Bertrams' sales and operating profit has dropped marginally in the last year while the book wholesaler said its merger with Dawson Books will increase revenues by a third.
In its financial results released today (20th October) Bertrams’ parent company Smith News revealed like-for-like sales at the Norwich-based book wholesaler had fallen 2.3% in the year to 31st August 2011, but hailed this as a positive “outperformance” of the market, which it said was down by 4.0% in that period. It said it fared better in the second half of its financial year with like-for-like sales only down 1.4%. Total sales were down from £137.1m to £131.8m in 2011.
Operating profit at Bertrams was £3.7m, down from £4.0m in 2010 and the company made £3m in cost-savings throughout the year. International sales is still an area of growth for the company, with revenue soaring by 14% in 2011, particularly in the Far East and Australasia. However, sales to public libraries were down by 21% like-for-like "in the year following the cuts to public spending announced in autumn 2010", although the company said the public library market now seems to be stabilising.
During the financial year, it won contracts to become one of Tesco's online fulfillment partners as well as supply books ordered from Sainsbury's website.
In June, Smiths News announced it had acquired Dawson Books and planned to merge it with Bertrams. The company said today the acquisition would increase Bertrams' revenues by one third. Once Dawson Books is fully integrated into Bertrams, Smiths News said the larger company is expected to generate revenues in excess of £200m and operating profits of at least £10m by 2014.
Bertrams also revealed it would be able to recover the £1.9m loss on a fraudulent account controlled by an employee after consultations with its insurers, minus a £65,000 deductible.
Dawson's e-book platform, Dawsonera, grew by 25% in 2011, compared to 90% in its previous financial year.
In its financial statement, Smiths News said it felt its book sales would not be adversely affected by the current UK economy. It said: "Demand for books is . . . resilient and the group strategy remains to increase sales by targeting growth sectors such as the internet and international sales. The vast majority of newspapers, magazines and books have a relatively low cover price; nonetheless, it remains possible that consumers seeking to economise could regard these as discretionary items and either stop or reduce the frequency of purchasing."
Smiths News group increased underlying profit before tax by 10.3%, from £35.0m in 2010 to £38.6m in 2011, but its revenue dropped by 5.2% from £1.83bn to £1.73bn in 2011.