JS Group reports 6% revenue drop for 2016

Academic retailer JS Group has reported a 6.2% year-on-year revenue drop to £38.1m in its annual results covering the financial year ending 31st May 2016, "in line with expectations" according to the company. Operating profit was £175,000, down 48% from the previous year's total of £336,000.

The company saw a 75% surge in e-book sales, with e-books now representing 17% of all book sales; however it also experienced its first ever decline in UK Higher Education revenues.

UK Higher Education revenues were down 8.3% reflecting the fact, according to the JS Group, that no new Aspire schemes commenced during the year (Aspire schemes being a cashless bursary solution for the UK Higher Education sector), although a number of new Aspire schemes have been secured for commencement this September, including at York St John University reported yesterday. Overall numbers of students served by Aspire schemes also declined, and the company said there had been a "planned de-emphasis of lower margin products". 

In International HE, the group's revenues for its business in Botswana increased by 1% on a constant currency basis despite a decline in the number of students at the University of Botswana.

Maintaining double digit growth, legal bookseller Hammicks, whose bricks and mortar London Fleet Street store closed in 2015, showed like-for-like sales growth of 12.3%, and secured a new contract secured with the Ministry of Justice (MoJ).

Books sales rallied showing growth of 4.5%, with books as a category accounting for 56% of sales up from 49% in the prior year. JS Group's e-commerce channel grew by 19% and accounted for 27% of all sales.

The retailer, including the John Smiths academic bookselling chain, supplies clients' e-textbooks through Kortext; that platform in August made two new senior hires in anticipation of "three-four times year-on-year growth" through international expansion.

Peter Gray, chairman and c.e.o. of JS Group, said: “Overall, I am pleased with the results we delivered in the year. We saw growth in our international and Hammicks businesses and, although we saw our first ever decline in revenue in UK HE, we did secure a number of new Aspire contracts both for both the 2016/17 and 2017/18 academic years. These and our new contract with the Ministry of Justice position us strongly for this current year and next.  We continued to deliver good growth in book sales throughout the business and the 4.5% increase in UK HE book sales was driven by the 75% increase in our e-book sales.  Our contract wins and strong book performance meant we continued to invest significantly in the business and we are confident that we will return to overall growth. We continue to perform well in our markets and I am impressed by the professionalism and dedication of all my colleagues.”

Gray added: “Our markets remain challenging with lower student numbers in Botswana and some pressures on student numbers here in the UK but our performance is strong and I am particularly encouraged by the interest in Aspire in the UK which is the strongest I have seen. The new Aspire scheme at Worcester has got off to a tremendous start as have our new contracts with the Ministry of Justice.  Our growth momentum is building as our Aspire schemes deliver real benefits to students and universities alike and I expect the introduction of TEF in the UK will provide further impetus not only for JS Group and other on campus retailers but also for our partner publishers.” 

Last year, JS Group’s revenues were up 2.7% to £40.66m, with operating profit up 25% to £3,36,000. At the time, Gray had said the Aspire bursary platform had been the main driver behind the company’s growth after four new universities begun to use the service.