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Blackwell Group is on course to make a profit this financial year despite reporting losses of more than £10m for the previous 12 months, the company's chief executive has told The Bookseller.
Andrew Hutchings confirmed that the retailer was set for a further bout of restructuring—its third in as many years. He refused to detail what this would involve beyond "adjust[ing] as quickly as possible" to changes in the academic market, including university funding cuts.
Earlier this week, Blackwell UK reported a fall in turnover from £77.8m to £74.2m for the 12 months to 27th June 2009. Although costs were also reduced—from £56.6m to £54.9m—administrative expenses rose more than £1m to £28.7m, resulting in an operating loss of £9.4m. The retailer lost roughly £6m the previous year. The Blackwell Group, which also includes the firm's library services, reported turnover of £158.3m, an increase of 3.3% on 2008, with the group's operating loss falling from £11.3m to £10.2m.
Hutchings, who took on the role of chief executive during the financial year, said the results were largely in line with expectations, although losses had been exacerbated by discounting and online competition. “The business that went into that [financial] year needed massive restructuring because it was a business that would lose money," he said. “It wasn't structured correctly to make money.
"This year, at a group level we are not anticipating making a loss, partly as a result of trading and partly with the sale of the North American and Australian businesses. At a trading level, I believe we will make a small loss this year. By that, I mean substantially less than last year."
As well as the £5.3m realised from the sale of Blackwell US and Bennets in December, Blackwell has secured a £7m loan from Toby Blackwell Ltd. Hutchings said this gave the business "headroom" to complete the turnround and get it to a level of sustainable profitability, “so we can get this business to where we want to be".
Hutchings said Blackwell had needed a "radical overhaul". That included substantial changes to head office and closure of underperforming branches.
"A lot of good progress was made on the retail side and substantial changes have been made to move the business forward," said Hutchings. "The results this year show we are heading in the right direction and things are going much better."