Canongate 'confident' as profit rises 7.5%

Canongate experienced another “solid” year in 2016 which saw its turnover rise marginally to £8.5m, including an “encouraging” 6% increase in backlist sales which "bodes well" for the long-term health of the business, its chief executive Jamie Byng said.

Overall turnover at the publisher rose just under 1% to £8.54m, while pre-tax profit was up 7.6% to £128,506 for the year ending December 2016.

Speaking to The Bookseller about company's "encouraging" financial results, Byng was particularly enthused by the strength of backlist sales, which he said demonstrated the "real health" of the business.

Last year was "another solid year for Canongate, one that saw us building on the return to profit we enjoyed in 2015, and which I believe will provide a strong base for further growth in 2017,” Byng said, adding "it was the performance of our backlist which helped our margins and delivered a profit to the bottom line. It also bodes well for the long-term health of the business as we continue to add strong-selling titles to the backlist each year and invest more time and money into growing this highly profitable engine of the business.”

Frontlist sales were up by 2%, the company said, particularly due to the "outstanding success" of Matt Haig’s Reasons to Stay Alive which sold 130,000 copies for £713,437 last year, and was the second bestselling narrative non-fiction paperback in 2016. Haig also ended the year with the second of his Christmas books for children, The Girl Who Saved Christmas, which sold 33,530 copies for £295,160, according to Nielsen BookScan.

Other significant frontlist successes included Amy Liptrot’s award-winning The Outrun, David Eagleman’s The Brain, Olivia Laing’s The Lonely City, Jess Kidd’s Himself, Richard Reed’s If I Could Tell You Just One Thing and the first paperback edition of Shaun Usher’s Letters of Note.

Byng said audio and rights sales had bolstered the business in the face of declining e-book sales.

“Our audio list continues to expand in encouraging ways and the right department had another good year, contributing £1.47m to the revenue of the company," Byng revealed. “Our e-book business was slightly down year-on-year which was reflective of the industry as a whole but remains steady and still contributed significantly to our bottom line.”

So far 2017 has begun well for Canongate with the publisher releasing the Bailey's prize-shortlisted Stay With Me by Ayobami Adebayo and the Man Booker-longlisted Solar Bones by Mike McCormack, and a new title from Scarlett Thomas, Dragon’s Green, heading up the business' revitalised children's list, which also features Haig's Christmas series. Haig’s first adult novel in four years, How to Stop Time, has been the publisher's biggest title for 2017 to date, spending eight weeks on the Sunday Times bestseller list. It has sold 25,105 copies for £233,445, according to Nielsen BookScan.

The publisher is "ahead of budget on the bottom line" at the half year point of 2017 and the second half of the year has the potential to “significantly outperform expectations”, Byng said, with memoirs coming from Robert Webb (How Not to be a Boy) and Matt Lucas (Little Me), as well as more titles from Haig. The recent signing of a new memoir from Gina Miller and the acquisition of a couple of "high profile" titles which have yet to be announced, means that 2018 is promising to be "big and exciting", Byng predicted.

The second half of 2017 also sees the company relaunching its business in North America through a new distribution with PGW/Ingram. Byng said that "time will tell how significant this part of the business could be" but added that the "early signs are encouraging”.

“It's still early days with PGW/Ingram but we’re putting a lot of effort and time into the relationship and are really confident that we’re going to be able to relaunch our list in the US," the Canongate chief said. :The international market is a significant part of the Canongate business so we feel quite bullish about what we’re going to achieve with it.”

Looking ahead, Byng named Brexit as potential risk and uncertainty for the company. "Brexit has created further uncertainties within the UK economy as well as our future relationship with Europe and further afield", he said. "International partnerships are such an important part of the global publishing industry and the export markets a highly significant part of Canongate’s business. Despite the ongoing confusion surrounding Brexit, we continue to work closely with all our international customers and partners as well as doing everything we can to ensure the business thrives in our crucial home market.”

Last year saw a consolidation of the senior management team at Canongate which now consists of Byng, finance director Kate Gibb, production director Caroline Gorham, sales director Neal Price, publishing director Francis Bickmore, rights director Andrea Joyce and communications director Jenny Fry after Jenny Todd's departure was announced in July.

But Byng said there was a "growing confidence" amongst the 41 members of staff and he felt "very encouraged" in the company's ability to "publish books at the highest level".

"The economy is not in the finest shape, there's a lot of uncertainty which is not conducive to consumer confidence or spending. However, great books are always wanted. We’re just going to keep our heads down and focus [on publishing great books]. We have the best team we've had in 25 years and I feel very privileged to be working with them," Byng said.