Hachette UK hails 'stellar' quarter but Lagardère sees revenue plunge 38.3%

Hachette UK hails 'stellar' quarter but Lagardère sees revenue plunge 38.3%

Hachette UK has reported a “stellar” third quarter with year-on-year growth of 15.6% and record download revenue for e-books and audio, however parent firm Lagardère saw a year-on-year revenue decline of 38.3%.

Exact figures for Hachette UK for the period to 30th September were not broken out, but c.e.o. David Shelley said there had been year-on-year growth in both the UK and Australia of more than double the rate of local market growth.

He said the “stellar performance” was powered by new bestsellers including Midnight Sun by Stephenie Meyer (Atom), Troubled Blood by Robert Galbraith (Sphere), Dear NHS edited by Adam Kay (Trapeze), Women Don’t Owe You Pretty by Florence Given (Cassell), Those Who Are Loved by Victoria Hislop (Headline), The Institute by Stephen King (Hodder), Once Upon A Tyne by Ant and Dec (Sphere) and Deliciously Ella Quick & Easy (Yellow Kite). There was also continued success for books such as Where The Crawdads Sing by Delia Owens (Corsair), Queenie by Candice Carty-Williams (Trapeze) and Natives by Akala (Two Roads).

Shelley said: “We had 148 appearances in the Sunday Times list, compared to 85 in the same period last year, and volumes increased due to the reopening of bookshops in the UK and Ireland during Q3. Our education business also recovered rapidly as schools prepared to go back in September and is now performing well.”

He also pointed to the recent acquisition of gift and creative art book specialist Laurence King Publishing alongside the launch of Phoenix Books at Orion and Greenfinch at Quercus as examples of the business diversifying.

Shelley said: “We continued to develop our market-leading diversity and inclusion programme, Changing The Story. We voluntarily announced our ethnicity pay gap, which showed that representation of black, Asian and minority ethnic (BAME) employees increased to 9.6% this year — encouraging progress towards our 2024 target of 15%. Meanwhile, our BAME employee network THRIVE continued to champion inclusion during the quarter, launching a BAME writers’ development programme and portfolio sessions for BAME designers and illustrators.”

For the Lagardère group, third-quarter revenue fell to €1.19bn from €1.93 in the same period last year, largely due to the pandemic's impact on its travel retail business. That sector saw a 66.1% drop in revenue as tighter travel restrictions hit trading in all of the division’s regions with the exception of mainland China. The group is under some pressure from investors, with French television channel BFM TV reporting this week (3rd November) that Lagardère chief Arnaud Lagardère, his ally LVMH chief Bernard Arnault and rival Vivendi chief Vincent Bolloré have been negotiating a carve-up of the Lagardère group for several weeks. Hachette has so far declined to comment on these rumours.

For now the firm said the steep decline across travel was partly countered by a rise in revenue for Lagardère Publishing over the same period. This was buoyed by “a good performance in France, which benefited from advances in General Literature and Illustrated Books, and by vigorous business growth in the US and the UK spurred by the success of a large number of bestselling titles and by upbeat trends in digital formats”.

Revenue for the division totalled €704m, up 6.3% on a consolidated basis and up 6% like-for-like. E-books as a proportion of total Lagardère Publishing revenue continued to grow, representing 9.9% in the third quarter of 2020 versus 7.8% in third-quarter 2019, while downloadable audiobooks represented 3.7% of revenue compared to 2.9% a year earlier.

The firm also warned further lockdowns could hit its future results in publishing. It reported: “The publishing business will be contending with an unfavourable prior-year comparison basis in fourth-quarter 2020, due to the absence of Asterix album releases (albums are only released every other year). The lockdown measures announced recently in several European countries will also affect sales in France and, to a lesser extent, the United Kingdom.

“In light of envisaged cost reductions and a favourable revenue mix, Lagardère Publishing expects the adverse impact on full-year 2020 recurring EBIT to be in the region of 20% to 30% of the decrease in its revenue.”