Flat sales and profit at CUP

Cambridge University Press sales dropped very marginally to £268.8m in the year ended April 2016, according to its latest annual report (£269.1m in 2015), with growth levels falling back from a 5% revenue rise the year before.

However underlying growth on a constant currency basis was said to be 1.5%, reflecting higher growth in CUP's Education division, offset by challenging conditions in the Academic division.  

Profit before exceptional one-off costs stood at £6.5m, flat with 2015.

Chief executive Peter Philips said the reported results were "a pleasing performance when set against difficult market conditions for the publishing industry as a whole", observing: "The world economy was fragile and uncertain, weighed down by sluggish expansion in Europe and worries over slowing growth in China, and the strength of sterling in 2015."

He noted: "The digital revolution sweeping through publishing gathered further pace in 2015-16, pushing the industry through fast and sometimes difficult change, but also creating growth opportunities for Cambridge University Press as we invest in new content and technology, as well as strengthening our position in important markets around the world."

Phillips said there were particularly strong opportunities for learning material supported by additional services in China and India, as a result of which the Press now had a more global outlook in sales and staff location, with over 90% of revenues from outside the UK - "a number which continues to increase" - with developing markets now accounting for 36% of sales, "a figure that has doubled in five years."

Education was once again the Press's fastest growing division in 2015-16, with particular success in Australia and "exceptional growth" in India.

The ELT division "advanced in a tough, competitive market",  and underwent "an internal transformation programme, including an increased investment in publishing and sales for our most important markets", Phillips said. The publisher said in January that it was shifting 45 ELT jobs from the UK office to overseas Press publishing centres.

The Academic division had "a challenging but profitable year" with journals publishing continuing to grow ahead of the market. "Academic books, in common with the industry, faced strong headwinds, particularly in the United States, where changing market dynamics and mergers between distributors affected sales," Phillips noted. "Library budgets are under pressure, and an increased proportion of spending is being directed towards journals." Universities in North American and Europe are also moving to new usage-based payment novels, involving buying a book digitally and paying the publisher when the book is used, deferring revenue, Phillips added.  

Digital products are "growing very strongly" and by the end of the year were running at a third of revenues. In its 2015 results report, CUP said digital was at "almost a third" of revenues.

Phillips said the launch this summer of the new digital platform for Academic, Cambridge Core, bringing together CUP's books and journals in one online home, "underscores how digital is now at the heart of all we do."