Quarto grows in 'difficult' market

<p>The Quarto Group, the publicly-quoted international book publisher, is keeping an eye out for some &quot;juicy&quot; acquisitions in 2009, after reporting double-digit sales growth in 2008, a year when the group admitted &quot;trading became progressively more difficult&quot;.</p><p>Quarto reported revenues of &pound;112.7m for 2008, an increase of 13% over 2007. Adjusted pretax profit, which increased marginally at &pound;7.7m, represented an eighth successive annual increase. However, reported pretax profit was &pound;1.6m, down a massive 76% on the previous year, thanks to &pound;4.2m of restructuring costs at its publishing wing and higher finance charges.</p><p>The group performance included a &quot;record operating result&quot; from its International Co-edition Book Publishing segment, with revenues up 11% to &pound;42.7m, and adjusted operating profit advancing by 23% to &pound;6.4m.</p><p>Book Publishing revenue increased by 11% to &pound;70m, with adjusted operating profit lower by 3%, at &pound;6.3m. In the UK, it reported that Aurum, which includes, operationally, the Jacqui Small and Apple lists, had sales that were flat overall. Except at Jacqui Small, which specializes in high-end interiors and lifestyle, UK sales moved ahead: significant gains were made at Waterstone&#39;s, and at Amazon, but trading with Borders was &quot;unsatisfactory&quot;.</p><p>Laurence Orbach, chairman and c.e.o., said: &quot;In common with many other industries, November was horrible, but this must have been the point when the fear of the future manifested itself most widely. Books commissioned in earlier years were launched into a retail environment that deteriorated very sharply in the second half of the year.&quot; Book publishing&#39;s operating margin, at 9% of sales, was &quot;respectable, but unimpressive&quot;, Orbach added. Quarto closed closed its art print publishing businesses, and advanced the consolidation of its US warehouse and back office functions. The overall exceptional cost of this was &pound;4.2m.</p><p>Commenting on the group as a whole, Orbach said: &quot;On this occasion, we&#39;re not going to be rash enough to make any forecast for the current year . . . Unlike most media businesses, book publishing does not have a stream of advertising revenue. Yet, despite not receiving this &#39;subsidy&#39; to the cost of content, books remain relatively inexpensive. Some of us are very disappointed that what was held, within book publishing, to be a truism, namely, that the sector always does well in recessions, is not being demonstrated unequivocally, although the experience is mixed, and books remain relatively inexpensive purchases.&quot;<br /><br />Orbach added that the group would look for &quot;some juicy acquisition candidates if the economy continues to deteriorate&quot;, but added that it was &quot;more likely to create new start-ups&quot;.</p>