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Trade offsets schools at Huveaux

23.07.08 Alison Flood

Sales were flat at Huveaux's education division, which includes UK publishers Letts, Leckie & Leckie and Lonsdale, in the first half of 2008. In a trading update put out today, the publishing group said that sales in the six months to 30th June 2008 were £5.5m (2007: £5.5m), while EBITDA was also flat at £0.9m.

Huveaux said that large scale changes to the secondary curriculum in the UK, excluding Scotland, had meant that this market was down by 5% in the first half of the year as schools delayed ordering while evaluating new KS3 and A-level materials. It said this also had a knock-on effect on GCSE sales, "as the overall departmental budget requirements were evaluated".

But Huveaux said that the shortfall in schools sales was offset by growth to trade outlets, with increased business to W H Smith and Borders, as well as major supermarket chains, and the addition of Argos to its customer list for the first time.

School sales were also down in Scotland, which Huveaux said reflected Scottish local authorities' budget shortfalls, and the absence of the one-off extra funding for schools which was given ahead of the elections in the same period in 2007. It said the shortfall was "more than" made up for by an increase in trade sales.

Huveaux said that it had maintained its overall margin over the period thanks to a cost reduction programme put in place in 2007, with production costs also kept in check.

Its digital development programme is also growing, with online sales of books up "significantly". It published eight purely digital products out of 68 new titles in the first half of the year, with a further 131 new titles scheduled to be published in the second half, 11 of which will be purely digital. It also launched product specifically for iPods in early 2008.

"These investments reinforce Huveaux's position as the leading publisher in the UK revision market," Huveaux said. "The second half of 2008, with the new curriculum and a new academic year, remains core to delivering a good result for the full year. The education division is performing strongly; however the full effect of curriculum change and the changed mix between trade sales and school sales, will only fully emerge in the second half of the year."

Overall, Huveaux's sales in the six months to end-June 2008 were flat at £21.7m, with EBITDA increaseing from £1.0m to £1.8m in aggregate, and from £0.5m to £1.1m on retained businesses.

At the end of 2007 Huveaux terminated talks with private equity firm August Equity about a possible offer for the company after failing to reach agreement on a proposal which fully valued the company.
 

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