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Quarto results 'exceed expectations'
16.08.12 | Charlotte Williams
Quarto has reported results which "exceeded expectations" for the first half of 2012, with operating profit up 6% to $3.9m (£2.5m) and revenue up 1% to $73.2m (£46.6m) for the six-month period to 30th June 2012.
However, while its book publishing revenues increased to $53.4m (£34m), from $51.6m (£32.8m) for the same period last year, its international co-edition revenues were down by 5% to $19.8m (£12.6m), from $21m (£13.4m).
Book publishing operating profit was $4.9m (£3.1m), growing by 13% on $4.3m (£2.7m), with operating profit for the international co-edition segment dropping by 33% to $0.53m (£0.3m), from $0.79m (£0.5m) in 2011.
Growth in digital, including e-book sales, slowed in the second quarter of the year, but overall rose by 87% over the half-year period, accounting for 2.2% of sales, or $1.6m (£0.6m).
Chairman and c.e.o. Laurence Orbach said key challenges remain in the area of display and discoverability: "Online is good, but it isn't the answer, and nor is online chatter, as others and we have discovered. To date, the bookstore remains the unique place to display numerous new and backlist titles to a committed audience."
Orbach added that in English-language markets: "the performance of independent book retailers has held up well, in some cases defying expectations that aggressive competition from online retailing of print and e-books would further erode their viability".
Orbach said the company's acquisition of Frances Lincoln in August 2011 has been of "great benefit", with plans to move the Aurum group and Frances Lincoln operations into the same premises. He noted "all imprints are performing well".
Overall, Orbach said: "Quarto's performance exceeded expectations for the first half of 2012. This was a good achievement, given the challenging economic environment globally."
Orbach also stressed that Quarto's core business of publishing illustrated books has been "little affected by e-books", saying illustrated titles in e-book format tend not to "make much headway".
In March this year, Quarto appointed Marcus Leaver, previously president of Sterling Publishing in the US, to the role of chief operating officer, with Leaver to succeed Orbach on his retirement next year.
Looking ahead, Orbach said: "Serious questions still remain as to how to reach interested audiences in an affordable way. The book-publishing ecosystem has been sundered, creating challenges and opportunities that many other sectors and infrastructures have also faced. The way forward is not clear, nor is it likely to be direct, but trial and error will uncover many new opportunities, and Quarto remains skeptical of jumping onto trendy bandwagons."