Profits fall at Penguin in 'momentous' year

Profits fall at Penguin in 'momentous' year

The Penguin Group saw a 1% rise in sales to £1.05bn in 2012 (£1.04bn in 2011). However, the publisher's profits dropped 12% on 2011, according to its 2012 preliminary results, producing an operating profit of £98m, down from £111m the year before.

Parent company Pearson reported a 5% rise in sales overall to £6.1bn, up from £5.9bn, with headline profits at £936m, down 1% from 2011's £942m, though a 1% rise with constant exchange rates.

Penguin Chairman and c.e.o. John Makinson, said: "We always knew that it would be tough to match Penguin's remarkable 2011 results in 2012 but, as we anticipated, our performance strengthened over the course of the year culminating in an outstanding fourth quarter around the world. It was a momentous year in many ways and I am proud that Penguin took centre stage for two of the defining moments, through the acquisition of Author Solutions, which has got off to a fantastic early start, and through the proposed merger with Random House, which we expect to conclude in the secondhalf of this year. We can say with some confidence that 2013 will be no less momentous than the year on which we are reporting."

The proposed partnership with Random House, which will see Pearson own 47% of the combined company, with Random House's owners Bertelsmann possessing the remaining share, was approved by the US Department of Justice on 14th February.

There were a total of 90 BookScan bestsellers in the UK, compared to 78 in 2011, with erotic novelist Sylvia Day and celebrity chef Jamie Oliver both performing strongly.

Digital has also continued to grow, with e-book revenue accounting for 17.5% of  Penguin's global revenue, and 30% in the US. Penguin e-books have now been made available in India, Brazil and China. App sales have also grown globally by more than 200%.

UK c.e.o. Tom Weldon said: "2012 was Penguin UK's best year ever. This standout performance reflected the amazing diversity of our publishing and that success allows us to invest in the future. We are now telling stories and spreading ideas through physical books, e-books, apps, virtual worlds, social media, live events, TV series, games, and consumer products.  We are the first of a new kind of publisher."

Events programme Penguin Live and Penguin Ventures, which focuses on exploring new IP opportunities, were highlights of 2012, Weldon said.

John Duhigg, Dorling Kindersley c.e.o., said DK had grown its market share in all major territories. He said: "2012 was another standout year for DK with strong performances across all our publishing categories and around the globe. Our traditional book markets continue to be challenging but we are reaching our consumers though new channels and markets around the world."