Profits drop for HarperCollins UK

Profits drop for HarperCollins UK

HarperCollins UK has seen a 66% drop in profits for the year ending 30th June 2013, according to results filed with Companies House.

Pre-tax profits at the publisher dropped from £8.3m in 2012 to £2.8m in 2013, a decline of 66%. Profit after tax stood at £1.07m, falling  80% from £5.3m.

HarperCollins has attributed the decline in profits to costs incurred by a change in its distribution system. The Companies House statement said margins had fallen "due mainly to a combination of the adverse impact on costs of a systems change in our distribution centre and the expense associated with fully writing off the residual internally capitalised publishing plant costs." The company added: “Operating profit is expected to recover to normal levels in the year ahead.”

A spokesperson for the publisher told The Bookseller it had been a strong publishing performance. They said: "HarperCollins UK had another strong publishing performance this year with turnover significantly up and particular success coming from George RR Martin, JRR Tolkien, Hilary Mantel and David Walliams.

"As the accounts, show operating profit was down because we brought forward the write-off of some capitalised internal publishing plant costs and also incurred one-off costs in relation to the launch of a new system in our distribution centre."

The results cover the period of Victoria Barnsley's final year as c.e.o. of the company. Barnsley left the business in July 2013, to be replaced by former Pottermore chief executive Charlie Redmayne.

Despite a loss in profit, turnover at the company grew by 4.4% during the same period, rising from £182.6m in 2012, to £190.6m in 2013. This growth was mainly driven by international sales in North America, Australia and New Zealand. Turnover in the UK dipped slightly by 1.2% from £134.8m to £133.2m.

The accounts also described its revenue growth as "strong", and said that its market share in the UK according to BookScan had increased slightly, to 7.9%.

Man Booker Prize  and Costa Prize winning title Bring Up the Bodies by Hilary Mantel and The Hobbit, boosted by Peter Jackson’s film adaptation, were singled out by HarperCollins as successes within the year. David Walliams also received a mention for his sales performance, while, a winner at the FutureBook Innovation Awards in 2012, is also referenced as the company's most popular website, with 1.6m unique hits a month.