Penguin: 'Double digit growth with Waterstones'

Penguin: 'Double digit growth with Waterstones'

Penguin UK achieved double-digit growth with Waterstones in the first six months of 2013, ahead of its merger with Random House, company leaders have confirmed.

Tom Weldon, now Penguin Random House chief executive, but occupying the role of Penguin UK chief executive for the period covered by Penguin's latest six-month results, described the growth as "very encouraging". He said the result was partly due to Penguin's mix of books across the six months, including John Le Carré's A Delicate Truth and Daniel Kahneman's Thinking, Fast and Slow, but added: "We're working well with them and we have a close relationship, as we do with all retailers."

Penguin's single bestselling book with Waterstones for the period was John Green's The Fault in Our Stars, which sold over 250,000 copies in all markets. "It was a great piece of publishing, reaching the children's market and the adult market," Weldon said, noting that while growth in IP development at Penguin Children's was "exciting stuff", "let it never be forgotten that we are a very author-centric business and both bits are very important to us".

Former Penguin Group chief executive John Makinson, now in place as chairman of Penguin Random House, said Penguin's first half growth figures (underlying growth of 6%, with sales standing at £513m) were "slightly flattering" because of comparison to 2012's first half, which saw a £20m tumble on the previous year.

But he added: "We were very happy with every territory of the world. The US had a very good first six months, Australia was pretty tough, but we're growing share. There was no area where there was disappointment, although there are all the industry issues – there is pressure on bricks and mortar retailing which is quite challenging for everyone."

The bulk of the difference between Penguin's headline growth (16%) and underlying growth (6%) related to the acquisition of self-publishing house Author Solutions, Makinson said. "As we said when we acquired it, it is an area of incredible growth," he noted. "It is a faster growing business than the traditional business, with growth focused on two areas – partnerships with other publishing companies, including HarperCollins and Simon and Schuster, and growth outside the US." The publisher is looking to extend its "Partridge" Author Solutions wings recently launched in India and South Africa.

Makinson sounded a bullish note in connection with the lawsuit being brought against Penguin and Author Solutions in the US by unhappy authors.

He said: "We think this is frivolous, we don't feel that the case presented is very strong. Clearly we are trying to deliver the strongest author experience we can. [In Author Solutions] we co-publish more titles in the course of a year as a whole than Penguin Random House—there will be authors who feel they aren't completely happy with the  service, but the overwhelming majority of Author Solutions authors are very happy with the service, as illustrated by the relatively high repeat numbers [of authors returning to publish subsequent titles]. We're not too troubled by that issue, but we could always do better."

Of Penguin's settlement with the DoJ and the EC over e-book price-fixing charges, Makinson noted that the recent judgement against Apple "confirmed our view that the judge in this matter had a particular angle on this". He added: "Although we felt and continue to feel we have done nothing wrong at all, the judge continued to assert some horizontal conspiracy. We wanted to start life with Penguin Random House with a clean page."

He added, of the 2013 first half results: "It shows we haven't been distracted by the merger, everyone has continued as usual . . . We really have delivered on books, we have been concentrating on publishing, and that's an encouraging indication for the next six months."