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Penguin sales top £1bn as e-book revenues grow 106%
27.02.12 | Charlotte Williams
Penguin has reported sales of £1.04bn in 2011, growing 1% on an underlying basis, though representing a headline drop of 1%, with adjusted operating profit up by 5%, or 8% on an underlying basis, to £111m. Penguin e-book revenues were up 106% year on year, equalling 12% of total Penguin revenues, or £126m.
Penguin chairman and c.e.o. John Makinson called 2011 "the most turbulent book market that anyone can remember", but said the company's growth had been driven by "excellent publishing around the globe, demonstrated by market share growth in our three biggest markets, and innovation in every aspect of our digital publishing".
In its full year 2011 results, parent company Pearson reported sales across the group as totaling £5.86bn, up 4% on 2010, with pretax profit up 72% to £1.15bn.
The statement highlighted a "strong and consistent publishing performance across imprints and territories" for Penguin, with market share gains in the US, UK and Australia, despite a "very challenging retail environment with the closure of more than 750 stores".
In developing markets, it reported a boost from the "strength of the direct marketing channel and strong publishing in India", including its first 100,000 copy bestseller, Ravinder Singh's Can Love Happen Twice?. In China, Penguin launched a new English language publishing programme last year, and in January of this year, Penguin acquired 45% of Brazilian trade publisher, Companhia das Letras.
Penguin's global publishing properties, such as Lego, Wimpy Kid and Jamie Oliver, are reported as having sold "significant numbers in multiple markets".
Since the beginning of 2008, digital downloads of apps and e-books across the group have totalled approximately 50 million, according to the publisher, with e-book revenues accounting for 12% of Penguin revenues worldwide, and more than 20% in the US, in 2011.
Penguin UK had 78 top ten bestsellers in 2011, 15 more than in 2010, including Jamie Oliver's 30-Minute Meals and Dawn French's A Tiny Bit Marvellous. For 2012, the statement highlighted books by Deborah Harkness, Ken Follett, Zadie Smith, Clare Balding and Michelle Paver, as well as DK's launch of more Lego titles, as potential strong sellers.
Also in 2011, Penguin launched more than 100 apps and enhanced e-books including On the Road and Moshi Monsters, and digital-only publishing programme, Penguin Shorts. Penguin also continued investment in direct-to-consumer initiatives including aNobii in the UK and Bookish in the US, new digital platforms for readers. In Australia, the publisher acquired the retailer REDgroup's online business, and Penguin signed its first author through new self-publishing platform BookCountry. Penguin's websites and social media channels now have a global following of more than 11 million.
Looking ahead, the results statement said revenues from digital and services businesses across the group are expected to exceed revenues from the traditional publishing businesses in 2012.
Pearson's North American education division, the group's largest business, reported a drop of 2% in sales, down to £2.58bn in 2011 compared to £2.64bn in 2010, representing a 1% drop in underlying terms. It reported its "strength in digital and services businesses enabled us to perform ahead of our more traditional print publishing markets, which were adversely affected by state budget pressures and declines in college enrolments".
Its international education business, which is active in more than 70 countries, reported sales were up by 15% to £1.4bn from £1.2bn, representing underlying growth of 4%, with adjusted operating profit up 15% to £196m from £171m, up 2% on an underlying basis. In the UK, the business "made solid progress during the year despite significant regulatory and policy changes in its markets, most notably in vocational and general qualifications, apprenticeships and in higher education".
Pearson's professional education business reported a 15% growth in sales to £382m, up 2% on an underlying basis, with adjusted operating profit up 29% to £66m, an underlying growth of 10%.
The Financial Times group reported sales up to £427m, 6% headline growth and underlying growth of 7%, and adjusted operating profit up 27% to £76m, up 17% in underlying growth terms. Digital and services now account for 47% of the FT Group revenues, up from 25% in 2007.
Chief executive Marjorie Scardino said: "The external environment provides a testing backdrop for these results, and all our industries face some degree of turbulence. But our strategy and long-term planning for change have helped us to another good year to add to our record of persistent out-performance."