Returns hit first-half profits at Quercus

Returns hit first-half profits at Quercus

Quercus has recorded a 10.9% rise in turnover to £10.2m for the six months to end June 2013, but with operating profit dropping 7% to £0.52m.

Chief executive Mark Smith (pictured) said the first half saw Quercus return to top-line growth after the peak of the Larsson trilogy in 2010 and years' investing in IP, staff and infrastructure. "The reduction in operating profit for the period is a reflection of the higher level of returns of physical titles from the UK book trade over the first six months," he said.

Non-Larsson revenues increased 53% to £9.5m. The publisher's bestselling titles for the period were Peter May's The Lewis Trilogy, Hilary Boyd's Thursdays in the park, David Mark's Dark Winter, Dorothy Koomson's The Rose Petal Beach, Lynne Hill's The Clandestine Cake Club Cookbook and Michael Bright's Africa.

Digital revenues rose 46% to £3.5m, standing at 34.3% of total revenue, up from 25.6% in 2012.

Smith said the first half of the year had been a time of preparation for the launch of its inaugural US publishing programme, with the first release date this month (September). Quercus now has a team of four in its New York office. The UK book trade had proved "somewhat challenging", he said, with retailers in many cases adopting a more cautious approach on the quantities they order, plus with a higher than expected level of book returns. Smith said the publisher had withdrawn from the Independent Alliance in order to have "more control" over selling books into its distribution channels via its own sales force.

The Quercus chief executive forecast that the bulk of Quercus' profits would be generated in the last quarter, but said that despite "one of our strongest-ever publishing programmes in the second half of this year", Christmas sales would be "open to the usual vagaries of customer sentiment." Smith said: "A good start in the first three months of the year was offset by the relative slowness of the second quarter and whilst the slowdown has stabilised with signs of trading picking up, this leads to increased uncertainty over forecast trading for the rest of the year."