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Profits stable at Quarto as shareholder vote approaches
01.11.12 | Charlotte Williams
Quarto has reported a drop in revenue but stable operating profit over the last nine months, with digital sales now accounting for 1.7% of total revenues at $2.225m (£1.39m). The company said its performance is “in line with expectations”.
The results come ahead of a shareholder vote next week (7th November) on the potential removal of chairman and c.e.o. Laurence Orbach (pictured) as director of the company.
In its unaudited results for the nine months to 30th September 2012, the company reported revenue of $127m (£79m), down on $130m (£80m) for the first nine months of 2011, and a slight drop in EBITDA from $24.7m (£15.3m) to $24.3m (£15m). Operating profit was stable at $9.4m (£5.8m), with a drop in profit before taxation of $5.5m (£3.4m) from $6m (£3.7m).
In a statement, the company reported that "traditional bookstore revenues are under pressure", with bookstore chains remaining "somewhat ambivalent" about how to integrate digital readers into their "bookselling missions".
It said they had seem some improvement in trading in September, but the third quarter was "subdued" overall. However, it sounded a note of optimism: "Following the response to our products at the Frankfurt Book Fair in October, we noted that licensees and distributors around the world are largely adjusting to a world in which online retailing and digital books have challenged long-entrenched business models."
Two shareholders have forced a special meeting next week, making a formal request to remove Orbach and replace him with Tim Chadwick, founder of Aurum Press.
The Quarto board has recommended that shareholders reject the proposal, calling it "opportunistic" and "destabilising", especially as it would derail the succession plan already put in place for Quarto's c.o.o. Marcus Leaver to become c.e.o. when Orbach steps down in 2013.