UPDATE: Future shares suspended

Simply put, without an emergency refinancing package, the company, with approximately 1,200 employees, looks bust. A statement about a rescue package is expected at any time from the company. Based on these results, if it comes at all, it is likely to lead to significant shareholder dilution.

Commenting on the results, Greg Ingham, Future's Chief Executive said: "We have taken extensive actions to reshape the group. Good progress has been made in sorting out the business, with tough actions taken to cut our cost base significantly and to reduce our risk profile. This restructuring, combined with the transition period currently affecting the computer games market, has inevitably had a significant impact on the group's results for the first half.”

His statement contained a warning about future prospects, however, adding: “trading conditions remain challenging and are expected to remain so for at least the remainder of this year. Though we believe that we have made cautious assumptions about the second half of this year, current market conditions, both generally and resulting from the video games transition, make it difficult to forecast revenues.”

In the first half of the year, the company closed, or sold 39 magazines; closed its German and Dutch operations entirely and axed the majority of the group's internet activities as well as cutting 810 or 39% of its workforce. Interim revenues for continuing activities were 70.3m, with 20.1m of revenues from discontinued operations. Excluding amortisation and refinancing costs, continuing activities made an operating profit of 1.9m for the six months. Refinancing costs amounted to 2.6m, with amortisation and write-off's of intangible assets weighing in at 82.0m as the company restructured its underperforming European and US acquisitions.

The interim results also include costs of 22.4m relating to closures and redundancies brought about by the sale of Business 2.0, with further losses of 4.5m of this kind to be taken in the second half. Proceeds of the US$68m (45m) sale will be recognised in the second half.

Accurately highlighting the management errors which led to this position, the CEO's review contains the statement: “Partly as a result of an ambitious growth plan in 2000, the group entered this period with a high level of debt and an expanded cost base. The tough actions necessary to change the business have inevitably resulted in the recognition of substantial losses associated with the closure of businesses, restructuring costs, and write-downs in the carrying value of assets.”

Shares in Future were suspended this morning, when the company had been due to report its interim results at 7am.

This lunchtime the company issued another announcement, confirming suspension of its shares and citing a need to prevent the creation of a false market ahead of a “significant refinancing” deal being announced.

“Future is in advanced discussions with respect to this refinancing and expects to be in a position to make a further announcement shortly,” the company said.

“The company's shares continue to be suspended pending this announcement.”

Shares were suspended at 25p, valuing the company at just 35m, a massive drop from the company's high point when shares were trading for more than 9.

Additional reporting by Iain Hepburn