Future Networks chief quits despite upturn

The magazines group The Future Network announced the surprise departure of its chief operating officer yesterday, despite reporting an improvement in interim results.

Colin Morrison joined the company as it began to suffer from a collapse in its technology sector titles in late 2000, after the company had embarked on what turned out to be a crippling expansion programme. A series of divestments began soon after and Mr Morrison has spent much of the last three years involved in restructuring and re-organisation of the business. That process appears to now be over.

The chief executive, Greg Ingham, paid tribute to Mr Morrison but said that his role was "not the job he anticipated" and that after three years of restructuring work it was "time for Colin to move on".

Adrian Kearsey, an analyst at Evolution Beeson Gregory, said Mr Morrison was "a key player" and the risk for the company was that it would be unable to maintain the programme of releasing titles on relatively modest budgets following his departure.

Another analyst said that there appeared to be "a bit of an overlap" between Mr Morrison and the chief executive Greg Ingham, and that Mr Morrison was more likely to favour a CEO role", with more equity than his current role offered.

The results, for the six months to June, showed pre-tax profit up 22 per cent at £1.1m. Strong results in the US, where an 8 per cent increase in turnover equated to a 20 per cent rise once exchange rate movements were factored out, had offset the increased launch spend that had held back profits in the UK.

Mr Ingham highlighted the £10m acquisition of Guitar World in the US earlier this month as a particularly important investment, but maintained that the company would retain its portfolio mix of games, computing and entertainment titles. With net cash at £17.3m and adequate banking facilities in place, the company remains well-placed to make further acquisitions.

Despite the company's games titles continuing to perform strongly - with turnover up 17 per cent on last year and contributing 45 per cent of total group turnover - and the struggling computing titles likely to benefit from a predicted rise in software sales over the next 12 months, Mr Ingham remained cautious.

Analysts said the markets had factored in most of the risks. The company's shares closed down 2.5p at 66p.