Canongate's turnover drops 24% in 'difficult' year

Canongate's turnover drops 24% in 'difficult' year

Canongate experienced a "difficult and dispiriting" 2014 in which its turnover dropped 24% to £7.9m.

In financial results posted on Companies House for the year ending December 2014, Jamie Byng, Canongate's c.e.o, said the financial performance of the business had been "very poor”, blaming the underperformance of the company's key autumn titles. However, the company said 2015 had "started well" with the publisher beating its half-year budget target.

In the year of 2014, Canongate saw turnover fall by 24% to £7.9m in 2014 from £10.3m in 2013, with pre-tax losses of £1.3m, a "sharp contrast" to the 2013 profits of £1.2m.

A statement by Sir Christopher Bland in the accounts, said: "After two excellent years in 2012 and 2013, the results for 2014 were extremely disappointing, illustrating the volatile and unpreditable nature of the publishing business."

Bland added that the "principle reason" for the company's losses last year was "the underperformance of our Autumn frontlist and some very significant advance write-offs we subsequently made."

However, the publisher said its 2015 had "started well" and it had reached the half-year point having beaten its budget, managed costs carefully and "published some superb books with great effectiveness." It also promoted Jenny Todd to publisher in March, while Kate Gibb's role was expanded to finance and operations director.

In his overview in the 2014 accounts, Jamie Byng, c.e.o of Canongate, said last year was a "dispiriting and difficult year for Canongate", echoing Bland's assessment that the publisher's autumn titles had underperformed.

"The financial performance of the business was very poor, primarily down to our failure to deliver on the high expectations for a number of our big Autumn titles," Byng said. "We were not alone in finding last Christmas challenging. Many other trade publishers reported disappointing sales for their big non-fiction titles. But this provides scant consolation."

Some of Canongate's big titles for 2014 included Ray Winstone's Young Winstone which according to Nielsen bookscan sold 30,000 copies for £330,000, in value, Russell Brand's Trickster Tales which sold 17,000 copies for £130,000 in value and Alan Cumming's Not My Father's Son which sold 7,000 copies for £111,000 in value. 

World According to Gogglebox was the publisher's biggest Christmas title in 2014, which sold 49,000 units taking in £508,000, while its big fiction title of last year, Karl Pilkington's latest book The Moaning of Life sold 42,000 copies for £260,000.

Byng said that six titles accounted for a £1.4m of £1.8m shortfall in the frontlist turnover "and this large gap was not made up by any of our other frontlist titles breaking out in a significant way."

However, on a more positive note, Byng said that the backlist preformance of the business was "excellent" with sales 25.6% ahead of budget. "Sales in digital and international rights were both down against budget but remained solid," he added. "And the audio list continues to perform steadily."

Canongate said the other major contributor to its loss-making performance of 2014 was the additional advance write-offs it "felt it would be prudent to make." These amounted to  £1.2m - £683,000 more than the company had budgeted that year.

Byng also named the “prolonged, expensive and extremely time-consuming" legal battle it fought concerning author and classical pianist James Rhodes to publish his memoir, Instrumental, as adding to the challenging year. Following the Supreme Court's ruling to overturn the injunction preventing the publication of this memoir, it went on to sell 6,851 copies according to Nielsen Bookscan. 

Canongate's non-fiction publishing director Katy Follain left the company in July and has since been appointed publisher of Quercus Non-Fiction, heading up a new, focused non-fiction division.

For 2015, the company's "stand out" titles in the first half of the year included Matt Haig's Reasons to Stay Alive, which spent 14 weeks on the bestseller lists. It also named James Rhodes' Instrumental and Mohamedou Ould Slahi's Guantanamo Diary as performing well and making it onto the Sunday Times bestseller lists. Canongate said "a number" of its other frontlist titles had performed ahead of budget.

"After last year's Autumn we have budgeted our key 2015 Christmas titles more cautiously and at this stage things would appear to be well set up for all these publications," the accounts said. "All the staff are very focussed on what needs to be done for us to maximise on the potential of our autumn list."

It added that its cash positions remains strong and the company continues to invest "substantial" amounts of money in acquiring new titles.

According to Nielsen Bookscan, Canongate's sales for the first 34 weeks of the year are £2.55m up 3.2% on the same period in 2014, with Haig's Reasons to Stay Alive and The Humans the company’s two bestselling titles of the year, combining to sell £375,000 through the TCM.