FNET Future

RNS Number:6756W
Future Network PLC
4 January 2001



4 January 2001



Trading Update



On 13 November 2000, The Future Network plc (LSE: FNET) announced estimated
revenues for the year to 31 December 2000 of around #260m, Underlying profits*
of just under #40m, and an EBITA figure in the region of #7m.  Latest internal
figures for November sales indicate that the expected seasonal uplift in sales
in the final months of the year has not occurred, which will result in those
estimates not being achieved, particularly if such trading conditions are
repeated throughout December.



Based on the latest management figures, sales for the year ended 31 December
2000 are now expected to be 3% lower at #253m, Underlying profits* are now
expected to be reduced to #34m and EBITA to #-1m.



As the costs of the business for the fourth quarter, predominantly production
and promotion costs, are committed before revenues are known, any shortfall in
sales will substantially also affect EBITA.  With much of Future's European
business operating on a sale or return basis, the actual results for a
particular period only become clear some time after the relevant period is
closed.  This has made it more difficult to identify the lack of the
traditional seasonal uplift, which has affected the Company's business in each
of its core territories.



With results for magazines that went on sale in December still to come in, the
actual results for the Company will not be known internally until early
February.  The revenue and profit figures estimated by the Company in this
announcement are therefore subject to a level of possible error which is
estimated at plus or minus #2m.



The shortfall against earlier estimates has been caused primarily by lower
than expected magazine newsstand sales, especially in the games market,
compounded by some games related advertising being cancelled or postponed
because of lower hardware availability of the Sony PlayStation 2.



In addition to the above trading position, the Company will be reviewing the
carrying value of goodwill held on the balance sheet as at 31 December 2000,
in accordance with FRS11 Impairment of Fixed Assets and Goodwill.  Reduced
expectations for the computer games titles acquired in Germany, together with
a write down of the carrying value of various internet investments, are
expected to give rise to additional charges below the EBITA level of
approximately #10m.



In the light of changed trading conditions, the Company is accelerating an
ongoing detailed review of its business and of its investment plans for 2001.
The Company now intends to cut investment levels in 2001 to below #20m.
Previously, the Company had budgeted for investment expenditure of
approximately #30m.



Future's Chief Executive, Greg Ingham, commented: "We are naturally
disappointed at having to make a further cut in expectations for the year
ended 31 December 2000.  Estimating the expected results for the vital fourth
quarter of 2000 is proving to be an extremely difficult task with trading
conditions not reflecting their traditional seasonal uplift.  As so much of
our business is seasonally weighted to the fourth quarter, even relatively
minor changes in newsstand sales can have a significant impact on the results
of operations."



* Underlying profits, consistently defined by the Company to exclude losses
from internet business and from magazines less than two years from their
launch date.

                                    -ends-



An analyst conference call has been arranged for 10:00am this morning.  For
details, please call Georgina Briscoe at Hogarth on 020 735 79477


For more information :



The Future Network plc,
Greg Ingham, Chief Executive           01225 442244
Ian Linkins, Finance Director          01225 442244


Hogarth Partnership,
James Longfield                        0207 357 9477

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