Sales at Hachette UK were down 3.5% in the first six months of 2015 compared to the year before, because of a “slate of new releases that was not as strong as the first half of 2014”, according to results announced by Hachette's parent company Lagardere.
E-books represented 33% of sales in adult trade in the UK, falling from 36% in the first half of 2014. In the UK the digital market is “stabilising and has been impacted” by the increase in VAT brought in on 1st January this year, Lagardere said.
Earlier this month Hachette UK c.e.o. Tim Hely Hutchinson described the first half of 2015 as “busy and successful” for Hachette UK, saying the company was “looking forward to a very strong second half”. E-book sales “remain buoyant but the general rapid growth that the trade experienced between 2009 and 2014 has been halted, at least for the time being”, he told The Bookseller.
Sales at Lagardere Publishing, which encompasses the company’s publishing activities across the world, were €968m, down by 2.9% on a like-for-like basis for the first half of 2015 but up 7.1% on a reported bases because of the strength of the US dollar and the pound. Recurring earnings before interest and taxes were at €36m, down €14m, “related to the decline in activity, particularly in the US”.
Activity “declined as expected” in the first half of 2015 for its publishing division, said Lagardere, “mainly due to the downturn in the US…which was not offset by the high level of activity in France”.
The US saw a 7.8% decline in sales which “can be explained by the high level of activity in the first half of 2014”, which included the release of Donna Tartt’s The Goldfinch and Robert Galbraith’s The Silkworm. US e-book sales dropped to 24% of sales for trade compared to 29% at the end of June 2014, “given a less successful slate of new releases and the implementation of the agreement with Amazon”.
Publishers Lunch said that on an investor call, Lagardere “tried to explain the effects of the Amazon contract without actually revealing the details, saying the effect was being phased in and the negative effects on income should ease by the end of the year”.
Total digital sales for Lagardere Publishing declined to 10.7%, compared to 11.3% for the first half of 2014.
Meanwhile Lagardere’s publishing business in France “grew sharply” by 3%, due to the positive trend in general literature, “with the success of new releases…and the performance of the paperback segment”, including the Fifty Shades of Grey series by E L James. In Spain and Latin America activity was down 3.8%, “particularly due to a postponement in education sales in Spain”.
Overall, Lagardere sales for the first half of 2015 were €3.304m, with sustained growth of 2.9% like-for-like. Recurring EBIT was €122m, “representing sustained growth of 11%”.