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Wiley reported adjusted revenue growth of 1% to $1.72bn in its 2013 fiscal after stripping out foreign exchange costs and the results of the consumer publishing lines it has now sold. Though "disappointed" by the results, Stephen Smith, president and chief executive of Wiley, was bullish about the future, highlighting a range of acquisitions, the expected savings from its restructuring, and an uplift in its digital businesses.
In the year ending 30th April, Wiley reported sales of $1.76bn before adjustments, and a profit before tax of $187m, the latter down 31%, or 8% on an adjusted basis. Its fourth quarter was particularly tough, with pretax profits at $10.1m, down 84% on last year's fourth quarter, due to a $3.8m loss on the sale of its remaining consumer assets, and $24.5m in restructuring costs.
During fiscal 2013 Wiley initiated the largest restructuring and reinvestment program in its history with the aim of saving $80m annually by the end of fiscal 2014, some of which will be reinvested in "high growth digital businesses".
The company has already begun reshaping itself with a number of acquisitions, including its largest ever "non-content acquisition" Deltak, an online program provider for higher education institutions, bought in October 2012 for $220m, a workplace assessment provider Inscape, and a test preparatory platform provider ELS, acquired for $24m in November.
Smith said the underlying performance of the journals subscription business was solid, but the decline in print book sales across its three division was "more significant than anticipated". He said fiscal 2014 would be a "transitional year", with the benefits from the integration of Deltak coming in 2015, along with an uplift from the transition to digital. Sales growth in fiscal 2014 are anticipated to be "low single-digit".
However, Smith added: "We expect a significant lift in FY15 earnings from savings resulting from the completion of the restructuring initiative, contributions from acquired business and new digital products and services. Going forward, we expect the downward trajectory of core-business earnings to moderate as print-related efficiencies take effect. At the same time we expect to see significant earnings contributions coming from new digital products and services and acquisitions."