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Hachette's profits return to post-Meyer levels
09.03.12 | Charlotte Williams
E-book sales at Hachette UK rose 250% in February, according to the company's c.e.o. Tim Hely Hutchinson, who has described the publisher's prospects for 2012 as “exceptional", despite an overall dip in profits at parent company Lagardere Publishing in 2011.
The comment came as the Lagardere Group revealed its full-year profit performance for 2011, having previously released the sales performance, with profit at the publishing business said to have "return[ed] to a normal degree of profitability after three years of momentum due to the success of Stephenie Meyer". Overall earnings at Lagardere Publishing before interest and tax fell 11.4% to €220.8m (£184.6m), which followed a drop in sales of 4.4% to €2.038m (£1.704bn), with its profit margin "close to 11%". The UK house made up 15% of the total publishing business, with sales of £255.6m.
The company said the Meyer effect in 2011 "dragged down profitability notably in the United States, the United Kingdom and Illustrated Books in France", adding that in English-speaking countries, the difficulties encountered by retailers (bankruptcy of Borders in the United States and REDgroup in Australia) also had an impact on profitability. Lagardere’s overall EBIT dropped 11.4% on a reported basis to €414.2m (£346.4m).
E-book sales for the publishing division were reported as “continuing strong”, with e-book revenue representing 10% of adult trade market sales in the UK at the end of December 2011, and 20% in the US. Across the division, e-books accounted for 6% of total revenue, with new digital readers launched in the autumn in France, though not as yet to any significant effect.
Hely Hutchinson said the UK company had started 2011 “with a flourish”, having faced “difficult comparisons with the huge success of the Twilight series” at the start of the year.
Looking to the year ahead, he called the company’s prospects “exceptional”. He reported e-book sales in February as being 250% up on February 2011, with five titles at number one in the physical bestseller lists to date this year. He picked out the success of Jennifer Worth’s Don’t Tell the Midwife titles, and Andrew Miller’s Pure (Sceptre) winning the Costa Book of the Year, and highlighted non-fiction titles coming up, including Antony Beevor’s Second World War (W&N); The John Lennon Letters (W&N); and comedian Miranda Hart’s autobiography, Is It Just Me? (Hodder); as well as fiction to come from Martina Cole, Simon Scarrow, Kate Mosse and Maeve Binchy.
He added: “Hodder & Stoughton have just announced Sebastian Coe’s autobiography and Little, Brown have just announced J K Rowling’s first novel for adults. These very special new announcements come in addition to the strongest programme of both fiction and non-fiction we have ever had.
"As we continue to transform the business to keep it at the forefront of digital publishing, the fact that we have so much good publishing to offer enables all of us at Hachette UK to look forward to the year with great excitement.”