessisincreasinglydependentontechnology.

Intheeventofatotalnetworkorserverfailure,ordataloss,therewouldbeamajorimpactontheproductionofmagazines,operationofwebsitesandtheoperationaleffectivenessofthebusiness.

Future’snetworkhasatleasttwodiverseroutesforallkeyofficesandbusiness-criticaldataisheldonthreehighlyresilientstoragedevicesindifferentlocations.Inaddition,allcoreswitchesareduplicatedindifferentbuildingssotherearenosinglepointsoffailure.ServersaredistributedacrosstwomaindatacentrelocationsandseveralcontrolledserverroomsindifferentbuildingsinBathandSanFrancisco.Futurecanswitchservicesfromoneservertoanotherwithinafewhours.Inaddition,allmission-criticalserviceshavemorethanoneserversothereisnosinglepointoffailure.FurtherinvestmentintheITinfrastructurehasbeenmadein2017andmoreisalreadyunderwayin2018.

Staff TheGroup’sstrongreputationasaleadingcontentprovidermakesitsstaffpotentiallyattractivetocompetitors.ThereisariskthatkeystaffwillmoveelsewhereifofferedsignificantincreasesinremunerationwithwhichFutureisunabletocompete.

Futureemployspeoplewhoarepassionateabouttheirsubject.Futureoffersanumberofstaffbenefitsandincentiveprogrammestoattractandretainkeystaff,andstepsaretakentoensurethattheGroupisnotexcessivelyreliantuponanyoneemployee.

Personal data and cyber fraud

AlossofpersonaldataoracyberattackwouldtriggertheneedtonotifyusersandtheInformationCommissioner’sOffice(ICO)andFuturemaysufferreputationalrisk,aswellasasignificantfinancialpenalty,ifitisresponsibleforthebreach.

TheGeneralDataProtectionRegulation(GDPR)comesintoforceinMay2018.GDPRextendsthescopeofEUdataprotectionlawbygivingdatasubjectsadditionalrightsandincreasingtheaccountabilityobligationsoncompaniesprocessingdata.ThemaximumpenaltiesunderGDPRaresignificantlyhigherthanunderthecurrentregime.

Futureseekstoensureallofitssystemscomplywithbestpracticeasregardstosecurityandhasinplaceaplantomitigatetheeffectsofanyhack.TheGroupiscontinuallyinvestingandupgradingitsITsystemsandprocessestoensurethattheyaresufficientlyrobustandappropriateforthedigitalage.

AGDPRsteeringcommitteehasbeenestablishedtoensureFuture’sreadinessforGDPRwhenitcomesintoforce.DatapoliciesandproceduresarebeingreviewedandlegislativeupdatesandICOguidancearebeingmonitoredregularly.

Major supplier or retailer fails Majordistributororretailergoesintoadministrationresultinginlossofmagazinesalesandassociatedrevenue.

Futurecarefullyselectsitssuppliers,takingintoaccountanumberoffactorsincludingfinancialstability.NewsstandsalesarespreadacrossanumberofretailersintheUKandUS.Inaddition,thegrowthinbookazinescontinuestodiversifytheretailersweworkwith.

Acquisitions TheGroupcontinuestosearchforopportunitiestogrowthroughacquisition.Thereisariskthatanysuchacquisitionoritssubsequentintegrationfailstocreatevalueforshareholders.

TheGrouphassuccessfullycompletedandintegratedseveralacquisitionsoverthelast18months.Themanagementteamhasbecomeexperiencedandadeptatidentifyingsuitableacquisitionopportunities,executingthedealandintegratingtheacquiredbusinessintothewiderFuturegroup.Theriskisfurthermitigatedthroughtheperformanceofduediligenceappropriatetothesizeandscaleoftheacquisitionandthepreparationofaclearanddetailedintegrationplan.


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Risk management

Risks Description Mitigation

Operating environment Thestructuralchangeinouroperatingenvironmentandthepaceofthetransitionfromprintremainarealrisk.Thereisariskthatprintcirculationvolumesandprintadvertisingrevenuesdeclineatafasterratethananticipatedanddigitalrevenuesdonotgrowataratetooffsetthedecline.

Futurecontinuestoinnovate,makingavailableitsspecial-interestcontenttoconsumersinanumberofformats,inprint,onlineandatevents.Thediversificationofrevenueshelpsprotectagainstrapidchangesinoperatingenviroment.Wecreatebest-in-classcontenttocreateanemotionalconnectionwithouraudiencesofengagedenthusiasts,whorepresentanattractiveaudienceforadvertisers.WehavebecomeanintegralpartofthepurchasecyclewhichcanbemonetisedviaeCommerce.

Intellectual property Futureuses,andgrantslicencestoitslicenseesallowingthemtouse,varioustypesofthird-partycontentincludingmusic,audiovisualmaterial,photos,imagesandtext.Asapublisher,Futureisresponsibleforanyintellectualpropertyorotherinfringementrelatingtothesameandaslicensor,Futureisresponsibletoitslicensees.

Futureproducesguidanceandin-housetrainingtoeducateitsstaffontheimportanceofobtainingappropriaterightsorlicencesandhasadedicatedin-houserightsmanagementteam.Future’slegalteamreviewsallsignificantlicencesrelatingtothird-partycontentand,whereappropriate,seekswarrantiesandindemnitiesrelatingtothesame.FuturelicensescontenttothirdpartiesbasedonstandardcontractswhichseektolimitFuture’sliability.

Financial Thelonglagtimeforreportingonsalesofexportedprintedcopiescontinuestobeanareaofforecastinguncertainty.

Forecastingremainsdifficultinallconsumermarkets.Aswediversifyourrevenuestreams,newactivitiesareinherentlymoredifficulttoforecastaccurately.

Advertisingpipelinescanbesubjecttoslippage,withtheriskthatresultingrevenueispushedintolateraccountingperiods.

Futurehasavailablebankfacilitiestotalling£25.4mat30September2017.Failuretocomplywiththefinancialcovenantsofthesefacilitiescouldresultinadditionalfinancecostsandthepossiblewithdrawalofthefacilities.

Thesignificantissuesconsideredinrelationtothefinancialstatementsfortheyearended30September2017aresetoutintheAuditCommitteesectionoftheCorporateGovernancereportonpages26to28.

Onprintedproducts,inparticularbookazines,amoreconservativeinitialviewonsalesestimatescontinues,withemergingtrendsbecomingmoreapparent.

Future’sforecastinginrespectofinnovativeproductswillbecomeeasierasthoseproductsdevelopamoreconsistentcustomerbaseandstablebusinessmodel.

Carefulmonitoringoftheadvertisingpipelineandbookingstoclosethegapintheeventofanyshortfall.

Futurecontinuallymonitorsitscashflowsandcovenantsandhasoperatedwithinallitscovenantsthroughouttheyear.TheGroupnegotiatedincreasedfacilities(upfrom£5.0min2016)followingtheacquisitionsofImagineandthehomeinterestdivisionwhichexpireinJune2021.Thereiscurrentlysignificantheadroomonthesefacilities.Seenote18tothefinancialstatementsformoredetail.

ReviewbyAuditCommitteewithexternalauditors.

IT Thebusinessisincreasinglydependentontechnology.

Intheeventofatotalnetworkorserverfailure,ordataloss,therewouldbeamajorimpactontheproductionofmagazines,operationofwebsitesandtheoperationaleffectivenessofthebusiness.

Future’snetworkhasatleasttwodiverseroutesforallkeyofficesandbusiness-criticaldataisheldonthreehighlyresilientstoragedevicesindifferentlocations.Inaddition,allcoreswitchesareduplicatedindifferentbuildingssotherearenosinglepointsoffailure.ServersaredistributedacrosstwomaindatacentrelocationsandseveralcontrolledserverroomsindifferentbuildingsinBathandSanFrancisco.Futurecanswitchservicesfromoneservertoanotherwithinafewhours.Inaddition,allmission-criticalserviceshavemorethanoneserversothereisnosinglepointoffailure.FurtherinvestmentintheITinfrastructurehasbeenmadein2017andmoreisalreadyunderwayin2018.

Staff TheGroup’sstrongreputationasaleadingcontentprovidermakesitsstaffpotentiallyattractivetocompetitors.ThereisariskthatkeystaffwillmoveelsewhereifofferedsignificantincreasesinremunerationwithwhichFutureisunabletocompete.

Futureemployspeoplewhoarepassionateabouttheirsubject.Futureoffersanumberofstaffbenefitsandincentiveprogrammestoattractandretainkeystaff,andstepsaretakentoensurethattheGroupisnotexcessivelyreliantuponanyoneemployee.

Personal data and cyber fraud

AlossofpersonaldataoracyberattackwouldtriggertheneedtonotifyusersandtheInformationCommissioner’sOffice(ICO)andFuturemaysufferreputationalrisk,aswellasasignificantfinancialpenalty,ifitisresponsibleforthebreach.

TheGeneralDataProtectionRegulation(GDPR)comesintoforceinMay2018.GDPRextendsthescopeofEUdataprotectionlawbygivingdatasubjectsadditionalrightsandincreasingtheaccountabilityobligationsoncompaniesprocessingdata.ThemaximumpenaltiesunderGDPRaresignificantlyhigherthanunderthecurrentregime.

Futureseekstoensureallofitssystemscomplywithbestpracticeasregardstosecurityandhasinplaceaplantomitigatetheeffectsofanyhack.TheGroupiscontinuallyinvestingandupgradingitsITsystemsandprocessestoensurethattheyaresufficientlyrobustandappropriateforthedigitalage.

AGDPRsteeringcommitteehasbeenestablishedtoensureFuture’sreadinessforGDPRwhenitcomesintoforce.DatapoliciesandproceduresarebeingreviewedandlegislativeupdatesandICOguidancearebeingmonitoredregularly.

Major supplier or retailer fails Majordistributororretailergoesintoadministrationresultinginlossofmagazinesalesandassociatedrevenue.

Futurecarefullyselectsitssuppliers,takingintoaccountanumberoffactorsincludingfinancialstability.NewsstandsalesarespreadacrossanumberofretailersintheUKandUS.Inaddition,thegrowthinbookazinescontinuestodiversifytheretailersweworkwith.

Acquisitions TheGroupcontinuestosearchforopportunitiestogrowthroughacquisition.Thereisariskthatanysuchacquisitionoritssubsequentintegrationfailstocreatevalueforshareholders.

TheGrouphassuccessfullycompletedandintegratedseveralacquisitionsoverthelast18months.Themanagementteamhasbecomeexperiencedandadeptatidentifyingsuitableacquisitionopportunities,executingthedealandintegratingtheacquiredbusinessintothewiderFuturegroup.Theriskisfurthermitigatedthroughtheperformanceofduediligenceappropriatetothesizeandscaleoftheacquisitionandthepreparationofaclearanddetailedintegrationplan.

There are a number of general business risks to which Future is naturally exposed in the UK and US. In addition, the range of industry-specific risks faced by Future has increased since last year, due to the increasingly digital focus of the media landscape and the increasing number of evolving business models.

Ourinternalcontrolsseektominimisetheimpactofrisks,asexplainedinourCorporateGovernancereportonpage25,andduringtheyearwehavecontinuedtodevelopthosecontrolsinresponsetothewiderrangeofrisks.

11 Future plc

Corporate responsibility

CorporateresponsibilityisintegraltothewayFutureconductsitsbusiness.Wefocusoureffortsaroundfivekeyareaswherewethinkwecanmakeadifference.

Responsible business

1. The environment

Aresponsibleapproachtotheenvironmentisessentialtoensurethefuturesustainabilityofourbusiness.

Sourcing paperPaperisthelargestrawmaterialweuseasaGroup.Weworkhardtomakesurethatwhateverweconsume,wedoinawaythatisethicallyresponsibleandenvironmentallysustainable.In2017,100%ofourpaperacrosstheGroupwassourcedfromeitherrecycledfibreorsustainableforestswhereatleastonetreeisplantedforeverytreefelled.

Allofourpaperissourcedandproducedfromsustainable,managedforests,conformingtostrictenvironmentalandsocio-economicstandards.OurpapermillsandpapermerchantsallholdfullFSC(ForestStewardshipCouncil)certificationandaccreditationshowingourcommitmenttosourcingpapersuppliesfromsustainablesources.

In2017,over90%ofthepaperweusedintheUKwasFSCcertified.WeactivelyencourageoursupplierstoworktowardsFSCcertificationoroneoftheotherinternationallyrecognisedandindependentlyauditedcertificationschemesforenvironmentalcareinforestmanagementandconservation.

Recycling and wasteTheGroupisstronglyincentivisedtominimisethenumberofunsoldmagazinesandweemploysophisticatedtechniquestohelpachievethis.IntheUK,Future’sunsoldmagazinesarerecycled.WealsosupportthePPA’sinitiativeencouragingreaderstorecycletheirmagazinesafteruseandwecomplywithourobligationsundertheProducerResponsibilityObligations(PackagingWaste)Regulations.Thedisposalofwastematerialsisalsoincludedinourprintsupplieraudit.

Supplier auditsWeundertakeenvironmentalandethicalauditsonourmainsupplierswhichincludeaspectssuchastheprocessinganddisposalofeffluents,emissionsandwastematerials,andtheuseoflabour.

2. Our people

Future’semployeesareourmostimportantassets;theyarethedrivingforcebehindoursuccessasabusiness.

Health and safetyThehealthandsafetyofallemployeesisakeypriorityfortheGroup.Futureislargelyanoffice-basedenvironment.AllcompaniesacrosstheGroupcomplywithrelevantlegislationandwecommunicateourhealthandsafetypolicytoallemployees.IntheUK,duringtheyearto30September2017,therewerenofatalities,onereportable(RIDDOR)injuryandtwominorinjuries.TherewerenofatalitiesorinjuriesintheUSorAustraliaduringtheyear.

DiversityWearecommittedtocreatinganinclusiveculturewhichgiveseveryonethefreedomtosucceed,irrespectiveoftheirgender,race,religion,disability,ageorsexualorientation.Wetreateachotherwithrespect.Weareproudofthefactthat50%ofourBoardwerefemaleduring2017andthegapbetweenthefemale:maleemployeesplithasreducedconsiderablyinrecentyears.

Future’sbusinessisunderpinnedbysixcorevalues,thefirstofwhichisthat‘wearepartoftheaudienceandtheircommunity’.Westrivetoensurethatourworkforcereflectstheconsumersacrossourportfoliostomaximiseengagementwithourpassionateaudience.

Policy on disabilityTheGroupaimstoensurethatwhenconsideringrecruitment,training,careerdevelopment,promotionoranyotheraspectofemployment,noemployeeorjobapplicantisdiscriminatedagainst,eitherdirectlyorindirectly,onthegroundsofdisability.

Ifanemployeebecamedisabledwhileinemploymentandasaresultwasunabletoperformtheirduties,wewouldmakeeveryefforttooffersuitablealternativeemploymentandassistancewithretraining.

Internal communicationFuturehaspoliciesonemployeecommunication,acceptableuseofIT,healthandsafetyandwhistle-blowing,andwehaveacommitmenttodiversityandopportunity.

Weholdregulartownhallsessionsforallemployees,andextendedleadershipteammeetingswherewediscusskeystrategicinitiativesandtheperformanceofthebusiness.InOctober2017weheldanallcompanyconferenceintheUK,USandAustralia.Theseinitiativesensurethatcommunicationisconstantlyimprovingacrossthebusiness,reinforcethebuildingofapositiveworkingenvironmentwherewecelebratesuccessesandalsohelptoensurethereisalignmentacrossthebusiness.Ourenvironmentisonewhereweencourageemployeestogivetheirviewsfreelyandcontributetoinitiatives,asthiscontinuouslydevelopsandimprovesourofferingforthebenefitofourconsumersandclients.

Whistle-blowing and anti-bribery policiesItisFuture’spolicytoconductallofourbusinessinanhonestandethicalmanner,andwetakeazero-toleranceapproachtobriberyandcorruption.Wearecommittedtoactingprofessionally,fairlyandwithintegrityinallourbusinessdealingsandrelationships,whereverweoperate,andweareimplementingandenforcingeffectivesystemstocounterbriberyandcorruption.Wehavewhistle-blowingandanti-briberypolicieswhichareupdatedregularlyandpublishedonourintranettoencourageemployeestoreport,ingoodfaith,anygenuinesuspicionsoffraud,briberyormalpractice.Thewhistle-blowingpolicyisalsodesignedtoensurethatanyemployeewhoraisesagenuineconcernisprotected.Inaddition,toensureFutureisadoptingbestpracticewithanti-corruptionlegislation,andtopromotetransparency,aReviewKit,TripsandGiftsLogisinplacetotrackthewhereaboutsofproductssenttousforreviewandtheacceptanceofgiftsandtripsbyouremployees.

Employment data across the Group 2017

Splitoffemale:maleemployeesasat30September2017 40%:60%Splitoffemale:maleDirectorsoftheCompanyasat30September2017 3:3Splitoffemale:malemembersoftheExecutiveCommitteeasat30September2017 1:6Earningsmeetatleastlegalminimumorminimumsetbyindustry YesCasesofreportedandprovendiscriminationorharassment NoneConsultationandcommunicationproceduresinplaceforallareasofthebusiness YesCodeofconductcirculatedtoallexistingandnewemployees YesEmploymentofyoungpeopleundertheageof15 None

WearemembersoftheProfessionalPublishersAssociation(PPA)andsupportitsinitiativeencouragingreaderstorecycletheirmagazinesafteruse.WeincorporatetherecyclelogoinallourUKmagazines.

WeworkinpartnershipwithBath-basedcharitablefoundation,Quartet.


eport

Statement of Greenhouse Gas (GHG) Emissions for the Group

Global GHG emissions in tonnes of CO2 equivalent:

Emissions from 2013 (base year) 2017

Total Total

Thecombustionoffuel:gasforheatingandfuel; forvehicles(Scope1)

UK 470 73US 102 -Total 572 73

Thepurchaseofelectricity:heat,steamorcooling bytheGroupforitsownuse(Scope2)

UK 1,310 385US 376 4Total 1,686 389

Total Emissions (CO2e Tonnes) 2,258 462Total Revenue £112.3m £84.4mIntensity Ratio (CO2e Tonnes per £1m) 20.1 5.5

WehavereportedonalloftheemissionsourcesrequiredundertheCompaniesAct2006(StrategicReportandDirectors’Reports)Regulations2013.

Theemissionssourcesfallwithinourfinancialstatements.Wedonothaveresponsibilityforanyemissionsourcesthatarenotincludedinourfinancialstatements.

Methodology:WehaveusedtheUKGovernment’sEnvironmentalReportingGuidance.Wehaveappliedthe2017DEFRAGHGConversionFactorRepositorytocalculatetheCO2e.AsaGroupwithonlyoffice-basedactivitiesandnomanufacturingactivities,undertheGHGProtocolCorporateStandard,ouremissionsfallunderScope1(thecombustionoffuel)andScope2(thepurchaseofelectricity).

Notes:• Scope1–Timeperiodsforcombustionofgasforheating–figuresforallofficesareforthefinancialyear.Allfiguresareestimatesbasedon%shareofofficespacewithinleasedbuildingsexceptforUKBathofficeswhichareactualconsumptionwherewholebuildingsorfloorswithinbuildingshavetheirownmeters.

• Scope1–Timeperiodsforcombustionoffuelinvehicles–onlytheUKoperatesleasedvehiclesandfiguresfortheconsumptionoffuelarebasedonaveragedannualmileage.

• Scope2–Timeperiodsforconsumptionofelectricity–figuresfortheUKandUSofficesareforthefinancialyear.FiguresfortheAustralianofficearepro-ratedfromtypical(August2017)monthlyconsumption.Allfiguresareestimatesbasedon%shareofofficespacewithinleasedbuildingsexceptfortheUSofficein2017andUKBathofficeswhichareactualconsumptionwherewholebuildingsorfloorswithinbuildingshavetheirownmeters.

• Scope2–ElectricitySources–Noelectricitywaspurchasedfromownedorcontrolledsources.• FugitiveEmissions–theGroupbenefitsfromairconditioninginsomeofitsleaseholdbuildings.Thescaleofemissionsfromleaksisverysmall(estimatedtobelessthan0.5%oftotalemissions)andisdeemedtobeimmaterialtooverallreportingandtrends.

• BaseYear-Financialyear2013isourbaselineyear.• IntensityRatio-weareusing‘Tonnesper£1millionrevenue’.• Wehavemaintainedourfocusonotherenvironmentalimpacts,particularlyinitiativestoreducewasteandtocontinuesourcingallourmagazinepaperfromsustainableforestry.

3. The community

Giving something back IntheUKtheGrouphasworkedinpartnershipwithBath-basedcharitablefoundationQuartet,whomakedonationstolocalcharitiesonourbehalf,andSpecialEffect,acharitywhichusesvideogamesandtechnologytoenhancethequalityoflifeofpeoplewithdisabilities.

Future in the wider communityFuturepeoplehavebeenactivelyinvolvedintheyearwithanumberofnationalorganisationsincludingtheProfessionalPublishersAssociation,EuropeanMagazineMediaAssociation,AssociationofOnlinePublishers,NABS,European&LeisureSoftwarePublishersAssociation,theIPA,theMarketingSocietyandtheInternationalFederationofthePeriodicalPress.

4. Modern slavery

TheModernSlaveryAct2015isaimedatcombatingcrimesofslaveryandhumantraffickingandaddressestherolewhichacommercialorganisationhastoplayinpreventingthesecrimes,bothwithinitsownbusinessandwithinitssupplychains.Wearecommittedtodoingbusinessethicallyandhaveazero-toleranceapproachtomodernslavery.Future’sModernSlaveryActstatementispublishedonourcorporatewebsite,www.futureplc.com.

5. Human rights

Futureiscommittedtorespectinghumanrights.Webelieveourbusinesspositivelyimpactshumanrightsby,forexample,promotingfreedomofopinionandexpressionandfacilitatingtheabilitytoseek,receiveandimpartinformationandideasthroughallmediaandacrossborders.Inaddition,weprovideameanstoparticipateintheculturallifeofthecommunityandenjoythearts.

Asaninternationalcompany,Futureisalsoawareofthepotentialforadverselyimpactinghumanrightsandweseektomitigateanysucheffectsthrough,forexample,oureffortstocombatbribery,corruptionandforcedlabourinourbusinessorinoursupplychain.

13 Future plc

Financial review

ThefinancialresultsdemonstratethattheGroupisprogressingwellwithexcitingtimesaheadasthebusinessbuildsscaleandincreasingprofitability.

Growth

Financial summary

Thefinancialreviewisbasedprimarilyonacomparisonofcontinuingresultsfortheyearended30September2017withthosefortheyearended30September2016.Unlessotherwisestated,changepercentagesrelatetoacomparisonofthesetwoperiods.

Continuingoperations2017

£m2016£m

Revenue 84.4 59.0AdjustedEBITDA 11.0 5.2Depreciation (0.3) (0.4)Adjustedamortisation (1.8) (2.0)Adjustedoperatingprofit 8.9 2.8Adjustednetfinancecosts (0.6) (0.5)Adjustedprofitbeforetax 8.3 2.3

Operatingprofit/(loss) 0.8 (14.2)Profit/(loss)beforetax 0.2 (14.9)

Earnings/(loss)pershare(p) 4.3 (59.6)Adjustedearningspershare(p) 23.2 9.5

Areconciliationofadjustedoperatingprofittoprofit/(loss)beforetaxisshownbelow:

2017£m

2016£m

Adjustedoperatingprofit 8.9 2.8Adjustednetfinancecosts (0.6) (0.5)Adjustedprofitbeforetax 8.3 2.3Adjustingitems:Share-basedpayments(includingrelatedsocialsecuritycosts) (2.1) (0.5)Exceptionalitems (3.7) (3.5)Amortisationofacquiredintangibles (2.3) -Impairmentofintangibleassets - (13.0)Non-tradingforeignexchangeloss - (0.2)Profit/(loss)beforetax 0.2 (14.9)

Revenue

Grouprevenuewasup43%to£84.4m(2016:£59.0m),whichwasachievedbothorganically(increaseof8%)andthroughacquisition.UKrevenuewasup50%to£67.2m(2016:£44.7m)withUSrevenueup26%to£19.1m(2016:£15.2m).

TheGroup’sstrategyistocontinuetobuildrecurringrevenuestreams.TheseencompasseCommerceandsubscriptions,andnowrepresent27%oftheGroup’stotalrevenue(2016:25%).

“ AdjustedEPShas grown144%to 23.2p.”

Penny Ladkin-Brand ChiefFinancialOfficer

andCompanySecretary

14AnnualReportandAccounts2017Financial R

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Group revenue 2016

1:Media41%2:Magazine59%

Media

Mediarevenuehasincreasedby43%to£34.1m(2016:£23.9m),drivenbytheGroup’sfastgrowingrevenuestreams;eCommerce,eventsandthroughacquisition.Onanunderlyingbasis,excludingtheimpactof2017acquisitions,Mediarevenuesincreasedby34%.

IntheUK,Mediarevenuesincreasedby50%to£21.1m(2016:£14.1m),drivenbyeCommercegrowthof88%to£4.9m(2016:£2.6m)andeventsgrowthof58%to£5.2m(2016:£3.3m).

TheUSalsoexperiencedexceptionalgrowth,up41%year-on-yearto£14.7m(2016:£10.4m),witheCommercerevenuesbeingthebiggestdriverofthisgrowth–up135%to£4.0m(2016:£1.7m).DigitaladvertisingintheUSnowrepresents90%(2016:88%)ofUSadvertisingrevenues.

Magazine

Magazinerevenueincreasedby43%to£50.3m(2016:£35.1m)largelydrivenbyacquisitions.Onanunderlyingbasis,excludingtheimpactof2017acquisitions,Magazinerevenuesdeclined9%to£31.9m.

Thedivisionisconstantlylookingforwaystoinnovateandpublishedover430bookazinesintheyeartotallingrevenueof£10.1m.

EBITDA and operating profit

TheGroup’sadjustedEBITDAwasup112%to£11.0m(2016:£5.2m),ofwhich£6.9m(2016:£3.2m)wasUKand£4.1m(2016:£2.0m)wasUS.Operatingprofitincreased£15.0mto£0.8m(2016:lossof£14.2m).

Future’sheadcountincreasedto634from449employeesasadditionalstaffjoinedtheGroupthroughacquisition.RationalisationoftheGroup’soverheadbasecontinueswithafocusonprocessre-engineering.Theglobalcontentmanagementsystemmigration(CMS)wascompletedinearly2017,whichputstheGroupinastrongpositiontobenefitfromeconomiesofscaleasthenumberofbrandsincreases.TheTeamRockandImagineacquisitionshavebeenfullyintegratedandthehomeinterestacquisitionisexpectedtobefullyintegratedintotheGroup’soperationsandsystemsbytheendofthecalendaryear.

Exceptional items and impairment

Exceptionalcostswere£3.7m(2016:£3.5m).Restructuringcostsof£1.1mincludeheadcountreductionandtransformationrelatedactivity.Thevacantpropertyprovisionmovementduringtheyearof£1.2mmainlyrelatestosurplusofficespaceintheUS.

Acquisitionrelatedcostsincludedealfeesandsubsequentintegrationrelatedactivityandtotal£1.4m(2016:£2.3m)andrelatetotheacquisitionsofImagine,TeamRockandhomeinterest.

Anon-cashimpairmentchargeof£13.0mwasrecognisedintheprioryearagainstgoodwillattributabletotheUKbusiness,whichreflectedashiftintheunderlyingprofitabilityandcashflowsoftheGroupandthecontinueddeclineofprint.

Net finance costs

Netfinancecostsfellto£0.6m(2016:£0.7m)asstrongcashconversionallowedtheGrouptorepayadditionaldebtfacilitiesarrangedtofundacquisitionsandduetolowerinterestonthelegacyHMRCsettlementagreementwhichwillbefullyrepaidduring2018.

TheGroup’sadjustedpre-taxprofitwas£8.3m(2016:£2.3m)andreportedpre-taxprofitwas£0.2m(2016:lossof£14.9m)reflectingsignificantlyimprovedperformance.

Group revenue 2017

1:Media40%2:Magazine60%

1

2

1

2

15 Future plc

Financial review

Taxation

Thetaxcreditfortheyearamountedto£1.4m(2016:£0.5m),comprisingacurrenttaxchargeof£0.8m(2016:£1.3m)andadeferredtaxcreditof£2.2m(2016:£1.8m)predominantlyrelatedtotherecognitionoffurtherUSlosses,acquiredintangibleassetsandshareschemes.ThecurrenttaxchargearisesintheUKwherethestandardrateofcorporationtaxis19.5%.

Earnings/(loss) per share

2017 2016

Basicearnings/(loss)pershare(p) 4.3 (59.6)Adjustedearningspershare(p) 23.2 9.5

Adjustedearningspershareisbasedontheprofit/(loss)aftertaxationwhichisthenadjustedtoexcludeshare-basedpayments(includingrelatedsocialsecuritycosts),exceptionalitems,amortisationofacquiredintangibleassets,impairmentofintangibleassets,non-tradingforeignexchangeandrelatedtaxeffects.

Thecontinuingadjustedprofitaftertaxamountedto£8.6m(2016:£2.3m)andtheweightedaveragenumberofsharesinissuewas37m(2016:24m).

Dividend

TheBoardisnotrecommendingafinaldividendfortheyearended30September2017.

Inlightofthecontinuedfocusondebtreduction,confidenceintheGroup’sgrowthstrategyandthecontinueddevelopmentofthebusinessleadingtomoreconsistentcashflowanddiversifiedrevenuestreams,theBoardisnowinapositiontoconsiderreturningtopaymentofadividendwhilstmaintainingsufficientresourcestocontinueinvestinginthebusinessin2018.

Cash flow and net debt

Netdebtat30September2017was£10.0m(2016:netcashof£0.5m),whichreflectstheadditionaldebttakenontofundtheImagineandhomeinterestacquisitions.

Duringtheyear,therewasacashinflowfromoperationsbeforeexceptionalitemsof£17.1m(2016:£6.5m)reflectingasignificantfocusonimprovingtheGroup’sworkingcapitalcycleandtradingperformance.

Areconciliationofadjustedoperatingcashinflowtocashinflowfromoperationsisincludedbelow:

2017£m

2016£m

Adjustedoperatingcashinflow 17.1 6.5

Cashflowsrelatedtoexceptionalitems (5.1) (3.4)

Cash inflow from operations 12.0 3.1

Othersignificantmovementsincashflowsincludeexceptionalpaymentsof£5.1m(2016:£3.4m),£1.8m(2016:£1.9m)ofcapitalexpenditure,netproceedsfromissuingsharesof£21.0m,drawdownofbankloans(netofrepaymentsandarrangementfees)of£10.6mandpaymentsof£32.6m(netofcashacquired)tofundacquisitions.Foreignexchangeandothermovementsaccountedforthebalanceofcashflows.

Credit facility and covenants

TheGrouphadavailablefacilitiesof£25.4mat30September2017,expiringinJune2021.Furtherdetailsofthesenewfacilitiesareincludedwithinnote18tothefinancialstatements.

Going concern

Afterdueconsideration,theDirectorshaveconcludedthatthereisareasonableexpectationthattheGrouphasadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.ForthisreasontheDirectorscontinuetoadoptthegoingconcernbasisinpreparingtheconsolidatedfinancialstatementsfortheyearended30 September2017.

Key performance indicators (KPIs)

ManagementusesanumberofKPIstomeasuretheGroup’soperationalandfinancialperformance,themostimportantofwhicharesetoutonpage8.

Conclusion

TheGrouphascompletedseveraltransformationalacquisitionsinthelast12monthsandmovesintoanewexcitingphaseofitsdevelopment.TheGroupiswellplacedtoachieveitsambitionsfor2018andbeyond.

TheStrategicReport(whichcomprisestheGroupoverview,Chairman’sstatement,ChiefExecutive’sreview,Strategicoverview,Whatwedo,RisksanduncertaintiesandCorporateresponsibilitysections)andtheFinancialReviewareapprovedbytheBoardofDirectorsandsignedonitsbehalfby:

Penny Ladkin-BrandChiefFinancialOfficerandCompanySecretary8December2017

16AnnualReportandAccounts2017Financial R

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17 Future plc

Strong leadershipBoard of Directors

Peter AllenIndependentnon-executiveChairman


Penny Ladkin-Brand ChiefFinancialOfficerandCompanySecretary

Hugo DraytonIndependentnon-executive

Richard HuntingfordIndependentnon-executiveandChairmanDesignate

James HanburyDeputyChairman

18Annual Report and Accounts 2017C

orporate Governance

Peter Allen Chairman sln

PeterwasnamedChairmaninAugust2011.HewasChiefFinancialOfficerofCelltechGroupplcbetween1992and2004.In2003hewasalsoappointedDeputyChiefExecutiveOfficerofCelltechuntilthecompanywassoldin2004.HewasChiefFinancialOfficeroftheelectronicscompanyAbacusGroupplcfrom2005untilthecompanywassoldtoAvnetIncinJanuary2009.PeteriscurrentlyChairmanofClinigenplc,AdvancedMedicalSolutionsGroupplc,OxfordNanoporeTechnologiesLimitedandDiurnalLimitedandanon-executiveDirectorofIstessoLimited.Peterhasdecidednottoseekre-electiontotheBoardandwillstepdownon1February2018.

Richard Huntingford Independentnon-executiveand ChairmanDesignate sln

RichardwasappointedtotheBoardon1December2017andwilltakeoverasChairmanon1February2018.Richardhada20yearcareeratChrysalisplcandwasCEOfrom2000to2007,followingwhichhewasChairmanofVirginRadiountilitssalein2008.Morerecently,hehasbeennon-executiveChairmanofWirelessGroupplc(formerlyUTVMediaplc)from2012to2016andnon-executiveDirector/ChairmanofCrestonplcfrom2011to2016.HeiscurrentlyChairmanofCrownPlaceVCTplcandnon-executiveDirectorofJPMorganInvestmentTrustplc.Heisacharteredaccountant,havingqualifiedwithKPMG.

James Hanbury DeputyChairman sl

JameswasappointedDeputyChairmaninOctober2016astherepresentativeofDisruptiveCapitalInvestmentsLimited.PriortohisappointmenthewasChairmanofImaginePublishing,whichwasacquiredbyFutureinOctober2016.JamesjoinedtheBoardofImagineinMarch2014soonafterleavingIncisiveMedia,apublishingbusinessheco-foundedin1994.HehasalsopreviouslychairedtheBusinessMediaCouncilofthePPA.JamesalsoactsasanadvisertoanumberofVCbackedbusinesses,isatrusteeforacharitabletrustandhassetupandchairsWARpaint,afundraisingorganisationforseveralarmedforcescharities.

Zillah Byng-Thorne ChiefExecutive

ZillahwasappointedasChiefExecutiveon1April2014.ShejoinedFutureinNovember2013asChiefFinancialOfficerandCompanySecretary.PriortoherappointmenttotheFutureplcBoard,shewasCFOofTraderMediaGroup–ownerofAutoTrader–from2009to2012,andinterimCEOofTraderMediafrom2012to2013.Beforethis,ZillahwasCommercialDirectorandCFOatFitnessFirstLimitedandChiefFinancialOfficeroftheThresherGroup.Zillahiscurrentlyanon-executiveDirectorofPaddyPowerBetfairplcandGocompare.comGroupplc.Zillahisaqualifiedaccountantandcorporatetreasurer.

Penny Ladkin-Brand ChiefFinancialOfficer andCompanySecretaryPennywasappointedasChiefFinancialOfficerandCompanySecretaryon3August2015,havingjoinedthebusinessasinterimChiefFinancialOfficerinJune2015.PriortothisshewasCommercialDirectoratAutoTraderGroupplc.Pennyisacharteredaccountantwithabackgroundindigitalmediaandexpertiseindigitalmonetisationmodels.Pennyiscurrentlyanon-executiveDirectorofNextFifteenCommunicationsGroupplc.

Hugo Drayton Independentnon-executive sl

HugojoinedFutureon1December2014.HeisCEOoftheadvertisingtechnologybusiness,InskinMedia.PriortoInskin,hespenttwoyearsasCEOofbehaviouraltargetingspecialist,Phorm,followingtwoyearsasEuropeanManagingDirectorofAdvertising.com.Hespent10yearsatTheTelegraphGroup,asGroupManagingDirector,andpreviouslyasMarketing&NewMediaDirector.HugoisaTrusteeoftheBritishSkinFoundation,chairedtheBritishInternetPublishers’Alliance,andisaregularcontributortotradepressandpublishingconferences.

s

MemberoftheNominationCommittee

l

MemberoftheRemunerationCommittee

n

MemberoftheAuditCommittee

19 Future plc

Principal activity

TheprincipalactivityoftheCompanyanditssubsidiaries(the‘Group’)asawholeisthepublishingofspecial-interestconsumermagazinesandwebsitesandtheoperationofeventsnotablyintheareasof:technology;gamesandentertainment;music;knowledge;creativeandphotography;fieldsportsandhomeinterest.

TheCompanyisapubliccompanylimitedbyshareslistedontheLondonStockExchangeandisincorporatedanddomiciledintheUK.IthassubsidiariesoperatingintheUK,theUSandAustralia.

Business review

ThepurposeoftheAnnualReportistoprovideinformationtotheshareholdersoftheCompany.

ReviewsoftheGroup’sactivitiesduringtheyear,thepositionattheyear-endanddevelopmentssincethenaresetoutintheChairman’sstatement,theChiefExecutive’sreview,theCorporateGovernancereportandtheFinancialreview.TheFinancialreviewandStrategicreportexplainfinancialperformance,KPIs,thepositionattheyear-end,anypostbalancesheetevents,anylikelyfuturedevelopmentsandadescriptionoftheprincipalrisksanduncertaintiesfacingtheGroupandhowthesearemanaged.

TheAnnualReportcontainscertainforward-lookingstatementswithrespecttotheoperations,performanceandfinancialconditionoftheGroup.Bytheirnature,thesestatementsinvolveuncertaintysincefutureeventsandcircumstancescancauseresultstodifferfromthoseanticipated.Theforward-lookingstatementsreflectknowledgeandinformation

availableatthedateofpreparationofthisAnnualReportandtheCompanyundertakesnoobligationtoupdatethoseforward-lookingstatements.

Result of 2017 Annual General Meeting

AllresolutionsputtotheAnnualGeneralMeetingheldon1February2017werepassedunanimouslyonashowofhands.Shareholdersholdingmorethan50%ofallissuedsharessubmittedproxyvotesandofthose,morethan95%ofallproxyvotescastwereinfavourofallresolutions.

Reported financial results

Theauditedfinancialstatementsfortheyearended30September2017aresetoutonpages49to86.DetailsoftheGroup’sresultsaresetoutintheconsolidatedincomestatementonpage50andinthenotestothefinancialstatementsonpages60to86.

Dividends

TheBoard’spolicyisthatdividendsshouldbecoveredatleasttwicebyadjustedearningspershare.TheCompany’sEmployeeBenefitTrust(EBT)waivesitsentitlementtoanydividends.TheBoardisnotrecommendingafinaldividendfortheyear.

Share capital

TheCompanyhasasingleclassofsharecapitalwhichisdividedintoOrdinarysharesoffifteenpenceeach.TherightsandobligationsattachingtotheCompany’sOrdinarysharesandprovisionsgoverningthe

appointmentandreplacementof,aswellasthepowersof,theDirectorsaresetoutintheCompany’sArticlesofAssociation,copiesofwhichcanbeobtainedfromCompaniesHouseintheUKorbywritingtotheCompanySecretary.SaveforrestrictionsthatmayfromtimetotimebesetoutintheCompany’sArticlesofAssociationorimposedbylawsandregulations(includingtheListingRulesoftheFinancialConductAuthority),therearenorestrictionsonthevotingrightsattachingtotheOrdinarysharesoronthetransferoftheOrdinaryshares.TheArticlesofAssociationmaybeamendedonlybyaspecialresolutionoftheCompany’sshareholders.

Detailsofallmovementsinsharecapitalaregiveninnote23onpage79.Asat30September2017,thenumberofsharesinissuewas45.4million.Thisrepresentsanincreaseof85%comparedwiththenumberofsharesinissueasat30September2016.InOctober2016,12.0millionshareswereissuedbytheCompanyasconsiderationfortheacquisitionofImagine.InJuly2017,8.8millionshareswereissuedbywayofaplacingofOrdinarysharesintheCompanytopartfundtheacquisitionofhomeinterest.ThebalanceofsharesissuedduringtheyearwereissuedinsatisfactionofemployeeshareawardsvestingorShareIncentivePlanmatchingshareawardsduringtheyear.

Directors

BiographicaldetailsoftheDirectorsholdingofficeasat8December2017aresetoutonpage18.

Directors’shareholdingsintheCompany’ssharecapitalaresetoutopposite.NoDirectorhasanyinterestinanyothersharecapitaloftheCompanyoranyotherGroupcompany,nor

Directors’ report

Fortheyearended30September2017

Significant shareholdings

At8December2017,theCompanyhadbeennotifiedofthefollowingsignificantinterestsinitsOrdinaryshares:

Shareholder NumberofsharesPercentageof

issuedsharecapital

AberforthPartnersLLP 8,498,699 18.62%HargreaveHale(Discretionary) 5,542,538 12.14%DisruptiveCapitalInvestmentsLimited 4,621,412 10.12%LombardOdierInvestmentManagers 3,457,051 7.57%RiverandMercantileAssetManagement 3,302,786 7.23%InvescoPerpetual 2,245,508 4.92%AXAFramlingtonInvestmentManagers 2,003,460 4.39%JOHambroCapitalManagement 1,768,029 3.87%HeraldInvestmentManagement 1,734,333 3.80%

33,173,816 72.66%Directors’holdings(seeopposite) 361,462 0.79%Totalofsignificantholdings 33,535,278 73.45%Totalnumberofsharesinissue 45,655,967 100%

TheinformationpresentedinthisDirectors’reportrelatestoFutureplcanditssubsidiaries.TheChairman’sstatement,ChiefExecutive’sreview,FinancialreviewandCorporateresponsibilitystatementareeachincorporatedbyreferenceinto,andformpartof,thisDirectors’report.

Directors’ report


orporate Governance

20

doesanyDirectorhaveamaterialinterestinanycontractofsignificancetotheGroup.

Significant agreements

TheprovisionsoftheEuropeanDirectiveonTakeoverBids(asimplementedintheUKintheCompaniesAct2006)requiretheCompanytodiscloseanysignificantagreementswhichtakeeffect,alterorterminateuponachangeofcontroloftheCompany.Incommonwithmanyothercompanies,theGroup’sbankfacility(detailsofwhicharesetoutinnote18onpage73)isterminableuponchangeofcontroloftheCompany.Incommonwithmarketpractice,awardsundercertainoftheGroup’slong-termincentiveplans(detailsofwhicharesetoutintheDirectors’remunerationreportonpage31andnote24onpage79)willvestorpotentiallybeexchangeableintoawardsoverapurchaser’ssharecapitaluponchangeofcontroloftheCompany.ThereisalsoachangeofcontrolprovisionintheserviceagreementsofthetwoexecutiveDirectors,exercisablewithinthreemonthsofachangeofcontrolbytheCompanyorononemonth’snoticebytheexecutivetoexpirenolaterthanthreemonthsfromthedateofthechangeofcontrol.

Financial instruments

InformationinrelationtotheGroup’suseoffinancialinstrumentsissetoutinnote22onpages75to78.

Corporate governance

TheBoard’sreportonthissubjectissetoutonpages23to28.

Political contributions

Nopoliticalcontributionsweremadeduringeitherthecurrentorprioryears.

Conflicts of interest

TheBoardhasasetofprocedurestoensurethat:(i)conflictsofinterestareraisedbyDirectors(andanypotentialDirectorspriortoappointment);(ii)appropriateguidelinesarefollowedbeforeanyconflictisauthorised(includingensuringthatonlyDirectorswhohavenointerestinthematterbeingconsideredwillbeabletotaketherelevantdecisionandintakingthedecisiontheDirectorsactinawaytheyconsider,ingoodfaith,willbemostlikelytopromotetheCompany’ssuccess);and(iii)recordsarekeptofconflictsofinterestandauthorisations.TheDirectorsaresatisfiedthattheBoard’spowersofauthorisationofconflictsareoperatingeffectivelyandthattheprocedureshavebeenfollowed.Theproceduresandanyauthorisationswillcontinuetobereviewedannually.

Corporate responsibility

TheBoardconsidersthatissuesofcorporateresponsibilityareimportant.TheBoard’sreport,includingtheGroup’spoliciesonemployeeinvolvementanddisability,andastatementonGreenhouseGasEmissionsfortheGroup,issetoutonpages11and12.

Annual General Meeting 2017

AttheCompany’snineteenthAnnualGeneralMeeting,whichwillbeheldonMonday5February2018at10:30amatFuture’sLondonofficeat1-10PraedMews,London,W21QY,anumberofresolutionswillbeproposed.TheresolutionsaresetoutintheNoticeofAnnualGeneralMeetingonpages87to88andanexplanationofallproposedresolutionsisprovidedbelow.

Ordinary resolution 1 – Financial statements

ShareholderswillbeaskedtoapprovethefinancialstatementsoftheCompanyforthefinancialyearended30September2017,togetherwiththereportsoftheDirectorsandauditors.Theauditedfinancialstatementsappearonpages49to86.

Notes:1. Allholdingsarebeneficial.2.Thepurchaseof4,615oftheseshareswaseffectedbytheexerciseof4,615Sharesaveoptionson1August2017.3. JamesHanburyreceived31,336sharesasconsiderationforhisshareholdinginMiura(Holdings)Limitedon21October2016.4.DetailsoftheshareoptionsandawardsforexecutiveDirectorsaresetoutonpage33.Nosuchoptionsorawardsaregrantedtonon-executiveDirectors.5.TheGroupcompletedashareconsolidationon2February2017whereby15OrdinarysharesofonepencewereexchangedforonenewOrdinaryshareof15pence.Allreferencestothenumberof

sharespriortothisdatehavebeenrestated.6.On27November2017,followingthefullvestingofthePSPawardgrantedon16July2014,ZillahByng-Thornereceived166,667Ordinaryshareswhichshesoldon29November2017.Alsoon27

November2017,followingtheachievementofthe2017AnnualBonusEBITDAtarget,ZillahByng-Thornereceivedabonusshareawardof56,022Ordinaryshares(ofwhich26,333sharesweresoldon29November2017tocoverthetaxandnationalinsurancearising).ZillahByng-Thorne’stotalshareholdingfollowingthesetransactionswas142,705Ordinaryshares.

7.On27November2017,followingtheachievementofthe2017AnnualBonusEBITDAtarget,PennyLadkin-Brandreceivedabonusshareawardof38,515Ordinaryshares,resultinginatotalholdingof70,295Ordinaryshares.

Directorsinofficeat30September2017

RestatedBalanceasat

30September2016 OnappointmentPurchases

duringtheyearBalanceasat

30September2017

ExecutiveZillahByng-Thorne 72,758 - 40,2582 113,016PennyLadkin-Brand 10,000 - 21,780 31,780Non-executivePeterAllen 73,333 - 12,834 86,167JamesHanbury - 31,3363 14,100 45,436ManjitWolstenholme 16,859 - - 16,859HugoDrayton - - - -Total 172,950 31,336 88,972 293,258

Directors’ shareholdings (audited)

Corporate G

overnance

21 Future plc

Ordinary resolution 2 – Directors’ remuneration implementation report

ShareholderswillbeaskedtoapprovetheDirectors’remunerationimplementationreportforthefinancialyearended30September2017,whichissetoutonpages30to36.

Ordinary resolution 3 – Directors’ remuneration policy report

ShareholderswillbeaskedtoapprovetheamendmentstotheDirectors’remunerationpolicyforthethreeyearperiodcommencing1October2016,whichareproposedwithintheDirectors’remunerationpolicyreportsetoutonpages38to41.

Ordinary resolutions 4 to 8 – Election of Richard Huntingford and annual re-election of other Directors

FollowingRichardHuntingford’sappointmenttotheBoardon1December2017,hestandsforelectiontoconfirmhisappointment.

Consistentwithourpolicysince2004,allDirectorswiththeexceptionofPeterAllen,whohaselectedtostanddownattheAGMinFebruary2018,andManjitWolstenholme,whosadlypassedawayon23November2017,areproposedforre-election.BiographicaldetailsofallDirectorsaresetoutonpage18.

Ordinary resolutions 9 and 10 – Auditors

AresolutionproposingthereappointmentofPricewaterhouseCoopersLLPasauditorsoftheCompanyandauthorisingtheDirectorstodeterminetheirremunerationwillbeproposedattheAnnualGeneralMeeting.AnexplanationregardingtheBoard’sproposaltoreappointPricewaterhouseCoopersLLPasauditorscanbefoundonpage28intheCorporateGovernancereport.

Ordinary resolution 11 – To authorise the Directors to issue and allot new Ordinary shares

Undertheprovisionsofsection551oftheCompaniesAct2006(the“Act”),theDirectorsmayallotandissueOrdinarysharesonlyifauthorisedtodosobytheCompany’sArticlesofAssociationorbyshareholdersatashareholders’meeting.ConsistentwithguidanceissuedbytheInvestmentAssociationthisresolutionwill,ifpassed,authorisetheDirectorstoallotsharesuptoamaximumnominalvalueof£4,565,590asfollows:

(a)inrelationtoapre-emptiverightsissueonly,equitysecurities(asdefinedbysection560oftheAct)uptoamaximumnominalamountof

£4,565,590whichrepresentsapproximatelytwothirdsoftheCompany’sissuedOrdinaryshares(excludingtreasuryshares)asat8December2017.Thismaximumisreducedbythenominalamountofanyequitysecuritiesallottedunderparagraph11.2oftheNoticeofAGM;and

(b)inanyothercase,equitysecuritiesuptoamaximumnominalamountof£2,282,795whichrepresentsjustunderonethirdoftheCompany’sissuedOrdinarysharesasat8December2017.Thismaximumisreducedbythenominalamountofanyequitysecuritiesallottedunderparagraph11.1oftheNoticeofAGMinexcessof£2,282,795.Ifgranted,thisauthoritywouldreplaceallpreviousauthoritiesgrantedinthisconnection.Theauthoritygrantedbythisresolutionwillexpireon31March2019or,ifearlier,followingtheconclusionofthenextAGMoftheCompany.IftheDirectorsexercisetheauthoritygrantedunderparagraph11.1oftheNoticeofAGM,theywillallstandforre-electionatthefollowingAGM.

TheDirectorsshallexercisethisauthorityinconnectionwithexercisesundershareincentiveschemes.Inaddition,theremaybecircumstanceswhereitwouldbeappropriatefortheCompanytoissuenewOrdinaryshares,suchasanacquisitionwhereitmightbeappropriatefortheconsiderationtobesettledinwhole,orinpart,bytheissueofnewOrdinaryshares.TheCompanydoesnotholdanysharesintreasury.

Ordinary resolution 12 – Approval of political donations

ItremainsthepolicyoftheCompanynottomakepoliticaldonationsortoincurpoliticalexpenditure,asthoseexpressionsarenormallyunderstood.However,followingbroaderdefinitionsintroducedbytheAct,theDirectorscontinuetoproposearesolutiondesignedtoavoidinadvertentinfringementofthesedefinitions.

TheActrequirescompaniestoobtainshareholders’authorityfordonationstoregisteredpoliticalpartiesandotherpoliticalorganisationstotallingmorethan£5,000inany12-monthperiod,andforanypoliticalexpenditure,subjecttolimitedexceptions.Thedefinitionofdonationinthiscontextisverywideandextendstobodiessuchasthoseconcernedwithpolicyreview,lawreformandtherepresentationofthebusinesscommunity.Itcouldalsoincludespecialinterestgroups,suchasthoseinvolvedwiththeenvironment,whichtheCompanyanditssubsidiariesmightwishtosupport,eventhoughtheseactivitiesarenotdesignedtosupportortoinfluencesupportforanyparticularpoliticalparty.

Special resolution 13 – Disapplication of statutory pre-emption rights

Resolution13will,ifpassed,authorisetheDirectorsincertaincircumstancestoallotequitysecurities(asdefinedbysection560oftheAct)orsellsharesforcashotherthaninaccordancewiththestatutorypre-emptionrights(whichrequireacompanytoofferallallotmentsforcashfirsttoexistingshareholdersinproportiontotheirholdings).Therelevantcircumstancesareeitherwheretheallotmenttakesplaceinconnectionwitharightsissueortheallotmentislimitedtoamaximumnominalamountof£342,420representingapproximately5%ofthenominalvalueoftheissuedOrdinarysharecapitaloftheCompanyasat8December2017beingthelatestpracticabledatebeforepublicationoftheNoticeofAGM.Unlessrevoked,variedorextended,thisauthoritywillexpireattheconclusionofthenextAGMoftheCompanyor31March2019,whicheveristheearlier.

Thefigureof5%reflectsthePre-EmptionGroup’sStatementofPrinciplesforthedisapplicationofpre-emptionrightsandtheDirectorswillhavedueregardtothePrinciplesinrelationtotheexerciseofthisauthority.

Special resolution 14 – Additional disapplication of pre-emption rights

Thisresolutionseeksafurtherpowerpursuanttotheauthoritygrantedbyresolution11toallotequitysecurities(asdefinedbysection560oftheAct)orsellsharesforcashotherthaninaccordancewiththestatutorypre-emptionrights(whichrequireacompanytoofferallallotmentsforcashfirsttoexistingshareholdersinproportiontotheirholdings)uptoamaximumnominalamountof£342,420,representingapproximately5%ofthenominalvalueoftheissuedOrdinarysharecapitaloftheCompanyasat8December2017,beingthelatestpracticabledatebeforepublicationoftheNoticeofAGM.Thisisinadditiontothe5%referredtoinresolution13aboveand,unlessrevoked,variedorextended,thisauthoritywillexpireattheconclusionofthenextAGMoftheCompanyor31March2019,whicheveristheearlier.

TheDirectorswillhavedueregardtothePre-EmptionGroup’sStatementofPrinciplesinrelationtotheexerciseofthisauthorityandconfirmtheyintendtousethispoweronlywherethatallotmentisinconnectionwithanacquisitionorspecifiedcapitalinvestment(withinthemeaninggiveninthemostrecentStatementofPrinciples)whichisannouncedcontemporaneouslywiththeallotment,orwhichhastakenplaceintheprecedingsix-monthperiodandisdisclosedintheannouncementoftheallotment.

Directors’ report



orporate Governance

Special resolution 15 – General meetings on 14 days’ notice

NoticeperiodsforAGMsmustgiveatleast21days’clearnotice.Forothergeneralmeetings,theoldminimumnoticeperiodof14dayswasincreasedto21daysbytheCompanies(Shareholders’Rights)Regulations2009,unlessshareholdersapproveashorterperiodofatleast14cleardays.Intheinterestsofgreaterefficiency,resolution15seekstorenewapprovalfornoticeperiodsofatleast14cleardays.

Action to be taken

AformofproxyisincludedwiththisAnnualReportforuseinconnectionwiththeAnnualGeneralMeeting.PleasecompleteandreturntheforminaccordancewiththeinstructionsprintedonittoComputershareInvestorServicesplc,ThePavilions,BridgwaterRoad,BristolBS996ZYassoonaspossibleand,inanyevent,nolaterthan10:30amon1February2018.ThereturnoftheformofproxywillnotpreventyoufromattendingtheAnnualGeneralMeetingandvotinginpersonifyouwishtodoso.FurtherinformationabouttheAGM,includingaboutelectronicappointmentofproxies,isprovidedonpages89to91.

Recommendations

TheBoardbelievesthateachoftheresolutionstobeproposedattheAnnualGeneralMeetingisinthebestinterestsoftheCompanyanditsshareholdersasawhole.Accordingly,theDirectorsunanimouslyrecommendthatyouvoteinfavourofalloftheresolutionsproposed,astheyintendtodoinrespectoftheirownbeneficialholdings.

Annual General Meeting procedures and result

Asinpreviousyears,theCompanywill:(a)indicatethelevelofproxieslodgedoneachresolution;(b)announcetheresultsofvotingtotheLondonStockExchange;and(c)posttheresultsofvotingonourcorporatewebsite,www.futureplc.com.

Statement of Directors’ responsibilities

TheDirectorsareresponsibleforpreparingtheAnnualReportandthefinancialstatementsinaccordancewithapplicablelawandregulations.

CompanylawrequirestheDirectorstopreparefinancialstatementsforeachfinancialyear.UnderthatlawtheDirectorshavepreparedtheGroupfinancialstatementsinaccordancewithInternationalFinancialReportingStandards(IFRSs)asissuedbytheInternationalAccountingStandardsBoard(IASB)and

CompanyfinancialstatementsinaccordancewithInternationalFinancialReportingStandards(IFRSs)asadoptedbytheEuropeanUnion.UndercompanylawtheDirectorsmustnotapprovethefinancialstatementsunlesstheyaresatisfiedthattheygiveatrueandfairviewofthestateofaffairsoftheGroupandCompanyandoftheprofitorlossoftheGroupandCompanyforthatperiod.Inpreparingthefinancialstatements,theDirectorsarerequiredto:

::selectsuitableaccountingpoliciesandthenapplythemconsistently;

:: statewhetherapplicableIFRSsasissuedbytheInternationalAccountingStandardsBoard(IASB)havebeenfollowedfortheGroupfinancialstatementsandIFRSsasadoptedbytheEuropeanUnionhavebeenfollowedfortheCompanyfinancialstatements,subjecttoanymaterialdeparturesdisclosedandexplainedinthefinancialstatements;

:: makejudgementsandaccountingestimatesthatarereasonableandprudent;and

:: preparethefinancialstatementsonthegoingconcernbasisunlessitisinappropriatetopresumethattheGroupandCompanywillcontinueinbusiness.

TheDirectorsareresponsibleforkeepingadequateaccountingrecordsthataresufficienttoshowandexplaintheGroupandCompany’stransactionsanddisclosewithreasonableaccuracyatanytimethefinancialpositionoftheGroupandCompanyandenablethemtoensurethatthefinancialstatementsandtheDirectors’remunerationreportcomplywiththeCompaniesAct2006and,asregardstheGroupfinancialstatements,Article4oftheIASRegulation.

TheDirectorsarealsoresponsibleforsafeguardingtheassetsoftheGroupandCompanyandhencefortakingreasonablestepsforthepreventionanddetectionoffraudandotherirregularities.

TheDirectorsareresponsibleforthemaintenanceandintegrityoftheCompany’swebsite.LegislationintheUnitedKingdomgoverningthepreparationanddisseminationoffinancialstatementsmaydifferfromlegislationinotherjurisdictions.

TheDirectorsconsiderthattheAnnualReportandAccounts,takenasawhole,isfair,balancedandunderstandableandprovidestheinformationnecessaryforshareholderstoassesstheGroupandCompany’sperformance,businessmodelandstrategy.

EachoftheDirectors,whosenamesandfunctionsarelistedintheBoardofDirectorssectiononpages17and18,confirmthattothebestoftheirknowledge:

::theCompanyfinancialstatements,whichhavebeenpreparedinaccordancewithIFRSsasadoptedbytheEuropeanUnion,giveatrueandfairviewoftheassets,

liabilities,financialpositionandlossoftheCompany;

::theGroupfinancialstatements,whichhavebeenpreparedinaccordancewithIFRSsasissuedbytheInternationalAccountingStandardsBoard(IASB),giveatrueandfairviewoftheassets,liabilities,financialpositionandprofitoftheGroup;and

::theDirectors’reportincludesafairreviewofthedevelopmentandperformanceofthebusinessandthepositionoftheGroupandCompany,togetherwithadescriptionoftheprincipalrisksanduncertaintiesthatitfaces.

InthecaseofeachDirectorinofficeatthedatetheDirectors’reportisapproved:

::sofarastheDirectorisaware,thereisnorelevantauditinformationofwhichtheGroupandCompany’sauditorsareunaware;and

::theyhavetakenallthestepsthattheyoughttohavetakenasaDirectorinordertomakethemselvesawareofanyrelevantauditinformationandtoestablishthattheGroupandCompany’sauditorsareawareofthatinformation.

ApprovedbytheBoardofDirectorsandsignedonitsbehalfby:

Penny Ladkin-BrandChiefFinancialOfficer andCompanySecretary8December2017

Corporate G

overnance

23 Future plc

Our approach to corporate governanceInthisreport,weprovidedetailontheroleoftheBoardofDirectors,followedbyamoredetailedfocusontheworkofeachofthethreekeycommittees:theAuditCommittee,theNominationCommitteeandtheRemunerationCommittee.Together,thesegiveaclearinsightintohowwemanagecorporategovernanceprinciplesandprocesseswithintheGroup.

AsaStandardListedentitytheGroupisnotrequiredtocomplywiththerequirementsoftheUKCorporateGovernanceCode(April2016)(the“Code”)andthereforetheGrouphasnotadoptedtheCode,howevertheDirectorscontinuetocomplywiththespiritoftheCode.

1. Board of Directors

Membership of the BoardTheBoardconsistsoftwoexecutiveandfournon-executiveDirectors.BiographiesofDirectorsanddetailsoftheirothertimecommitmentsaresetoutonpage18.

Board changes during the yearFollowingtheacquisitionofImagineJamesHanburywasappointedtotheBoardasDeputyChairmanon21October2016.TherewerenootherchangestotheBoardduringtheyearended30September2017.

Subsequenttotheyear-endPeterAllensignalledhisintentionnottoseekre-electiontotheBoardand,verysadly,theGroup’sseniorindependentnon-executiveDirector,ManjitWolstenholme,passedawayunexpectedlyinNovember2017.Inaddition,RichardHuntingfordwasappointedtotheBoardasanindependentnon-executiveDirectoron1December2017.RichardbringsawealthofmediaexperienceandwillsucceedPeterAllenasChairman.

Role of the non-executive DirectorsThenon-executivesplayacriticalroleontheBoardinoverseeingandscrutinisingtherunningofthebusinessandinensuringthatcorporategovernanceremainsatthetopoftheagenda.

Thenon-executiveDirectorsallservethree-yearterms,terminablebyeitherpartyonthreemonths’noticeatanytimeandsubjecttotheirelectionandannualre-electionorremovalbyshareholders.Althoughannualre-electionisnotarequirementforFuture,webelieveitisthebestwaytoensurenon-executivesaredirectlyaccountabletoshareholders.

Allofthenon-executiveDirectors,withtheexceptionofJamesHanbury,areconsideredtobeindependentbytheBoard.JamesHanbury

wasappointedtotheBoardasarepresentativeofDisruptiveCapitalInvestmentsLimited,theCompany’sthirdlargestshareholder,whichhastherighttoappointaDirectortotheBoarduntilsuchtimeasitsshareholdingintheCompanyfallsbelow10percentoftheissuedsharecapital.Consequently,theBoarddoesnotconsiderthatJamesHanburymeetstherelevantindependencecriteria.ManjitWolstenholmewastheseniorindependentnon-executiveDirectorduring2017andthesearchforhersuccessorisunderway.Thereisagenuinemixofviewsandinsights,aswellasexperience.

Eachnon-executiveDirectorisexpectedtocommit20daysayeartotheirroletoallowforpreparationfor,andattendanceat,BoardandCommitteemeetingsandkeepingintouchwiththeseniormanagementteam,shareholdersandotherstakeholders.

Roles of the Chairman and Chief ExecutiveThedutiesandresponsibilitiesoftheBoardareeffectivelydividedsothattheChairmanleadstheBoardandtheChiefExecutiveleadsthebusiness.

Board meetingsTheBoardhadsevenscheduledmeetingsduringthefinancialyearandattendanceissummarisedopposite.TheBoardhadfiveunscheduledtelephonemeetingstodiscussandapproveaspectsoftheImagineandhomeinterestacquisitions,duringwhichasufficientquorumofdirectorsincludingtheChairmanandChiefExecutivewerepresent.

AllDirectorsareawareoftheneedtobeavailableandthereisaclearcontactprocess.BoardmeetingsaresometimesprecededbyaninformaldinnerwhereBoardDirectorscanmeetwithanddiscussbusinessissueswiththeGroup’sseniormanagementteam.

ThereisaregularandcomprehensiveexchangeofinformationbetweenmeetingstoensureBoardmembersarewellinformedtoparticipateeffectivelyinmeetings.DirectorsreceiveaBoardpackbeforeeachmeetingwithminutesofthepreviousmeeting,allpapersforagendaitems,areportfromtheCompanySecretarysummarisinganykeylegalissuesandprovidinganyregulatory/legislativeupdates,andasummaryofshareownershipandrecentsharedealing.SimilarpacksareprovidedforallCommitteemeetings.Betweenmeetings,theBoardreceivesamonthlyBoardreportwrittenbytheexecutiveDirectorswhichsummarisesfinancialandoperationalperformanceandprovidesupdatesonkeyprogrammeswithinthebusiness.

ThereisawrittenscheduleofmattersreservedfortheBoardwhichsetsoutthosemattersthatrequireBoardapprovalincludingsetting

Effectivecorporategovernancerequiresnotjustcompliancewithlegislativeandregulatoryrequirements,butalsoapplyingtheprincipleofgoodgovernanceintheboardroomandthroughoutthebusiness.

Good PracticeCorporate Governance report

Quick find contents

Board of Directors Page23

Audit Committee Page26 Nomination CommitteePage28

Remuneration CommitteePage28

“ Goodcorporategovernanceisunderpinnedbyvalues,visionandstrategicleadership.”

Penny Ladkin-Brand ChiefFinancialOfficer andCompanySecretary


orporate Governance

strategy,approvingbudgetsandfinancialstatementsandsettinguppolicies.Itwasnotedthat42mattershadbeenconsideredbytheBoardduringtheyear.ThescheduleisavailableontheCompany’swebsiteatwww.futureplc.com.TheBoarddelegatesday-to-dayoperationalmatterstotheGroup’sseniormanagementteam.

DirectorAttendance

(7scheduledmeetings)

PeterAllen 7 of 7ZillahByng-Thorne 7 of 7ManjitWolstenholme 7 of 7 HugoDrayton 7 of 7PennyLadkin-Brand 7 of 7JamesHanbury(appointed21October2016) 7 of 7

Boarddecisionsaremadeunanimouslywheneverpossible,butcanbemadebymajority.IfDirectorshaveconcernsthatcannotberesolvedabouttherunningoftheCompanyoraproposedaction,theirconcernsarerecordedintheminutes.Nosuchconcernsaroseintheyear.TheBoardregularlyappointsasub-committeeconsistingofatleasttwoDirectorsinordertofinaliseandapprovethosemattersthathavebeenapprovedinprinciplebytheBoard,subjecttofinalamendmentsonly.Apermanentsub-committeeconsistingofatleasttwoDirectorsexiststoapprovetheissueandallotmentofnewsharesinsatisfactionofemployeeshareschemes.

TheBoardhasanumberofnominatedadvisers(aslistedonpage93).Duringthelastfinancialyearmeetingswereregularlyheldwithkeyadviserstokeepthemawareofissues,andPricewaterhouseCoopersLLPattendedAuditCommitteemeetingsandbriefingswithmembersoftheexecutiveandseniorfinanceteams.

Advice and supportAllDirectorshaveaccesstotheCompanySecretarywhocanadvisethemonissuesofgovernance,bestpracticeandanyotherlegislativeorregulatorymatters.

TheappointmentandremovaloftheCompanySecretaryisaBoarddecision.TheDirectorsmayalsotakeindependentprofessionaladviceattheCompany’sexpenseprovidedthattheygivenoticetotheChairman.Nosuchadvicewassoughtduring2017.TheCompanymaintainsappropriateinsuranceforitsDirectors.

Effective Development

Training and inductionTheBoard’straininganddevelopmentpolicyrequiresthatallnewDirectorsshouldreceiveappropriateinductiononjoiningtheBoard,bothinrespectoftheGroup’sactivitiesasawholeandofeachoperatingcompanyindividually.OngoingtrainingforDirectorsisavailableasappropriatewhetherbypresentationstotheBoardbyseniormanagementormoreformallywhereindividualDirectorsrequesttrainingonspecificissues.ThetraininganddevelopmentneedsofeachindividualDirectorareassessedanddiscussedaspartoftheannualBoardperformanceevaluationprocess.TheBoardencouragesappropriatetraining,andregularupdatesandrefreshersessionsareprovidedbytheCompanySecretaryandtheCompany’slegaladvisersandauditors,toinformtheBoardorrelevantCommitteesofimportantchangesinlegislation,regulationandbestpractice.

Performance evaluationTheDirectorscompletedadetailedBoardperformanceevaluationquestionnaireaspartoftheannualperformanceevaluationprocess.EachquestionnairewasanalysedandtheChairmandiscussedtheBoard’sperformanceduringtheyearandanyspecificrequirementsfortraininganddevelopmentwitheachDirector.TheBoardconsidersthisexercisetobeofsignificantvalueinensuringafunctionalandeffectiveBoardandCommittees.

TheChairmanalsometwiththenon-executiveDirectorsduringtheyearwithouttheexecutiveDirectors,inordertoassesstheperformanceoftheexecutiveDirectors.

Summary of performance evaluation

Objectivesfor2017 Stepstakenduring2017

Supportmanagementindevelopingthe ExecutiveLeadershipCommittee

ProvidedguidanceandadviceonsuccessionplanningandthecompositionoftheCommittee

Supportmanagementgrowthebusiness throughacquisition

SignificantacquisitionscompletedintheyearincludingImagineandhomeinterest

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Terms of reference for the Audit, Remuneration and Nomination Committees

ThetermsofreferenceforallCommitteesareavailableon theCompany’swebsiteat www.futureplc.com

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Corporate Governance report

Going concernTheDirectorsarerequiredtomakeanassessmentoftheGroup’sabilitytocontinuetotradeasagoingconcern.Afterdueconsideration,theDirectorshaveconcludedthatthereisareasonableexpectationthattheGrouphasadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.ForthisreasontheycontinuetoadoptthegoingconcernbasisinpreparingtheGroup’sfinancialstatements.

Financial covenant complianceKeycovenantsaretestedquarterlyandtheGroupwasinfullcompliancewithallcovenantsatalltestingdatesduringtheyear.TheGrouphascovenantsinrespectofnetdebt/bankEBITDAandbankEBITDA/interest.Furtherdetailsareincludedwithinnote18onpage73.

Risk management and internal controlsDetailsoftheprincipalrisksandtheGroup’sapproachtomanagingthemaresetoutonpages9and10.TheBoardconductedanannualreviewoffinancial,operational,legalandcomplianceriskswiththeassistanceofmembersoftheGrouplegalandfinanceteamsandtheExecutiveCommitteetoensurethatthereisasoundsystemofinternalcontrolsinplaceandthatthesearesufficienttomanage(ratherthaneliminate)thoseriskseffectively.Nosignificantfailingsorweaknesseswereidentifiedaspartofthisreview.

TheinternalcontrolsthatareinplacetoensureeffectiveriskmanagementarestructuredtoensureatimelyflowofinformationwithintheGroupandaclearstructureofdelegatedauthorityandresponsibility.ThemainfeaturesoftheGroup’sinternalcontrolandriskmanagementsystemsareexplainedfurtherinthefollowingparagraphs.

TheBoardreviewedandendorsedasummaryoftheGroup’sinternalcontrolframeworkduringtheyear.

TheGroupfinanceteammanagesthefinancialreportingprocessesensuringthatthereisappropriatecontrolandreviewofthefinancialinformationincludingtheproductionoftheconsolidatedfinancialstatements.GroupfinanceissupportedbycommercialfinancedirectorswhohavetheresponsibilityandaccountabilitytoprovideinformationinaccordancewiththeGroup’spoliciesandprocedures.

TheExecutiveCommitteeholdsmonthlymeetingswithseniormanagementinordertoprovideaproperopportunityforfinancialresultsandotherbusinessandoperationalissuestobeexploredandaddressedinatimelymanner.

Internal auditTheAuditCommitteeandtheBoardhaveagainduring2017reconsideredwhetherthereisaneedforaninternalauditfunction.Itwasconcludedthat,whilstanindependentinternalauditdepartmentwiththenecessarytechnicalskillsisnotcurrentlyjustified,theCommitteeshouldcontinuetoreviewthissubjecteachyear.

Whistle-blowing and anti-bribery policiesAspartofitsinternalcontrols,theGrouphaswhistle-blowingandanti-briberypolicieswhichareupdatedregularlyandpublishedontheGroup’sintranettoencourageemployeestoreport,ingoodfaith,anygenuinesuspicionsoffraud,briberyormalpracticeinordertoidentifyanyproblemswithintheGroupatanearlystage.Thewhistle-blowingpolicyisalsodesignedtoensurethatanyemployeewhoraisesagenuineconcernisprotected.

Relations with shareholders/communicationWeaimtohaveanopenrelationshipwithourshareholders,andshareholderscanfindup-to-dateinformationonGroupactivitiesontheCompany’swebsiteatwww.futureplc.com.ThereisaspecificInvestorRelationssectiononthatsitewhichincludeslinkstoalloftheGroup’spublicannouncementsmadeviatheRegulatoryNewsServiceoftheLondonStockExchangeincludingtheCompany’slatestannualandinterimresults.

AllDirectorsareavailabletomeetshareholdersattheAGMoronrequestbycontactingtheChairmanorCompanySecretary.Becausemorethan70%oftheCompany’ssharesareheldbysignificantshareholders,theexecutiveDirectorsholdaseriesofmeetingspresentingtheinterimandannualresultstotheseshareholdersinordertoupdatethemontheprogressofthebusinessandgaugetheirviewsfollowingtheanalystpresentationsof theresults.

InorderthatallDirectorsareawareoftheviewsofshareholders,BoardpacksincludeanoteofviewsasexpressedbyshareholdersduringmeetingsheldwithDirectorsorasreportedtoDirectorsthroughtheCompany’sbrokers,togetherwithcopiesofanalysts’notes,pressarticlesandotherrelevantinformation.

“ AtFuture,weremaincommittedtoensuringthatgoodcorporategovernanceisenshrinedattheheartofourbusiness.”



orporate Governance

2. Audit Committee

MemberAttendance


ManjitWolstenholme(Chairmanin2017)1 3 of 3

PeterAllen 3 of 3

1.AstheChairmanoftheCommitteeduring2017,ManjitWolstenholmehadrecentandrelevantfinancialexperienceandtheactingChairman,RichardHuntingford(appointed1December2017),hasrecentandrelevantfinancialexperience.

TheAuditCommittee’sprimaryobjectiveistoprovideeffectivefinancialgovernanceandmonitortheintegrityoftheGroup’sfinancialstatementsandinternalcontrols.

TheAuditCommitteemeetsbeforetheinterimandannualresultsannouncementsandreviewstherelevantfinancialresultswiththeexecutivemanagementteamandtheexternalauditors.TheAuditCommitteealsomeetsseparatelyforthepurposesofplanningtheauditprocess,monitoringitseffectiveness,reviewingtheGroup’srelationshipwiththeexternalauditorsandundertakingadetailedreviewoftheGroup’sinternalcontrolsandriskmanagementsystems.Itconsideredwhetherthe2017AnnualReportwasfair,balancedandunderstandableandadvisedtheBoardaccordingly.

TheAuditCommitteecarriesoutthefunctionsrequiredbyrule7.1.3oftheDisclosureandTransparencyRules.

Significant financial reporting judgements TheAuditCommitteediscussedthekeyrisksandjudgementswithmanagementandtheauditorsaspartoftheauditplanningprocessinJuly2017.Atthesametimetheydiscussedandagreeduponappropriatelevelsofmaterialityinthecontextoftheanticipatedresultsfortheyear.Asaresultofthosediscussionsanauditplanwasagreedandsubsequentlyexecuted.

Thesignificantjudgementsconsideredinrelationtothefinancialstatementsfortheyearended30September2017,whichwereoriginallyidentifiedanddiscussedaspartoftheplanningprocessreferredtoabove,aresetoutbelowandwereaddressedasfollows:

1.RevenuerecognitionTheareaofrevenuewhichcarriesthemostjudgementisnewstraderevenue(bothdomesticandexport).Managementhascarefullyconsideredtheestimatesofreturnsmadeinrespectofnewstraderevenuesandtherecognitionofrevenuesonthelargeradvertisingcontractsandhaveconcludedthattheyareappropriate.TheestimatesandjudgementsmadehavebeendiscussedwiththeauditorsandtheAuditCommittee.

2.Carryingvalueofgoodwillandlong livedassetsIAS36requiresanimpairmenttesttobeperformedforgoodwillonanannualbasisorwherethereisanindicationofimpairment.ManagementpreparedadetailedimpairmentassessmentoftheUKbusinessat30September2017andconcludedthatnoimpairmentwasrequired. Thekeyassumptionsmadeinthatassessmentwereasfollows:

-Longtermgrowthratetoperpetuity2.0%

-EBITDAmarginsassumed12.0%to12.9%

-Discountrate(post-tax)7.7% TheAuditCommitteeagreedwithmanagement’sconclusionthatnoimpairmentisrequired.

3.ExceptionalitemsDuetothecontinuedrestructuringofthebusinessandsignificantacquisitionrelatedactivitythereareanumberofitemsconsideredexceptionalinnature.TheAuditCommitteehasdiscussedtheitemswiththeauditorsandagreeswiththeconclusionthattheseitemsshouldbepresentedasexceptional.

4.AcquisitionaccountingTheAuditCommitteehasreviewedtheacquisitionaccountingpreparedbymanagement,includingthefairvalueassessmentsperformedontheopeningbalancesheetsforboththeImagineandhomeinterestacquisitions,andagreeswiththejudgementsmade.

Audit feesTheAuditCommitteehasreviewedtheremunerationreceivedbyPricewaterhouseCoopersLLPfornon-auditworkconductedduringthefinancialyear.Thefeesfornon-auditworkwerehigherthantheauditfeeduetoworkperformedinareportingaccountantcapacityandduediligenceinrespectoftheImagineandhomeinterestacquisitions.Forfurtherdetailsregardingfeespaid,seenote3tothefinancialstatementsonpage61.

Auditors’ independenceTheAuditCommitteemonitorstheCompany’ssafeguardsagainstcompromisingtheobjectivityandindependenceoftheexternalauditorsbyperforminganannualreviewofnon-auditservicesprovidedtotheGroupandtheircost,reviewingwhethertheauditorsbelievethereareanyrelationshipsthatmayaffecttheirindependenceandobtainingwrittenconfirmationfromtheauditorsthattheyare

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Re-election of Directors

WearenotrequiredtoofferallourDirectorsupforannualelection,however,allourDirectorstakeindividualandcollectiveresponsibilityforthedecisionsthattheBoardmakesandarehappytoletshareholdersjudgetheirperformancebystandingforannualre-election.WehavefollowedthispracticesincetheAGMin2005.

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orporate Governance

independent.TheCommitteehasreviewedtheGroup’sauditindependencepolicyandiscomfortablethatitalignstotheFinancialReportingCouncil’slatestguidance.

Forthefinancialyearended30September2017,theAuditCommitteehasconducteditsreviewoftheauditors’independenceandconcludedthatnoconflictofinterestexistsbetweenPricewaterhouseCoopersLLP’sauditandnon-auditwork,andthattheirinvolvementinnon-auditmatters,which(asnotedonpage26)mainlycomprisedadviceinrespectoftheImagineandhomeinterestacquisitions,wasthemosteffectivewayofconductingtheGroup’sbusinessduringtheyear.

Auditors appointment policyTheAuditCommitteehasrevieweditspolicyforappointingauditorsandawardingnon-auditwork.

TheGrouphasusedPricewaterhouseCoopersLLPforreportingaccountantworkonboththeacquisitionsofImagineandhomeinterestandalsoworkingcapitaladvisoryworkontheacquisitionofhomeinterest.TheAuditCommitteeconsideredwhetherthisconstitutedathreattoindependenceandconfirmedthatitwascomfortablethattherewereappropriatesafeguardsinplace.

OntherecommendationoftheAuditCommittee,theBoardhasdecidedthatitisinthebestinterestsoftheCompanytoputaresolutiontoshareholdersthatPricewaterhouseCoopersLLP,whohavebeentheCompany’sexternalauditorsfor19years,bereappointedasauditorsfortheforthcomingyear.TheresolutiontoappointPricewaterhouseCoopersLLPwillproposethattheyholdofficeuntiltheconclusionofthenextAnnualGeneralMeetingatwhichaccountsarelaidbeforetheCompany,atalevelofremunerationtobedeterminedbytheDirectors.

3. Nomination Committee

MemberAttendance

(1scheduledmeeting)

PeterAllen(Chairman) 1 of 1ManjitWolstenholme 1 of 1HugoDrayton 1 of 1JamesHanbury 1 of 1

FollowingdiscussionoftheskillsandcontributionofeachDirector,theNominationCommitteesupportstheproposedre-electionofallDirectorsstandingforre-electionatthe2018AGM.Inlinewithbestpractice,eachCommitteememberseekingre-electionwasexcludedfromapprovingtheproposalfortheirre-election.

4. Remuneration Committee

MemberAttendance


ManjitWolstenholme(Chairmanin2017)1 3 of 3

PeterAllen 3 of 3

HugoDrayton 3 of 3JamesHanbury 3 of 3

1.RichardHuntingfordwasappointedactingChairmanoftheCommitteeon1December2017.

Therewerethreescheduledmeetingsduringtheyear.

TheRemunerationCommitteedeterminestheremunerationpackagesofexecutiveDirectors,includingperformance-relatedawardsandshare-basedincentives,remunerationpolicy,whichincludestheindividualbonustargetsforexecutiveDirectorsandperformancecriteriaattachedtoshare-basedincentives,theremunerationoftheChairman,recommendationsofremunerationlevelsfornon-executiveDirectorsandseniormanagementinlinewithindustryremunerationpackagesandtheimplementationofanynewshare-basedincentiveschemeproposedtobeimplemented.TheDirectors’remunerationreportissetoutonpages29to41.


Penny Ladkin-BrandChiefFinancialOfficer andCompanySecretary8December2017

Corporate Governance report

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Investor Relations

ForcopiesofalloftheGroup’spublicannouncementsmade viatheRNSandcopiesof theCommittees’termsof referencevisit

www.futureplc.com/invest-in-future

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Dearshareholders,

IampleasedtopresenttheDirectors’remunerationreportforthefinancialyearended30September2017.ThisreporthasbeenpreparedonbehalfoftheFutureplcBoardbytheRemunerationCommittee,andhasbeenapprovedbytheFutureplcBoard.

AsrequiredundertheLargeandMedium-sizedCompaniesandGroups(AccountsandReports)(Amendment)Regulations2013(Sl2013/1981)Directors’RemunerationRegulations,thisreportissplitintothreesections:thisletter,anImplementationreport,settingoutdetailsofDirectors’remunerationforthefinancialyearended30September2017,andaRemunerationpolicyreport,settingouttheGroup’sremunerationpolicy(“Policy”)forexecutiveandnon-executiveDirectorsforthethree-yearperiodfrom1October2016.

ThekeychallengesfacedbytheRemunerationCommitteeduringtheyearinvolvedassessingthelevelandmake-upoftheexecutiveDirectors’remunerationpackages,includingthegrantofshare-basedincentiveawardsandthebasisofperformance-relatedbonuses,detailsofwhicharesetoutintheImplementationreportandthePolicy.InparticulartheCommittee,aftertakingadvicefromremunerationspecialistsatErnst&YoungfocuseditseffortsonensuringthattheremunerationpackagesreceivedbytheexecutiveDirectorsrecognisetheircontributiontotransformingtheGroup’sperformanceandmarketcapitalisationaswellascontinuetoincentivisegoingforwards.

TheCommitteealsoconsideredtheremunerationofnon-executiveDirectorsandhasproposedamendmentstothecurrentremunerationpolicytobetabledattheAGMinFebruary2018toensurethatthesefeesreflectprevailingmarketrates.TheamendmentstothepolicywillbesubjecttoabindingshareholdervoteattheCompany’sAGMon5February2018andwilltakeeffectimmediatelythereafter.

TheremunerationphilosophyisdesignedtoensurethatrewardforperformanceiscompetitiveandappropriatetothesignificantlyincreasedscaleandmarketcapitalisationoftheGroupfollowingthetransformationofthebusinesscombinedwiththesignificantacquisitionsofImagineandhomeinterestin2017,aswellasthefuturedevelopmentoftheGroup.Theremunerationpolicyseekstoalignremunerationwithshareholderinterestsbasedontheachievementofstrategicobjectivesandfinancialperformance.Asaresult,remunerationlevelsaredesignedtoreflecttherelativeperformanceofthebusinessfortherelevantperiod.

WebelievethatthePolicywillincentivisetheteamtodelivergrowthintheshort,mediumandlongtermandhopetoreceiveyourcontinuedsupportattheCompany’s2018AGM.

Peter Allen(onbehalfoftheRemunerationCommittee)8December2017

Directors’ remuneration report


Annual statementTheremunerationphilosophyisdesignedtoensurethatrewardforperformanceiscompetitiveandappropriateforthefuturedevelopmentof,andresultsdeliveredby,theGroup.Theremunerationpolicyseekstoalignremunerationwithshareholderinterestsbasedontheachievementofstrategicobjectivesandfinancialperformance.

Quick find contents

Implementation reportPage30

Remuneration policy report Page38


orporate Governance

Implementation report

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Remuneration Committee

Threeindependentnon-executiveDirectorsservedontheRemunerationCommitteeduringtheyearto30September2017:ManjitWolstenholmechairedtheCommitteeduringtheyearandbothPeterAllenandHugoDraytonservedthroughouttheyear.JamesHanburyjoinedtheCommitteefollowinghisappointmenttotheBoardon21October2016.RichardHuntingfordwasappointedasactingChairmanoftheCommitteeinDecember2017.PennyLadkin-BrandactedasSecretarytotheCommitteethroughouttheyear.

TheCommitteeisresponsiblefordeterminingthebasicannualsalaries,incentivearrangementsandtermsofemploymentofexecutiveDirectors,formakingrecommendationsregardingnon-executiveDirectors’fees,thelevelandmake-upoftheremunerationpackagesofseniormanagers,

includingbonusschemesandshare-basedincentives,andensuringthatremunerationpoliciesandpracticesdonotencourageexcessiverisk-taking.TheCommitteeisalsoresponsibleforfixingtheChairman’sremunerationandapprovingthetermsofanynewshare-basedincentiveschemeforanyemployeesoftheGroup,subject,whereappropriate,toshareholderapproval.

ItistheBoardthatisresponsiblefordeterminingtheremunerationofnon-executiveDirectorsfollowingtherecommendationoftheCommitteeassetoutonpage32and35.

NoDirectorisinvolvedindecidinghisorherownremuneration.Asexplainedonpage24,thetermsofreferenceoftheRemunerationCommittee,reviewedannually,areavailableontheCompany’swebsite.

Performance-related bonus (Annual Bonus Scheme)

Operation of the scheme

Theperformance-relatedbonusissubjecttoprofitrelatedperformancecriteria,althoughtheCommitteehasdiscretiontovarythepotentialtotalmaximumbonus,theweightingofthevariableelementsandthestretchofthetargetsinordertoincentiviseorrecruitexecutiveDirectors,providedthatthetotalpotentialmaximumbonuspayableforanyyearshallnotexceed150%ofsalaryandthebonusshallonlybepayableforoverperformance.During2017,aprofitpoolbonuswasintroducedforallemployeesacrosstheGroup,includingtheexecutiveDirectors.Themaximumbonuspayableduring2017was95%ofcurrentbasicannualsalaryforbothZillahByng-ThorneasChiefExecutiveandPennyLadkin-BrandasChiefFinancialOfficer.

Single Total Figure of Remuneration (audited)

TheremunerationoftheDirectorsissetoutbelow:

Salary/fees Benefits1 Annualbonus2 PSP3 Pension Total

2017 £’000

2016 £’000

2017£’000

2016£’000

2017 £’000

2016 £’000

2017 £’000

2016 £’000

2017£’000

2016£’000

2017 £’000

2016 £’000

Executive Directors in office as at 30 September 2017ZillahByng-Thorne4 350 300 10 10 640 - 1,452 - 44 37 2,496 347PennyLadkin-Brand4 250 178 - - 324 - 921 - 11 8 1,506 186Total for executive Directors 600 478 10 10 964 - 2,373 - 55 45 4,002 533

Non-executive Directors in office as at 30 September 2017PeterAllen 95 101 - - - - - - - - 95 101ManjitWolstenholme 50 50 - - - - - - - - 50 50JamesHanbury5 60 - - - - - - - - - 60 -HugoDrayton 40 40 - - - - - - - - 40 40Total for non-executive Directors 245 191 - - - - - - - - 245 191

Total 845 669 10 10 964 - 2,373 - 55 45 4,247 724

Notes:1.BenefitsforexecutiveDirectorscompriseprincipallycarallowance,privatehealthinsuranceandlifeassurance.TherewerenotaxableexpensespaidtoanyDirectorintheyear.2.DetailsrelatingtotheAnnualBonusSchemearesetoutonpages30and31.InadditiontoamountsincludedinrespectoftheAnnualBonusSchemefor2017,bothZillahByng-ThorneandPenny

Ladkin-Brandreceivedtransactionbonusesof£350,000and£125,000respectivelyfollowingthesuccessfulcompletionandintegrationoftheImagineacquisitioninOctober2016.During2016,bothZillahByng-ThorneandPennyLadkin-Brandwaivedtheirentitlementtoanyperformancebonus(althoughthecriteriahadbeenpartlysatisfied)andasaresultnobonuspaymentwasmadein2016.

3.DetailsrelatingtothePerformanceSharePlan(“PSP”)aresetoutonpage31.TheamountincludedinthetableaboveinrespectofZillahByng-ThornerelatestothePSPawardgrantedon16July2014whichvestedinfullon27November2017,followingtheachievementofperformancecriteriaoverthethree-yearperiodended30September2017,and25%ofthePSPawardsgrantedon23November2016and2February2017whichwillveston23November2019,followingtheachievementoftheadjustedEBITDAtargetfortheyearended30September2017.ThevalueoftheJuly2014awardhasbeencalculatedusingthesharepriceonthedateofvestingof382pandthevalueoftheNovember2016andFebruary2017awardshasbeencalculatedusingtheaveragesharepriceforthelastthreemonthsofthefinancialyearof308p,astheawardhadnotvestedatthedateofthisreport.TheamountincludedinrespectofPennyLadkin-BrandrelatestothePSPawardgrantedon2August2015whichwillvestinfullon2August2018,followingtheachievementofperformancecriteriaoverthethree-yearperiodended30September2017,and25%ofthePSPawardsgrantedon23November2016and2February2017whichwillveston23November2019,followingtheachievementoftheadjustedEBITDAtargetfortheyearended30September2017.Astheseawardshadnotvestedatthedateofthisreport,thevalueabovehasbeencalculatedusingtheaveragesharepriceforthelastthreemonthsofthefinancialyearof308p.

4.ZillahByng-Thornereceivedacashsupplementinlieuofpensioncontributionwitheffectfrom1July2016andPennyLadkin-Brandreceivedacashsupplementinlieuofpensioncontributionwitheffectfrom1November2016.Theseadditionalcashpaymentsarenotincludedindeterminingtheirentitlementtoanybonus,share-basedincentiveorpensionentitlement.

5.JamesHanburywasappointedtotheBoardon21October2016.6.RichardHuntingfordwasappointedtotheBoardon1December2017andconsequentlynoremunerationisincludedinthetableabove.

ThefollowingreportprovidesdetailsofDirectors’remunerationfortheyearended30September2017.Insettingremunerationfortheyear,theCommitteeappliedtheprinciplessetoutintheRemunerationpolicyreport.

31 Future plc



Paymentofanyperformance-relatedbonusundertheAnnualBonusSchemeisusuallymadeinDecember,followingannouncementofthepreliminaryresultsandconclusionoftheauditinrespectoftheprecedingfinancialyear.Paymentofanyperformance-relatedbonusisalsosubjecttotheexecutiveDirectorbeingintheCompany’semploymentatthetimeofpaymentofsuchperformance-relatedbonusandnothavinggivenorreceivednoticeofterminationofemploymentandcertainothereventsnothavingoccurred.

Performance targets

Theperformance-relatedbonusfortheexecutiveDirectorsduring2017comprisedtwoelements.Amaximumof45%ofcurrentbasicannualsalarywaspayableundertheprofitpoolbonussubjecttotheachievementoftargetEBITDAandafurther50%ofcurrentbasicannualsalarywaspayableinshares,whichmustbeheldforatleastoneyear,subjecttotheachievementoftargetEBITDA.

Theprofitcriteriaforpaymentoftheprofitpoolbonussetfor2017wasinarangefrom101%to120%targetEBITDA,asfollows:

::IfEBITDAisatorbelowtargetEBITDA,noprofit-relatedbonuswillbepayable.

::IfEBITDAtargetisexceededby10%ormore,50%ofthepotentialmaximumoftheprofit-relatedbonuswillbepayable.

::IfEBITDAtargetisexceededby20%ormore,100%ofthepotentialmaximumoftheprofit-relatedbonuswillbepayable.

::IfEBITDAfallsinbetweenanyoftheabovelevels,apercentageofthepotentialmaximumprofit-relatedbonuswillbepayable,onaproratabasistothelevelsexpressedabove,intheeventthattheCommitteedetermines,initsabsolutediscretion,thatsuchpaymentismeritedbytheindividual.

TheprofitcriteriainrespectofthesharesbonuswasaspecifiedtargetEBITDA,whichhadtobemetinfullinorderforthebonussharestobeissued.

TheEBITDAtargetisnotdisclosedasthisisbelievedtobeacommerciallysensitivenumberbutitissetbytheCommitteetobechallengingandissetbyreferencetothebudgetfortherelevantfinancialyear.

Actual performance against targets for the year

BasedonEBITDAperformanceachievedfor2017,theChiefExecutiveandtheChiefFinancialOfficerwereeachawardedaprofitpoolbonusof22.5%oftheircurrentsalaryandasharesbonusof50%oftheircurrentsalary.

2005 Performance Share Plan (PSP)

Operation of the schemeThePSPhasbeeninoperationsince2005andisdesignedtorewardperformance,usuallyoverathree-yearperiodinthecontextofperformancetargetswhicharedesignedtoaligntheinterestsoftheexecutiveDirectorswiththoseoftheshareholders.Thosetargetsaresetoutbelow.Themaximumamountofanawardinanyfinancialyearisnormally100%ofbasicannualsalary.However,inexceptionalcircumstances,whereitisfeltnecessarytoprovidefurtherincentivetotheexecutiveDirectors,awardsofupto400%ofbasicannualsalarymaybeapproved.AwardsunderthisschemearegrantedtoexecutiveDirectorsandcertainkeyemployees.ThePSPwillexpireinJanuary2025,followingitsrenewalinJanuary2015forafurther10years.

SubjecttotheexecutiveDirectorsremaininginemploymentatthevestingdate,awardsgrantedshallvestsubjecttothefollowingperformancecriteriahavingbeenmetattheendoftherelevantthree-yearmeasurementperiod.

Performance criteria in respect of awards granted during the year ended 30 September 2017

EBITDA (50% of award)

25%oftheawardwillvestiftheGroup’sadjustedEBITDAfortheyearended30September2017isatorabovetarget.IftheGroup’sadjustedEBITDAisbelowtarget,noneofthat25%oftheawardwillvest.

25%oftheawardwillvestiftheGroup’sadjustedEBITDAfortheyearending30September2018isatorabovetarget.IftheGroup’sadjustedEBITDAisbelowtarget,noneofthat25%oftheawardwillvest.

Share price performance (50% of award)

25%oftheawardwillvestiftheCompany’ssharepriceperformanceintheperiodfromthedateofgrantto30September2018isatorabovetarget.IftheCompany’ssharepriceperformanceisbelowtarget,noneofthat25%oftheawardwillvest.

25%oftheawardwillvestiftheCompany’ssharepriceperformanceintheperiodfromthedateofgrantto30September2019isatorabovetarget.IftheCompany’ssharepriceperformanceisbelowtarget,noneofthat25%oftheawardwillvest.

Performance criteria in respect of awards granted between 30 November 2015 and 30 September 2016

Earnings Per Share (50% of award)

AdjustedEPSforthelastfinancialyearoftheperformanceperiodofatleast18.0pforthispartoftheawardtovest(atthislevelthevested

amountis25%ofthispartoftheaward),withfullvestingat22.5pandonastraight-linebasisbetweentheseamounts.

Net Cash Flow (50% of award)

NetCashFlowforthelastfinancialyearoftheperformanceperiodofatleast£(0.25)mforthispartoftheawardtovest(atthislevelthevestedamountis25%ofthispartoftheaward),withfullvestingat£0.75mandonastraight-linebasisbetweentheseamounts.

Performance criteria in respect of awards granted between 16 July 2014 and 29 November 2015

InJuly2017,theRemunerationCommitteeexerciseditsdiscretiontochangetheperformancecriteriainrespectoftheawardgrantedtoZillahByng-ThorneinJuly2014fromTSRperformanceandEPSgrowthtoabsoluteEPSandnetcashflowinordertoaligntheperformancecriteriaforawardsmadetotheexecutiveDirectors.TheCommitteealsoextendedthevestingdatefrom16July2017to27November2017.Theperformancecriteriaareasfollows:

Earnings Per Share (50% of award)

AdjustedEPSforthelastfinancialyearoftheperformanceperiodofatleast15.0pforthispartoftheawardtovest(atthislevelthevestedamountis25%ofthispartoftheaward),withfullvestingat21.0pandonastraight-linebasisbetweentheseamounts.

Net Cash Flow (50% of award)

NetCashFlowforthelastfinancialyearoftheperformanceperiodofatleast£0.25mforthispartoftheawardtovest(atthislevelthevestedamountis25%ofthispartoftheaward),withfullvestingat£1.25mandonastraight-linebasisbetweentheseamounts.

Performance against targets in respect of the 16 December 2013 awards

ThemovementinEPSfortherelevantmeasurementperiodwas-33%forthetotalGroupandTSRperformanceplacedtheCompany13thwithinthegroupof16comparatorcompanies.Consequently,thePSPawardgrantedtoZillahByng-Thorneon16December2013lapsedinitsentiretyon16December2016.


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Performance against targets in respect of the awards granted on 16 July 2014 and 2 August 2015

TheadjusteddilutedEPSfortherelevantmeasurementperiodwas21.0pfortheGroupandthenetcashflowwas£8.9m(aftermakingadjustmentsfornetdebtacquiredwithImagineanddebtdrawndowntofundtheacquisitionofhomeinterest).Consequently,thePSPawardgrantedtoZillahByng-Thorneon16July2014vestedinfullon27November2017andthePSPawardgrantedtoPennyLadkin-Brandon2August2015willvestinfullon2August2018.

Non-executive Directors’ remuneration

Non-executiveDirectorsdonotparticipateinanyoftheCompany’sshareincentivearrangements,nordotheyreceiveanybenefits.Theirfeesarereviewedeverythreeyears.TheChairman’sfeesaresetbytheCommittee,andthoseforthenon-executiveDirectorsaresetbytheBoardasawhole.

Pension entitlements (audited)

Theonlyelementofremunerationthatispensionableisbasicannualsalary,excludingperformance-relatedbonusesandbenefitsinkind.Duringtheyearended30September2017,employer’spensioncontributionswerepayablefortheexecutiveDirectorsatarateof12.5%fortheChiefExecutiveandupto6%fortheChiefFinancialOfficer.Theentitlementtoemployer’spensioncontributionswaspaidincashasasalarysupplementtoZillahByng-Thorne,witheffectfrom1July2016,andtoPennyLadkin-Brand,witheffectfrom1November2016.Thisadditionalcashpaymentisnotincludedindeterminingtheirentitlementtoanyperformance-relatedbonus,share-basedincentiveorpension.TheCompanyhadnoliabilityinrespectoftheexecutiveDirectors’pensionsasat30September2017.Normalretirementageundertheschemerulesis75.

Payments to past Directors (audited)

NopaymentsweremadetoanypastDirectorsduringthefinancialyearended30September2017.

Payments for loss of office (audited)

Duringthefinancialyearto30September2017nopaymentsinrespectoflossofofficeweremade.

Statement of Directors’ shareholding and share interests (audited)

TheCompanyhasapolicyonshareownershipbyexecutiveDirectorswhichrequiresthatanysuchDirectorshouldaccumulateaholdinginsharesoverafiveyearperiodfromappointmentwherethevalueofthosesharesrepresentsatleastonetimessalary.

InrespectofZillahByng-Thorne,therelevantfiveyearperiodcommencedon1November2013andwillendon31October2018.Asat30September2017,ZillahByng-Thornehadaholdingof113,016shareswhich,atthesharepriceonthesamedate,wereworth£349,785.

InrespectofPennyLadkin-Brand,theperiodcommencedon3August2015andwillendon2August2020.Asat30September2017,PennyLadkin-Brandhadaholdingof31,780shareswhich,atthesharepriceonthesamedate,wereworth£98,359.

DetailsofDirectors’shareholdingsaresetoutonpage20oftheDirectors’report.

Share incentives awarded during the year (audited)

PSP Grants

Date of award % salary Value (£)% vesting at min performance

No. shares awarded Performance period

ZillahByng-Thorne 23November2016 200% 700,000 75% 529,702 1October2016–30September2019

PennyLadkin-Brand 23November2016 200% 500,000 75% 378,358 1October2016–30September2019

ZillahByng-Thorne 2February2017 200% 700,000 75% 529,702 1October2016–30September2019

PennyLadkin-Brand 2February2017 200% 500,000 75% 378,358 1October2016–30September2019

Notes:1. ThevalueofthePSPawardsareusuallycalculatedusingthesharepriceatthedateofgrant,whichwas132.15ppershareforthe23November2016awardstoZillahByng-ThorneandPenny

Ladkin-Brand.ThevalueoftheawardsgrantedtoZillahByng-ThorneandPennyLadkin-Brandon2February2017wasbasedonthesamesharepriceastheawardsgrantedon23November2016astheywereconsideredtobepartofthesameshareaward.

2.ThePSPawardsareexercisableatnilvalue.3.Theperformanceconditionsattachedtothegrantoftheaboveawardsarethesameassetoutonpage31.4. Thepercentagevestingatminimumperformancerepresentsthe50%vestingoftheEBITDAelementandthe100%vestingofthesharepriceperformanceelementoftheawardastherelevant

criteriahavebeenmetinfullat8December2017.

33 Future plc



Company performance

TheperformancegraphoppositeshowstheTSRonaholdingofsharesintheCompanycomparedwiththeFTSEAllShareMediaIndex(UKcompanies).

ThefollowingisalistofthecompaniescurrentlyincludedintheFTSEAllShareMediaIndex(UKcompanies):

4 Imprint GroupAscentialAuto Trader GroupBloomsbury PublishingEntertainment One Euromoney Instl. InvestorGocompare.comHuntsworthInformaITE GroupITV

Moneysupermarket.com GPPearsonRELXRightmoveSkySTV GroupTarsus GroupTrinity MirrorUBMWPP Zoopla Property Group

Notes:1. TheperformancecriteriawhichapplytoawardsgrantedunderthePSPschemearesetoutonpage31.2. DetailsoftheSharesavescheme,whichhasnoperformanceconditions,aresetoutinnote24onpage81.3. ThemarketpriceatthetimeofgrantofthePSPawardon23November2016was132.15ppershareandthispricewasalsousedforthegrantofthePSPawardon2February2017astheywere

consideredtobepartofthesameshareaward.4.InJuly2017theRemunerationCommitteeexerciseditsdiscretiontochangetheperformancecriteriainrespectoftheawardgrantedtoZillahByng-ThorneinJuly2014fromTSRperformanceand

EPSgrowthtoabsoluteEPSandnetcashflowinordertoaligntheperformancecriteriaforawardsmadetotheexecutiveDirectors.TheCommitteealsoextendedthevestingdatefrom16July2017to27November2017.

5.ZillahByng-Thorneexercised4,615optionsundertheSharesaveschemeon1August2017.Theexercisepriceoftheoptionswas195ppershareandthemarketpriceonthedateofexercisewas320ppershare.

6.TheawardsgrantedtoZillahByng-Thorneon16December2013lapsedon16December2016,sincetherelevantperformancecriteriawerenotmet.7.Balancesat1October2016inthetableabovehavebeenrestatedtoreflecttheshareconsolidationinFebruary2017.

Directors’ interests in share schemes (audited)

DetailsofoptionsandothershareincentivesheldbyexecutiveDirectorsandmovementsduringtheyeararesetoutbelow,includingdetailsoftheawardsmadeduringtheyear.

Dateofgrant

Pricepaid

for grant

Earliest exercisedate

Expiry date

RestatedExerciseprice per share(p)

RestatedBalanceat

1Oct2016

Grantedduringthe

year3

Vestedduringthe

year

Lapsed unexercised

during theyear

Balance at 30 Sept

2017

PSP1

ZillahByng-Thorne4 16Dec2013 Nil 16Dec2016 N/A Nil 133,334 - - (133,334) -16Jul2014 Nil 27 Nov 2017 N/A Nil 166,667 - - - 166,667

30 Nov 2015 Nil 30 Nov 2018 N/A Nil 166,667 - - - 166,66723 Nov 2016 Nil 23 Nov 2019 N/A Nil - 529,702 - - 529,7022Feb2017 Nil 23 Nov 2019 N/A Nil - 529,702 - - 529,702

PennyLadkin-Brand 3Aug2015 Nil 3Aug2018 N/A Nil 109,856 - - - 109,85630 Nov 2015 Nil 30 Nov 2018 N/A Nil 83,334 - - - 83,33423 Nov 2016 Nil 23 Nov 2019 N/A Nil - 378,358 - - 378,3582Feb2017 Nil 23 Nov 2019 N/A Nil - 378,358 - - 378,358

Sharesave2

ZillahByng-Thorne 13Dec2013 Nil 1Feb2017 1Aug2017 195.0 4,615 - (4,615) - -

34AnnualReportandAccounts2017C

orporate Governance

Corporate G

overnance

Graph: Past nine financial years ended 30 September 2017Total Shareholder Return: Rebased to Future plc as of 1 October 2008

Chief Executive pay during last nine years

Year

Chief Executive single figure

£’000Bonus paid as %

of maximumShare based incentives

vesting as % of maximum

2009(StevieSpring) £423 0% 100%1

2010(StevieSpring) £746 40% 48%2

2011(StevieSpring) £546 0% 100%3

2012(MarkWood) £430 50% 0%4

2013(MarkWood) £331 0% 0%4

2014(ZillahByng-Thorne) £3066 20% 0%5

2015(ZillahByng-Thorne) £471 36% 0%5

2016(ZillahByng-Thorne) £347 0%7 0%5

2017(ZillahByng-Thorne) £2,496 88%8 100%

Notes:1. Thisrepresentsshareswhichweregrantedaspartofanexceptionalone-offawardintendedtoaidrecruitmentandretention.Theawardwasnotsubjecttoperformancecriteria.2. ThisrepresentsthefirsttrancheofadeferredbonusshareawardwhichwasnotsubjecttoperformancecriteriaandthePSPawardgrantedinDecember2006whichpartiallyvestedinDecember2009

followingthepartialsatisfactionofTSRperformancecriteria.3. Thisrepresentsthesecondtrancheofadeferredbonusshareawardwhichwasnotsubjecttoperformancecriteria.ThePSPawardgrantedinDecember2007lapsedinDecember2010.4. ThefirstawardsgrantedtoMarkWoodunderthePSPweregrantedinJanuary2012andlapsedon18January2015,sincetherelevantperformancecriteriawerenotmet.5. ThefirstawardsgrantedtoZillahByng-ThorneunderthePSPweregrantedinDecember2013andlapsedon16December2016,sincetherelevantperformancecriteriawerenotmet.6. ThesinglefigureforZillahByng-Thornefor2014includesfivemonthsofherChiefFinancialOfficersalaryandsixmonthsofhersalaryasChiefExecutive.7.ZillahByng-Thornewaivedherperformance-relatedbonusfor2016.8.ZillahByng-Thornereceivedatransactionbonusof£350,000followingthesuccessfulcompletionoftheImagineacquisitioninOctober2016.Therighttoaperformance-relatedbonuswaswaivedin

2016asaresultofthistransactionbonusbeingpaid.The88%inthetablereflectsthecombinationofthistransactionbonus,theprofitpoolbonuswhichwasawardedasaresultofEBITDAperformanceachievedfor2017andthefurtherbonusof50%ofcurrentsalary(tobesatisfiedinsharesthatmustbeheldforatleastoneyear)fortheachievementof2017targetEBITDA.

Future(rebasedto100) FTSEAll-ShareMediaIndex(UKcompanies)(rebasedto100)

50

100

150

200

250

300

350

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

400

35 Future plc



Percentage change in remuneration of Chief Executive

Salary Benefits (inc pension) Bonus

2017 2016 % change 2017 2016 % change 2017 2016 % change

Chief Executive £350,000 £300,000 +16.7% £54,000 £47,000 +14.9% £640,000 - +100%All employees £38,758 £38,491 +0.7% £1,777 £3,022 -41.2% £1,551 - +100%

Relative importance of spend on pay

Therelativeimportanceofspendonpayforthebusinessisshowninthetablebelow.

2017£m

2016£m

Grouppay 28.8 24.0GroupoperatingcostsexcludingGrouppay&exceptionalcosts 52.6 34.3Capitalexpenditure 1.8 1.9Dividends - -

ThetableshowstheactualexpenditureoftheGroup,andchangebetweenthecurrentandpreviousyears,onremunerationpaidtoallemployeescomparedtothetotaloperatingcostsfortheGroupexcludingexceptionalcostsandremuneration,andinvestmentincapitalexpenditureanddividends.

Shareholder voting

AtthelastAnnualGeneralMeeting,votescastontheDirectors’remunerationreportbeginningon1October2016to30September2019wereasfollows:

For % Discretionary % Against %

ApprovalofDirectors’remunerationreportfor2017* 18,578,620 99.93 1,732 0.01 11,690 0.06

*ThenumbersofsharesstatedabovehavebeenrestatedtoreflecttheshareconsolidationinFebruary2017.

Implementation of remuneration policy in the year to 30 September 2018

TheRemunerationCommitteedoesnotproposetomakeanychangestotheremunerationpolicythatwasoutlinedintheAnnualReportfortheyearended30September2016andapprovedattheCompany’sAnnualGeneralMeetinginFebruary2017,acopyofwhichissetoutonpages38to41,otherthanasdetailedbelowinrespectofnon-executiveDirectors’fees.

TheRemunerationCommitteeproposesthefollowingchangestotheremunerationpolicyfor2018fornon-executiveDirectors,asoutlinedintheRemunerationpolicyreportonpages38to41,subjecttoshareholderapprovalattheCompany’sAGMon5February2018.

Non-executive Directors

Element Operation of element Max. potential valuePerformance, weighting & time

Fees Non-executiveDirectors’feesarereviewedeverythreeyearsandpaidin12monthlyinstalments.

Chairman:£120,000DeputyChairman:£65,000Othernon-executiveDirectors:£40,000Additionalfeespayable:ChairmanofCommittee:£5,000SeniorindependentDirector:£5,000MemberofCommittee:Nil

TheChairman’sfeewillincreaseto£120,000 from1October2017.

SubjecttoshareholderapprovalattheAGMinFebruary2018thefollowingchangesareproposed:

1.Anincreaseinthebasefeefornon-executiveDirectorsby£5,000to£45,000effectivefrom1February2018.

2.Anadditionalfeeof£7,500fortheroleofSeniorIndependentDirectorand£5,000foreachChairmanofRemunerationandAuditCommitteeroleheld.


orporate Governance

Executive Directors:

Asdetailedopposite,theoverallremunerationpolicyforexecutiveDirectorsremainsunchanged,howeverthechangestoremunerationthathavetakenplaceinrespectof2018inaccordancewiththepolicyaredetailedbelow:

Element Operation of element Max. potential valuePerformance, weighting & time

Basesalary Nochange ZillahByng-Thorne’ssalaryasChiefExecutiveincreasedto£400,000andPennyLadkin-Brand’ssalaryasChiefFinancialOfficerincreasedto£275,000,bothwitheffectfrom1October2017.

Nochange

Benefits Nochange ZillahByngThorne’stotalbenefitsincreasedto£17,000andPennyLadkin-Brand’stotalbenefitsincreasedto£15,000,bothwitheffectfrom1October2017.

Nochange

AnnualBonus Nochange Nochangetotheprofitpoolbonusthatwasintroducedin20171.

Nochange

PSP Nochange TheExecutiveDirectorsreceivedanawardof100%ofsalaryinNovember2017which,subjecttotheachievementofcertainperformanceconditions,willvestinNovember2020.

Nochange

Pension Nochange Employers’pensioncontributionswereincreasedtoarateof15%forboththeChiefExecutiveandtheChiefFinancialOfficerfrom1October2017.

Nochange

Notes:1.PerformancetargetsfortheAnnualBonusfor2018arenotdisclosedduetotheircommercialsensitivity.IntheeventthatthereisanincreaseintheexecutiveDirectors’basesalariesduringtheyear,the

potentialmaximumvalueoftheAnnualBonusandpensionshallincreaseaccordingly.

Advisers to the Remuneration Committee

Ernst&YoungLLP(‘EY’)advisetheCommitteeinrespectofvariousshareincentivesandexecutiveremunerationandwerepaid£9,000intheyearforprovidingtheseservicestotheCommittee.

Compliance with the UK Corporate Governance CodeTheBoardhascompliedfullywiththeprovisionsofSectionDoftheUKCorporateGovernanceCodeinrelationtoDirectors’remunerationpolicyandpractice,andhasfollowedScheduleAtotheCodeinrelationtoperformance-relatedremunerationpolicy.FurtherinformationregardingtheCompany’sapproachtocorporategovernanceissetoutonpages23to28.

37 Future plc


orporate Governance

Remuneration policy report

Corporate G

overnance

Thepolicysetoutbelowappliesforallfinancialyearsbeginningonorafter1October2016to30September2019followingshareholderapprovalattheCompany’sAnnualGeneralMeetingon1February2017.

TheCommitteeconsiderstheremunerationpolicyannuallytoensurethatitremainsalignedwiththeGroup’sbusinessneedsandisappropriatelypositionedrelativetothemarket.TheCommitteedoesnotproposetomakeanychangestothepolicythatwasapprovedbyshareholdersattheCompany’sAnnualGeneralmeetinginFebruary2017inrespectofexecutiveDirectors’remunerationhoweveritseekstoamendthelevelofnon-executiveDirectors’feestoreflectprevailingmarketratesandthereforeintendstoputtheproposedamendmentstothepolicyinrespectofnon-executiveDirectors’remunerationforwardtoshareholdersforapprovalattheCompany’sAnnualGeneralMeetingtobeheldon5February2018.

Approach to recruitment remuneration for executive and non-executive DirectorsTheCommittee’sobjectiveatthetimeofanappointmenttoanewroleistoweightexecutiveDirectors’remunerationpackagestowardsperformance-relatedpay,withperformance-relatedtargetslinkedtofinancialperformanceoftheGroupagainstbudgetandtheGroup’sperformanceagainstbusinessobjectivesanditsstatedstrategy.

AnynewexecutiveDirector’sremunerationpackagewouldincludethesameelementsasthoseoftheexistingexecutiveDirectors,asshowninthenextcolumn.

Element of remuneration Maximum % of salary

Salary Nothigherthanmarketvalue

Benefits Dependentoncircumstances

Pension 15%ofbasicannualsalary

Performance- relatedbonus2 150%

Shareincentiveschemes1 100%

Notes:1.PSPschemerulesprovideforawardsofupto100%of

basicannualsalary,saveinexceptionalcircumstanceswheretheCommitteeisalloweddiscretiontoawardupto400%ofbasicannualsalary.

2.Intheeventofaninternalpromotion,anycommitmentsmadebytheCompanytoaninternalcandidateshallbehonouredevenifitwouldotherwisebeinconsistentwiththepolicy.

3.IftheDirectorisrequiredtorelocatethenthepolicyistoprovidereasonablerelocation,travelandsubsistencepaymentsatthediscretionoftheCommittee.

Indeterminingthelevelandmake-upofexecutiveDirectors’remuneration,theCommitteecarefullyconsidersthefollowingissues:

(a)RemunerationpackagesofferedtoexecutiveDirectorsshouldbecompetitivewiththoseavailableforcomparablerolesincompaniesoperatinginsimilarmarketsandonasimilarscale.Theyshouldbesufficientlydesirablesoastoattract,retainandmotivatehighcalibreDirectorstoperformatthehighestlevels,whilstatthesametimeensuringthatrecruitmentand

remunerationexpenditureisnotexcessiveanddoesnotencourageexcessiverisk-taking.

(b)TheinterestsofexecutiveDirectorsshouldbealignedwiththoseofshareholdersbyensuringthatasignificantproportionofremunerationislinkedtoGroupperformance.

(c)RemunerationpackagesandemploymentconditionsofexecutiveDirectorsareconsideredinconjunctionwithboththoseofkeyseniormanagers(keepingsuccessionplanninginmind)andallemployeesintheGroupinordertoachieveaconsistentremunerationpolicyacrosstheGroup.TheCommitteehasgivenparticularattentiontoensuringthattheremunerationpackagesofthekeyseniormanagersrecruitedduringtheyeararealignedwiththoseoftheexecutiveDirectors.

(d)Bonuspotentialandshareschemeawardsthatarecappedatapercentageofsalaryarerestrictedifsalariesarelow.

(e)Subjectivecriteriaareappliedtotheperformance-relatedbonusoftheChiefExecutiveandChiefFinancialOfficerinordertoensurethattheCommitteeretainsdiscretionandtoensurenoperformance-relatedbonusisunjustlyreceived.

Service contracts and payments for loss of office

Executive Directors Contract provision Policy Details

Noticeperiods DirectororCompanyshallbeentitledtoserve6months’notice(inPennyLadkin-Brand’scase)or12months’notice(inZillahByng-Thorne’scase).

ADirectormayberequiredtoworkduringtheirnoticeperiodorbeputongardenleave.

Compensationforlossofoffice Directorshallbeentitledtoreceive6months’salary(inPennyLadkin-Brand’scase)or12months’salary(inZillahByng-Thorne’scase)andbenefitsduringanyunexpirednoticeperiod.

Whileserviceagreementsallowformonthlypaymentsduringnoticeperiodwhicharesubjecttomitigation,theCommitteeretainsdiscretiontomakepaymentsinsuchmannerasisdeemedappropriate,particularlybyreferencetothecircumstancesofthelossofoffice.

Treatmentofshareincentivesontermination

IncentiveswilllapseorvestattheCommittee’sdiscretion,subjecttoperformancecriteriabeingmetandtherulesofthescheme.

TheCommitteehasdiscretiontoallowawardstovestpartiallyorinfullontermination,ortopreserveawards.

Changeofcontrol Intheeventofachangeofcontrol,aDirector mayterminatetheirappointmentonservingnolessthan1month’snotice.

IntheeventofterminationbyeithertheDirectorortheCompany,theDirectorwillbeentitledtoreceive6months’salary.


Noticeperiods 3months’noticefromeitherCompanyorDirector.

Appointedforathreeyearterm,subjecttoannualre-electionbyshareholdersattheCompany’sAGM.

CopiesofDirectors’serviceagreementsandlettersofappointmentareavailableforinspectiononrequestattheCompany’sregisteredoffice.

39 Future plc



Remuneration table

Executive Directors

Element Operation Objective & link to strategy Max. potential value Performance measures Changes for 2018Basic annual salary Basicannualsalaryispaidin12equalmonthlyinstalmentsduringtheyearandisreviewedannually.

Whenassessingthelevelofbasicannualsalary,theCommitteetakesintoaccountperformance,marketconditions,remunerationofequivalentroleswithincomparablecompanies,thesizeandscaleofthebusinessandpayintheGroupasawhole.

TheCommitteeretainsdiscretiontopayasalarysupplementtoanexecutiveDirectorforfulfillingtheroleofanotherhigherpaidexecutiveDirectorwhenthatexecutiveDirectorleavestheCompany.

Torecruit,retainandmotivateindividualsofhighcalibre,andreflecttheskills,experienceandcontributionoftherelevantDirector.

Salaryincreasesshallgenerallyreflectmarketconditions,performanceoftheindividual,newchallengesoranewstrategicdirectionforthebusiness.Similarly,theCommitteemayapproveahigherbasicannualsalaryforanewlyappointedDirectorthantheoutgoingDirectorreceivedwhereitconsidersitnecessaryinordertorecruitanindividualofsufficientcalibrefortherole.

Notapplicable. BasicannualsalaryofChiefExecutiveincreasedto£400,000andChiefFinancialOfficerto£275,000(bothwitheffectfrom1October2017)from£350,000and£250,000respectively.

Benefits CurrentbenefitsavailabletoexecutiveDirectorsarecarallowance,permanenthealthinsurance,healthcareandlifeassurance.AdditionalbenefitsmaybeofferedifapplicableandsubjecttothemaximumvalueofallbenefitsnotexceedingthemaximumpotentialvaluesetbytheCommittee.

Toensurebroadcompetitivenesswithmarketpractice. TheCompanyshallcontinuetoprovidebenefitstoexecutiveDirectorsatsimilarlevels;whereinsurancecoverisprovidedbytheCompany,thatcovershallbemaintainedatasimilarlevelandtheCompanyshallpaythethencurrentmarketratesforsuchcover.

Notapplicable. TotalbenefitsprovidedtotheChiefExecutiveincreasedto£17,000andtotheChiefFinancialOfficerto£15,000(bothwitheffectfrom1October2017).

Pension TheCompanyshallmakeacontributionuptoamaximumpercentageofbasicannualsalary. Toensurebroadcompetitivenesswithmarketpractice. Totalcostannuallyshallnotexceed15%ofbasicannualsalary. Notapplicable. Employers’pensioncontributionsincreasedto15%forboththeChiefExecutiveandChiefFinancialOfficer(from12.5%and6%respectively).

Performance- related bonus1

TargetsaresetannuallybytheCommittee,basedon(i)financialperformanceagainstbudgetand,attheCommittee’sdiscretion,(ii)individualsubjectiveperformancetargetswhicharedeterminedforeachexecutiveDirector.

TheCommitteeretainsdiscretiontosetthefinancialtargetsbasedontheperformanceduringthepreviousfinancialyearandthebudgetfortheforthcomingyear,andperformanceoftheindividualagainsttheirspecificsubjectiveperformancetargets.

DesignedtorewarddeliveryofshareholdervalueandimplementationoftheGroup’sstrategy.

ForboththeChiefExecutiveandChiefFinancialOfficertheCommitteeretainsdiscretiontovarythepotentialtotalmaximumbonus,theweightingofthevariableelementsandthestretchofthetargetsinordertoincentiviseorrecruitexecutiveDirectors,providedthatthetotalmaximumpotentialbonusforanyoneyearshallnotexceed150%ofbasicannualsalaryandthatthemaximumbonusshallonlybepayableforoverperformance.

Theperformancemeasures,relativeweightingsandtargetsaresetannuallybytheCommittee.DetailsofthemeasuresandtheirrelativeweightingsaredisclosedannuallyintheDirectors’remunerationreportwiththetargetsdisclosedprovidedtheyarenotdeemedtobecommerciallysensitive.TheCommitteeretainsdiscretiontoadjustthetargetsifeventsoccurwhichleadittoconcludethattheyarenolongerappropriate.

TheCommitteealsoretainsdiscretiontoadjusttheoutcomeoftheperformance-relatedbonusforanyperformancemeasureifitconsidersthattobeappropriate.

Nochange.

Long term share-based incentive2

AnnualawardstoexecutiveDirectorsofuptoamaximumof1xbasicannualsalary,withdiscretiontoawarduptoamaximumof4xbasicannualsalary,e.g.recruitmentofaDirectororto“buyout”awardsgrantedbyprioremployer.

TheschemerulesallowtheCommitteediscretiontochangetheperformancetargetsandtheCommitteeshallbeentitledtoexerciseitsdiscretiontochangeperformancecriteriatotheextentthatitreflectsmarketpracticeand/ortheCommitteeconsidersalternativeperformancetargetstobemoreappropriatetothebusiness.

Designedtorewarddeliveryofshareholdervalueinthemedium-to-longterm.

Valueofgrantasamaximumpercentageofsalaryis100%ofbasicannualsalary,howeverinexceptionalcircumstancestheCommitteeretainsdiscretiontograntone-offawardsofavalueupto400%ofbasicannualsalary.

TheperformancetargetsaresetannuallybytheCommitteeanddisclosedannuallyintheDirectors’remunerationreportprovidedtheyarenotdeemedtobecommerciallysensitive.

Awardsvestattheendofthethree-yearperformanceperiod,whentheCommitteewillassessperformanceagainstthetargetssetanddetermine,initsabsolutediscretion,theoveralllevelofvestingoftheaward.

ExecutiveDirectorsreceivedanawardof100%ofsalaryinNovember2017.

All-employee share plans TheCompanyoperatesaShareIncentivePlan(“SIP”)intheUKwhichqualifiesfortaxbenefits.

TheCommitteeretainsdiscretiontoallowexecutiveDirectorstoparticipateintheSIPonthesametermsasotheremployees.

Toencourageshareownershipbyemployeesandaligntheirinterestswiththoseoftheshareholders.

Themaximumparticipationlevelsforall-employeeshareplanswillbethelimitssetoutinUKtaxlegislation.

Notapplicable. Nochange.


Element Operation Objective & link to strategy Max. potential value Performance measures Changes for 2018Fees1 Non-executiveDirectors’feesarereviewedeverythreeyearsandpaidin12monthlyinstalments. Reflectsthetimecommitmentandresponsibilitiesoftheroles. Chairman:£120,000

DeputyChairman:£65,000Othernon-executiveDirectors:£40,000Additionalfeespayable:ChairmanofCommittee:£5,000SeniorindependentDirector:£5,000MemberofCommittee:Nil

Notapplicable. TheChairman’sfeewillincreaseto£120,000from1October2017.

SubjecttoshareholderapprovalattheAGMinFebruary2018thefollowingfurtherchangesareproposed:

1.Anincreaseinthebasefeefornon-executiveDirectorsby£5,000to£45,000effectivefrom1February2018onwards.

2.Anadditionalfeeof£7,500fortheroleofSeniorIndependentDirector(increasedfrom£5,000)and£5,000foreachroleasChairmanofeitherRemunerationorAuditCommittee.

Notes to the table1.Feesarepaidatastandardannualratetoreflectthetime,commitmentandresponsibilitiesoftheroles,withadditionalfeespaidtothosewhochairBoardCommitteestoreflecttheiradditional

responsibilities.Separately,theBoardsetsthefeepayabletotheChairmanoftheBoard.CurrentlyadditionalfeesforchairingaCommitteeapplyonlyonce,regardlessofthenumberofCommitteesofwhichanon-executiveDirectorisChairman.SubjecttoshareholderapprovalitisproposedthatthisisamendedsothatafeeispayableforeachChairmanroleheld.Non-executiveDirectorsarenotincludedinanyperformance-relatedbonus,shareincentiveschemesorpensionarrangements.

Notes to the table1. Performance-relatedbonustargets:TheperformancetargetsaredeterminedannuallybytheCommitteeandaredesignedtoalignexecutiveDirectors’interestswiththoseoftheCompany’s

shareholdersandtorewardgoodperformancebytheCompany.FinancialtargetsaresetbyreferencetotheCompany’sbudgetfortherelevantfinancialyear,andindividualperformancetargetsaresetbyreferencetotheCompany’sstrategyandgoalsfortherelevantfinancialyear.Thetargetsforthefinancialyearto30September2018arenotdisclosedhereduetotheircommercialsensitivity.

2. PSPperformancetargets:AdditionaldetailsoftheperformancecriteriaattachingtoPSPawardsgrantedtodatearesetoutonpage31.


orporate Governance

Corporate G

overnance

Remuneration table

Executive Directors

Element Operation Objective & link to strategy Max. potential value Performance measures Changes for 2018Basic annual salary Basicannualsalaryispaidin12equalmonthlyinstalmentsduringtheyearandisreviewedannually.

Whenassessingthelevelofbasicannualsalary,theCommitteetakesintoaccountperformance,marketconditions,remunerationofequivalentroleswithincomparablecompanies,thesizeandscaleofthebusinessandpayintheGroupasawhole.

TheCommitteeretainsdiscretiontopayasalarysupplementtoanexecutiveDirectorforfulfillingtheroleofanotherhigherpaidexecutiveDirectorwhenthatexecutiveDirectorleavestheCompany.

Torecruit,retainandmotivateindividualsofhighcalibre,andreflecttheskills,experienceandcontributionoftherelevantDirector.

Salaryincreasesshallgenerallyreflectmarketconditions,performanceoftheindividual,newchallengesoranewstrategicdirectionforthebusiness.Similarly,theCommitteemayapproveahigherbasicannualsalaryforanewlyappointedDirectorthantheoutgoingDirectorreceivedwhereitconsidersitnecessaryinordertorecruitanindividualofsufficientcalibrefortherole.

Notapplicable. BasicannualsalaryofChiefExecutiveincreasedto£400,000andChiefFinancialOfficerto£275,000(bothwitheffectfrom1October2017)from£350,000and£250,000respectively.

Benefits CurrentbenefitsavailabletoexecutiveDirectorsarecarallowance,permanenthealthinsurance,healthcareandlifeassurance.AdditionalbenefitsmaybeofferedifapplicableandsubjecttothemaximumvalueofallbenefitsnotexceedingthemaximumpotentialvaluesetbytheCommittee.

Toensurebroadcompetitivenesswithmarketpractice. TheCompanyshallcontinuetoprovidebenefitstoexecutiveDirectorsatsimilarlevels;whereinsurancecoverisprovidedbytheCompany,thatcovershallbemaintainedatasimilarlevelandtheCompanyshallpaythethencurrentmarketratesforsuchcover.

Notapplicable. TotalbenefitsprovidedtotheChiefExecutiveincreasedto£17,000andtotheChiefFinancialOfficerto£15,000(bothwitheffectfrom1October2017).

Pension TheCompanyshallmakeacontributionuptoamaximumpercentageofbasicannualsalary. Toensurebroadcompetitivenesswithmarketpractice. Totalcostannuallyshallnotexceed15%ofbasicannualsalary. Notapplicable. Employers’pensioncontributionsincreasedto15%forboththeChiefExecutiveandChiefFinancialOfficer(from12.5%and6%respectively).

Performance- related bonus1

TargetsaresetannuallybytheCommittee,basedon(i)financialperformanceagainstbudgetand,attheCommittee’sdiscretion,(ii)individualsubjectiveperformancetargetswhicharedeterminedforeachexecutiveDirector.

TheCommitteeretainsdiscretiontosetthefinancialtargetsbasedontheperformanceduringthepreviousfinancialyearandthebudgetfortheforthcomingyear,andperformanceoftheindividualagainsttheirspecificsubjectiveperformancetargets.

DesignedtorewarddeliveryofshareholdervalueandimplementationoftheGroup’sstrategy.

ForboththeChiefExecutiveandChiefFinancialOfficertheCommitteeretainsdiscretiontovarythepotentialtotalmaximumbonus,theweightingofthevariableelementsandthestretchofthetargetsinordertoincentiviseorrecruitexecutiveDirectors,providedthatthetotalmaximumpotentialbonusforanyoneyearshallnotexceed150%ofbasicannualsalaryandthatthemaximumbonusshallonlybepayableforoverperformance.

Theperformancemeasures,relativeweightingsandtargetsaresetannuallybytheCommittee.DetailsofthemeasuresandtheirrelativeweightingsaredisclosedannuallyintheDirectors’remunerationreportwiththetargetsdisclosedprovidedtheyarenotdeemedtobecommerciallysensitive.TheCommitteeretainsdiscretiontoadjustthetargetsifeventsoccurwhichleadittoconcludethattheyarenolongerappropriate.

TheCommitteealsoretainsdiscretiontoadjusttheoutcomeoftheperformance-relatedbonusforanyperformancemeasureifitconsidersthattobeappropriate.

Nochange.

Long term share-based incentive2

AnnualawardstoexecutiveDirectorsofuptoamaximumof1xbasicannualsalary,withdiscretiontoawarduptoamaximumof4xbasicannualsalary,e.g.recruitmentofaDirectororto“buyout”awardsgrantedbyprioremployer.

TheschemerulesallowtheCommitteediscretiontochangetheperformancetargetsandtheCommitteeshallbeentitledtoexerciseitsdiscretiontochangeperformancecriteriatotheextentthatitreflectsmarketpracticeand/ortheCommitteeconsidersalternativeperformancetargetstobemoreappropriatetothebusiness.

Designedtorewarddeliveryofshareholdervalueinthemedium-to-longterm.

Valueofgrantasamaximumpercentageofsalaryis100%ofbasicannualsalary,howeverinexceptionalcircumstancestheCommitteeretainsdiscretiontograntone-offawardsofavalueupto400%ofbasicannualsalary.

TheperformancetargetsaresetannuallybytheCommitteeanddisclosedannuallyintheDirectors’remunerationreportprovidedtheyarenotdeemedtobecommerciallysensitive.

Awardsvestattheendofthethree-yearperformanceperiod,whentheCommitteewillassessperformanceagainstthetargetssetanddetermine,initsabsolutediscretion,theoveralllevelofvestingoftheaward.

ExecutiveDirectorsreceivedanawardof100%ofsalaryinNovember2017.

All-employee share plans TheCompanyoperatesaShareIncentivePlan(“SIP”)intheUKwhichqualifiesfortaxbenefits.

TheCommitteeretainsdiscretiontoallowexecutiveDirectorstoparticipateintheSIPonthesametermsasotheremployees.

Toencourageshareownershipbyemployeesandaligntheirinterestswiththoseoftheshareholders.

Themaximumparticipationlevelsforall-employeeshareplanswillbethelimitssetoutinUKtaxlegislation.

Notapplicable. Nochange.


Element Operation Objective & link to strategy Max. potential value Performance measures Changes for 2018Fees1 Non-executiveDirectors’feesarereviewedeverythreeyearsandpaidin12monthlyinstalments. Reflectsthetimecommitmentandresponsibilitiesoftheroles. Chairman:£120,000

DeputyChairman:£65,000Othernon-executiveDirectors:£40,000Additionalfeespayable:ChairmanofCommittee:£5,000SeniorindependentDirector:£5,000MemberofCommittee:Nil

Notapplicable. TheChairman’sfeewillincreaseto£120,000from1October2017.

SubjecttoshareholderapprovalattheAGMinFebruary2018thefollowingfurtherchangesareproposed:

1.Anincreaseinthebasefeefornon-executiveDirectorsby£5,000to£45,000effectivefrom1February2018onwards.

2.Anadditionalfeeof£7,500fortheroleofSeniorIndependentDirector(increasedfrom£5,000)and£5,000foreachroleasChairmanofeitherRemunerationorAuditCommittee.

Notes to the table1.Feesarepaidatastandardannualratetoreflectthetime,commitmentandresponsibilitiesoftheroles,withadditionalfeespaidtothosewhochairBoardCommitteestoreflecttheiradditional

responsibilities.Separately,theBoardsetsthefeepayabletotheChairmanoftheBoard.CurrentlyadditionalfeesforchairingaCommitteeapplyonlyonce,regardlessofthenumberofCommitteesofwhichanon-executiveDirectorisChairman.SubjecttoshareholderapprovalitisproposedthatthisisamendedsothatafeeispayableforeachChairmanroleheld.Non-executiveDirectorsarenotincludedinanyperformance-relatedbonus,shareincentiveschemesorpensionarrangements.

3. AllemployeesoftheGroupreceiveabasicannualsalary,benefits,pensionandannualbonus(subjecttofinancialperformance).Themaximumvalueofremunerationpackagesisbasedontheseniorityandresponsibilitiesoftherelevantrole.DiscretionaryshareincentivesarenotawardedtoemployeesotherthanexecutiveDirectorsandcertainkeyindividuals,howevertheCompanyintroducedaShareIncentivePlanin2015inordertoencourageactiveemployeeshareownership.

41 Future plc



Consideration of employee conditions within the Group

TheCommitteetakesintoconsiderationthepayandconditionsofemployeesacrosstheGroupwhendeterminingremunerationforexecutiveDirectors.

Allemployeesreceiveabasicannualsalary,benefitsandanentitlementtoreceiveabonus,subjecttofinancialperformance,undertheGroup’sprofitpoolbonusscheme.

DiscretionaryshareincentiveawardsaregrantedtocertainkeyemployeesunderthePSPandDABSschemes,thedetailsofwhicharesetoutatnote24onpage81.During2015theGroupintroducedaShareIncentivePlantoreplacetheSharesavescheme,inordertoencourageactiveemployeeshareownership.

Consideration of shareholder views

TheRemunerationCommitteeconsidersshareholderfeedbackreceivedaspartofanydiscussionswithshareholdersandconsultswithshareholdersonspecificmattersasandwhenappropriate.


Peter Allen(onbehalfoftheRemunerationCommittee)8December2017


orporate Governance

Corporate G

overnance

43 Future plcFuture plc

Independent auditors’ report Independent auditors’ report to

the members of Future plc

Report on the audit of the financial statements

Opinion

Inouropinion,Futureplc’sGroupfinancialstatementsandCompanyfinancialstatements(the“financialstatements”):

• giveatrueandfairviewofthestateoftheGroup’sandoftheCompany’saffairsasat30September2017andoftheGroup’sprofitandtheGroup’sandtheCompany’scashflowsfortheyearthenended;

• havebeenproperlypreparedinaccordancewithIFRSsasadoptedbytheEuropeanUnionand,asregardstheCompany’sfinancialstatements,asappliedinaccordancewiththeprovisionsoftheCompaniesAct2006;and

• havebeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006and,asregardstheGroupfinancialstatements,Article4oftheIASRegulation.

Wehaveauditedthefinancialstatements,includedwithintheAnnualReportandAccounts(the“AnnualReport”),whichcomprise:theConsolidatedandCompanybalancesheetsasat30September2017;theConsolidatedincomestatement,theConsolidatedstatementofcomprehensiveincome,theConsolidatedandCompanycashflowsstatements,andtheConsolidatedandCompanystatementsofchangesinequityfortheyearthenended;theAccountingPolicies;andthenotestothefinancialstatements.

OuropinionisconsistentwithourreportingtotheAuditCommittee.

Basis for opinion

WeconductedourauditinaccordancewithInternationalStandardsonAuditing(UK)(“ISAs(UK)”)andapplicablelaw.OurresponsibilitiesunderISAs(UK)arefurtherdescribedintheAuditors’responsibilitiesfortheauditofthefinancialstatementssectionofourreport.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

IndependenceWeremainedindependentoftheGroupinaccordancewiththeethicalrequirementsthatarerelevanttoourauditofthefinancialstatementsintheUK,whichincludestheFRC’sEthicalStandard,asapplicabletolistedpublicinterestentities,andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeserequirements.

Tothebestofourknowledgeandbelief,wedeclarethatnon-auditservicesprohibitedbytheFRC’sEthicalStandardwerenotprovidedtotheGrouportheCompany.

Otherthanthosedisclosedinnote3tothefinancialstatements,wehaveprovidednonon-auditservicestotheGrouportheCompanyintheperiodfrom1October2016to30September2017.

Our audit approach

The scope of our audit Aspartofdesigningouraudit,wedeterminedmaterialityandassessedtherisksofmaterialmisstatementinthefinancialstatements.Inparticular,welookedatwheretheDirectorsmadesubjectivejudgements,forexampleinrespectofsignificantaccountingestimatesthatinvolvedmakingassumptionsandconsideringfutureeventsthatareinherentlyuncertain.Asinallofourauditswealsoaddressedtheriskofmanagementoverrideofinternalcontrols,includingevaluatingwhethertherewasevidenceofbiasbytheDirectorsthatrepresentedariskofmaterialmisstatementduetofraud.

Key audit matters Keyauditmattersarethosemattersthat,intheauditors’professionaljudgement,wereofmostsignificanceintheauditofthefinancialstatementsofthecurrentperiodandincludethemostsignificantassessedrisksofmaterialmisstatement(whetherornotduetofraud)identifiedbytheauditors,includingthosewhichhadthegreatesteffecton:theoverallauditstrategy;theallocationofresourcesintheaudit;anddirectingtheeffortsoftheengagementteam.Thesematters,andanycommentswemakeontheresultsofourproceduresthereon,wereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.Thisisnotacompletelistofallrisksidentifiedbyouraudit.


orporate Governance

Key audit matter How our audit addressed the key audit matter

The measurement of Magazine newsstand revenue (£26.9 million (2016: £16.9 million) within the Magazine segment) Refer to note 1 for further information

Magazinenewsstandrevenueisrecognisedatthedatethattherelatedpublicationgoesonsale.Theamountofrevenuerecognisedisbasedonthenumberofissuesprintedandanestimateofthenumberofreturns.

WefocusedonthisareabecauseoftheinherentsubjectivityinestimatingthenumberofreturnsandbecauseofthesignificanceofMagazinerevenuetotheGroup’sreportedresult.ChangestotheestimatednumberofreturnscanhaveamaterialimpactonMagazinerevenue.

Group

Weassessedwhethertheestimatednumberofreturnswasreasonablebycomparingtheestimatetohistoricaltrendsandbyconsideringtheaccuracyofmanagement’sforecastinginthepast.

Weconsideredwhethertherehadbeenanychangetothetypesofmagazinessoldorchangestothemarketenvironmentwhichcouldincreasethelevelofuncertaintyintheestimate.

Wealsoexaminedthenumberofreturnsprocessedaftertheyear-endandcomparedthatdatatothelevelofreturnsforecastbymanagement.

Basedontheworkperformed,wefoundthatthemethodsandassumptionsusedtoestimatethenumberofreturnswereappropriateandthattheestimatewassupportedbytheevidenceobtained.

The valuation of goodwill (£65.8 million (2016: £29.5 million))Refer to note 11 for further information

Goodwillisanintangibleassetthatarisesontheacquisitionofabusinessandreflectstheportionoftheconsiderationpaidwhichcannotbeallocatedtoseparatelyidentifiableacquiredassets.Goodwillisnotamortisedbuttestedforimpairmentatleastonceayearormorefrequentlywhenthereisanindicationthatitmaybeimpaired.

Wefocusedonthisareabecausegoodwillismaterialtotheconsolidatedfinancialstatementsandtheassumptionsusedintheimpairmentassessmentareinherentlysubjective.Inparticular,theassessmentishighlysensitivetochangesinforecastearningsbeforeinterest,tax,depreciation,amortisation,impairmentandexceptionalitems(EBITDA)margins.

Group

Ourworktoaddressthevaluationofgoodwillwassupportedbyourin-housevaluationexperts,andincludedthefollowingprocedures:

•WeassessedwhethertheforecastEBITDAmarginswerereasonablebycomparingthemtohistoricaltrendsandbyconsideringtheaccuracyofmanagement’sforecastinginthepast.Weconsideredwhethertherehadbeenanychangestothebusinessortothemarketenvironmentwhichcouldincreasethelevelofuncertaintyintheforecast.

•WeperformedsensitivitiestoconfirmthattheforecastEBITDAmargincontinuestoremainthekeyassumptiontowhichtheimpairmentassessmentismostsensitive.WealsoconsideredtowhatleveltheEBITDAmarginwouldneedtodeterioratetoinordertoindicateimpairment.

•Weusedourin-housevaluationexpertstocomparethediscountratetoourownestimateoftheGroup’scostofcapital,adjustedfortheeffectsoftax.

•Wealsoassessedthereasonablenessoftheassumedlong-termgrowthrateinlightofexternalgrowthforecastsfortheUKeconomy.

Basedontheworkperformed,wefoundthatthemethodsusedintheimpairmentassessmentwereappropriateandthattheconclusionsreachedweresupportedbytheevidenceobtained.

The classification of exceptional items (£3.7 million (2016: £3.5 million)) Refer to note 4 for further information

TheGroup’saccountingpolicyistoreportitemsofincomeandexpensesasexceptionalitemswheretheyrelatetoaneventthatfallsoutsidetheordinaryactivitiesofthebusinessandwhereindividuallyorinaggregatetheyhaveamaterialimpactonthefinancialstatements.

Exceptionalitemsprimarilyconsistedofredundancyandacquisitionrelatedcostsassociatedwiththerestructuringofthebusinessandothertransformationalactivity.Wefocusedonthisareabecauseexceptionalitemsarematerialtotheconsolidatedfinancialstatementsandthereisadegreeofjudgementintheirclassification.

Group

Wetestedtheclassificationofexceptionalitemsby;

•examiningsupportinginformationsuchasinvoices;•checkingthatredundancycostsagreedtothepaymentsmadetothoseemployees;and•confirmingthatthosepaymentsweredescribedasredundancypaymentsinwrittencommunicationswiththoseemployees.

Redundancyandacquisitionrelatedcostshavebeenincurredinboththecurrentyearandinprioryearssowechallengedmanagementastowhethersuchcostswereexceptionalinnature.Management’sviewwasthatwhilstthesechargeshavepersistedin2017,theyhavearisenfromasignificant,ongoingrestructuringandtransformationprogramme,assetoutinfurtherdetailintheChiefExecutive’sReviewonpage3.

Followingcompletionofthisprogrammethesechargeswillnotrecur.Giventhescaleoftherestructuringandtransformationprogramme,andthatonlyredundancyandacquisitioncostsspecifictoitarebeingseparated,weacceptedthistreatmentforthecurrentyear.

Fromtheevidenceobtained,weconcurredwithmanagement’sassessmenttoclassifyanddisclosethesecostsasseparatelyreportedexceptionalitems,inlinewiththedisclosedaccountingpolicy.

Corporate G

overnance

45 Future plc

Key audit matter How our audit addressed the key audit matter

The accounting for the acquisition of Imagine Publishing and the home interest division of Centaur Media Refer to note 29 for further information

On21October2016,theGroupcompleteditsacquisitionofImaginePublishingandon1August2017itsacquisitionofthehomeinterestdivisionofCentaurMedia.Wefocusedonthesetransactionsbecausetheyarematerialtotheconsolidatedfinancialstatementsandbecausethereisadegreeofjudgementintheidentificationandvaluationoftheassetsandliabilitiesacquired.

Group and parent

Ourworkovertheaccountingfortheacquisitionincludedthefollowingprocedures:

•Weagreedthecashconsiderationpaidtosupportingdocumentation.

•Wetestedthefairvalueadjustmentstotheassetsandliabilitiesacquiredand,basedonourunderstandingoftheacquiredbusiness,assessedwhetherallassetsandliabilitieshadbeenappropriatelyidentifiedandclassified.Wealsoconsideredanyrequiredalignmentofaccountingpoliciesandvaluationmethodologies.

•Were-performedthecalculationofgoodwill.

•Weassessedthesufficiencyofthedisclosuresrelatingtotheacquisition,takingintoaccounttherequirementsofrelevantfinancialreportingstandardsandtestedthecompletenessandaccuracyofthosedisclosures.

Basedontheworkperformed,wefoundthattheaccountingfortheacquisitionwasappropriateandthatthefairvalueoftheacquiredassetsandliabilitieswassupportedbytheevidenceobtained.

How we tailored the audit scope

Wetailoredthescopeofouraudittoensurethatweperformedenoughworktobeabletogiveanopiniononthefinancialstatementsasawhole,takingintoaccountthestructureoftheGroupandtheCompany,theaccountingprocessesandcontrols,andtheindustryinwhichtheyoperate.

TheGroupisstructuredalongtwogeographicallines,beingtheUKandUS.TheGroup’sfinancialstatementsconsistofaconsolidationof23statutoryentities;buttheGroupprimarilyoperatesthroughtwomaintradingentities;FuturePublishingLimitedandFutureUS,Inc.

InestablishingtheoverallapproachtotheGroupaudit,wedeterminethetypeofworkthatweneededtoperformateachentitytobeabletoconcludewhethersufficientappropriateauditevidencehadbeenobtainedasabasisforouropinionontheGroupfinancialstatementsasawhole.

Inourview,thetwomaintradingentitiesrequiredafullscopeauditoftheircompletefinancialinformation,duetotheirsizeandtheirriskcharacteristics.ThesewereauditedbytheUKGroupengagementteam.This,togetherwithourauditoftheparentholdingCompanyandtestingoftheconsolidationatGrouplevel,gaveustheevidenceweneededforouropinionontheGroupfinancialstatementsasawholeandaccountedfor94%oftheGroup’srevenue,80%oftheGroup’sreportedprofitbeforetaxand76%oftheGroup’snetassets.

Independent auditors’ report


orporate Governance

Materiality

Thescopeofourauditwasinfluencedbyourapplicationofmateriality.Wesetcertainquantitativethresholdsformateriality.These,togetherwithqualitativeconsiderations,helpedustodeterminethescopeofourauditandthenature,timingandextentofourauditproceduresontheindividualfinancialstatementlineitemsanddisclosuresandinevaluatingtheeffectofmisstatements,bothindividuallyandinaggregateonthefinancialstatementsasawhole.

Basedonourprofessionaljudgement,wedeterminedmaterialityforthefinancialstatementsasawholeasfollows:

Group financial statements Company financial statements

Overall materiality £840,000 £820,000

How we determined it 1% of revenue 0.86%oftotalassets

Rationale for benchmark applied

InarrivingatthisjudgementweconsideredthefinancialmeasureswhichwebelievedtobemostrelevanttotheshareholdersinassessingtheperformanceoftheGroup.

Profitbeforetaxisagenerallyacceptedbenchmarkforaprofitorientatedbusiness.However,duetorestructuringandcontinuedtransformationalactivity,theGrouphascontinuedtoreportlossesandtherehasbeenadegreeofvolatilityinthismeasure.Weconcludedthat,inisolation,thismetricdidnotappropriatelyreflectthescaleoftheGroup’songoingoperationsoritsunderlyingperformance.

Asaresult,revenuewasconsideredtobethemostappropriatemetric,butinquantifyingmaterialitywehavealsohadregardtootherperformancemeasuressuchasoperatingprofitandtheimpactofexceptionalitems.

Asaholdingcompany,theentityisnotconsideredtobeprofitorientated.Insuchcircumstances,totalassetsisagenerallyacceptedbenchmark.

ForeachcomponentinthescopeofourGroupaudit,weallocatedanequalmaterialityof£756,000,whichwaslessthanouroverallGroupmateriality.CertaincomponentswereauditedtoalocalstatutoryauditmaterialitythatwasalsolessthanouroverallGroupmateriality.

WeagreedwiththeAuditCommitteethatwewouldreporttothemmisstatementsidentifiedduringourauditabove£42,000(Groupaudit)and£40,000(Companyaudit)aswellasmisstatementsbelowthoseamountsthat,inourview,warrantedreportingforqualitativereasons.

Conclusions relating to going concern

WehavenothingtoreportinrespectofthefollowingmattersinrelationtowhichISAs(UK)requireustoreporttoyouwhen:

• theDirectors’useofthegoingconcernbasisofaccountinginthepreparationofthefinancialstatementsisnotappropriate;or

• theDirectorshavenotdisclosedinthefinancialstatementsanyidentifiedmaterialuncertaintiesthatmaycastsignificantdoubtabouttheGroup’sandCompany’sabilitytocontinuetoadoptthegoingconcernbasisofaccountingforaperiodofatleasttwelvemonthsfromthedatewhenthefinancialstatementsareauthorisedforissue.

However,becausenotallfutureeventsorconditionscanbepredicted,thisstatementisnotaguaranteeastotheGroup’sandCompany’sabilitytocontinueasagoingconcern.

47 Future plc

Reporting on other information

TheotherinformationcomprisesalloftheinformationintheAnnualReportotherthanthefinancialstatementsandourauditors’reportthereon.TheDirectorsareresponsiblefortheotherinformation.Ouropiniononthefinancialstatementsdoesnotcovertheotherinformationand,accordingly,wedonotexpressanauditopinionor,excepttotheextentotherwiseexplicitlystatedinthisreport,anyformofassurancethereon.

Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsorourknowledgeobtainedintheaudit,orotherwiseappearstobemateriallymisstated.Ifweidentifyanapparentmaterialinconsistencyormaterialmisstatement,wearerequiredtoperformprocedurestoconcludewhetherthereisamaterialmisstatementofthefinancialstatementsoramaterialmisstatementoftheotherinformation.If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportbasedontheseresponsibilities.

WithrespecttotheStrategicReportandDirectors’Report,wealsoconsideredwhetherthedisclosuresrequiredbytheUKCompaniesAct2006havebeenincluded.

Basedontheresponsibilitiesdescribedaboveandourworkundertakeninthecourseoftheaudit,theCompaniesAct2006andISAs(UK)requireusalsotoreportcertainopinionsandmattersasdescribedbelow.

Strategic Report and Directors’ ReportInouropinion,basedontheworkundertakeninthecourseoftheaudit,theinformationgivenintheStrategicReportandDirectors’Reportfortheyearended30September2017isconsistentwiththefinancialstatementsandhasbeenpreparedinaccordancewithapplicablelegalrequirements.

InlightoftheknowledgeandunderstandingoftheGroupandCompanyandtheirenvironmentobtainedinthecourseoftheaudit,wedidnotidentifyanymaterialmisstatementsintheStrategicReportandDirectors’Report.

Directors’ RemunerationInouropinion,thepartoftheDirectors’RemunerationReporttobeauditedhasbeenproperlypreparedinaccordancewiththeCompaniesAct2006.

Responsibilities for the financial statements and the audit

Responsibilities of the Directors for the financial statements

AsexplainedmorefullyintheStatementofDirectors’responsibilitiessetoutonpage22,theDirectorsareresponsibleforthepreparationofthefinancialstatementsinaccordancewiththeapplicableframeworkandforbeingsatisfiedthattheygiveatrueandfairview.TheDirectorsarealsoresponsibleforsuchinternalcontrolastheydetermineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Inpreparingthefinancialstatements,theDirectorsareresponsibleforassessingtheGroup’sandtheCompany’sabilitytocontinueasagoingconcern,disclosingasapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccountingunlesstheDirectorseitherintendtoliquidatetheGrouportheCompanyortoceaseoperations,orhavenorealisticalternativebuttodoso.

Auditors’ responsibilities for the audit of the financial statements

Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditors’reportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithISAs(UK)willalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyorinaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.

AfurtherdescriptionofourresponsibilitiesfortheauditofthefinancialstatementsislocatedontheFRC’swebsiteat:www.frc.org.uk/auditorsresponsibilities.Thisdescriptionformspartofourauditors’report.

Use of this report

Thisreport,includingtheopinions,hasbeenpreparedforandonlyfortheCompany’smembersasabodyinaccordancewithChapter3ofPart16oftheCompaniesAct2006andfornootherpurpose.Wedonot,ingivingtheseopinions,acceptorassumeresponsibilityforanyotherpurposeortoanyotherpersontowhomthisreportisshownorintowhosehandsitmaycomesavewhereexpresslyagreedbyourpriorconsentinwriting.

Independent auditors’ report


orporate Governance

Other required reporting

Companies Act 2006 exception reporting

UndertheCompaniesAct2006wearerequiredtoreporttoyouif,inouropinion:

• wehavenotreceivedalltheinformationandexplanationswerequireforouraudit;or

• adequateaccountingrecordshavenotbeenkeptbytheCompany,orreturnsadequateforouraudithavenotbeenreceivedfrombranchesnotvisitedbyus;or

• certaindisclosuresofDirectors’remunerationspecifiedbylawarenotmade;or

• theCompanyfinancialstatementsandthepartoftheDirectors’RemunerationReporttobeauditedarenotinagreementwiththeaccountingrecordsandreturns.

Wehavenoexceptionstoreportarisingfromthisresponsibility.

Appointment

FollowingtherecommendationoftheAuditCommittee,wewereappointedbythememberson11May1999toauditthefinancialstatementsfortheyearended31December1999andsubsequentfinancialperiods.Theperiodoftotaluninterruptedengagementis19years,coveringtheyearsended31December1999to30September2017.

ColinBates(SeniorStatutoryAuditor)forandonbehalfofPricewaterhouseCoopersLLPCharteredAccountantsandStatutoryAuditorsBristol8December2017

49 Future plc

Contents

Consolidatedincomestatement 50

Consolidatedstatementof 50comprehensiveincome

Consolidatedstatementof 51changesinequity Companystatementof 51changesinequity

Consolidatedbalancesheet 52

Companybalancesheet 53

ConsolidatedandCompany 54cashflowstatements

NotestotheConsolidatedand 55Companycashflowstatements

Accountingpolicies 56

Notestothefinancialstatements 60

Financial statementsFinancial statements

50AnnualReportandAccounts2017Financial Statem

ents

Consolidated income statement fortheyearended30September2017

Note

Adjusted results

£m

2017

Adjusting items

£m

Statutory results

£m

Adjustedresults

£m

2016

Adjustingitems£m

Statutoryresults

£m

Continuing operationsRevenue 1 84.4 - 84.4 59.0 - 59.0Netoperatingexpenses 2 (75.5) (8.1) (83.6) (56.2) (17.0) (73.2)Operating profit/(loss) 8.9 (8.1) 0.8 2.8 (17.0) (14.2)Finance income 6 0.1 - 0.1 - - -Financecosts 6 (0.7) - (0.7) (0.5) (0.2) (0.7)Netfinancecosts (0.6) - (0.6) (0.5) (0.2) (0.7)Profit/(loss) before tax 1 8.3 (8.1) 0.2 2.3 (17.2) (14.9)Taxonprofit/(loss) 7 0.3 1.1 1.4 - 0.5 0.5Profit/(loss) for the year from continuing operations 8.6 (7.0) 1.6 2.3 (16.7) (14.4)Discontinued operations(Loss)/profitfortheyearfromdiscontinuedoperations - - - (0.1) 0.3 0.2Profit/(loss) for the year attributable to owners of the parent 8.6 (7.0) 1.6 2.2 (16.4) (14.2)

Earnings per 15p Ordinary share

Note

Adjusted resultspence

2017Adjusting

itemspence

Statutory resultspence

Adjustedresultspence

Restated2016*

Adjustingitems

pence

Statutoryresultspence

Basicearnings/(loss)pershare–TotalGroup 9 23.2 (18.9) 4.3 9.1 (67.9) (58.8)Dilutedearnings/(loss)pershare–TotalGroup 9 21.0 (17.1) 3.9 8.8 (67.6) (58.8)Basicearnings/(loss)pershare–Continuingoperations 9 23.2 (18.9) 4.3 9.5 (69.1) (59.6)Dilutedearnings/(loss)pershare–Continuingoperations 9 21.0 (17.1) 3.9 9.2 (68.8) (59.6)

* The prior year comparatives have been restated to reflect the 15:1 share consolidation completed on 2 February 2017.

AspermittedbytheexemptionunderSection408oftheCompaniesAct2006noCompanyincomestatementorstatementofcomprehensiveincomeispresented.

Consolidated statement of comprehensive incomefortheyearended30September2017

2017£m

2016£m

Profit/(loss) for the year 1.6 (14.2)Items that may be reclassified to the consolidated income statementContinuing operationsCurrencytranslationdifferences (0.2) 0.3Other comprehensive (loss)/income for the year from continuing operations (0.2) 0.3

Total comprehensive income/(loss) for the year attributable to continuing operations 1.4 (14.1)Total comprehensive income for the year attributable to discontinued operations - 0.2Total comprehensive income/(loss) for the year attributable to owners of the parent 1.4 (13.9)

Itemsinthestatementabovearedisclosednetoftax.


51 Future plc

Consolidated statement of changes in equity fortheyearended30September2017

Group Note

Issuedshare

capital£m

Share premium account

£m

Merger reserve

£m

Treasury reserve

£m

Accumulated losses

£m

Total equity

£m

Balance at 1 October 2015 3.3 24.8 109.0 (0.3) (105.4) 31.4Loss for the year - - - - (14.2) (14.2)Currencytranslationdifferences - - - - 0.3 0.3Other comprehensive income for the year - - - - 0.3 0.3Total comprehensive loss for the year - - - - (13.9) (13.9)Sharecapitalissuedduringtheyear 0.4 2.8 - - - 3.2Shareschemes-Valueofemployees’services 5 - - - - 0.5 0.5Balance at 30 September 2016 3.7 27.6 109.0 (0.3) (118.8) 21.2Profit for the year - - - - 1.6 1.6Currencytranslationdifferences - - - - (0.2) (0.2)Other comprehensive loss for the year - - - - (0.2) (0.2)Total comprehensive income for the year - - - - 1.4 1.4Sharecapitalissuedduringtheyear 23 3.1 19.8 13.5 - - 36.4Shareschemes-Valueofemployees’services 5 - - - - 1.8 1.8-Deferredtaxonoptions 13 - - - - 0.5 0.5Balance at 30 September 2017 6.8 47.4 122.5 (0.3) (115.1) 61.3

Company statement of changes in equity fortheyearended30September2017

Company Note

Issuedshare

capital£m

Share premium account

£m

Merger reserve

£m

Retained earnings

£m

Total equity

£m

Balance at 1 October 2015 3.3 24.8 - 9.9 38.0Loss for the year - - - (6.4) (6.4)Total comprehensive loss for the year - - - (6.4) (6.4)Sharecapitalissuedduringtheyear 0.4 2.8 - - 3.2Shareschemes-Valueofemployees’services - - - 0.5 0.5Balance at 30 September 2016 3.7 27.6 - 4.0 35.3Loss for the year - - - (2.3) (2.3)Total comprehensive loss for the year - - - (2.3) (2.3)Sharecapitalissuedduringtheyear 23 3.1 19.8 13.5 - 36.4Shareschemes-Valueofemployees’services - - - 1.8 1.8-Deferredtaxonoptions 13 - - - 0.5 0.5Balance at 30 September 2017 6.8 47.4 13.5 4.0 71.7

Financial statements


entsFinancial Statem

ents

Consolidated balance sheetasat30September2017

Note2017

£m2016£m

AssetsNon-current assetsProperty,plantandequipment 10 1.0 0.5Intangibleassets-goodwill 11 65.8 29.5Intangibleassets-other 11 26.5 3.7Investments 0.2 -Deferredtax 13 4.4 2.4Total non-current assets 97.9 36.1Current assetsInventories 14 0.7 0.4Corporationtaxrecoverable 0.1 0.1Tradeandotherreceivables 15 13.6 12.4Cashandcashequivalents 16 10.1 2.9Total current assets 24.5 15.8Total assets 122.4 51.9Equity and liabilitiesEquityIssuedsharecapital 23 6.8 3.7Sharepremiumaccount 25 47.4 27.6Mergerreserve 25 122.5 109.0Treasuryreserve 25 (0.3) (0.3)Accumulatedlosses (115.1) (118.8)Total equity 61.3 21.2Non-current liabilitiesFinancialliabilities-interest-bearingloansandborrowings 18 16.9 0.1Corporationtaxpayable - 2.6Deferredtax 13 4.6 0.9Provisions 20 2.6 1.5Othernon-currentliabilities 21 0.6 0.5Total non-current liabilities 24.7 5.6Current liabilitiesFinancialliabilities-interest-bearingloansandborrowings 18 3.2 2.3Financialliabilities-derivatives 19 0.1 -Tradeandotherpayables 17 29.9 21.4Corporationtaxpayable 3.2 1.4Total current liabilities 36.4 25.1Total liabilities 61.1 30.7Total equity and liabilities 122.4 51.9

Thefinancialstatementsonpages49to86wereapprovedbytheBoardofDirectorson8December2017andsignedonitsbehalfby:

Peter Allen Penny Ladkin-BrandChairman ChiefFinancialOfficer

53 Future plc

Company balance sheetasat30September2017

Note2017

£m2016£m

AssetsNon-current assetsInvestmentinGroupundertakings 12 19.5 1.0Deferredtax 13 0.8 -Total non-current assets 20.3 1.0Current assetsTradeandotherreceivables 15 74.4 43.5Cashandcashequivalents 16 0.7 -Total current assets 75.1 43.5Total assets 95.4 44.5Equity and liabilitiesEquityIssuedsharecapital 23 6.8 3.7Sharepremiumaccount 25 47.4 27.6Mergerreserve 25 13.5 -Retainedearnings 4.0 4.0Total equity 71.7 35.3Non-current liabilitiesFinancialliabilities-interest-bearingloansandborrowings 18 16.9 -Corporationtaxpayable - 2.6Total non-current liabilities 16.9 2.6Current liabilitiesFinancialliabilities-interest-bearingloansandborrowings 18 3.1 2.3Financialliabilities-non-interest-bearingoverdraft 18 - 1.0Financialliabilities-derivatives 19 0.1 -Tradeandotherpayables 17 0.9 2.4Corporationtaxpayable 2.7 0.9Total current liabilities 6.8 6.6Total liabilities 23.7 9.2Total equity and liabilities 95.4 44.5

Thefinancialstatementsonpages49to86wereapprovedbytheBoardofDirectorson8December2017andsignedonitsbehalfby:

Peter Allen Penny Ladkin-BrandChairman ChiefFinancialOfficer

FutureplcCompanyregistrationnumber:3757874



ents

Consolidated and Company cash flow statementsfortheyearended30September2017

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

Cash flows from operating activitiesCashgeneratedfrom/(usedin)operations 12.0 (2.6) 3.1 (1.4)Taxreceived - - 0.1 -Interestpaid (0.6) (0.6) (0.4) (0.4)Taxpaid (1.4) (0.8) (0.8) (0.7)Net cash generated from/(used in) operating activities 10.0 (4.0) 2.0 (2.5)Cash flows from investing activitiesPurchaseofproperty,plantandequipment (0.6) - (0.2) -Purchaseofcomputersoftwareandwebsitedevelopment (1.2) - (1.7) -Purchaseofmagazinetitlesandevents (0.8) - (0.6) -Purchaseofsubsidiaryundertakings,netofcashacquired (31.8) - (0.3) -Disposalofmagazinetitlesandtrademarks 0.2 - - -Netmovementinamountsowedto/bysubsidiaries - (25.9) - 8.3Net cash (used in)/generated from investing activities (34.2) (25.9) (2.8) 8.3Cash flows from financing activitiesProceedsfromissueofOrdinarysharecapital 22.0 22.0 3.3 3.3Costsofshareissue (1.0) (1.0) (0.2) (0.2)Drawdownofbankloans 23.3 23.3 4.6 4.6Repaymentofbankloans (12.0) (12.0) (5.7) (5.7)Bankarrangementfees (0.7) (0.7) - -Repaymentoffinanceleases (0.1) - (0.1) -Net cash generated from financing activities 31.5 31.6 1.9 2.0Net increase in cash and cash equivalents 7.3 1.7 1.1 7.8Cashandcashequivalentsatbeginningofyear 2.9 (1.0) 1.6 (8.8)Exchangeadjustments (0.1) - 0.2 -Cash and cash equivalents at end of year 10.1 0.7 2.9 (1.0)Amountattributabletocontinuingoperations 10.1 0.7 2.9 (1.0)


55 Future plc

Notes to the Consolidated and Company cash flow statementsfortheyearended30September2017

A. Cash generated from operationsThereconciliationofprofit/(loss)fortheyeartocashgeneratedfrom/(usedin)operationsissetoutbelow:

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

Profit/(loss)fortheyear–Continuingoperations 1.6 (2.3) (14.4) (6.4)–Discontinuedoperations - - 0.2 -Profit/(loss)fortheyear–TotalGroup 1.6 (2.3) (14.2) (6.4)Adjustmentsfor: Depreciationcharge 0.3 - 0.4 -Amortisationofintangibleassets 4.1 - 2.0 -Impairmentofintangibleassets - - 13.0 -Profitondisposalofmagazinetitlesandtrademarks - - (0.4) -Shareschemes-Valueofemployees’services 1.8 - 0.5 -ImpairmentofinvestmentinGroupundertakings - - - 131.4DividendreceivablefromGroupundertaking - (0.3) - (130.9)Netfinancecosts 0.6 0.6 0.7 2.9Tax(credit)/charge (1.4) 0.7 (0.5) 0.1Profit/(loss) before changes in working capital and provisions 7.0 (1.3) 1.5 (2.9)Movementinprovisions 1.0 - (0.6) -Decreaseininventories 0.1 - 0.1 -Decrease/(increase)intradeandotherreceivables 6.0 0.1 3.8 (0.1)(Decrease)/increaseintradeandotherpayables (2.1) (1.4) (1.7) 1.6Cash generated from/(used in) operations 12.0 (2.6) 3.1 (1.4)

B. Analysis of net cash/(debt)

Group

1 October 2016

£mCash flows

£mAcquisitions

£m

Finance leases entered into

£m

Other non-cash changes

£m

Exchange movements

£m

30 September 2017

£m

Cashandcashequivalents 2.9 5.6 1.7 - - (0.1) 10.1Debtduewithinoneyear (2.3) 6.0 (6.9) (0.1) 0.1 - (3.2)Debtdueaftermorethanoneyear (0.1) (17.2) - - 0.4 - (16.9)Net cash/(debt) 0.5 (5.6) (5.2) (0.1) 0.5 (0.1) (10.0)

Company

1 October 2016

£mCash flows

£mAcquisitions

£m

Other non-cash changes

£m

30 September 2017

£m

Cashandcashequivalents (1.0) 1.7 - - 0.7Debtduewithinoneyear (2.3) 6.0 (6.9) 0.1 (3.1)Debtdueaftermorethanoneyear - (17.3) - 0.4 (16.9)Net debt (3.3) (9.6) (6.9) 0.5 (19.3)

C. Reconciliation of movement in net cash/(debt)

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

Netcash/(debt)atstartofyear 0.5 (3.3) (1.8) (12.2)Increaseincashandcashequivalents 7.3 1.7 1.1 7.8Movementinborrowings (11.2) (11.3) 1.2 1.1Borrowingsacquiredwithsubsidiaries (6.9) (6.9) - -Financeleasesenteredinto (0.1) - (0.2) -Othernon-cashchanges 0.5 0.5 - -Exchangemovements (0.1) - 0.2 -Net (debt)/cash at end of year (10.0) (19.3) 0.5 (3.3)



ents

Basis of preparation

Thesefinancialstatementshavebeenpreparedunderthehistoricalcostconvention,exceptforderivativefinancialinstrumentsandshareawardswhicharemeasuredatfairvalue.

Theprincipalaccountingpoliciesappliedinthepreparationoftheconsolidatedfinancialstatementspublishedinthis2017AnnualReportaresetoutonpages56to59.Thesepolicieshavebeenappliedconsistentlytoallyearspresented,unlessotherwisestated.

ThefinancialstatementsoftheGrouphavebeenpreparedinaccordancewithInternationalFinancialReportingStandards(IFRS)issuedbytheInternationalAccountingStandardsBoard(IASB)andtheIFRSInterpretationsCommittee’s(IFRSIC)interpretationsasadoptedbytheEuropeanUnion,applicableasat30September2017,andthosepartsoftheCompaniesAct2006applicabletocompaniesreportingunderIFRS.

ThegoingconcernbasishasbeenadoptedinpreparingthesefinancialstatementsasstatedbytheDirectorsonpage25.

Presentation of non-statutory measures

TheDirectorsbelievethatadjustedresultsandadjustedearningspershareprovideadditionalusefulinformationonthecoreoperationalperformanceoftheGrouptoshareholders,andreviewtheresultsoftheGrouponanadjustedbasisinternally.Theterm‘adjusted’isnotadefinedtermunderIFRSandmaynotthereforebecomparablewithsimilarlytitledprofitmeasurementsreportedbyothercompanies.Itisnotintendedtobeasubstitutefor,orsuperiorto,IFRSmeasurementsofprofit.

Adjustmentsaremadeinrespectof:

Share-basedpayments–share-basedpaymentexpensesorcredits,togetherwiththeassociatedsocialsecuritycosts,areexcludedfromtheadjustedresultsoftheGroupastheDirectorsbelievethatthevolatilityofthesechargescandistorttheuser’sviewofthecoretradingperformanceoftheGroup.Detailsofshare-basedpaymentsareshowninnote24.

Exceptionalitems–theGroupconsidersitemsofincomeandexpenseasexceptionalandexcludesthemfromtheadjustedresultswherethenatureoftheitem,oritssize,ismaterialandlikelytobenon-recurringinnature(inthemediumterm)soastoassisttheuserofthefinancialstatementstobetterunderstandtheresultsofthecoreoperationsoftheGroup.Detailsofexceptionalitemsareshowninnote4.

Amortisationofacquiredintangibleassets–theamortisationchargeforthoseintangibleassetsrecognisedonbusinesscombinationsisexcludedfromtheadjustedresultsoftheGroupsincetheyarenon-cashchargesarisingfromnon-tradinginvestmentactivities.Assuch,theyarenotconsideredreflectiveofthecoretradingperformanceoftheGroup.

Non-tradingforeignexchangelosses–certainotheritemsareexcludedfromadjustedresultswheretheirinclusiondistortsthecomparabilityofcoretradingresultsyear-on-year.

Thetaxrelatedtoadjustingitemsisthetax

effectoftheitemsabovethatareallowabledeductionsfortaxpurposescalculatedusingthestandardrateofcorporationtax.

Areconciliationofadjustedoperatingprofittoprofit/(loss)beforetaxisshownbelow:

2017 £m

2016£m

Adjustedoperatingprofit 8.9 2.8Adjustedfinancecosts (0.6) (0.5)Adjustedprofitbeforetax 8.3 2.3

Adjustingitems:Share-basedpayments (2.1) (0.5)Exceptionalitems (3.7) (3.5)

Amortisationofacquiredintangibles (2.3) -

Impairmentofintangibleassets - (13.0)

Non-tradingforeignexchangelosses - (0.2)

Profit/(loss) before tax 0.2 (14.9)

Areconciliationbetweenadjustedandstatutoryearningspersharemeasuresisshowninnote9.

Basis of consolidation

TheconsolidatedfinancialstatementsincorporatethefinancialstatementsofFutureplc(theCompany)anditssubsidiaryundertakings.SubsidiariesareallentitiescontrolledbytheGroup.ControlexistswhentheGroupiseitherexposedtoorhastherightstovariablereturnsfromitsinvolvementwiththeentityandhastheabilitytoaffectthosereturnsthroughitspowerovertheentity.SubsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroup.Theyaredeconsolidatedfromthedatethatcontrolceases.ThepurchasemethodofaccountingisusedtoaccountfortheacquisitionofsubsidiariesbytheGroup.

Thecostofanacquisitionismeasuredasthefairvalueoftheassetsgiven,equityinstrumentsissuedandliabilitiesincurredorassumedatthedateofexchange,andincludesthefairvalueofanyassetorliabilityresultingfromacontingentconsiderationarrangement.Acquisition-relatedcostsareexpensedasincurred.Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesattheacquisitiondate.TheexcessofthecostofacquisitionoverthefairvalueoftheGroup’sshareoftheidentifiablenetassetsacquiredisrecordedasgoodwill.

Inter-companytransactions,balancesandunrealisedgainsontransactionsbetweenGroupcompaniesareeliminated.Unrealisedlossesarealsoeliminatedbutareconsideredanimpairmentindicatoroftheassettransferred.AccountingpoliciesofsubsidiarieshavebeenchangedwherenecessarytoensureconsistencywiththepoliciesadoptedbytheGroup.

Segment reporting

TheGroupisorganisedandarrangedprimarilybygeographicalsegment.OperatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtotheChiefOperatingDecisionMakerswhoareconsideredtobetheexecutiveDirectorsofFutureplc.

Revenue recognition

Revenuefromthesaleofgoodsisrecognisedintheincomestatementwhenthesignificantrisksandrewardsofownershiphavebeentransferredtothebuyer.Revenuefromservicesrenderedisrecognisedintheincomestatementoncetheservicehasbeencompleted.

RevenuecomprisesthefairvalueoftheconsiderationreceivedorreceivableforthesaleofgoodsandservicesintheordinarycourseoftheGroup’sactivities.Revenue

Accounting policies


57 Future plc

isshownnetofvalue-addedtax,estimatedreturns,rebatesanddiscountsandaftereliminatingsaleswithintheGroup.Thefollowingrecognitioncriteriaalsoapply:

•Magazinenewsstandcirculationandadvertisingrevenueisrecognisedaccordingtothedatethattherelatedpublicationgoesonsale.

•Onlineadvertisingrevenueisrecognisedovertheperiodduringwhichtheadvertisementsareserved.

•Revenuefromthesaleofdigitalmagazinesubscriptionsisrecogniseduniformlyoverthetermofthesubscription.

•Eventincomeisrecognisedwhentheeventhastakenplace.

•Licensingrevenueisrecognisedonthesupplyofthelicensedcontent.

•Otherrevenueisrecognisedatthetimeofsaleorprovisionofservice.

Foreign currency translation

(a) Functional and presentation currencyItemsincludedinthefinancialstatementsofeachoftheGroup’sentitiesaremeasuredusingthecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(‘thefunctionalcurrency’).Theconsolidatedfinancialstatementsarepresentedinsterling,whichistheGroup’spresentationcurrency.

(b) Transactions and balancesForeigncurrencytransactionsaretranslatedintothefunctionalcurrencyusingtheexchangerateprevailingatthedateofthetransaction.Foreignexchangegainsandlossesresultingfromthesettlementofsuchtransactionsandfromthetranslationatbalancesheetexchangeratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedintheincomestatement,withexchangedifferencesarisingontradingtransactionsbeingreportedinoperatingprofitandwiththosearisingonfinancingtransactionsreportedinnetfinancecostsunless,asaresultofcashflowhedging,theyarereportedinothercomprehensiveincome.

(c) Group companiesTheresultsandfinancialpositionofalltheGroupentitiesthathaveafunctionalcurrencydifferentfromthepresentationcurrencyaretranslatedintothepresentationcurrencyasfollows:

(i) Assetsandliabilitiesforeachbalancesheetaretranslatedattheclosingrateatthedateofthatbalancesheet.

(ii) Incomeandexpensesforeachincomestatementaretranslatedataverageexchangerates.

(iii)Allresultingexchangedifferencesarerecognisedasaseparatecomponent ofequity.

Onconsolidation,exchangedifferences arisingfromthetranslationofthenetinvestmentinforeignoperations,andofborrowingsandothercurrencyinstrumentsdesignatedashedgesofsuchinvestments,aretakentoshareholders’equity.Whenaforeignoperationissold,exchangedifferencesthatwererecordedinequityarerecognisedintheincomestatementaspartofthegainorlossonsale.

Employee benefits

(a) Pension obligationsTheGrouphasanumberofdefinedcontributionplans.FordefinedcontributionplanstheGrouppayscontributionsintoaprivatelyadministeredpensionplanonacontractualorvoluntarybasis.TheGrouphasnofurtherpaymentobligationsoncethecontributionshavebeenpaid.Contributionsarechargedtotheincomestatementastheyareincurred.

(b) Share-based compensationTheGroupoperatesanumberofequity-settled,share-basedcompensationplans. Thefairvalueoftheemployeeservicesreceivedinexchangeforthegrantoftheawardsisrecognisedasanexpense.Thetotalamounttobeexpensedovertheappropriateserviceperiodisdeterminedbyreferencetothefairvalueoftheawards.Thecalculationoffairvalueincludesassumptionsregardingthenumberofcancellationsandexcludestheimpactofanynon-marketvestingconditions(forexample,earningspershare).Non-marketvestingconditionsareincludedinassumptionsaboutthenumberofawardsthatareexpectedtovest.Ateachbalancesheetdate,theGrouprevisesitsestimatesofthenumberofawardsthatareexpectedtovest.Itrecognisestheimpactoftherevisionoforiginalestimates,ifany,intheincomestatement,withacorrespondingadjustmenttoequity.

ThegrantbytheCompanyofshareawardstotheemployeesofsubsidiaryundertakingsistreatedasacapitalcontribution.Thefairvalueofemployeeservicesreceived,measuredbyreferencetothegrantdatefairvalue,isrecognisedoverthevestingperiodasanincreasetoinvestmentinsubsidiaryundertakings,withacorrespondingcredittoequityintheCompany’sfinancialstatements.

SharesintheCompanyareheldintrusttosatisfytheexerciseofawardsundercertain oftheGroup’sshare-basedcompensationplansandexceptionalawards.ThetrustisconsolidatedwithintheGroupfinancialstatements.Thesesharesarepresented intheconsolidatedbalancesheetasa deductionfromequityatthemarketvalue onthedateofacquisition.

(c) Bonus plansTheGrouprecognisesaliabilityandanexpenseforbonusestakingintoconsiderationtheprofitattributabletotheCompany’sshareholdersaftercertainadjustments.TheGrouprecognisesaprovisionwherecontractuallyobligedorwherethereisapastpracticethathascreatedaconstructiveobligation.

Leases

LeasesinwhichtheGroupassumessubstantiallyalltherisksandrewardsofownershipoftheleasedassetsareclassifiedasfinanceleases.Allotherleasesareclassedasoperatingleases.

Assetsheldunderfinanceleasesareincludedeitherasproperty,plantandequipmentorintangibleassetsattheloweroftheirfairvalueatinceptionorthepresentvalueoftheminimumleasepaymentsandaredepreciatedovertheirestimatedeconomiclivesorthefinanceleaseperiod,whicheveristheshorter.Thecorrespondingliabilityisrecordedwithinborrowings.Theinterestelementoftherentalcostsischargedagainstprofitsovertheperiodoftheleaseusingtheactuarialmethod.

Paymentsmadeunderoperatingleases(netofanyincentivesreceivedfromthelessor)arechargedtotheincomestatementonastraight-linebasisovertheperiodofthelease.

Tax

Taxontheprofitorlossfortheyearcomprisescurrenttaxanddeferredtax.Taxisrecognisedintheincomestatementexcepttotheextentthatitrelatestoitemsrecogniseddirectlyinequityinwhichcaseitisrecognisedinequity.

Currenttaxispayablebasedontaxableprofitsfortheyear,usingtaxratesthathavebeenenactedorsubstantivelyenactedatthebalancesheetdate,alongwithanyadjustmentrelatingtotaxpayableinpreviousyears.Managementperiodicallyevaluatesitemsdetailedintaxreturnswherethetaxtreatmentissubjecttointerpretation.Taxableprofitdiffersfromnetprofitintheincomestatementinthatincomeorexpenseitemsthataretaxableordeductibleinotheryearsareexcluded–asareitemsthatarenevertaxableordeductible.Currenttaxassetsrelatetopaymentsonaccountnotoffsetagainstcurrenttaxliabilities.

Deferredtaxisprovidedinfull,usingtheliabilitymethod,ontemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsintheconsolidatedfinancialstatements.However,deferredtaxisnotaccountedforifitarisesfrominitialrecognitionofanassetorliabilityinatransactionotherthanabusinesscombinationthatatthetimeofthetransactionaffectsneitheraccountingnortaxableprofitorloss.Deferredtaxisdeterminedusingtaxrates(andlaws)thathavebeenenactedorsubstantivelyenactedbythebalancesheetdateandareexpectedtoapplywhentherelateddeferredtaxassetisrealisedorthedeferredtaxliabilityissettledintheappropriateterritory.

Deferredtaxassetsarerecognisedtotheextentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhichthetemporarydifferencescanbeutilised.Deferredtaxisprovidedontemporarydifferencesarisingoninvestmentsinsubsidiaries,exceptwherethetimingofthereversalofthetemporarydifferenceis



ents

controlledbytheGroupanditisprobable thatthetemporarydifferencewillnotreverse intheforeseeablefuture.

Deferredtaxassetsandliabilitiesareoffsetagainsteachotherwheretheyrelatetothesamejurisdictionandthereisalegallyenforceablerighttooffset.

Dividends

AlldividenddistributionstotheCompany’sshareholdersarerecognisedasaliabilityinthefinancialstatementsintheperiodinwhichtheyareapproved.

Property, plant and equipment

Property,plantandequipmentisstatedatcost(ordeemedcost)lessaccumulateddepreciationandimpairmentlosses.Costincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitems.

Depreciation

Depreciationiscalculatedusingthestraight-linemethodtoallocatethecostofproperty,plantandequipmentlessresidualvalueoverestimatedusefullives,asfollows:

•Landandbuildings–50yearsorperiodoftheleaseifshorter.

•Plantandmachinery–betweenoneand fiveyears.

•Equipment,fixturesandfittings–betweenoneandfiveyears.

Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,ateachbalancesheetdate.Anasset’scarryingamountiswrittendownimmediatelytoitsrecoverableamountiftheasset’scarryingamountisgreaterthanitsestimatedrecoverableamount.

Gainsandlossesondisposalsaredeterminedbycomparingproceedswithcarryingamounts.Theseareincludedintheincomestatement.

Intangible assets

(a) GoodwillGoodwillrepresentsthedifferencebetweenthecostoftheacquisitionandthefairvalueofnetidentifiableassetsacquired.

Goodwillisstatedatcostlessany accumulatedimpairmentlosses.Goodwill isallocatedtoappropriatecashgeneratingunits(thoseexpectedtobenefitfromthebusinesscombination)anditisnotsubjecttoamortisationbutistestedannuallyforimpairment.

(b) Titles, trademarks, customer lists, advertising relationships, eCommerce technology and other ‘magazine and website related’ intangiblesMagazineandwebsiterelatedintangibleassetshaveafiniteusefullifeandarestatedatcostlessaccumulatedamortisation.Assetsacquiredaspartofabusinesscombinationareinitiallystatedatfairvalue.Amortisationiscalculatedusingthestraight-linemethodtoallocatethecostoftheseintangiblesovertheirestimatedusefullives(betweenoneandtenyears).

Expenditureincurredonthelaunchofnewmagazinetitlesisrecognisedasanexpense intheincomestatementasincurred.

(c) Computer software and website developmentNon-integralcomputersoftwarepurchasesarestatedatcostlessaccumulatedamortisation.Costsincurredinthedevelopmentofnewwebsitesarecapitalisedonlywherethecostcanbedirectlyattributedtodevelopingthewebsitetooperateinthemannerintendedbymanagementandonlytotheextentofthefutureeconomicbenefitsexpectedfromitsuse.Thesecostsareamortisedonastraight-linebasisovertheirestimatedusefullives(betweenoneandthreeyears).Costsassociatedwithmaintainingcomputersoftwareorwebsitesarerecognisedasanexpenseasincurred.

Impairment tests and Cash-Generating Units (CGUs)

ACGUisdefinedasthesmallestidentifiablegroupofassetsthatgeneratescashinflowsthatarelargelyindependentofthecashinflowsfromotherassetsorgroupsofassets.

Goodwillisnotamortisedbuttestedforimpairmentatleastonceayearormorefrequentlywhenthereisanindicationthatitmaybeimpaired.Therefore,theevolutionofgeneraleconomicandfinancialtrendsaswellasactualeconomicperformancecomparedtomarketexpectationsrepresentexternalindicatorsthatareanalysedbytheGroup,togetherwithinternalperformanceindicators,inordertoassesswhetheranimpairmenttestshouldbeperformedmorethanonceayear.

IAS36‘ImpairmentofAssets’requirestheseteststobeperformedatthelevelofeachCGUorgroupofCGUslikelytobenefitfromacquisition-relatedsynergies,withinanoperatingsegment.

Anyimpairmentofgoodwillisrecordedintheincomestatementasadeductionfromoperatingprofitandisneverreversedsubsequently.

Otherintangibleassetswithafinitelifeareamortisedandaretestedforimpairmentonlywherethereisanindicationthatanimpairmentmayhaveoccurred.

Recoverable amount

Todeterminewhetheranimpairmentlossshouldberecognised,thecarryingvalueof

theassetsandliabilitiesoftheCGUsor groupsofCGUsiscomparedtotheirrecoverableamount.

CarryingvaluesofCGUsandgroupsofCGUstestedincludegoodwillandassetswithfiniteusefullives(property,plantandequipment,intangibleassetsandnetworkingcapital).

TherecoverableamountofaCGUisthehigherofitsfairvaluelesscoststosellanditsvalueinuse.Fairvaluelesscoststosellisthebestestimateoftheamountobtainablefromthesaleofanassetinanarm’slengthtransactionbetweenknowledgeable,willingparties,lessthecostsofdisposal.Thisestimateisdetermined,on30September,onthebasisofthediscountedpresentvalueofexpectedfuturecashflowsplusaterminalvalueandreflectsgeneralmarketsentimentandconditions.

ValueinuseisthepresentvalueofthefuturecashflowsexpectedtobederivedfromtheCGUsorgroupofCGUs.CashflowprojectionsarebasedoneconomicassumptionsandforecasttradingconditionsdrawnupbytheGroup’smanagement, asfollows:

•cashflowprojectionsarebasedonfive-yearbusinessplans;

•cashflowprojectionsbeyondthattimeframeareextrapolatedbyapplyinga2.0%growthratetoperpetuity;and

•thecashflowsobtainedarediscountedusingappropriateratesforthebusinessandtheterritoriesconcerned.

IfgoodwillhasbeenallocatedtoaCGUandanoperationwithinthatCGUisdisposed,thegoodwillassociatedwiththatoperationisincludedinthecarryingamountoftheoperationindeterminingtheprofitorlossondisposal.Thegoodwillallocatedtothedisposalismeasuredonthebasisoftherelativeprofitabilityoftheoperationdisposedandtheoperationsretained.

Inventories

Inventoriesarestatedatthelowerofcostandnetrealisablevalue.Forrawmaterials,costistakentobethepurchasepriceonafirstin,firstoutbasis.Forworkinprogressandfinishedgoods,costiscalculatedasthedirectcostofproduction.Itexcludesborrowingcosts.Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessapplicablevariablesellingexpenses.

Trade and other receivables

Tradeandotherreceivablesareinitiallyrecognisedatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,lessaprovisionforimpairment.AprovisionforimpairmentoftradereceivablesismadewhenthereisobjectiveevidencethattheGroupwillnotbeabletocollectallamountsdueinaccordancewith theoriginaltermsofthereceivables.


59 Future plc

Cash and cash equivalents

Cashandcashequivalentsincludecashinhand,depositsheldatcallwithbanksandbankoverdraftsforthepurposeofthecashflowstatement.Bankoverdraftsareshownwithinborrowingsincurrentliabilitiesonthebalancesheet.

Trade and other payables

Tradeandotherpayablesareinitiallyrecognisedatfairvalueandsubsequentlymeasuredatamortisedcostusingthe effectiveinterestmethod.

Borrowings

Borrowingsarerecognisedinitiallyatfairvalue,netoftransactioncostsincurred.Borrowingsaresubsequentlystatedatamortisedcostwithanydifferencebetweentheproceeds(netoftransactioncosts)andtheredemptionvaluerecognisedintheincomestatementovertheperiodoftheborrowingsusingtheeffectiveinterestmethod. BorrowingsareclassifiedascurrentliabilitiesunlesstheGrouphasanunconditionalrighttodefersettlementoftheliabilityforatleast12monthsafterthebalancesheetdate.

Provisions

ProvisionsarerecognisedwhentheGrouphasapresentlegalorconstructiveobligationasaresultofpastevents,anditismorelikelythannotthatanoutflowofresourceswillberequiredtosettletheobligation.

ProvisionsaremeasuredattheDirectors’bestestimateoftheexpenditurerequiredtosettletheobligationatthebalancesheetdate,andarediscountedtopresentvaluewheretheeffectismaterial.

Derivative financial instruments and hedging activities

TheGroupusesderivativefinancialinstrumentstoreduceexposuretoforeignexchangeandinterestraterisksandrecognisestheseatfairvalueinitsbalancesheet.TheGroupappliescashflowhedgeaccountingunderIAS39inrespectofcertaininstrumentsheld.Forinstrumentsforwhichhedgeaccountingisapplied,gainsandlossesaretakentoequity.Anychangestothefairvalueofderivativesnothedgeaccountedforarerecognisedintheincomestatement.AnynewinstrumentsenteredintobytheGroupwillbereviewedona‘casebycase’basisatinceptiontodeterminewhethertheyshouldqualifyashedgesandbeaccountedforaccordinglyunderIAS39.Inaccordancewithitstreasurypolicy,theGroupdoesnotholdorissueanyderivativefinancialinstrumentsfortradingpurposes.

Investments

TheCompany’sinvestmentsinsubsidiaryundertakingsarestatedatthefairvalue ofconsiderationpayable,includingrelatedacquisitioncosts,lessanyprovisions forimpairment.

Exceptional items

TheGroupclassifiestransactionsasexceptionalwheretheyrelatetoaneventthatfallsoutsidetheordinaryactivitiesofthebusinessandwhereindividuallyorinaggregatetheyhaveamaterialimpactonthefinancialstatements.ThisclassificationexcludesimpairmentchargesmadeonthecarryingvalueofCGUsorgroupsofCGUs.TheseparatereportingofexceptionalitemshelpsprovideabetterpictureoftheGroup’sunderlyingperformance.

Critical accounting assumptions, judgements and estimates

ThepreparationofthefinancialstatementsunderIFRSrequirestheuseofcertaincriticalaccountingassumptionsandrequiresmanagementtoexerciseitsjudgementandtomakeestimatesintheprocessofapplyingtheGroup’saccountingpolicies.TheareaswhichtheBoardbelievescontainthemostsignificantaccountingestimatesare:

(a) Carrying value of goodwill and other intangiblesTheGroupusesforecastcashflowinformationandestimatesoffuturegrowthtoassesswhethergoodwillandotherintangibleassetsareimpaired.Iftheresultsofanoperationinfutureyearsareadversetotheestimatesusedforimpairmenttesting,animpairmentmaybetriggeredatthatpoint,orareductioninusefuleconomiclifemayberequired.Furtherdetailsareincludedwithinnote11.

(b) Valuation of acquired intangible assetsAcquisitionsmayresultintherecognitionofintangibleassets,suchastitles,trademarks,customerlists,advertisingrelationships,publishingrightsandeCommercetechnology.Theseassetsarevaluedusingadiscountedcashflowmodelorarelieffromroyaltymethod.Inapplyingthesevaluationmethods,anumberofkeyjudgementsaremadeinrespectofdiscountrates,growthratesandroyaltyrates.

(c) TaxationTheGroupissubjecttotaxinallterritories,andjudgementandestimatesoffutureprofitabilityarerequiredtodeterminetheGroup’sdeferredtaxposition.Ifthefinaltaxoutcomeisdifferenttothatassumed,resultingchangeswillbereflectedintheincomestatementorstatementofchangesinequityasappropriate.TheGroupcorporationtaxprovisionreflectsmanagement’sestimationoftheamountoftaxpayableforfiscalyearswithopentaxcomputationswhereliabilitiesremaintobeagreedwithHerMajesty’sRevenueandCustomsandothertaxauthorities.Furtherdetailsareincludedwithinnote7.

(d) Revenue recognitionTheGroupmakesaprovisionforsalesreturnsattheendofeachmonth.TheUKestimateiscalculatedbylookingattheforecastsalesprojectionsforthefollowingmonthofthe titlesthatwereonsaleattheyear-endandprovidingforanyshortfall.TheUSestimateis madebasedonastudyofthehistoriclevels ofreturns.

(e) Recoverability of investmentsThecarryingamountoftheCompany’sinvestmentsinsubsidiaryundertakingsisreviewedannuallytodetermineifthereisanyindicationofimpairment.Ifanysuchindicationexists,theinvestments’recoverableamountsareestimated.Therecoverableamountisthehigheroffairvaluelesscosttosellandvalueinuse.Valueinuseisthepresentvalueoftheestimatedfuturecashflows.Impairmentlossesarerecognisedintheincomestatementwhenthecarryingamountofanassetexceedsitsestimatedrecoverableamount.

New or revised accounting standards and interpretations

TherehasbeennomaterialimpactfromtheadoptionofthefollowingneworrevisedstandardswhicharerelevanttotheGroup:

• AnnualimprovementstoIFRSs2012- 2014Cycle.

• AmendmenttoIAS1Presentationoffinancialstatementsonthedisclosureinitiative.

• AmendmenttoIAS16andIAS38Clarificationofacceptablemethodsofdepreciationandamortisation.

Certainnewstandards,amendmentsandinterpretationstoexistingstandardshavebeenpublishedthataremandatoryforaccountingperiodsbeginningonorafter1October2017orlaterperiodsbutwhichtheGrouphaschosennottoadoptearly.TheseincludethefollowingstandardswhicharerelevanttotheGroup:

• AmendmenttoIFRS2Share-basedpaymenttoclarifytheclassificationandmeasurementofshare-basedpaymenttransactions.

• IFRS9Financialinstruments.• IFRS15Revenuefromcontracts

withcustomers.• IFRS16Leases. TheGrouphasbeguntoassesstheimpactofadoptingbothIFRS15,whichwillbeeffectivefortheyearending30September2019,andIFRS16,whichwillbeeffectivefortheyearending30September2020.

TheGroupdoesnotexpectthattheotherstandardsandamendmentsissuedbutnotyeteffectivewillhaveamaterialimpactonresultsornetassets.



ents

1. Segmental reporting

TheGroupisorganisedandarrangedprimarilybyreportablesegment.TheexecutiveDirectorsconsidertheperformanceofthebusinessfromageographicalperspective,namelytheUKandtheUS.TheAustralianbusinessisconsideredtobepartoftheUKsegmentandisnotreportedseparatelyduetoitssize.

(a) Reportable segment(i) Segment revenue

2017£m

2016£m

UK 67.2 44.7US 19.1 15.2Revenuebetweensegments (1.9) (0.9)Total continuing operations 84.4 59.0

Transactionsbetweensegmentsarecarriedoutatarm’slength.

(ii) Segment adjusted EBITDA

2017£m

2016£m

UK 6.9 3.2US 4.1 2.0Total segment adjusted EBITDA from continuing operations 11.0 5.2

AdjustedEBITDAisusedbytheexecutiveDirectorstoassesstheperformanceofeachsegment.

AreconciliationoftotalsegmentadjustedEBITDAfromcontinuingoperationstoprofit/(loss)beforetaxfromcontinuingoperationsisprovidedasfollows:

2017£m

2016£m

Total segment adjusted EBITDA from continuing operations 11.0 5.2Share-basedpayments(includingsocialsecuritycosts) (2.1) (0.5)Depreciation (0.3) (0.4)Amortisation (4.1) (2.0)Exceptionalitems (3.7) (3.5)Impairmentofintangibleassets - (13.0)Netfinancecosts (0.6) (0.7)Profit/(loss) before tax from continuing operations 0.2 (14.9)

(iii) Segment assets and liabilities

Segment assets Segment liabilities Segment net assets

2017£m

2016£m

2017£m

2016£m

2017£m

2016£m

UK 113.9 46.6 (56.5) (26.5) 57.4 20.1US 8.5 5.3 (4.6) (4.2) 3.9 1.1Total 122.4 51.9 (61.1) (30.7) 61.3 21.2

(iv) Other segment informationAdditions to

non-current assetsDepreciation

and amortisation Impairment charges Exceptional items

2017£m

2016£m

2017£m

2016£m

2017£m

2016£m

2017£m

2016£m

UK 64.5 4.6 4.3 1.9 - 13.0 2.4 2.8US - - 0.1 0.5 - - 1.3 0.7Continuingoperations 64.5 4.6 4.4 2.4 - 13.0 3.7 3.5Discontinuedoperations - - - - - - - (0.3)Total 64.5 4.6 4.4 2.4 - 13.0 3.7 3.2

Otherthantheitemsdisclosedaboveandashare-basedpaymentschargeof£1.8m(2016:£0.5m)therewerenoothersignificantnon-cashexpensesduringtheyear.

Notes to the financial statements


61 Future plc

1. Segmental reporting (continued)

(b) Business segmentAftergeographicallocation,theGroupismanagedintwosegments.TheMediasegmentcompriseswebsitesandeventsandtheMagazinesegmentcomprisesmagazines.Anadditionalsegment,Other,wasretainedtoreflectunallocatedsalariesandotherdirectcostswhicharenotdirectlychargedtothebusinesssegmentsforinternalreportingpurposes.TheGroupconsidersthattheassetswithineachsegmentareexposedtothesamerisks.

(i) Revenue by business segment

2017£m

2016£m

Media 35.8 24.5Magazine 50.5 35.4Revenuebetweensegments (1.9) (0.9)Total continuing operations 84.4 59.0

(ii) Gross profit by business segment

2017£m

2016£m

Media 27.6 19.5Magazine 33.4 23.5Other (31.8) (24.8)Addback:distributionexpenses 4.7 3.6Total continuing operations 33.9 21.8

2. Net operating expenses Operatingprofit/(loss)fromcontinuingoperationsisstatedaftercharging:

Adjusted results

£m

2017Adjusting

items£m

Statutoryresults

£m

Adjustedresults

£m

2016Adjusting

items£m

Statutoryresults

£m

Costofsales (50.5) - (50.5) (37.2) - (37.2)Distributionexpenses (4.7) - (4.7) (3.6) - (3.6)Share-basedpayments(includingsocial securitycosts) - (2.1) (2.1) - (0.5) (0.5)

Exceptionalitems(note4) - (3.7) (3.7) - (3.5) (3.5)Depreciation (0.3) - (0.3) (0.4) - (0.4)Amortisation (1.8) (2.3) (4.1) (2.0) - (2.0)Impairmentofintangibleassets - - - - (13.0) (13.0)Otheradministrationexpenses (18.2) - (18.2) (13.0) - (13.0)

(75.5) (8.1) (83.6) (56.2) (17.0) (73.2)

3. Fees paid to auditors

2017£m

2016£m

AuditfeesinrespectoftheauditofthefinancialstatementsoftheCompanyandtheconsolidatedfinancialstatements 0.16 0.10Auditrelatedassuranceservices 0.02 0.02

0.18 0.12Taxcomplianceservices - 0.05Taxadvisoryservices - 0.03Otherassuranceservices 0.29 -Servicesrelatingtocorporatefinancetransactions 0.06 0.14Total fees 0.53 0.34



ents

4. Exceptional items from continuing operations

2017£m

2016£m

Vacantpropertyprovisionmovements 1.2 (0.5)Restructuringandredundancycosts 1.1 1.8Acquisitionandintegrationrelatedcosts 1.4 2.3Profitondisposalofmagazinetitlesandtrademarks - (0.1)Total charge 3.7 3.5

ThevacantpropertyprovisionmovementduringtheyearrelatestosurplusofficespaceintheUKandtheUS.

Therestructuringandredundancycostsrelatemainlytostaffterminationpaymentsandotherrestructuringactivities.

TheacquisitionandintegrationrelatedcostsrepresentfeesincurredinrespectoftheacquisitionsandsubsequentintegrationsofMiura(Holdings)Limited,theultimateparentcompanyofImaginePublishingLimited,whichwascompletedon21October2016,andthehomeinterestdivisionofCentaurMediaplc,whichwascompletedon1August2017.Furtherdetailsinrespectoftheacquisitionsareshowninnote29.

5. Employee costs from continuing operations

Group 2017

£m

Company2017

£m

Group 2016 £m

Company2016£m

Wagesandsalaries 26.0 0.3 21.3 0.2Socialsecuritycosts 2.5 - 2.0 -Otherpensioncosts 0.6 - 0.7 -Shareschemes-Valueofemployees’services 1.8 - 0.5 -Total employee costs from continuing operations 30.9 0.3 24.5 0.2

Average monthly number of people for continuing operations (including Directors)

Group2017

No.

Company2017

No.

Group2016No.

Company2016No.

Production 471 - 399 -Administration 111 4 89 4Total 582 4 488 4

At30September2017,theactualnumberofpeopleemployedbytheGroupwas634(2016:449).Inrespectofourreportablesegments592(2016:390)wereemployedintheUKand42(2016:59)wereemployedintheUS.

Key management personnel compensation

Group 2017

£m

Company 2017

£m

Group 2016£m

Company2016£m

Salariesandothershort-termemployeebenefits 1.4 0.3 0.7 0.2Postemploymentbenefits 0.1 - - -Shareschemes-Valueofemployees’services 1.3 - 0.2 -Total 2.8 0.3 0.9 0.2

KeymanagementpersonnelaredeemedtobethemembersoftheBoardofFutureplc.ItisthisBoardwhichhasresponsibilityforplanning,directingandcontrollingtheactivitiesoftheGroup.

ZillahByng-ThorneandPennyLadkin-BrandwerepaidbyFuturePublishingLimited,asubsidiarycompany,fortheirservices.In2017£0.4m(2016:£0.3m)wasrechargedtoFutureplcbyFuturePublishingLimitedinrespectofZillahByng-Thorneand£0.2m(2016:£0.2m)wasrechargedinrespectofPennyLadkin-Brand.

FurtherdetailsontheDirectors’remunerationandinterestsaregivenintheDirectors’remunerationreportonpages29to41.ThehighestpaidDirectorduringtheyearwasZillahByng-Thorne(2016:ZillahByng-Thorne)anddetailsofherremunerationareshownonpage30.


63 Future plc

6. Finance income and costs

2017£m

2016£m

Fairvaluegainoninterestratederivativenotinahedgerelationship 0.1 -Total finance income 0.1 -Interestpayableoninterest-bearingloansandborrowings (0.4) (0.1)Amortisationofbankloanarrangementfees (0.2) (0.1)Otherfinancecosts (0.1) (0.3)Adjustedfinancecosts (0.7) (0.5)Exchangelosses - (0.2)Total reported finance costs (0.7) (0.7)Net finance costs from continuing operations (0.6) (0.7)

7. Tax on profit/(loss)

Thetaxcreditedintheconsolidatedincomestatementforcontinuingoperationsisanalysedbelow:

2017£m

2016£m

UK corporation taxCurrenttaxat19.5%(2016:20%)ontheprofit/(loss)fortheyear 0.6 -Adjustmentsinrespectofpreviousyears 0.2 1.3Current tax 0.8 1.3Deferred tax origination and reversal of temporary differencesCurrentyearcredit (2.0) (1.6)Adjustmentsinrespectofpreviousyears (0.2) (0.2)Deferred tax (2.2) (1.8)Total tax credit on continuing operations (1.4) (0.5)

ThetaxassessedineachyeardiffersfromthestandardrateofcorporationtaxintheUKfortherelevantyear.Thedifferencesareexplainedbelow:

2017£m

2016£m

Profit/(loss)beforetax 0.2 (14.9)Profit/(loss)beforetaxatthestandardUKtaxrateof19.5%(2016:20%) - (3.0)Non-deductibleamortisation&impairment - 2.6Lossesnotpreviouslyrecognised (0.7) -LossesandothertimingdifferencesrecognisedinrespectoftaxintheUS (1.3) (1.4)Profitsrelievedagainstbroughtforwardlosses - (0.2)Othernetdisallowableitems 0.6 0.4Adjustmentsinrespectofpreviousyears - 1.1Total tax credit on continuing operations (1.4) (0.5)

In2013theGroupreachedagreementwithHMRCrelatingtothetaxtreatmentofcertainone-offtransactionswhichtookplacein2003.PartofthatagreementwillresultintheGrouppayingtaxof£6.2mplusinterest(comprisinginstalmentsof£85,000permonthoverfiveyearsfromJuly2013andafinalinstalmentof£2.0m).Thetaxpayablewasfullyprovidedforinprioryears’financialstatements.

Theprioryearadjustmentin2016reflectsareassessmentoftheavailabilityofEUGrouplossreliefavailabletotheGroupasaresultoftheadditionaluncertaintysurroundingtheimpactoftheBrexitvoteonthesuccessoftheclaims.

TheDirectorshaveassessedtheGroup’suncertaintaxpositionsandarecomfortablethattheprovisionsinplacearenotmaterialeitherindividuallyorinaggregateandthatareasonablypossiblechangeinthenextfinancialyearwouldnothavematerialimpactontheresultsoftheGroup.



ents

8. Dividends

Equity dividends 2017Restated

2016*

Numberofsharesinissueatendofyear(million) 45.4 24.6Dividendspaidinyear(pencepershare) - -Dividends paid in year (£m) - -

* The prior year comparatives have been restated to reflect the 15:1 share consolidation completed on 2 February 2017.

9. Earnings per share

BasicearningspersharearecalculatedusingtheweightedaveragenumberofOrdinarysharesinissueduringtheyear.DilutedearningspersharehavebeencalculatedbytakingintoaccountthedilutiveeffectofsharesthatwouldbeissuedonconversionintoOrdinarysharesofawardsheldunderemployeeshareschemes.

On2February2017,theCompanyissuedonenewOrdinaryshareof15penceforeach15existingOrdinarysharesof1pencefollowingcompletionofashareconsolidation.Theweightedaveragenumberofsharesinissueforallperiodshasbeenadjustedfortheshareconsolidation.

Adjustedearningspershareremovetheeffectofshare-basedpayments,exceptionalitems,amortisationofintangibleassetsarisingonacquisitions,impairmentofintangibleassets,exchangelossesincludedinfinancecostsandanyrelatedtaxeffectsfromthecalculation.

Total Group 2017Restated

2016

Adjustmentstoprofit/(loss)aftertax:Profit/(loss) after tax (£m) 1.6 (14.2)Share-basedpayments(includingsocialsecuritycosts)(£m) 2.1 0.5Exceptionalitems(£m) 3.7 3.2Amortisationofintangibleassetsarisingonacquisitions(£m) 2.3 -Impairmentofintangibleassets(£m) - 13.0Exchangelossesincludedinfinancecosts(£m) - 0.2Taxeffectoftheaboveadjustments(£m) (1.1) (0.5)Adjusted profit after tax (£m) 8.6 2.2

Weightedaveragenumberofsharesinissueduringtheyear:-Basic 37,093,344 24,165,768-Dilutiveeffectofshareoptions 3,878,185 871,639-Diluted 40,971,529 25,037,407Basicearnings/(loss)pershare(inpence) 4.3 (58.8)Adjustedbasicearningspershare(inpence) 23.2 9.1Dilutedearnings/(loss)pershare(inpence) 3.9 (58.8)Adjusteddilutedearningspershare(inpence) 21.0 8.8

Theadjustmentstoprofit/(loss)aftertaxhavethefollowingeffect:Basic earnings/(loss) per share (pence) 4.3 (58.8)Share-basedpayments(includingsocialsecuritycosts)(pence) 5.7 2.1Exceptionalitems(pence) 10.0 13.3Amortisationofintangibleassetsarisingonacquisitions(pence) 6.2 -Impairmentofintangibleassets(pence) - 53.8Exchangelossesincludedinfinancecosts(pence) - 0.8Taxeffectoftheaboveadjustments(pence) (3.0) (2.1)Adjusted basic earnings per share (pence) 23.2 9.1

Diluted earnings/(loss) per share (pence) 3.9 (58.8)Share-basedpayments(includingsocialsecuritycosts)(pence) 5.2 2.1Exceptionalitems(pence) 9.0 13.3Amortisationofintangibleassetsarisingonacquisitions(pence) 5.6 -Impairmentofintangibleassets(pence) - 53.4Exchangelossesincludedinfinancecosts(pence) - 0.8Taxeffectoftheaboveadjustments(pence) (2.7) (2.0)Adjusted diluted earnings per share (pence) 21.0 8.8


65 Future plc

9. Earnings per share (continued)

Continuing operations 2017Restated

2016

Adjustmentstoprofit/(loss)aftertax:Profit/(loss) after tax (£m) 1.6 (14.4)Share-basedpayments(includingsocialsecuritycosts)(£m) 2.1 0.5Exceptionalitems(£m) 3.7 3.5Amortisationofintangibleassetsarisingonacquisitions(£m) 2.3 -Impairmentofintangibleassets(£m) - 13.0Exchangelossesincludedinfinancecosts(£m) - 0.2Taxeffectoftheaboveadjustments(£m) (1.1) (0.5)Adjusted profit after tax (£m) 8.6 2.3

Weightedaveragenumberofsharesinissueduringtheyear:-Basic 37,093,344 24,165,768-Dilutiveeffectofshareoptions 3,878,185 871,639-Diluted 40,971,529 25,037,407Basicearnings/(loss)pershare(inpence) 4.3 (59.6)Adjustedbasicearningspershare(inpence) 23.2 9.5Dilutedearnings/(loss)pershare(inpence) 3.9 (59.6)Adjusteddilutedearningspershare(inpence) 21.0 9.2

Theadjustmentstoprofit/(loss)aftertaxhavethefollowingeffect:Basic earnings/(loss) per share (pence) 4.3 (59.6)Share-basedpayments(includingsocialsecuritycosts)(pence) 5.7 2.1Exceptionalitems(pence) 10.0 14.5Amortisationofintangibleassetsarisingonacquisitions(pence) 6.2 -Impairmentofintangibleassets(pence) - 53.8Exchangelossesincludedinfinancecosts(pence) - 0.8Taxeffectoftheaboveadjustments(pence) (3.0) (2.1)Adjusted basic earnings per share (pence) 23.2 9.5

Diluted earnings/(loss) per share (pence) 3.9 (59.6)Share-basedpayments(includingsocialsecuritycosts)(pence) 5.2 2.1Exceptionalitems(pence) 9.0 14.5Amortisationofintangibleassetsarisingonacquisitions(pence) 5.6 -Impairmentofintangibleassets(pence) - 53.4Exchangelossesincludedinfinancecosts(pence) - 0.8Taxeffectoftheaboveadjustments(pence) (2.7) (2.0)Adjusted diluted earnings per share (pence) 21.0 9.2




ents

10. Property, plant and equipment

Group

Land and buildings

£m

Plant and machinery

£m

Equipment, fixtures and

fittings£m

Total£m

Cost At1October2015 1.6 5.2 1.8 8.6Additions - 0.3 - 0.3Disposals (1.1) (2.4) (1.6) (5.1)Exchangeadjustments - 0.2 0.1 0.3At30September2016 0.5 3.3 0.3 4.1Additionsthroughbusinesscombinations - 0.1 - 0.1Otheradditions 0.2 0.2 0.3 0.7At 30 September 2017 0.7 3.6 0.6 4.9

Accumulated depreciationAt1October2015 (1.4) (4.9) (1.7) (8.0)Chargefortheyear - (0.3) (0.1) (0.4)Disposals 1.1 2.3 1.6 5.0Exchangeadjustments - (0.2) - (0.2)At30September2016 (0.3) (3.1) (0.2) (3.6)Chargefortheyear - (0.2) (0.1) (0.3)At 30 September 2017 (0.3) (3.3) (0.3) (3.9)

Net book value at 30 September 2017 0.4 0.3 0.3 1.0Netbookvalueat30September2016 0.2 0.2 0.1 0.5Netbookvalueat1October2015 0.2 0.3 0.1 0.6

Depreciationisincludedwithinadministrationexpensesintheconsolidatedincomestatement.

67 Future plc

11. Intangible assets

GroupGoodwill

£m

Magazine and website

£mOther

£m Total

£m

Cost At1October2015 287.5 12.4 14.8 314.7Additionsthroughbusinesscombinations 1.5 1.1 - 2.6Otheradditions - - 1.7 1.7Disposals - (0.2) (0.2) (0.4)Exchangeadjustments 4.9 1.0 1.2 7.1At30September2016 293.9 14.3 17.5 325.7Additionsthroughbusinesscombinations 36.6 25.5 0.1 62.2Otheradditions - - 1.5 1.5Adjustmentstofairvalueonprioryearacquisitions (0.2) - - (0.2)Disposals - (1.4) - (1.4)Exchangeadjustments (1.1) (0.2) (0.3) (1.6)At 30 September 2017 329.2 38.2 18.8 386.2

Accumulated amortisationAt1October2015 (246.6) (12.4) (11.9) (270.9)Chargefortheyear - - (2.0) (2.0)Impairment (13.0) - - (13.0)Disposals - 0.2 0.2 0.4Exchangeadjustments (4.8) (1.0) (1.2) (7.0)At30September2016 (264.4) (13.2) (14.9) (292.5)Chargefortheyear - (2.3) (1.8) (4.1)Disposals - 1.1 - 1.1Exchangeadjustments 1.0 0.2 0.4 1.6At 30 September 2017 (263.4) (14.2) (16.3) (293.9)

Net book value at 30 September 2017 65.8 24.0 2.5 92.3Netbookvalueat30September2016 29.5 1.1 2.6 33.2Netbookvalueat1October2015 40.9 - 2.9 43.8

Magazineandwebsiterelatedassetsrelatemainlytotrademarks,advertisingrelationships,publishingrightsandcustomerlists.Theseassetsareamortisedovertheirestimatedeconomiclives,typicallyrangingbetweenoneandtenyears.

Anyresidualamountarisingasaresultofthepurchaseconsiderationbeinginexcessofthevalueofidentifiedmagazinerelatedassetsisrecordedasgoodwill.GoodwillisnotamortisedunderIFRS,butissubjecttoimpairmenttestingatleastannuallyormorefrequentlyontheoccurrenceofsometriggeringevent.Goodwillisrecordedandtestedforimpairmentonaterritorybyterritorybasis.

Furtherdetailsregardingtheintangibleassetsacquiredduringtheyearthroughbusinesscombinationsaresetoutinnote29.

Otherintangiblesrelatetocapitalisedsoftwarecostsandwebsitedevelopmentcosts.

Amortisationisincludedwithinadministrationexpensesintheconsolidatedincomestatement.

Impairment assessments for goodwill

Thenetbookvalueofgoodwillatboth30September2017and30September2016relatestotheUK.

Thebasisforcalculatingrecoverableamountsisdescribedintheaccountingpolicies.

Trendsintheeconomicandfinancialenvironment,competitionandregulatoryauthorities’decisions,orchangesincompetitorbehaviourinresponsetotheeconomicenvironmentmayaffecttheestimateofrecoverableamounts,aswillunforeseenchangesinthepolitical,economicorlegalsystemsofsomecountries.




ents

11. Intangible assets (continued)

Otherassumptionsthatinfluenceestimatedrecoverableamountsaresetoutbelow:

At30September2017

UK

BasisofrecoverableamountSourceused

ValueinuseFiveyearplans

Discountedcashflow

Growthratetoperpetuity 2.0%EBITDAmarginsassumed 12.0%to12.9%Post-taxdiscountrate 7.7%Pre-taxdiscountrate 9.4%

At30September2016

UK

BasisofrecoverableamountSourceused

ValueinuseFiveyearplans

Discountedcashflow

Growthratetoperpetuity 2.0%EBITDAmarginsassumed 2.4%to3.7%Post-taxdiscountrate 8.2%Pre-taxdiscountrate 10.3%

Sensitivity of recoverable amountsAt30September2017theanalysisoftherecoverableamountsgaverisetothefollowingassessmentsofsensitivity:

ThevalueinuseoftheUKbusinessexceededthecarryingvalueby£43.3m.Achangeofplusorminus50basispointsinthepost-taxdiscountratewoulddecreaseorincreaserespectivelytherecoverableamountby£8.7m.Likewiseachangeofplusorminus10%intheforecastcashflowsoverthenextfiveyearswouldincreaseordecreaserespectivelytherecoverableamountby£11.7m.

Goodwillisnotconsideredtobeimpairedat30September2017.

Impairment At30September2016animpairmentchargeof£13.0mwastakenagainstthecarryingvalueoftheUKbusiness.ThisreflectedashiftintheunderlyingprofitabilityandcashflowsoftheUKandthecontinueddeclineofprint.

69 Future plc


12. Investments in Group undertakings

Company2017

£m2016£m

Shares in Group undertakingsAt1October 1.0 131.9Additions 18.5 -Provisionforimpairment - (130.9)At30September 19.5 1.0

Additionsof£16.7mduringtheyearrelatetotheacquisitionofMiura(Holdings)Limited,theholdingcompanyandultimateparentcompanyofImaginePublishingLimited,andthesubsequentcapitalisationofanintercompanybalanceowedtotheCompany.Followingtheacquisition,thetradeandassetsofImaginePublishingLimitedweretransferredtoFuturePublishingLimited,afellowsubsidiaryundertaking,andagroupre-organisationeffectedtosettleallintercompanybalancesbetweenthecompaniesacquiredandtherestoftheGroup.TheinvestmentheldbytheCompanywassubsequentlyre-designatedasaninvestmentinFutureHoldings2002Limited,theparentcompanyofFuturePublishingLimited.

Theremainingadditionof£1.8mrepresentsthefairvalueofsharebasedcompensationawardsgrantedtoemployeesofsubsidiaryundertakingsofFutureHoldings2002Limited,treatedasacapitalcontributiontothatcompany.

TheDirectorsbelievethatthecarryingvaluesoftheinvestmentsaresupportedbytheirunderlyingassets.

InSeptember2016,followingareviewofthevaluationoftheCompany’sinvestmentsandthereceiptofadividendof£130.9m,theCompany’sinvestmentinRhoHoldingsLimitedwaswrittendowntoacarryingvalueof£nilresultinginanimpairmentchargeof£130.9m.

13. Deferred tax

ThefollowingarethemajordeferredtaxassetsandliabilitiesrecognisedbytheGroup,andthemovementsthereon,duringthecurrentandprioryears.

Intangible assets

£m

Share-based payments

£m

Short term timing

differences£m

Depreciation vs tax allowances

£mTax losses

£mTotal

£m

At1October2015 (0.7) - - 0.4 0.1 (0.2)Acquisitions (0.3) - - - - (0.3)Creditedtoincomestatement–Continuingoperations 0.1 - 0.2 0.1 1.4 1.8

Exchangeadjustment - - - - 0.2 0.2At30September2016 (0.9) - 0.2 0.5 1.7 1.5Acquisitions (4.3) - - - - (4.3)Creditedtoincomestatement–Continuingoperations 0.6 0.3 - 0.1 1.2 2.2

Creditedtoequity - 0.5 - - - 0.5Exchangeadjustment - - - - (0.1) (0.1)At 30 September 2017 (4.6) 0.8 0.2 0.6 2.8 (0.2)

Certaindeferredtaxassetsandliabilitieshavebeenoffsetagainsteachotherwheretheyrelatetothesamejurisdiction.Thefollowingistheanalysisofdeferredtaxbalancesafteroffsetforbalancesheetpurposes:

2017£m

2016£m

Deferredtaxassets 4.4 2.4Deferredtaxliabilities (4.6) (0.9)Net deferred tax (liability)/asset (0.2) 1.5

Thedeferredtaxassetof£4.4m(2016:£2.4m)isdisclosedasanon-currentassetofwhichtheassetsduewithinoneyeartotal£0.4m(2016:£0.1m).Thedeferredtaxliabilityof£4.6m(2016:£0.9m)isdisclosedasanon-currentliabilityofwhichtheliabilitiesduewithinoneyeartotal£0.7m(2016:£nil).

Asat30September2017theGrouphas:•unprovidedtaxlossestotalling£33.1m(2016:£38.3m)ofwhich£29.0m(2016:£34.9m)aroseintheUS;and•unprovidedothertemporarydifferencesintheUStotalling£2.0m(2016:£2.8m).

Deferredtaxassetshavebeenrecognisedinrespectoftaxlossesandothertemporarydifferenceswhereitisprobablethattheseassetswillberecovered.



ents

13. Deferred tax (continued)

Nodeferredtaxisrecognisedontheunremittedearningsofoverseassubsidiariesasanyremittedearningswouldnotgiverisetoataxliabilityintheforeseeablefuture.

Thedeferredtaxassetof£0.8m(2016:£nil)recognisedontheCompany’sbalancesheetisinrespectofshare-basedpayments.TheCompanyhasnounprovideddeferredtaxassetsorliabilitiesat30September2017(2016:£nil).

14. Inventories

2017£m

2016£m

Rawmaterials 0.2 0.1Workinprogress 0.5 0.3Total 0.7 0.4

Thecostofrawmaterialinventoriesrecognisedasanexpenseandincludedwithincostofsalesamountedto£5.4m(2016:£3.5m).

15. Trade and other receivables

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

Current assets:Tradereceivables 11.9 - 9.2 -Provisionsforimpairmentoftradereceivables (2.2) - (0.6) -Tradereceivablesnet 9.7 - 8.6 -AmountsowedbyGroupundertakings - 74.4 - 43.4Otherreceivables 0.4 - 0.3 -Prepaymentsandaccruedincome 3.5 - 3.3 0.1

13.6 74.4 12.2 43.5Non-current assets:Otherreceivables - - 0.2 -Total 13.6 74.4 12.4 43.5

TheDirectorsconsiderthatthecarryingamountoftradeandotherreceivablesapproximatestheirfairvalue.

ReceivablebalancesfromtheGroup’stwomainmagazinedistributors,oneintheUKsegmentandoneintheUSsegment,represented13%(2016:26%)oftheGroup’stradereceivablesbalanceat30September2017.

TheGrouphasprovidedforestimatedirrecoverableamountsinaccordancewithitsaccountingpolicydescribedonpage58ofthesefinancialstatements.

Creditchecksareobtainedand,ifapplicable,guaranteesputinplacebeforeanewcustomerisacceptedandtermsandcreditlimitsareagreed.Bookingsarenottakenbeforethesefactorshavebeenfulfilled.Inaddition,annualcreditchecksarecarriedoutandfullydocumented.Finaldecisionsoncredittermsaremadebyanappropriateseniormanagerwithinadvertisingorfinance.Intheeventofarequesttoincreaseacustomer’screditlimitthefollowingfactorswillbeconsidered:tradinghistorytodate,reviewofcreditstatusandreviewofthereasonfortheincrease.

IncludedwithintheGroup’stradereceivablesbalancearereceivableswithacarryingamountof£4.6m(2016:£3.0m)whicharepastdueatthereportingdatebutforwhichtheGrouphasnotprovidedastherehasnotbeenasignificantchangeincreditqualityandtheGroupbelievesthattheamountsarestillrecoverable.TheserelatetoadvertisingandlicensingdebtorsintheUKandUS.TheGroupdoesnotholdanysecurityoverthesebalances.Abreakdownoftheageingissetoutbelow:

Past due

Group2017

£m

Group2016£m

0-30days 2.9 1.631-60days 1.3 0.861-90days 0.3 0.391+days 0.1 0.3Total 4.6 3.0

71 Future plc

15. Trade and other receivables (continued)

Asat30September2017,tradereceivablesof£2.2m(2016:£0.6m)wereimpairedandprovidedfor.Theindividuallyimpairedreceivablesmainlyrelatetoadvertising,eventsandlicensingcustomers.Itisassessedthataportionofthereceivablesisexpectedtoberecovered.

ThemovementintheGroupprovisionfortradereceivablesduringtheyearisasfollows:

Group2017

£m

Group2016£m

At1October 0.6 0.6Provisionforreceivablesimpaired 0.5 0.1Onacquisition 1.3 -Receivableswrittenoffduringtheyear (0.2) (0.1)At 30 September 2.2 0.6

Thecreationandreleaseofprovisionsforimpairedreceivableshavebeenincludedinadministrationexpensesintheincomestatement.Amountschargedtotheprovisionarewrittenoffwhenthereisnorealisticexpectationofrecoveringadditionalcash.

Theotherassetclasseswithintradeandotherreceivablesdonotcontainimpairedassets.

Themaximumexposuretocreditriskatthereportingdateisthecarryingvalueofeachclassofreceivablementionedabove.TheGroupdoesnotholdanycollateralassecurityfortradereceivables.

AlltheCompany’sreceivablesarewithGroupundertakings,withtheexceptionof£0.1min2016relatingtoprepaidshareissuecosts,andnoadditionaldisclosureinrelationtocreditriskisrequired.Intereston£0.3m(2016:£0.3m)oftheamountsowedbyGroupundertakingshasbeenchargedatthree-monthLIBOR+2.6%.ThebalanceofamountsowedbyGroupundertakingsisinterest-freewithoutanytermsforrepayment.

16. Cash and cash equivalents

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

Cashatbankandinhand 10.1 0.7 2.9 -Cash and cash equivalents (excluding bank overdraft) 10.1 0.7 2.9 -

Cashandcashequivalentsincludethefollowingforthepurposesofthecashflowstatements:

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

Cashatbankandinhand 10.1 0.7 2.9 -Bankoverdraft(note18) - - - (1.0)Cash and cash equivalents 10.1 0.7 2.9 (1.0)

TheGrouphasanumberofauthorisedcounterpartieswithwhomcashbalancesareheldinthecountriesinwhichtheGroupoperates.Creditriskisminimisedbyconsideringthecreditstandingofallpotentialbankersbeforeselectingthembytheuseofexternalcreditratings.AlloftheGroup’scashatbankisheldatcounterpartieswithanS+PcreditratingofatleastBBB+.




ents

17. Trade and other payables

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

Tradepayables 2.5 - 4.4 -AmountsowedtoGroupundertakings - 0.7 - 0.8Othertaxationandsocialsecurity 0.9 - 0.8 -Otherpayables 0.7 - 0.8 -Accrualsanddeferredincome 25.8 0.2 15.4 1.6Total 29.9 0.9 21.4 2.4

Tradepayablesandaccrualsprincipallycompriseamountsoutstandingfortradepurchasesandongoingcosts.TheGrouphasfinancialriskmanagementpoliciesinplacetoensureallpayablesarepaidwithintheagreedcreditterms.

TheDirectorsconsiderthatthecarryingamountoftradepayablesapproximatestotheirfairvalue.

18. Financial liabilities – loans, borrowings and overdrafts

Non-current liabilities

Interest rate at30 September

2017

Interestrateat30September

2016

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

Sterlingtermloan 2.8% - 10.0 10.0 - -Sterlingrevolvingloan 2.8% - 6.9 6.9 - -

16.9 16.9 - -Obligationsunderfinanceleases - 9.6% - - 0.1 -Total 16.9 16.9 0.1 -

Current liabilities

Interest rate at30 September

2017

Interestrateat30September

2016

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

Sterlingtermloan 2.8% - 1.8 1.8 - -Sterlingrevolvingloan 2.8% 2.5% 1.3 1.3 2.3 2.3

3.1 3.1 2.3 2.3Obligationsunderfinanceleases 0.0% - 0.1 - - -Total 3.2 3.1 2.3 2.3

Theinterest-bearingloansarerepayableasfollows:

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

Withinoneyear 3.2 3.1 2.3 2.3Betweenoneandtwoyears 3.3 3.3 0.1 -Betweentwoandfiveyears 13.6 13.6 - -Total 20.1 20.0 2.4 2.3

73 Future plc


18. Financial liabilities – loans, borrowings and overdrafts (continued)

On21October2016,followingtheacquisitionofImagine,theGroupnegotiatedanewbankfacilitywithHSBCBankplctoreplaceitspreviousfacilitywithSantanderplc.ThisnewfacilitywassubsequentlyamendedandrestatedinAugust2017followingthehomeinterestacquisition.ThetotalmulticurrencyrevolvingandoverdraftfacilityavailabletotheGroupat30September2017amountedto£25.4m,comprisinga£12.0mtermloan,atotalof£11.4mrevolvingcreditfacilitiesanda£2.0muncommittedoverdraftfacility.Thenewfacilitiesrunto23June2021.Repaymentsrequiredinrespectofthefacilitiesareasfollows:

Repayment date Repayment amount30September2017* £600,00030September2018 £2,600,00030September2019 £3,400,00030September2020 £4,850,00023June2021 £14,550,000

*£0.6m was due to be repaid on 30 September 2017 however this was not taken by the bank until October 2017.

TheGrouphasgrantedsecuritytothebankandtheavailabilityofthefacilityissubjecttocertaincovenants.

Totalfeesrelatingtothenewfacilityamountedto£0.7mandthesearebeingamortisedoverthetermofthefacility.ThebankborrowingsandinterestareguaranteedbyFutureplc,FutureHoldings2002Limited,FuturePublishingLimited,FutureUS,Inc,FuturePublishing(Overseas)LimitedandNextCommercePtyLtd.

Interestpayableunderthecurrentcreditfacilityiscalculatedasthecostofone-monthLIBOR(currentlyapproximately0.5%)plusaninterestmarginofbetween2.0%and2.5%,dependentonthelevelofBankEBITDA.

Thekeycovenantsaresetoutinthefollowingtablewherenetdebtisexclusiveofnon-currenttaxandotherpayablesandBankEBITDAisnotmateriallydifferenttostatutoryEBITDA.

Netdebt/BankEBITDA Periodsfrom31March2017–lessthan2.25times

BankEBITDA/Interest Periodsfrom31March2017–morethan4.00times

Thecovenantsaretestedquarterlyonthebasisofrollingfiguresforthepreceding12monthsandthecovenantpositionattheyear-endissetoutinthefollowingtable:

30 September 2017 Covenant

Netdebt/BankEBITDA 0.69times<2.25times

BankEBITDA/Interest 37.28times>4.00times

TheCompanyhadnotdrawndownonitsnon-interest-bearingoverdraftat30September2017(2016:£1.0m).AnydrawdownformspartoftheGroupcashpoolingaccountandcanbeoffsetagainstcashbalancesinotherGroupcompanies.


ents

19. Financial liabilities – derivatives

TheGroupacquiredaninterestrateswapaspartoftheImagineacquisition.TheswapwasoriginallyenteredintobySkaro(Holdings)LimitedandwastransferredintothenameoftheCompanyfollowingtheacquisition.

Thefairvalueoftheswapat30September2017was£0.1musingLevel2–inputsthatareobservablefortheassetorliability,eitherdirectly(thatis,asprices)orindirectly(thatis,derivedfromprices).

20. Provisions

GroupProperty

£m

At1October2016 1.5Onacquisition 0.1Chargedintheyear 1.4Releasedintheyear (0.1)Utilisedintheyear (0.3)At 30 September 2017 2.6

Theprovisionforpropertyrelatestodilapidationsandobligationsundershortleaseholdagreementsonvacantproperty.Thevacantpropertyprovisionisexpectedtobeutilisedoverthenexttenyears.

ProvisionsfortheCompanywere£nil(2016:£nil).

21. Other non-current liabilities

Group2017

£m2016£m

Otherpayables 0.6 0.5

Otherpayablesconsistmainlyofdeferredpropertyleaseliabilities.


75 Future plc


22. Financial instruments

Financial instruments by category

TheGroup’sfinancialassetsandfinancialliabilitiesaresetoutbelow:

Fair value Amortised cost 2017

Group NoteDerivatives

£m

Loans and receivables

£m

Other liabilities

£m

Total carrying value

£m

Total fairvalue

£m

Tradereceivablesnet 15 - 9.7 - 9.7 9.7Otherreceivables - 1.4 - 1.4 1.4Cashandcashequivalents 16 - 10.1 - 10.1 10.1Total financial assets - 21.2 - 21.2 21.2Tradepayables 17 - - (2.5) (2.5) (2.5)Otherliabilities - - (14.4) (14.4) (14.4)Currentborrowings 18 - - (3.2) (3.2) (3.2)Non-currentborrowings 18 - - (16.9) (16.9) (16.9)Derivatives 19 (0.1) - - (0.1) (0.1)Total financial liabilities (0.1) - (37.0) (37.1) (37.1)

Amortised cost 2016

Group Note


£m

Other liabilities

£m


£m

Total fair value

£m

Tradereceivablesnet 15 8.6 - 8.6 8.6Otherreceivables 1.7 - 1.7 1.7Cashandcashequivalents 16 2.9 - 2.9 2.9Total financial assets 13.2 - 13.2 13.2Tradepayables 17 - (4.4) (4.4) (4.4)Otherliabilities - (10.3) (10.3) (10.3)Currentborrowings 18 - (2.3) (2.3) (2.3)Non-currentborrowings 18 - (0.1) (0.1) (0.1)Total financial liabilities - (17.1) (17.1) (17.1)

Totalfinancialliabilitiesareshownnetofunamortisedcostswhichamountedto£0.6m(2016:£0.1m).



ents

22. Financial instruments (continued)

TheCompany’sfinancialassetsandliabilitiesaresetoutbelow:

Fair value Amortised cost 2017

Company NoteDerivatives

£m


£m

Other liabilities

£m


£m

Total fair value

£m

Otherreceivables 15 - 74.4 - 74.4 74.4Cashandcashequivalents 16 - 0.7 - 0.7 0.7Total financial assets - 75.1 - 75.1 75.1Otherliabilities 17 - - (0.9) (0.9) (0.9)Currentborrowings 18 - - (3.1) (3.1) (3.1)Non-currentborrowings 18 - - (16.9) (16.9) (16.9)Derivatives 19 (0.1) - - (0.1) (0.1)Total financial liabilities (0.1) - (20.9) (21.0) (21.0)

Amortised cost 2016

Company Note


£m

Other liabilities

£m


£m

Total fair value

£m

Otherreceivables 15 43.4 - 43.4 43.4Total financial assets 43.4 - 43.4 43.4Otherliabilities 17 - (2.4) (2.4) (2.4)Overdrafts 18 - (1.0) (1.0) (1.0)Currentborrowings 18 - (2.3) (2.3) (2.3)Total financial liabilities - (5.7) (5.7) (5.7)

Totalfinancialliabilitiesareshownnetofunamortisedcostswhichamountedto£0.6m(2016:£0.1m).

Thefairvalueistheamountforwhichafinancialinstrumentcouldbeexchangedbetweenknowledgeable,willingparties.Ifanactivemarketexists,themarketpriceisapplied.Ifanactivemarketdoesnotexistadiscountedcashfloworgenerallyacceptedestimationandvaluationtechniquebasedonmarketconditionsatthebalancesheetdateisusedtocalculateanestimatedvalue.

Themarketvalueoffinancialinstrumentsisdeterminedbytheuseofvaluationtechniquesincludingestimateddiscountedcashflows.

Treasury overviewTheGroupusesfinancialinstrumentstoraisefundingforitsoperationsandtomanagethefinancialrisksarisingfromthoseoperations.TheagreementsgoverningtheprincipalinstrumentsenteredintowereapprovedbytheBoard.

TheprincipalfinancingandtreasuryexposuresfacedbytheGrouparisefromforeigncurrencies,workingcapitalmanagement,thefinancingofcapitalexpenditureandacquisitions,themanagementofinterestratesontheGroup’sdebt,theinvestmentofsurpluscashandthemanagementoftheGroup’sdebtfacilities.TheGroupmanagesalloftheseexposureswithanobjectiveofremainingwithincovenantratiosagreedwiththeGroup’sbanks,andtheGrouphasbeenincompliancewithitscovenantsduringtheyear.Theseratiosaredisclosedinnote18.

77 Future plc



Currency and interest rate profileThecurrencyandinterestrateprofileoftheGroup’sfinancialassetsandliabilitiesisshownbelow:

Financial assets Financial liabilities

Non- interest bearing

£mTotal

£m

Floating rate£m

Fixed rate£m

Non-interest bearing

£m Total

£m

Net financial (liabilities)/

assets£m

At 30 September 2017Currency:Sterling 12.1 12.1 (20.0) (0.1) (13.5) (33.6) (21.5)USDollar 7.6 7.6 - - (2.9) (2.9) 4.7Euro 0.2 0.2 - - (0.1) (0.1) 0.1Other 1.3 1.3 - - (0.5) (0.5) 0.8Total 21.2 21.2 (20.0) - (17.1) (37.1) (15.9)

At30September2016Currency:Sterling 4.1 4.1 (2.3) (0.1) (10.2) (12.6) (8.5)USDollar 7.5 7.5 - - (3.2) (3.2) 4.3Euro 0.4 0.4 - - (0.2) (0.2) 0.2Other 1.2 1.2 - - (1.1) (1.1) 0.1Total 13.2 13.2 (2.3) (0.1) (14.7) (17.1) (3.9)

Interest rate riskDetailsoftheinterestratesonborrowingsasat30September2017aresetoutinnote18.

TheGrouphasnosignificantinterest-bearingassetsbutisexposedtointerestrateriskasitborrowsfundsatfloatinginterestratesthroughitsbankfacilities.BorrowingsissuedatvariableratesexposetheGrouptocashflowinterestraterisk.TheGroupevaluatesitsriskappetitetowardsinterestraterisksregularlyandmayundertakehedgingactivities,includinginterestrateswapcontracts,tomanageinterestrateriskinrelationtoitsrevolvingcreditfacilityifdeemednecessary.TheGroupdidnotenterintoanyhedgingtransactionsduringthecurrentorprioryearsand,althoughitinheritedaninterestrateswapaspartoftheImagineacquisition,asat30September2017theonlyfloatingratetowhichtheGroupwasexposedisLIBOR.TheGroup’sexposuretointerestratesonfinancialassetsandfinancialliabilitiesisdetailedintheliquidityrisksectionofthisnote.

For2017,ifinterestratesonnetborrowingshadbeenonaverage0.5%higher/lowerwithallothervariablesheldconstant,thepost-taxprofitfortheyearwouldhavedecreased/increasedby£0.1m(2016:£nil).

Therewouldbenoimpactonequityexcludingretainedearnings.

Foreign exchange riskSomeoftheGroup’sactivitiesarecarriedoutincountriesoutsidetheUnitedKingdomwheretransactionsarecarriedoutinthatcountry’sownfunctionalcurrency.MovementsinexchangeratescanthereforehaveasignificantimpactontheGroup’stotalcashflows,whilstthetranslationoftheresults,assetsandliabilitiesofforeignoperationsintosterlingcanhaveasignificanteffectontheGroup’sreportedprofitsandbalancesheet.ThemainexposureistomovementsintheUSDollaragainststerling. TheGroup’spolicyformanagingexchangerateriskissummarisedasfollows:

Transactionexposure–theGroupmanagesthisbyensuringthattransactionsaredenominatedinthelocalfunctionalcurrencyoftheoperatingunitswhereverpossible.Wherethisisnotpossibletheuseofforwardcontractstohedgeexposureisconsidered.Theuseofforwardcontracts(oranyotherderivativefinancialinstrument)issubjecttoauthorisationbytheChiefFinancialOfficer.

Translationexposure–theGroupmatchescurrencyassetswithcurrencyliabilitieswhereverpossible.



ents


ThefollowingtablesummarisestheGroup’ssensitivitytotranslationalcurrencyexposuresat30September:

2017 currency risks expressed in Currency 1/Currency 2£m GBP/USD

Reasonableshift 10%ImpactonprofitaftertaxifCurrency1strengthensagainstCurrency2 (0.3)ImpactonprofitaftertaxifCurrency1weakensagainstCurrency2 0.3ImpactonequityexcludingretainedearningsifCurrency1strengthensagainstCurrency2 0.3ImpactonequityexcludingretainedearningsifCurrency1weakensagainstCurrency2 (0.3)

2016currencyrisksexpressedinCurrency1/Currency2£m GBP/USD

Reasonableshift 10%ImpactonlossaftertaxifCurrency1strengthensagainstCurrency2 (0.5)ImpactonlossaftertaxifCurrency1weakensagainstCurrency2 0.5ImpactonequityexcludingretainedearningsifCurrency1strengthensagainstCurrency2 0.5ImpactonequityexcludingretainedearningsifCurrency1weakensagainstCurrency2 (0.5)

Liquidity riskTheGroupfundsthebusinesslargelyfromcashflowsgeneratedfromoperationsandlong-termdebt.DetailsoftheGroup’sborrowingsaredisclosedinnote18.

TheGroupmonitorsandmanagesthecashfortheGroupandhasmaintainedcommittedbankingfacilitiesasnotedabovetomitigateanyliquidityriskitmayface.Ifnecessary,inter-companyloanswithintheGroupmeetshort-termcashneeds.ThefollowingtableshowstheGroup’sremainingcontractualmaturityforfinancialliabilitiesandderivativefinancialinstruments.ThetablehasbeendrawnupbasedontheundiscountedcashflowsoffinancialliabilitiesbasedontheearliestdateonwhichtheGroupisobligedtopay:

30 September 2017

Less than one year

£m

Between one and two years

£m

Between two and five years

£m

Over five years

£mTotal

£m

Tradepayables (2.5) - - - (2.5)Otherliabilities (12.6) (0.6) (0.9) (0.3) (14.4)Borrowings (3.2) (3.3) (13.6) - (20.1)Derivatives (0.1) - - - (0.1)Total financial liabilities (18.4) (3.9) (14.5) (0.3) (37.1)

30September2016

Less than one year

£m

Between one and two years

£m

Between two and five years

£m

Over five years

£mTotal

£m

Tradepayables (4.4) - - - (4.4)Otherliabilities (9.2) (0.1) (1.0) - (10.3)Borrowings (2.3) (0.1) - - (2.4)Total financial liabilities (15.9) (0.2) (1.0) - (17.1)

79 Future plc


23. Issued share capital

2017Restated

2016

Number of shares £m

Numberofshares £m

Allotted, issued and fully paid Ordinary shares of 15p eachAtbeginningofyear 24,583,908 3.7 22,296,085 3.3Issuedasconsiderationforacquisition 11,971,189 1.8 - -PlacingofOrdinaryshares 8,800,000 1.3 2,229,333 0.4Shareschemeexercises 37,392 - 57,460 -ShareIncentivePlanmatchingshares 325 - 1,030 -At end of year 45,392,814 6.8 24,583,908 3.7

On2February2017,theCompanyissuedonenewOrdinaryshareof15penceforeach15existingOrdinarysharesofonepencefollowingcompletionofashareconsolidation.Prioryearcomparativeshavebeenrestatedonthisbasis.

On21October2016,theCompanyissued11,971,189Ordinaryshareswithanominalvalueof£1,795,678asconsiderationfortheacquisitionofMiura(Holdings)Limited,theholdingcompanyandultimateparentcompanyofImaginePublishingLimited.On7July2017,theCompanycompletedaplacingof8,800,000Ordinaryshareswithanominalvalueof£1,320,000foratotalcashcommitmentof£22,000,000inordertofundthehomeinterestacquisition,furtherdetailsofwhichareshowninnote29.Duringtheyear37,392Ordinaryshareswithanominalvalueof£5,609wereissuedbytheCompanypursuanttoshareschemeexercisesandafurther325OrdinaryshareswereissuedundertheShareIncentivePlanforacombinedtotalcashcommitmentof£40,312,asdetailedinnote24.

In2016theCompanycompletedaplacingof2,229,333Ordinaryshareswithanominalvalueof£334,400foratotalcashcommitmentof£3,344,000,issued57,460Ordinaryshareswithanominalvalueof£8,619pursuanttoshareschemeexercisesandissuedafurther1,030OrdinarysharesundertheShareIncentivePlanforacombinedcashcommitmentof£nil,asdetailedinnote24.

24. Share-based payments

Theincomestatementchargefortheyearforshare-basedpaymentswas£1.8m(2016:£0.5m).Thischargehasbeenincludedwithinadministrationexpenses.

ThesechargesarisewhenemployeesaregrantedawardsundertheGroup’sshareoptionschemes,performanceshareplan(PSP),deferredannualbonusscheme(DABS)orShareIncentivePlan(SIP)andwhenemployeesaregrantedawardsbythetrusteesofTheFutureNetworkplc1999EmployeeBenefitTrust(EBT).ThechargeequatestothefairvalueoftheawardandhasbeencalculatedusingtheMonteCarloandBlack-Scholesmodels,usingthemostappropriatemodelforeachscheme.Assumptionshavebeenmadeinthesemodelsforexpectedvolatility,risk-freeratesanddividendyields.

Areconciliationofmovementsinshareoptionsandothershareincentiveschemesisshownbelow,whereprioryearcomparativeshavebeenrestatedtoreflecttheshareconsolidationinFebruary2017:

2017Number of

options/awards

2017Weighted average

exercise price

Restated2016

Numberofoptions/awards

Restated2016

Weightedaverageexerciseprice

Outstandingatthebeginningoftheyear 1,389,633 £0.049 1,078,814 £0.187Granted 3,956,118 £0.000 787,115 £0.000Shareawardsexercised–newshareissues (37,392) £1.078 (57,460) £0.000Lapsed (1,037,300) £0.026 (418,836) £0.320Outstandingat30September 4,271,059 £0.000 1,389,633 £0.049Exercisableat30September 13,121 £0.000 23,287 £0.000

Theweightedaveragesharepriceatthedateofexerciseofshareoptionsandothershareincentiveawardsduringtheyearwas£2.150(2016:£1.314).



ents

24. Share-based payments (continued)

Foroptionsandothershareincentiveschemesoutstandingat30Septembertheweightedaverageexercisepricesandremainingcontractuallivesareasfollows:

Number of options/awards Weighted average exercise priceWeighted average remaining

contractual life in years

2017Restated

2016 2017Restated

2016 2017 2016

Sharesave PlanDecember2013 - 34,700 £1.950 £1.950 - 1PSPDecember2013 - 143,734 - - - -July2014 166,667 166,667 - - - 1February2015 127,889 247,824 - - - 1May2015 69,799 69,799 - - 1 2August2015 109,856 109,856 - - 1 2November2015 322,894 425,925 - - 1 2September2016 80,525 161,049 - - 2 3November2016 1,546,732 - - - 2 -February2017 1,833,576 - - - 2 -DABSNovember2009 69 69 - - - -December2010 393 393 - - - -January2012 1,686 1,686 - - - -December2012 470 470 - - - -December2013 1,706 6,803 - - - -November2015 8,797 20,658 - - - -Total outstanding at 30 September 4,271,059 1,389,633 - £0.049 2 2

Thefairvaluepershareforgrantsmadeduringtheyearandtheassumptionsusedinthecalculationareasfollows:

2017

PSP PSP DABS PSP PSP

Grantdate 23/11/16 02/02/17 30/11/15 30/11/15 01/09/16Sharepriceatgrantdate £1.3335 £1.7950 £1.6313 £1.6313 £1.3125Exerciseprice - - - - -Vestingperiod(years) 3 3 1 3 3Expectedvolatility 40% 37% 50% 50% 49%Optionlife(years) 3 3 1 3 3Expectedlife(years) 3 3 1 3 3Risk-freerate 0% 0% 0% 1% 0%Dividendyield - - - - -Fairvalue £0.8716 £1.3752 £1.6313 £1.6313 £1.3125Fairvalue–EBITDAelement £1.3335 £1.7950 - - -Fairvalue–sharepriceelement £0.4097 £0.9554 - - -Fairvalue–EPSelement - - - £1.6313 £1.3125Fairvalue–cashelement - - - £1.6313 £1.3125

Notes:1.TheexpectedvolatilityisbasedonFuture’shistoricalvolatility,averagedoveraperiodequaltotheexpectedlife,wherepossible.2.TheGrouphasusedtheBlack-Scholesmodeltovalueinstrumentswithnon-market-basedperformancecriteriasuchasearningspershare.Forinstrumentswithmarket-basedperformancecriteria,notablytotalshareholderreturnandsharepriceperformance,theGrouphasusedaMonteCarlomodeltodeterminethefairvalue.TheBlack-Scholesmodelhasbeenusedtovaluealloptionswiththeexceptionof50%ofcertainPSPgrantswhichhavemarket-basedperformancecriteria;theMonteCarlomodelhasbeenusedtovaluetheseawards.

3.InJuly2017,theperformancecriteriainrespectoftheawardgrantedinJuly2014werechangedfromTSRperformanceandEPSgrowthtonetcashflowandabsoluteEPS.Thefairvalueofthisawardhasbeenrecalculatedasatthedateofthechange.

4.PrioryearcomparativeshavebeenrestatedtoreflecttheshareconsolidationinFebruary2017.

FutureplcoperatesoneshareoptionschemebeingtheFutureplc2010ApprovedSharesavePlan(2010SharesavePlan)andat30September2017therewerenooptionsoutstandingunderthisscheme.

Restated2016

81 Future plc



The 2010 Sharesave Plan (the Sharesave Plan)UndertheSharesavePlantheoptionentitlementgrantedtoparticipatingemployeesislinkedtothemonthlycontributionswhichsuchemployeeshaveagreedtopayintotheSharesavePlan(uptoamaximumamountof£250permonth).TheoptionsgrantedundertheSharesavePlanvestonthethirdanniversaryofthegrantofsuchoptions.Wherelegalandregulatoryconstraintspermit,theCompanyusesitsdiscretiontoofferoptionsgrantedundertheSharesavePlanatadiscounttothemarketpriceinforceatthedateoftheinvitationbeingmade.

Other share-based paymentsNofurthershareoptionsaretobegranted.Instead,theGrouphasputintoplaceanumberofalternativeshareincentiveschemes.

Performance Share Plan (PSP)ThePSPisashare-basedincentiveschemeopentotheexecutiveDirectorsandcertainotherkeyemployees,usuallybasedonapercentageoftheparticipant’ssalary.Awardsunderthisschemearesubjecttostretchingperformancecriteriameasuredagainstacombinationofearningspershare(EPS),totalshareholderreturn(TSR),netcashflow,adjustedEBITDAorsharepriceperformance,dependingonthedateofgrant.UnlesstheRemunerationCommitteedecidesotherwiseatthedateofgrant,awardswillvestthreeyearsafterthedateofgrantsubjecttotheparticipant’scontinuedemploymentwithintheGroupandachievementofthefollowingperformancecriteria:

PerformancecriteriainrespectofawardsgrantedinDecember2013

•Amaximumof50%ofanawardwillvestiftheGroup’sgrowthinadjustedEPSisequaltoRPIplus8%,0%willvestiftheGroup’sgrowthinadjustedEPSisequaltoRPIplus3%,andvestingwillbeonaproratastraight-linebasisbetweenthetwo.IfgrowthintheGroup’sadjustedEPSislessthanRPIplus3%,noneofthat50%oftheawardwillvest.

•Theremaining50%oftheawardwillvestiftheCompany’sTSRperformance,comparedtoagroupofsimilarcompanies,placesitinthetopquintileasagainstthecomparatorcompanies.IftheCompany’sTSRperformanceismedian,12.5%oftheawardwillvest,andvestingwillbeonaproratastraight-linebasisbetweenthetwopoints.IftheCompany’sperformanceisbelowmedian,noneofthat50%oftheawardwillvest.

Performancecriteriainrespectofawardsgrantedbetween16July2014and29November2015

InJuly2017,theRemunerationCommitteeexerciseditsdiscretiontochangetheperformancecriteriainrespectoftheawardgrantedinJuly2014fromTSRperformanceandEPSgrowthtonetcashflowandabsoluteEPSinordertoaligntheperformancecriteriaforawardsmadetotheexecutiveDirectors.TheCommitteealsoextendedthevestingdateoftheawardfrom16July2017to27November2017.Theperformancecriteriaareasfollows:

•Amaximumof50%ofanawardwillvestiftheGroup’sadjustedEPSfortheyearended30September2017(thelastfinancialyearoftheperformanceperiod)is21.0p,12.5%willvestiftheGroup’sadjustedEPSis15.0p,andvestingwillbeonaproratastraight-linebasisbetweenthetwo.IftheGroup’sadjustedEPSisbelow15.0p,noneofthat50%oftheawardwillvest.

•Theremaining50%oftheawardwillvestiftheGroup’snetcashflowfortheyearended30September2017(thelastfinancialyearoftheperformanceperiod)is£1.25m,12.5%willvestiftheGroup’snetcashflowis£0.25m,andvestingwillbeonaproratastraight-linebasisbetweenthetwo.IftheGroup’snetcashflowisbelow£0.25m,noneofthat50%oftheawardwillvest.

Performancecriteriainrespectofawardsgrantedbetween30November2015and30September2016

•Amaximumof50%ofanawardwillvestiftheGroup’sadjustedEPSfortheyearended30September2018(thelastfinancialyearoftheperformanceperiod)is22.5p,12.5%willvestiftheGroup’sadjustedEPSis18.0p,andvestingwillbeonaproratastraight-linebasisbetweenthetwo.IftheGroup’sadjustedEPSisbelow18.0p,noneofthat50%oftheawardwillvest.

•Theremaining50%oftheawardwillvestiftheGroup’snetcashflowfortheyearended30September2018(thelastfinancialyearoftheperformanceperiod)is£0.75m,12.5%willvestiftheGroup’snetcashflowis£(0.25)m,andvestingwillbeonaproratastraight-linebasisbetweenthetwo.IftheGroup’snetcashflowisbelow£(0.25)m,noneofthat50%oftheawardwillvest.

Performancecriteriainrespectofawardsgrantedduringtheyearended30September2017

•25%oftheawardwillvestiftheGroup’sadjustedEBITDAfortheyearended30September2017isatorabovetarget.IftheGroup’sadjustedEBITDAisbelowtarget,noneofthat25%oftheawardwillvest.

•25%oftheawardwillvestiftheGroup’sadjustedEBITDAfortheyearending30September2018isatorabovetarget.IftheGroup’sadjustedEBITDAisbelowtarget,noneofthat25%oftheawardwillvest.

•25%oftheawardwillvestiftheCompany’ssharepriceperformanceintheperiodfromthedateofgrantto30September2018isatorabovetarget.IftheCompany’ssharepriceperformanceisbelowtarget,noneofthat25%oftheawardwillvest.

•25%oftheawardwillvestiftheCompany’ssharepriceperformanceintheperiodfromthedateofgrantto30September2019isatorabovetarget.IftheCompany’ssharepriceperformanceisbelowtarget,noneofthat25%oftheawardwillvest.

GrantsweremadeunderthePSPinNovember2015,September2016,November2016andFebruary2017.

Deferred Annual Bonus Scheme (DABS)TheDABSisashare-basedincentiveschemeopentotheexecutiveDirectorsandcertainmanagersacrosstheGroup.ThemaximumvalueofanysharesgrantedundertheDABStoanyoneparticipantwillbeanamountwhichisequaltoafixedpercentageofthateligibleparticipant’sannualbonusforthepreviousfinancialyear.ThenumberofsharesoverwhichanawardistobegrantedtoeachparticipantwillusuallybecalculatedbyreferencetothemarketvalueofanOrdinaryshareintheCompanyonthedateoftheaward.UnlesstheRemunerationCommitteedecidesotherwiseatthedateof



ents


grant,thesharesawardedundertheDABSwillvestsixmonthsafterthedateoftheaward,subjectonlytotheemployeeremainingintheemploymentoftheGroupthroughoutthevestingperiod.

AgrantwasmadeundertheDABSinNovember2015.

Share Incentive Plan (SIP)TheSIPisopentoallUKemployeesincludingtheexecutiveDirectors.Itisataxefficientincentiveplanpursuanttowhichemployeesareeligibletoacquireupto£150(or10%ofsalary,ifless)worthofOrdinarysharesintheCompanypermonthor£1,800perannum.UndertheSIPemployeesareinvitedtosubscribeforPartnershipsharesviasalarydeductions.IfanemployeeagreestobuyPartnershipsharestheCompanycurrentlymatchesthenumberofPartnershipsharesboughtwithanawardofMatchingsharesonthebasisofoneMatchingshareforeveryfourPartnershipshares.MatchingshareawardstodatehavebeenmetbytheissueofOrdinarysharestoYorkshireBuildingSocietyasTrusteeoftheSIP.

25. Reserves

Share premium accountSharepremiumrepresentstheexcessofproceedsreceivedoverthenominalvalueofnewsharesissued.

Group and Company

2017£m

2016£m

At1October 27.6 24.8Premiumarisingonissueofequityshares 20.7 3.0Costsofshareissue (0.9) (0.2)At 30 September 47.4 27.6

Treasury reserveThetreasuryreserverepresentsthecostofsharesinFutureplcpurchasedinthemarketandheldbytheEBTtosatisfyawardsmadebythetrustees.

Group 2017

£m

Group 2016£m

At1Octoberand30September (0.3) (0.3)

The95,123(2016restated:95,123)sharesheldbytheEBTrepresent0.2%(2016:0.4%)oftheCompany’sissuedsharecapital.Thetreasuryreserveisnon-distributable.

Merger reserve

Group2017

£m

Company2017

£m

Group2016£m

Company2016£m

At1October 109.0 - 109.0 -Premiumarisingonequitysharesissuedasconsideration 13.6 13.6 - -Costsofshareissue (0.1) (0.1) - -At 30 September 122.5 13.5 109.0 -

ThemovementinthemergerreserveduringtheyearrelatestothepremiumonsharesissuedasconsiderationfortheacquisitionofMiura(Holdings)LimitedinOctober2016.Furtherdetailsoftheacquisitionaresetoutinnote29.

ThebroughtforwardbalanceintheGroupmergerreserveof£109.0m(2016:£109.0m)arosefollowingthe1999Groupreorganisationandisnon-distributable.

26. Pensions

TheGroupoperatesadefinedcontributionschemeforemployeesresidentintheUnitedKingdom.

IntheUS,theGroupoperatesasection401(K)profitsharingdefinedcontributionplaninrespectofpensions,whichcoverssubstantiallyallFutureUSemployees.Thesection401(K)planallowsemployeestoinvestin29registeredmutualfundssupportedbyT.RowePrice,theplan’sserviceprovider.Theemployees,nottheemployer,havecompletecontroloverwhichfundstheyinvestin,althoughtheyhavenocontroloverthestocksownedbythefunds.

Duringtheyear,£0.6m(2016:£0.7m)contributionsweremadetotheseplansandat30September2017theoutstandingbalanceduetobepaidovertotheplanswas£0.1m(2016:£0.1m).

83 Future plc


27. Commitments and contingent liabilities

(a) Operating lease commitmentsAt30September2017,theGrouphadthefollowingtotalfutureleasepaymentsundernon-cancellableoperatingleases:

Land and buildings

£mOther

£m

Total2017

£m

Landandbuildings

£mOther

£m

Total2016£m

Withinoneyear 2.1 - 2.1 2.2 - 2.2Betweenoneandfiveyears 7.4 - 7.4 6.4 - 6.4Afterfiveyears 6.5 - 6.5 7.0 - 7.0Total 16.0 - 16.0 15.6 - 15.6

Futureminimumsub-leasereceiptsexpectedundernon-cancellablesubleasesat30September2017total£0.8m(2016:£1.8m).

Duringtheyear,£1.7m(2016:£1.6m)wasrecognisedintheincomestatementinrespectofoperatingleaserentalpaymentsand£0.2m(2016:£0.4m)wasrecognisedinrespectofsub-leasereceipts.

TheGroupleasesvariousofficesundernon-cancellableoperatingleaseagreements.Theleaseshavevariousterms,escalationclausesandrenewalrights.TheGroupalsoleasesotherequipmentundernon-cancellableoperatingleaseagreements.

(b) Contingent liabilitiesTherearenocontingentliabilitiesexpectedtoresultinamateriallossfortheGroup.

(c) Capital commitmentsTherewerenomaterialcapitalcommitmentsasat30September2017(2016:£nil).

28. Related party transactions

TheGrouphadnomaterialtransactionswithrelatedpartiesin2017or2016whichmightreasonablybeexpectedtoinfluencedecisionsmadebyusersofthesefinancialstatements.

Duringtheyear,theCompanyhadmanagementchargespayableof£0.9m(2016:£0.5m)tosubsidiaryundertakings.Theoutstandingbalanceowedat30September2017was£0.9m(2016:£0.5m).

29. Acquisitions

Acquisition of Miura (Holdings) LimitedOn21October2016,Futureplcacquired100%ofthesharecapitalofMiura(Holdings)Limited,theholdingcompanyandultimateparentcompanyofImaginePublishingLimited,fortotalconsiderationof11,971,189newsharesintheCompanywhich,attheclosingpriceof129pon21October2016,representsconsiderationof£15.4m.

Theimpactoftheacquisitionontheconsolidatedbalancesheetwas:

Provisional fair value

£m

Intangibleassets-Publishingrights 6.8-Brands 2.0-Otherintangibles 0.1

Tangibleassets 0.1Inventories 0.3Tradeandotherreceivables 2.7Cashandcashequivalents 1.7Tradeandotherpayables (6.3)Corporationtax (0.1)Deferredtax (1.5)Loansandborrowings (6.9)Net liabilities acquired (1.1)Goodwill 16.6

15.5Consideration:Equityshares 15.4Cash 0.1Total consideration 15.5



ents

29. Acquisitions (continued)

ThegoodwillisattributabletothesynergiesexpectedtoariseinintegratingthemagazinesintothewiderFuturegroupandthroughcombiningproductionandbackofficefunctions.Thepublishingrightsandbrandswillbeamortisedoverperiodsoffiveandtenyearsrespectively.

IncludedwithintheGroup’sresultsfortheyeararerevenuesof£14.8mandstatutoryprofitbeforetaxfortheperiodof£2.0m(excludingdealfeesandassociatedintegrationcosts)fromMiura(Holdings)Limitedanditssubsidiaries.

Iftheacquisitionhadbeencompletedonthefirstdayofthefinancialyear,itwouldhavecontributed£15.3mofrevenueandstatutoryprofitbeforetaxof£2.0mduringtheyear.

Acquisition of Ascent Publishing Limited and Centaur Consumer Exhibitions Limited (“home interest”)On1August2017,Futureplcacquired100%ofthesharecapitalofbothAscentPublishingLimitedandCentaurConsumerExhibitionsLimitedfortotalconsiderationof£32.8m.



£m

Intangibleassets-Publishingrights 3.9-Brands 4.7-Customerlists 6.9

Inventories 0.1Tradeandotherreceivables 4.6Tradeandotherpayables (4.5)Deferredtax (2.6)Provisions (0.1)Net assets acquired 13.0Goodwill 19.8

32.8Consideration:Cash 32.8Total consideration 32.8

ThegoodwillisattributabletothesynergiesexpectedtoariseinintegratingthemagazinesandeventsintothewiderFuturegroup.Thepublishingrights,brandsandcustomerlistswillbeamortisedoverperiodsoffive,tenandeightyearsrespectively.

IncludedwithintheGroup’sresultsfortheyeararerevenuesof£2.5mandstatutoryprofitbeforetaxfortheperiodof£0.4m(excludingdealfeesandassociatedintegrationcosts)fromhomeinterest.

Iftheacquisitionhadbeencompletedonthefirstdayofthefinancialyear,itwouldhavecontributed£13.2mofrevenueandstatutoryprofitbeforetaxof£2.0mduringtheyear.

85 Future plc


29. Acquisitions (continued)

Acquisition of Team RockOn6January2017,FuturePublishingLimitedacquiredcertainassetsfromTeamRockLimitedforcashconsiderationof£0.8m.



£m

Intangibleassets-Publishingrights 1.2

Tradeandotherpayables (0.4)Deferredtax (0.2)Net assets acquired 0.6Goodwill 0.2

0.8Consideration:Cash 0.8Total consideration 0.8

ThegoodwillisattributabletothesynergiesexpectedtoariseinintegratingthemagazinesandwebsitesintothewiderFuturegroup.Thepublishingrightswillbeamortisedoveraperiodoffiveyears.

IncludedwithintheGroup’sresultsfortheyeararerevenuesof£3.2mandstatutoryprofitbeforetaxfortheperiodof£0.6m(excludingdealfeesandassociatedintegrationcosts)fromtheTeamRockassets.

Iftheacquisitionhadbeencompletedonthefirstdayofthefinancialyear,itwouldhavecontributed£4.8mofrevenueandstatutoryprofitbeforetaxof£1.0mduringtheperiod.

Acquisition of Next Commerce Pty LtdOn15August2016,FuturePublishing(Overseas)Limitedacquired100%ofthesharecapitalofNextCommercePtyLtd.Theconsiderationpayableincludeddeferredconsiderationofupto£0.6m,intheformofsharesinFutureplc,payableby24January2017basedonrevenueperformance.At30September2016theprovisionalfairvalueofdeferredconsiderationwasmeasuredat£0.6m.InJanuary2017,FuturePublishing(Overseas)Limitedagreedwiththesellerstopaydeferredconsiderationof£0.7mincashinsteadofsharesinFutureplc.Asthischangetodeferredconsiderationoccurredwithinoneyearofthedateofacquisition,theprovisionalfairvalueofgoodwillrecognisedat30September2016hasbeenadjusted,asdetailedbelow:

Provisional fair value at 30 September 2016

£mFair value adjustment

£m

Fair value at 30 September 2017

£m

Goodwill 0.6 0.1 0.7

Acquisition of Blaze PublishingOn12May2016,FuturePublishingLimitedacquiredcertainassetsfromBlazePublishingLimitedforcashconsiderationof£0.4m.Theconsiderationpayableincludeddeferredconsiderationofupto£0.3mpayableby12May2017basedongrosscontributiontargets.At30September2016theprovisionalfairvalueofdeferredconsiderationwasmeasuredat£0.3m.Duringtheyearended30September2017itwasdeterminedthatnodeferredconsiderationwaspayable.Asthischangetodeferredconsiderationoccuredwithinoneyearofthedateofacquisition,theprovisionalfairvalueofgoodwillrecognisedat30September2016hasbeenadjusted,asdetailedbelow:

Provisional fair value at 30 September 2016

£mFair value adjustment

£m

Fair value at 30 September 2017

£m

Goodwill 0.6 (0.3) 0.3

Acquisition of Noble House Media LimitedOn5April2016,FuturePublishingLimitedacquired100%ofthesharecapitalofNobleHouseMediaLimitedforcashconsiderationof£0.1m.



ents

30. Subsidiary undertakings

DetailsoftheCompany’ssubsidiariesat30September2017aresetoutbelow.Allsubsidiariesareincludedintheconsolidation.Sharesofthosecompaniesmarkedwithan*areindirectlyownedbyFutureplcthroughanintermediateholdingcompany.

Company name and registered number

Country of incorporation and

registered office Nature of business Holding % Class of shares

A&SPublishingCompanyLimited*01584580 EnglandandWales1 Non-trading 100 £1Ordinaryshares

AscentPublishingLimited*02561341 EnglandandWales1 Non-trading 100 £1Ordinaryshares

CentaurConsumerExhibitionsLimited*07276298 EnglandandWales1 Non-trading 100 £1Ordinaryshares

Fascination(Holdings)Limited*08464940 EnglandandWales1 Holdingcompany 100 £1Ordinaryshares

FutureHoldings2002Limited04387886 EnglandandWales1 Holdingcompany 100 £1Ordinaryshares

FuturePublishingLimited*02008885 EnglandandWales1 Publishing 100 £1Ordinaryshares

FuturePublishing(Overseas)Limited*06202940 EnglandandWales1 Publishing 100 £1Ordinaryshares

FuturePublishingHoldingsLimited03430449 EnglandandWales1 Holdingcompany 87.5 1penceOrdinaryshares

FutureUS,Inc*0513070 USA(StateofCalifornia)2 Publishing 100 Notapplicable

FutureVerlagGmbH*HRB125675 Germany3 Non-trading 87.5 €1Ordinaryshares

FutureFolioLimited*07956484 EnglandandWales1 Digitalpublishingsolutions 100 £1Ordinaryshares

ImaginePublishingGroupLimited*07375965 EnglandandWales1 Holdingcompany 100 1penceOrdinaryshares

ImaginePublishingLimited*05374037 EnglandandWales1 Non-trading 100 1penceOrdinaryshares

Miura(Holdings)Limited08464815 EnglandandWales1 Holdingcompany 100 £1Ordinaryshares

NextCommercePhilippinesInc*CS201517783 Philippines4 Dormant 100 ₱1Ordinaryshares

NextCommercePtyLtd*113 146 786 Australia5 Comparisonshopping

searchengine 100 $1Ordinaryshares

PricepandaGroupGmbH*HRB138471B Germany6 Dormant 100 €1Ordinaryshares

RhoHoldingsLimited00040056 Guernsey7 Investmentcompany 100 £1Ordinaryshares

SarraceniaLimited04582851 EnglandandWales1 Dormant 100 £1Ordinaryshares

Skaro(Holdings)Limited*08469998 EnglandandWales1 Holdingcompany 100 £1Ordinaryshares

1Registeredoffice:QuayHouse,TheAmbury,Bath,BA11UA,England2Registeredoffice:1390MarketSt,Suite200,SanFrancisco,CA94102,USA3Registeredoffice:c/oPorubaGbR,Clemensstraße32,80803Munich,Germany4Registeredoffice:2/FGCCorporatePlaza,150LegaspiStreet,LegaspiVillage,Makati,Manila,Philippines5Registeredoffice:Suite3,Level10,100WalkerStreet,NorthSydney,NSW2060,Australia6Registeredoffice:Charlottenstraße4,10969Berlin,Germany7Registeredoffice:AquitaineGroupLimited,POBox357,MillCourt,LaCharroterie,StPeterPort,GY13XH,Guernsey

A&SPublishingCompanyLimited,AscentPublishingLimited,CentaurConsumerExhibitionsLimited,Fascination(Holdings)Limited,FutureHoldings2002Limited,FuturePublishingLimited,FutureFolioLimited,ImaginePublishingGroupLimited,ImaginePublishingLimited,Miura(Holdings)LimitedandSkaro(Holdings)LimitedareexemptfromtherequirementtofileauditedfinancialstatementsbyvirtueofSection479AoftheCompaniesAct2006.SarraceniaLimitedisexemptfromtherequirementtofileauditedfinancialstatementsbyvirtueofSection480oftheCompaniesAct2006.

87 Future plc

Notice of Annual General Meeting

Ordinary Business

Ordinary resolutions

1. ToreceiveandadopttheauditedfinancialstatementsoftheCompanyforthefinancialyearended30September2017andthereportsoftheDirectorsandtheauditors(the“AnnualReport”).

2. ToapprovetheDirectors’remunerationimplementationreportassetoutinpages30to36oftheAnnualReportoftheCompanyforthefinancialyearended30September2017.

3.ToapprovetheamendmentstotheRemunerationpolicyforthethreeyearperiodcommencingon1October2016assetoutinpages38to41oftheAnnualReportoftheCompany.

4.ToelectasaDirectorRichardHuntingford.

5. Tore-electasaDirectorZillahByng-Thorne.

6. Tore-electasaDirectorPennyLadkin-Brand.

7.Tore-electasaDirectorHugoDrayton.

8.Tore-electasaDirectorJamesHanbury.

9.ToreappointPricewaterhouseCoopersLLP,CharteredAccountantsandRegisteredAuditors,asauditorsoftheCompanytoholdofficeuntiltheconclusionofthenextGeneralMeetingatwhichaccountsarelaidbeforetheCompany.

10.ToauthorisetheDirectorstodeterminetheremunerationoftheauditorsoftheCompany.

11.That,insubstitutionforanyexistingauthority,theDirectorsbeandareherebygenerallyandunconditionallyauthorisedinaccordancewithsection551oftheCompaniesAct2006(the‘Act’)toexerciseallthepowersoftheCompanytoallotsharesintheCompanyandtograntrightstosubscribefor,ortoconvertanysecurityinto,sharesintheCompany:

11.1 inconnectionwithanofferbywayofarightsissue(comprisingequitysecuritiesasdefinedbysection560oftheAct),uptoanaggregatenominalamountof£4,565,590(suchamounttobereducedbythenominalamountofanyrelevantsecuritiesallottedunderparagraph11.2below):

(a) toholdersofOrdinarysharesinthecapitaloftheCompanyinproportion(asnearlyasmaybepracticable)totheirrespectiveholdingsofOrdinarysharesinthecapitaloftheCompany;and

(b) toholdersofanyotherequitysecuritiesasrequiredbytherightsofthosesecuritiesorastheDirectorsotherwiseconsidernecessary,

butsubjecttosuchexclusionsorotherarrangementsastheBoardmaydeemnecessaryorexpedientinrelationtotreasuryshares,fractionalentitlements,recorddates,legalorpracticalproblemsinorunderthelawsofanyterritory,ortherequirementsofanyregulatorybodyorstockexchange;and

11.2 inanyothercase,uptoanaggregatenominalamountof£2,282,795(suchamounttobereducedbythenominalamountofanyequitysecuritiesallottedunderparagraph11.1aboveinexcessof£2,282,795),atanytimeortimesduringtheperiodbeginningonthedateofthepassingofthisresolutionandendingfollowingtheconclusionoftheCompany’snextAnnualGeneralMeeting

or,ifearlier,on31March2019(unlesspreviouslyrevokedorvariedbytheCompanyinGeneralMeeting)savethattheCompanymaybeforeexpiryofthisauthoritymakeanofferoragreementwhichwouldormightrequirerelevantsecuritiestobeallottedafteritsexpiryandtheDirectorsmayallotrelevantsecuritiespursuanttosuchanofferoragreementasiftheauthorityherebyconferredhadnotexpired.

12.ToauthorisetheCompany,andallcompaniesthatareitssubsidiaries,atanytimeduringtheperiodforwhichthisresolutionhaseffectforthepurposesofSection366oftheActto:

(a) makepoliticaldonationstopoliticalpartiesand/orindependentelectioncandidatesnotexceeding£50,000intotal;

(b)makepoliticaldonationstopoliticalorganisationsotherthanpoliticalpartiesnotexceeding£50,000intotal;and

(c)incurpoliticalexpenditurenotexceeding£50,000intotal,

duringtheperiodbeginningwiththedateofthepassingofthisresolutionandendingfollowingtheconclusionoftheCompany’snextAnnualGeneralMeetingor,ifearlier,on31March2019.

ThisNoticeofMeetingisimportantandrequiresyourimmediateattention.

Ifyouareinanydoubtastowhatactionyoushouldtake,youshouldconsultyourstockbroker,bankmanager,solicitor,accountantorotherindependentadviserauthorisedundertheFinancialServicesandMarketsAct2000.

IfyouhavesoldorotherwisetransferredallyoursharesinFutureplc,pleaseforwardthisnotice,togetherwiththeaccompanyingdocuments,assoonaspossibleeithertothepurchaserortransferee,ortothepersonwhoarrangedthesaleortransfersothattheycanpassthesedocumentstothepurchaserortransferee.


NoticeisherebygiventhatthenineteenthAnnualGeneralMeetingofFutureplcwillbeheldonMonday5February2018atFuture’sLondonoffice,1-10PraedMews,LondonW21QYat10:30amatwhichthefollowingresolutionsnumbered1to12willbeproposedasordinaryresolutions,andresolutionsnumbered13to15willbeproposedasspecialresolutions.

88Annual Report and Accounts 2017Financial Statem

ents

Special resolutions

13.That,ifresolution11ispassed,theDirectorsbeauthorisedtoallotequitysecurities(asdefinedinsection560oftheAct)forcashundertheauthoritygivenbythatresolution(inaccordancewithsection570(1)oftheAct)and/ortosellOrdinarysharesheldbytheCompanyastreasuryshares(inaccordancewithsection573oftheAct)forcashasifsection561(1)oftheActdidnotapplytoanysuchallotmentorsale,suchauthoritytobelimitedto:

(a) theallotmentofequitysecuritiesinconnectionwithanofferof,orinvitationtoapplyfor,equitysecurities(butinthecaseoftheauthoritygrantedunderparagraph11.1ofresolution11,bywayofarightsissueonly):

(i) infavourofholdersofOrdinarysharesinthecapitaloftheCompany,wheretheequitysecuritiesrespectivelyattributabletotheinterestsofallsuchholdersareproportionate(asnearlyaspracticable)totherespectivenumberofOrdinarysharesinthecapitaloftheCompanyheldbythem;and

(ii) toholdersofanyotherequitysecuritiesasrequiredbytherightsofthosesecuritiesorastheDirectorsotherwiseconsidernecessary,

butsubjecttosuchexclusionsorotherarrangementsastheDirectorsmaydeemnecessaryorexpedienttodealwithtreasuryshares,fractionalentitlementsorlegal,regulatoryorpracticalproblemsarisingunderthelawsorrequirementsofanyoverseasterritoryorbyvirtueofsharesbeingrepresentedbydepositoryreceiptsortherequirementsofanyregulatorybodyorstockexchangeoranyothermatterwhatsoever;and

(b)theallotment,otherwisethanpursuanttosub-paragraph(a)above,ofequitysecuritiesuptoanaggregatenominalvalueequalto£342,420,

suchauthoritytoexpireattheendofthenextAGMoftheCompanyor,ifearlier,atthecloseofbusinesson31March2019(unlesspreviouslyrevokedorvariedbytheCompanyinGeneralMeetingbut,ineachcase,priortoitsexpirytheCompanymaymakeoffers,andenterintoagreements,whichwould,ormight,requireequitysecuritiestobeallotted(andtreasurysharestobesold)aftertheauthorityexpiresandtheBoardmayallotequitysecurities(andselltreasuryshares)underanysuchofferoragreementasiftheauthorityhadnotexpired.

14. That,ifresolution11ispassed,theBoardbeauthorisedinadditiontoanyauthoritygrantedunderresolution13toallotequitysecurities(asdefinedinsection560oftheAct)forcashundertheauthoritygivenbythatresolution(inaccordancewithsection570(1)oftheAct)and/ortosellOrdinarysharesheldbytheCompanyastreasuryshares(inaccordancewithsection573oftheAct)forcashasifsection561(1)oftheActdidnotapplytoanysuchallotmentorsale,suchauthoritytobe:

a) limitedtotheallotmentofequitysecuritiesorsaleoftreasurysharesuptoanominalamountof£342,420;and

b) usedonlyforthepurposesoffinancing(orrefinancing,iftheauthorityistobeusedwithinsixmonthsaftertheoriginaltransaction)atransactionwhichtheBoardoftheCompanydeterminestobeanacquisitionorothercapitalinvestmentofakindcontemplatedbytheStatementofPrinciplesonDisapplyingPre-EmptionRightsmostrecentlypublishedbythePre-EmptionGrouppriortothedateofthisnotice,

suchauthoritytoexpireattheendofthenextAGMoftheCompanyor,ifearlier,atthecloseofbusinesson31March2019but,ineachcase,priortoitsexpirytheCompanymaymakeoffers,andenterintoagreements,whichwould,ormight,requireequitysecuritiestobeallotted(andtreasurysharestobesold)aftertheauthorityexpiresandtheBoardmayallotequitysecurities(andselltreasuryshares)underanysuchofferoragreementasiftheauthorityhadnotexpired.

15. Thatageneralmeeting,otherthananAnnualGeneralMeeting,maybecalledonnotlessthan14cleardays’notice.

OnbehalfoftheBoard

Penny Ladkin-BrandChiefFinancialOfficerandCompanySecretary8December2017


89 Future plc

Notes

Further information about the AGM

1. Informationregardingthemeeting,includingtheinformationrequiredbysection311AoftheAct,isavailablefrom:www.futureplc.com/invest-in-future

Attendance at the AGM

2. Ifyouwishtoattendthemeetinginperson,pleasebringtheattendancecardattachedtoyourformofproxyandarriveatFuture’sLondonoffice,1-10PraedMews,LondonW21QY,insufficienttimeforregistration.Appointmentofaproxydoesnotprecludeamemberfromattendingthemeetingandvotinginperson.Ifamemberhasappointedaproxyandattendsthemeetinginperson,theproxyappointmentwillautomaticallybeterminated.

Appointment of proxies

3. Anymemberentitledtoattendandvoteatthemeetingmayappointoneormoreproxiestoattend,speakandvoteintheirplace.Amembermayappointmorethanoneproxyprovidedthateachproxyisappointedtoexercisetherightsattachedtoadifferentshareorsharesheldbythatshareholder.Ifyouappointmultipleproxiesforanumberofsharesinexcessofyourholding,theproxyappointmentsmaybetreatedasinvalid.AproxyneednotbeamemberoftheCompany.Aproxycardisenclosed.Tobeeffective,proxycardsshouldbecompletedinaccordancewiththesenotesandthenotestotheproxyform,signedandreturnedsoastobereceivedbytheCompany’sRegistrars:

ComputershareInvestorServicesPLC,ThePavilions,BridgwaterRoad,BristolBS996ZY notlaterthan10:30amonThursday1February2018beingtwobusinessdaysbeforethetimeappointedfortheholdingofthemeeting.Ifyousubmitmorethanonevalidproxyappointment,theappointmentreceivedlastbeforethelatesttimeforthereceiptofproxieswilltakeprecedence.

Electronic appointment of proxies

4. Asanalternativetocompletingtheprintedproxyform,youmayappointaproxyelectronicallybyvisitingthefollowingwebsite:www.investorcentre.co.uk/eproxy.

YouwillbeaskedtoentertheControlNumber,theShareholderReferenceNumber(SRN)andPINasprintedonyourproxyformandtoagreetocertaintermsandconditions.Tobeeffective,electronicappointmentsmusthavebeenreceivedbytheCompany’sRegistrarsnotlaterthan10:30amonThursday1February2018.

Number of shares in issue

5. Asatthecloseofbusinesson8December2017(beingthelastbusinessdaypriortothepublicationofthisnotice)theCompany’sissuedsharecapitalconsistedof45,655,967Ordinarysharesof15penceeach.EachOrdinarysharecarriesonevote.Therearenosharesheldintreasury.ThetotalnumberofvotingrightsintheCompanyistherefore45,655,967.

Documents available for inspection

6. PrintedcopiesoftheservicecontractsoftheCompany’sDirectorsandthelettersofappointmentforthenon-executiveDirectorswillbeavailableforinspectionduringusualbusinesshoursonanyweekday(Saturdays,Sundaysandpublicholidaysexcluded)attheCompany’sLondonofficeat

1-10PraedMews, London, W21QY

andattheCompany’sregisteredofficeat QuayHouse, TheAmbury, Bath, BA11UA

includingonthedayofthemeetingfrom 10:15amuntilitscompletion.

Eligible shareholders

7. TheCompany,pursuanttoRegulation41ofTheUncertificatedSecuritiesRegulations2001,specifiesthatonlythosemembersontheregisteroftheCompanyasat6pmonThursday1February2018or,ifthismeetingisadjourned,intheregisterofmembers48hoursbeforethetimeofanyadjournedmeeting,shallbeentitledtoattendandvoteatthemeetinginrespectofthenumberofsharesregisteredintheirnameatthattime.ChangestoentriesontheRegisterafter6pmonThursday1February2018or,ifthismeetingisadjourned,intheregisterofmembers48hoursbeforethetimeofanyadjournedmeeting,shallbedisregardedindeterminingtherightsofanypersontoattendorvoteatthemeeting.

Indirect investors

8. Anypersontowhomthisnoticeissentwhoisapersonthathasbeennominatedundersection146oftheActtoenjoyinformationrights(a‘NominatedPerson’)doesnothavearighttoappointaproxy.However,aNominatedPersonmay,underanagreementwiththeregisteredshareholderbywhomtheywerenominated(a‘RelevantMember’),havearighttobeappointed(ortohavesomeoneelseappointed)asaproxyforthemeeting.Alternatively,ifaNominatedPersondoesnothavesucharight,ordoesnotwishtoexerciseit,theymayhavearightunderanysuchagreementtogiveinstructionstotheRelevantMemberastotheexerciseofvotingrights.

ANominatedPerson’smainpointofcontactintermsoftheirinvestmentintheCompanyremainstheRelevantMember(or,perhaps,theNominatedPerson’scustodianorbroker)andtheNominatedPersonshouldcontinuetocontactthem(andnottheCompany)regardinganychangesorqueriesrelatingtotheNominatedPerson’spersonaldetailsandtheirinterestintheCompany(includinganyadministrativematters).TheonlyexceptiontothisiswheretheCompanyexpresslyrequestsaresponsefromtheNominatedPerson.

Appointment of proxies through CREST

9. CRESTmemberswhowishtoappointaproxyorproxiesthroughtheCRESTelectronicproxyappointmentservicemaydosoforthemeetingandanyadjournment(s)thereofbyusingtheproceduresdescribedintheCRESTManual.CRESTpersonalmembersorotherCRESTsponsoredmembers,andthoseCRESTmemberswhohaveappointedavotingserviceprovider(s),shouldrefertotheirCRESTsponsororvotingserviceprovider(s),whowillbeabletotaketheappropriateactionontheirbehalf.

InorderforaproxyappointmentorinstructionmadeusingtheCRESTservicetobevalid,theappropriateCRESTmessage(a‘CRESTProxyInstruction’)mustbeproperlyauthenticatedinaccordancewithEuroclearUK&IrelandLimited’sspecificationsandmustcontaintheinformationrequiredforsuchinstructions,asdescribedintheCRESTManual.Themessage,regardlessofwhetheritconstitutestheappointmentofaproxyoranamendmenttotheinstructiongiventoapreviouslyappointedproxymust,inordertobevalid,betransmittedsoastobereceivedbytheissuer’sagent(ID3RA50)by10:30amonThursday1February2018or,ifthemeetingisadjourned,notlessthan48hoursbefore



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thetimefixedfortheadjournedmeeting.Forthispurpose,thetimeofreceiptwillbetakentobethetime(asdeterminedbythetimestampappliedtothemessagebytheCRESTApplicationsHost)fromwhichtheissuer’sagentisabletoretrievethemessagebyenquirytoCRESTinthemannerprescribedbyCREST.AfterthistimeanychangeofinstructionstoproxiesappointedthroughCRESTshouldbecommunicatedtotheappointeethroughothermeans.

CRESTmembersand,whereapplicable,theirCRESTsponsorsorvotingserviceprovidersshouldnotethatEuroclearUK&IrelandLimiteddoesnotmakeavailablespecialproceduresinCRESTforanyparticularmessages.NormalsystemtimingsandlimitationswillthereforeapplyinrelationtotheinputofCRESTProxyInstructions.ItistheresponsibilityoftheCRESTmemberconcernedtotake(or,iftheCRESTmemberisaCRESTpersonalmemberorsponsoredmemberorhasappointedavotingserviceprovider(s),toprocurethathisCRESTsponsororvotingserviceprovider(s)take(s))suchactionasshallbenecessarytoensurethatamessageistransmittedbymeansoftheCRESTsystembyanyparticulartime.Inthisconnection,CRESTmembersand,whereapplicable,theirCRESTsponsorsorvotingserviceprovidersarereferred,inparticular,tothosesectionsoftheCRESTManualconcerningpracticallimitationsoftheCRESTsystemandtimings. TheCompanymaytreatasinvalidaCRESTProxyInstructioninthecircumstancessetoutinRegulation35(5)(a)oftheUncertificatedSecuritiesRegulations2001.

Amending a proxy

10.Tochangeaproxyinstruction,amemberneedstosubmitanewproxyappointmentusingthemethodssetoutabove.Notethatthedeadlinesforreceiptofproxyappointments(seeabove)alsoapplyinrelationtoamendedinstructions;anyamendedproxyappointmentreceivedaftertherelevantdeadlinewillbedisregarded.Whereamemberhasappointedaproxyusingthepaperproxyformandwouldliketochangetheinstructionsusinganothersuchform,thatmembershouldcontacttheRegistrarson+44(0)3707071443.

Ifmorethanonevalidproxyappointment

issubmitted,theappointmentreceivedlastbeforethedeadlineforthereceiptofproxieswilltakeprecedence.

Revoking a proxy

11.Inordertorevokeaproxyinstruction,asignedletterclearlystatingamember’sintentiontorevokeaproxyappointmentmustbesentbypostorbyhandtotheCompany’sRegistrars:

ComputershareInvestorServicesPLC, ThePavilions,BridgwaterRoad, BristolBS996ZY. Notethatthedeadlinesforreceiptofproxyappointments(seeabove)alsoapplyinrelationtorevocations;anyrevocationreceivedaftertherelevantdeadlinewillbedisregarded.

Corporate members

12. Inthecaseofamemberwhichisacompany,anyproxyform,amendmentorrevocationmustbeexecutedunderitscommonsealorsignedonitsbehalfbyanofficerofthecompanyoranattorneyforthecompany.Anypowerofattorneyoranyotherauthorityunderwhichthedocumentsaresigned(oradulycertifiedcopyofsuchpowerofauthority)mustbeincluded.Acorporatemembercanappointoneormorecorporaterepresentativeswhomayexercise,onitsbehalf,allitspowersasamemberprovidedthatnomorethanonecorporaterepresentativeexercisespowersoverthesameshare.Membersconsideringtheappointmentofacorporaterepresentativeshouldchecktheirownlegalposition,thecompany’sarticlesofassociationandtherelevantprovisionoftheCompaniesAct2006.

Joint holders

13.Wheremorethanoneofthejointholderspurportstovoteorappointaproxy,onlythevoteorappointmentsubmittedbythememberwhosenameappearsfirstontheregisterwillbeaccepted.

Questions at the AGM

14. Undersection319AoftheAct,theCompanymustansweranyquestionyouaskrelatingtothebusinessbeingdealtwithatthemeetingunless:

(a) answeringthequestionwouldinterfereundulywiththepreparationforthemeetingorinvolvethedisclosureofconfidentialinformation;

(b) theanswerhasalreadybeengivenonawebsiteintheformofananswertoaquestion;or

(c) itisundesirableintheinterestsoftheCompanyorthegoodorderofthemeetingthatthequestionbeanswered.

Members’ right to require circulation of a resolution to be proposed at the AGM

15. Undersection338oftheAct,amemberormembersmeetingthequalificationcriteriasetoutatnote18onpage91,may,subjecttoconditionssetoutatnote19,requiretheCompanytogivetomembersnoticeofaresolutionwhichmayproperlybemovedandisintendedtobemovedatthatmeeting.

Members’ right to have a matter of business dealt with at the AGM

16.Undersection338AoftheAct,amemberormembersmeetingthequalificationcriteriasetoutatnote18onpage91,may,subjecttotheconditionssetoutatnote19,requiretheCompanytoincludeinthebusinesstobedealtwithattheAGMamatter(otherthanaproposedresolution)whichmayproperlybeincludedinthebusiness(amatterofbusiness).


91 Future plc

Website publication of any audit concerns

17. PursuanttoChapter5ofPart16oftheAct,whererequestedbyamemberormembersmeetingthequalificationcriteriasetoutatnote18below,theCompanymustpublishonitswebsiteastatementsettingoutanymatterthatsuchmembersproposetoraiseattheAGMrelatingtotheauditoftheCompany’saccounts(includingtheauditors’reportandtheconductoftheaudit)thataretobelaidbeforetheAGM.

WheretheCompanyisrequiredtopublish

suchastatementonitswebsite:

(a) itmaynotrequirethemembersmakingtherequesttopayanyexpensesincurredbytheCompanyincomplyingwiththerequest;

(b) itmustforwardthestatementtotheCompany’sauditorsnolaterthanthetimethestatementismadeavailableontheCompany’swebsite;and

(c) thestatementmaybedealtwithaspartofthebusinessoftheAGM.

Therequest:

(d) maybeinhardcopyformorinelectronicformandmustbeauthenticatedbythepersonorpersonsmakingit(seenote19(d)and(e)below);

(e) shouldeithersetoutthestatementinfullor,ifsupportingastatementsentbyanothermember,clearlyidentifythestatementwhichisbeingsupported;and

(f) mustbereceivedbytheCompanyatleastoneweekbeforetheAGM.

Members’ qualification criteria

18.Inordertobeabletoexercisethemembers’rightssetoutinnotes15to17abovetherelevantrequestmustbemadeby:

(a) amemberormembershavingarighttovoteattheAGMandholdingatleast5%oftotalvotingrightsoftheCompany;or

(b) atleast100membershavingarighttovoteattheAGMandholding,onaverage,atleast£100ofpaidupsharecapital.

Conditions

19. Theconditionsarethat:

(a) anyresolutionmustnot,ifpassed,beineffective(whetherbyreasonofinconsistencywithanyenactmentortheCompany’sconstitutionorotherwise);

(b) theresolutionormatterofbusinessmustnotbedefamatoryofanyperson,frivolousorvexatious;

(c) therequest:

(i) maybeinhardcopyformorin electronicform;

(ii) mustidentifytheresolutionorthematter ofbusinessofwhichnoticeistobegivenbyeithersettingitoutinfullor,ifsupportingaresolution/matterofbusinesssentbyanothermember,clearlyidentifyingtheresolution/matterofbusinesswhichisbeingsupported;

(iii)inthecaseofaresolution,mustbeaccompaniedbyastatementsettingoutthegroundsfortherequest;

(iv)mustbeauthenticatedbythepersonorpersonsmakingit;and

(v) mustbereceivedbytheCompanynotlaterthansixweeksbeforethedateoftheAGM;

(d) inthecaseofarequestmadeinhardcopyform,suchrequestmustbe:

(i) signedbyyouandstateyourfullnameandaddress;and

(ii) senteither:bypostto

CompanySecretary, Futureplc, QuayHouse, TheAmbury, BathBA11UA;

orbyfaxto+44(0)1225732266

markedfortheattentionoftheCompanySecretary;and

(e) inthecaseofarequestmadeinelectronic

form,suchrequestmust:

(i) stateyourfullnameandaddress;and

(ii) [email protected].

Pleasestate‘AGM’inthesubjectlineoftheemail.YoumaynotusethiselectronicaddresstocommunicatewiththeCompanyforanyotherpurpose.




ents

Investor information

Registrar and transfer office

TheCompany’sshareregisterismaintainedby:

ComputershareInvestorServicesPLCThePavilionsBridgwaterRoadBristol BS138AETel:+44(0)3707071443

ShareholdersshouldcontacttheRegistrar,Computershare,inconnectionwithchangesofaddress,lostsharecertificates,transfersofsharesandbankmandateformstoenableautomatedpaymentofdividends.

Online information – www.investorcentre.co.uk

OurRegistrar,Computershare,hasaservicetoprovideshareholderswithonlineinternetaccesstodetailsoftheirshareholdings. Theserviceisfree,secureandeasytouse. Toregisterfortheservice,gotowww.investorcentre.co.uk

Unsolicited mail

Theshareregisterisbylawapublicdocument.Tolimitthereceiptofmailfromotherorganisations,pleaseregisterwiththeMailingPreferenceService,byvisitingwww.mpsonline.org.uk/mpsr/

Warning to shareholders – ‘boiler room’ scams

Inrecentyears,manycompanieshavebecomeawarethattheirshareholdershavereceivedunsolicitedphonecallsorcorrespondenceconcerninginvestmentmatters.Thesearetypicallyfromoverseas-based‘brokers’whotargetUKshareholders,offeringtosellthemwhatoftenturnouttobeworthlessorhigh-risksharesinUSorUKinvestments.Theseoperationsarecommonlyknownas‘boilerrooms’.These‘brokers’canbeverypersistentandextremelypersuasive.

Itisnotjustthenoviceinvestorthathasbeendupedinthisway;manyofthevictimshadbeensuccessfullyinvestingforseveralyears.Shareholdersareadvisedtobeverywaryofanyunsolicitedadvice,offerstobuysharesatadiscountoroffersoffreecompanyreports.Ifyoureceiveanyunsolicitedinvestmentadvice:

• Makesureyougetthecorrectnameofthepersonandorganisation

• CheckthattheyareproperlyauthorisedbytheFCAbeforegettinginvolvedbyvisiting www.fca.org.uk/register

• ReportthemattertotheFCAeitherbycalling0800 111 6768 orbycompletingthefraudreportingformontheFCAwebsiteat:www.fca.org.uk/consumers/scams/investment-scams/share-fraud-and-boiler-room-scams/reporting-form

• Ifthecallspersist,hangup.

Ifyoudealwithanunauthorisedfirm,youwillnotbeeligibletoreceivepaymentundertheFinancialServicesCompensationScheme.

DetailsofanysharedealingfacilitiesthattheCompanyendorseswillbeincludedincompanymailings.

Moredetailedinformationonthisorsimilaractivitycanbefoundat www.moneyadviceservice.org.uk

For enquiries of a general nature regarding the Company and for investor relations enquiries please contact Penny Ladkin-Brand at the Company’s Registered Office, or visit www.futureplc.com and select the investor relations section.

Registered office

FutureplcQuayHouseTheAmburyBathBA11UA

Tel+44(0)1225442244

www.futureplc.com/invest-in-future

i

93 Future plc

Directors and advisers

Directors

Peter Allen Chairman(until1February2018)

Richard HuntingfordChairman(witheffectfrom1February2018)

James HanburyDeputyChairman


Penny Ladkin-BrandChiefFinancialOfficerandCompanySecretary

Hugo DraytonIndependentnon-executiveDirector

Offices

Registered officeFutureplcQuayHouseTheAmburyBathBA11UATel+44(0)1225442244

London office1-10PraedMewsLondon W21QYTel+44(0)2070424000

www.futureplc.com

Companyregistrationnumber3757874RegisteredinEnglandandWales

Advisers

Independent auditorsPricewaterhouseCoopersLLPCharteredaccountantsandstatutoryauditors2GlassWharfBristolBS20FR

BrokersNumisSecuritiesLtd10PaternosterSquareLondonEC4M7LT

N+1Singer1BartholomewLaneLondonEC2N2AX

Principal bankersHSBCBankplc8CanadaSquareLondonE145HQ

SolicitorsSimmonsandSimmonsLLP1LinearParkAvonStreetTempleQuayBristolBS2OPS

Registrar ComputershareInvestorServicesPLCThePavilionsBridgwaterRoadBristol BS138AE

Financial calendar

Announcement of annual results 24November2017

Annual General Meeting5February2018

Half-year end31March2018

Announcement of interim resultsMay2018

Financial year-end30September2018


ents

Future plc and Future Publishing LtdRegistered officeQuayHouseTheAmburyBathBA11UA

Tel+44(0)1225442244

Future US, Inc.1390MarketStreetSuite200SanFranciscoCA94102USA

Tel+16502382400

www.futureplc.com

London office1-10PraedMewsLondon W21QY

Tel+44(0)2070424000

Future Publishing (Overseas) LtdSuite3,Level10100WalkerStreetNorthSydneyNSW 2060Australia

Tel+61299552677

Bournemouth officeRichmondHouse33RichmondHillBournemouthBH26EZ

Bromsgrove officeSugarBrookCourt2AstonRoadBromsgroveB603EX

Contacts