Interview: Greg Ingham on Future's Highbury bid

For further information about the £97.5 million bid which Future has made for Highbury House, which publishes 68 consumer magazines in the UK including games titles Play, P2, XBM, Cube and gamesTM, click on this morning's story about the deal.

This afternoon we spoke with Future plc chief executive Greg Ingham about the implications of the deal for Future, and why his company is making such a large investment in the print industry at a time when it faces greater challenges than ever from other forms of media.

Greg Ingham: No, not even faintly. From early days, Future has acquired titles; the first title we bought was Mountain Bike UK back in 1991. We've made it clear that we will use both acquisitions and launches as a means to finding growth, and we've been consistent over that for a number of years.

If anything, it's the other way around - we see acquisitions as a way of driving subsequent launches. We've made it very clear to the City today that we see this giving us a number of new areas from which then to be able to launch. Future's got one of the best launch track records of any business - in the last fifteen years, our success rate is 75 per cent, which compares with an industry average of 33 per cent.

So, far from a diminished enthusiasm for launches, this actually underlines their importance.

Greg Ingham: We think it's an extremely good fit. It takes us further and stronger into some areas where we're already active, and obviously games is one of those. The same applies to computing and other technology areas.

It builds our position in, for example, the car market, which is extended by the key title Fast Car, it augments our position in film with Hot Dog and the DVD titles, it builds out our position in home entertainment with the What Video range of magazines, and it strengthens us in the parenting area as well.

Also, it gives us new opportunities into puzzles, gardening titles, men's lifestyle and a raft of other areas as well. So we think it's a great strategic fit, we're looking to find growth from here, and we will do that very very capably going forwards.

Greg Ingham: Well, we don't accept the principle. The print magazine market is not declining. The special interest sector has shown very good growth over a long period of time. We think that if anything, print magazines have got some long way to go, because as consumer desires and interests become yet more precise, and as consumers become more demanding, so there'll be a whole raft of new specialist interest areas opening up. Also, given where we are in the market, we've got a lot of growing to do. There are new worlds to conquer out there!

Greg Ingham: I think that there are always challenges in the games market - it's one of the things that attracted us from inception back in 1985. It's quite volatile, it requires very close attention, but it throws up many many opportunities.

For us, as the games industry as a whole gets bigger, so there are more opportunities. Our own games business has actually increased over time, it hasn't decreased - so I think the premise that you're starting from may not be quite right. For us it's a long term plan - we're part of the ecosystem of the games industry, and we believe strongly that we have an important part to play in the explaining and the extending of the games industry, the evaluation of different games and so on.

We're well aware of our position in that, and we take that with a long-term perspective.

Greg Ingham: Well, I haven't got the facts to hand, and I'm really not sure about that. We started with Home Computing, as it was then called, back in 1985 and moved into games magazines with titles which had some games content very shortly after that. We continue to find growth opportunities - so again, I can't recognise the start point that you're coming from.

Also, for us, we look at it internationally. We've built out to the extent where the UK is about half of our business. We've got a very strong business in the USA, a smaller business in France and a more modest business in Italy, and then a whole raft of licensing as well. We don't see a solely UK focus as how we seek to run our business.

Greg Ingham: I don't think that's the way to approach it, because ultimately, value is value. If you're not delivering value to advertisers, then they won't pay, whether you've got an X per cent or a Y per cent share.

We are long-term partners; we're not here to take out the maximum amount of money and run. It doesn't work like that. Future has had 20 years in games, and I've personally had 23 years or some such, and we've had quite a lot of experience during that time. You just do not take the short term perspective, and we have no intention of doing that here.

Greg Ingham: Well, let's look at the terms of the offer. It's an all-shares deal, valuing the equity at £31.6 million - that is basically with Highbury shareholders taking shares in Future. There's a maximum cash alternative of up to £10 million, so there may well be some people who want cash rather than shares, and they have that opportunity up to that level.

We're also absorbing Highbury's debt, and for a business of our size, this is a relatively modest, manageable level of debt - we have a very conservative approach to financing, and we have a lot of head room between that debt level, and the newly negotiated bank facilities that we have. We feel that it's a very sensible step, and we can certainly cope with that and of course, seek to do further acquisitions at some point in the future.

Greg Ingham: It takes us broadly from about 1250, 1200 or so to approximately 2000.

Greg Ingham: The ABCs are the ABCs, and we'll see what they come to. We're not going to bust any embargos on that one! We know that the ABCs get quite a lot of attention, and that's fine, but we're very focused on delivering value to both readers and advertisers.