Severn House acquisition pushes Canongate to 2017 loss

Severn House acquisition pushes Canongate to 2017 loss

Canongate made a loss last year despite a rise in turnover because of the significant purchase costs of acquiring Severn House Publishers and the writing off of "some sizeable unearned advances".

While the Edinburgh-based independent publisher saw a rise in turnover from £8.54m in 2016 to £8.9m (£9.59m including four months of Severn House sales) in 2017, the acquisition of indie press Severn House last summer and the writing off of advances saw it end with a pre-tax loss of £440,000, compared to a pre-tax profit of £128,506 in 2016.

Canongate c.e.o. Jamie Byng told The Bookseller: “The acquisition of Severn House was always going to impact our 2017 results adversely and was a sizeable one-off cost in last year’s loss. Nevertheless, we remain more confident than ever that the addition of Severn House to the Canongate business was a smart strategic decision, one that has already strengthened the company in a number of important ways and will continue to do so, not least through the upcoming launch of our new crime and thriller imprint, Black Thorn, in May 2019. 

“We also felt it prudent to write off some sizeable unearned advances, which is what we’ve done, and I’m pleased that having taken this pain in 2017, we are on course to deliver not only additional growth in 2018 but also profits. And to do so through the publication of a number of exceptional books.” 

“2017 was a significant year for Canongate,” chairman David Young wrote in the results posted in Companies House. The publisher bought Severn House on 31st August, seen by Canongate as a “smart, strategic acquisition and a publishing business that sits well alongside Canongate”. The company paid a total of £3.04m to authors and agents, 34% of its 2017 turnover.

Successes in the non-fiction section included the strong selling of memoir How Not To Be a Boy by Robert Webb which saw 88,171 copies sold across all editions through Nielsen BookScan's TCM, as well as stocking-filler The Beautiful Poetry of Donald Trump by Rob Sears which shifted 47,195 books. Cookery book Salt, Fat, Acid, Heat by Samin Nosrat sold 14,800 copies while social science anthology If I Could Tell You Just One Thing by Richard Reed shifted 27,495 copies.

Across fiction, How to Stop Time by Matt Haig was a strong performer with 191,240 copies sold via Nielsen BookScan, and Stay with Me by Ayọ̀bámi Adébáyọ̀, shortlisted for various prizes such as the Baileys Women's Prize for Fiction.

Meanwhile, Young said in his Companies House report that 2018 is a “strong and full programme of publishing” and he looks forward to “improving our bottom line performance”.