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2011 a 'transition' year for Quercus
01.01.70 | Katie Allen
Sales and profit at Quercus dropped 22% in 2011 but the company grew sales of its non-Stieg Larsson publishing by 74%, with sales of digital books soaring by 158%, in what chairman David Potter called a "year of transition" for the company.
In its financial results for the year ending 31st December 2011, the company revealed today (29th May) that revenue shrank from £31.8m in 2010 to £24.8m in 2011, while operating profit dropped from £7.6m to £5.9m within the year—both decreases of 22%.
However within that timeframe, the publisher also achieved a trade sales hike of 74% from publishing not connected to its successful Millennium Trilogy by Stieg Larsson, adding 179 new titles, up from 128 the year before and growing e-book sales by 158%. In the year of 2011, digital accounted for 11% of the Quercus business and the company today said its investment in digital publishing going forward would mean it was “well placed to benefit from this (digital) transition, with over 500 Quercus e-books now
Potter said: “No one can predict the percentage of books that will be read on e-readers in five years' time, however it seems likely that further considerable growth will occur. Whatever the result, we intend to continue supporting our readers in the publishing
formats they demand.”
The publisher also grew its children’s publishing list by 49% in 2011, strengthening its position in the 9+ age market. Potter said the company had seen a lot of change, including moving headquarters to Baker Street, London, increasing its staff from 44 to 67 and upgrading its IT systems, but the effects of its investments would be borne out in the months to come.
“2011 has been a year of transition for Quercus, from which we expect to see the results over the next two years,” Potter said. “We have improved the quality of the company's earnings, continuing to benefit from the Larsson franchise yet growing our other revenues by 74% over the previous year.”
Mark Smith, chairman of Quercus, said that going forward the company would develop its marketing to connect directly with readers.
“We increasingly recognise that we need to invest in communicating with our customer base in order to develop brand and author loyalty and interest," he said. "We have been devoting resources to creating dedicated websites, blogs and to initiating social media initiatives with book reader communities in order to place Quercus in a pivotal role."
He added: “The current year has started with pressure continuing in the market for physical books. We believe this partly reflects macro-economic factors but it is also partly structural, as sales move towards the e-book market. However, our investment in digital publishing means that we are well placed to benefit from this transition . . . Overall, we remain confident of the company's growth prospects and are optimistic that we will see the benefits from investments in people, intellectual property, our 'multi-channel'
proposition and the delivery of our digital publishing strategy.”
A spokesperson for Edison investment research said: “Quercus is using the continuing benefits from the Larsson franchise to ensure its has a sound base on which to build a significant publishing enterprise that is increasingly platform agnostic. 2011 marked a major step up in investing for the future health of the group in terms of author advances to build a broader roster and in the physical and HR infrastructure to support a more
Quercus won the Publisher of the Year award at the Bookseller Industry Awards 2011.