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The History Press is confident of reporting a substantial and sustainable operating profit in the future and returning to growth in 2010 despite recording a £1.4m pretax loss in the 12 months to 31st December 2009. THP chief executive Stuart Biles told The Bookseller that the business was growing and taking on new staff.
The recent results follow a turbulent period for the Stroud-based publishing company, which went into administration in November 2007. The business, formerly NPI Group, was rescued with the continued backing of private equity partner Octopus Investments and renamed The History Press.
For 2009, group turnover was £11.7m, compared to £12.8m recorded in its previous published results (13 months to 31st December 2008). After stripping out discontinued operations, sales dropped 4%, with UK sales down 23% to £5.6m, but overseas sales rose from £4.8m to £6.2m. The group operating loss was £648,000, an improvement on 2008’s £1m loss, helped by an increase in its gross margin from 61% to 67%.
Stripping out non-recurring costs of £222,000 such as royalty payments not made to authors before the firm’s administration, but subsequently paid, and the costs associated with restructuring, the business’ earnings before interest, tax and depreciation were £46,000.
Biles said the new management team had re-engineered THP significantly over this period, and the company was forecast to return to growth in 2010, with a small increase in sales. THP has outsourced its printing, with warehousing and distribution moved to Marston Book Services, allowing it to focus on market-led publishing decisions.
Biles, who joined the business as a consultant before becoming its c.e.o. in early 2010, said: "Having got ourselves into a very organised position, we are now growing in the UK."
Biles indicated that Waterstone’s "refocus on local" this year had benefited the company. Local titles and transport books had done well for the group, he said.
THP will publish about 450 titles over the course of 2010, and this was expected to grow by about 10% over 2011. Publishing director Laura Perehinec highlighted Butlin’s: 75 Years of Fun! by Sylvia Endacott and Shirley Lewis, coming in March, and House Histories: The Secrets Behind Your Front Door by Melanie Backe-Hansen, coming in May, as potential strong sellers, as well as a strand
on the "Titanic" timed for the 2012 centenary of the ship sinking.
The group also intends to produce 50 digital titles for Christmas and Boxing Day to test the market.
Biles said he believed the legacy issues around unpaid royalties from NPI had been resolved. "I think it’s absolutely fair to say that the operating profit within the business will be substantial and sustainable. The exceptional costs will not be there in 2010," he said.
He added that THP was able to grow itself from its own cash resources and had had no further outside cash injected into the business this year. In 2009 it took on a further £1.1m in additional borrowings.
Biles said he was confident in the continued backing of Octopus, whose £5.5m loan is due at the end of 2012, along with the annual interest payments that are being accrued as debt.
"Octopus has supported the business from the beginning without any deviation. They can see that The History Press is a business with a real future," he said.