'Encouraging' results for Cengage Learning (EMEA)

Cengage Learning (EMEA) Ltd, whose parent company Cengage Learning Inc emerged from Chapter 11 proceedings in the US in the spring, has reported turnover of £34.1m in the nine months to 31st March 2014, with a profit after tax of £4.8m.

The company described the performance as "encouraging",  saying direct comparison with the previous financial year (turnover £49.3m and profit £5.3m for the full 12 month period) was not possible because the Chapter 11 proceedings had brought about a change to the financial reporting year-end.

"Whilst turnover is lower than the same period in 2013, overall performance has exceeded the plans set for the period ended 31st March 2014," the company said.   

Cengage Learning (EMEA) reported success in its strategy following its parent company's decision to implement a minimum price on many bestselling products outside the US since May of last year after the Kirtsaeng ruling allowing re-import to the US of cheaper international editions. "Cengage Learning (EMEA) Limited's policy of negotiating specific exemptions, offering substitutions, digital product, localised product and older editions has proved successful in maintaining turnover at higher than expected levels," the company said in its Strategic Report for the year.

The company also continued a "fundamental reorganisation of its sales, operational and administration groups", leading to exceptional costs of £307,000, much lower than the £1.6m incurred in 2013.

It said market conditions remain a "challenge" with flat university enrolments in core Western markets and public spend on education and libraries subject to budgetary pressures. Political unrest in the Middle East also proved "an impediment to winning new business and collecting payment on previous transactions," the company noted. However, Cengage Learning (EMEA)'s Middle East revenues continued to grow as a result of continued investment in resources and sales force in that area.