Hachette UK sales up 11% for 2016

Hachette UK's parent company Lagardère has published its annual results, reporting sales in the UK grew by 11% in 2016, helped by Little, Brown titles Harry Potter and the Cursed Child and Fantastic Beasts that helped to offset the full-year impact of a return to the agency agreement for e-books.

The annual results provide further detail following Lagardère's Q4 financial results in February, when the same two books were credited in contributing to 17.5% sales growth for Hachette UK in 2016's fourth quarter.

The break down shows a strong performance from Lagardère Publishing in 2016, with revenues up 2.5% on a like-for-like basis to €2,264m (2015: €2,206m). The publishing division's recurring EBIT (earnings before interest and tax) was up by €10m, coming in at €208 (2015: €198), comprising over half of the group's profits. (Group recurring EBIT for the whole of Lagardère for 2016 was €395m, up from €378m in 2015.) 

Lagardère Publishing improved its operating margin by 0.2 points to 9.2% and this increase in profitability was attributed to three things: profitability gains in the US, due to "disciplined cost management"; the performance of Partworks in Japan and Spain; and the impact of Harry Potter and the Cursed Child and Fantastic Beasts in the UK, which it said "more than offset the decline in digital revenue in the UK".

Hachette UK's revenues were up 11% and the UK was credited in driving business growth for the whole publishing division, lifted by the success of Harry Potter and the Cursed Child in English worldwide (excluding the US and Canada) and Fantastic Beasts, and by the "good performance" of Partworks, up 5.7%, especially in Japan and Spain.

In France, revenues were up 1.5%, its education publishing helped by curricular reform offsetting a "more subdued performance" from Illustrated Books and General Literature; while in the US, business was down 4.2% due to a "less eventful" publishing programme than in 2015. The Spain/Latin America region was stable (down 0.4%).

The contribution of e-books to Lagardère Publishing's overall revenue in 2016 was 8% in comparison to 9% in 2015. 

Purchases of investments represented an outflow of €108 million for Lagardère overall, which mainly related to the acquisition of North American publisher Perseus by Lagardère Publishing and "to a lesser extent" Neon Play in June 2016.

Hachette UK has since acquired e-book publisher Bookouture, on 6th March, as reported this week.

Hachette UK c.e.o. Tim Hely Hutchinson commented: "As has been widely reported, 2016 was an outstanding year across the Hachette UK group, at home and abroad, with standout contributions from each of the publishing divisions and crowned by the publication of the book of the decade, J.K. Rowling's Harry Potter and the Cursed Child and of  Fantastic Beasts and Where to Find Them, both brilliantly published by Little, Brown and the Christmas Book of the Year, Five on Brexit Island ingeniously conceived and published by Quercus. We celebrated the year with our UK staff and representatives from our overseas companies at our Showcase on Monday and looked forward to the wonderful publishing programmes coming from across the group in 2017."