Hachette fourth quarter revenue down 14.3% but digital sales rise

Hachette UK’s revenues declined 14.3% in the fourth quarter of 2017 after the company struggled to compete with the success last year of J K Rowling's Fantastic Beasts and Where to Find Them, the restocking of Harry Potter and the Cursed Child and a spike in sales of the Enid Blyton for Grown Ups series.

Parent company Lagardère said the UK’s performance was down to “an unfavourable comparison effect” from last year that had been “expected”. 

David Shelley, Hachette UK’s c.e.o., said that despite the on-going comparison with the record-breaking sales in 2016, Hachette UK had a “strong” fourth quarter with sales ahead of budget. Moreover, digital sales were “considerably up on 2016”, buoyed by double-digit growth in audio, he said.

“Hachette UK had a strong Q4 with sales ahead of budget but below 2016 because of the comparison with sales of Fantastic Beasts and Where to Find Them by J.K Rowling in Q4 2016 and the on-going comparison with the record-breaking sales of the original hardback edition of Harry Potter and the Cursed Child in the same period in 2016,” Shelley commented. “Digital sales in the quarter were considerably up on 2016 and with the inclusion of Bookouture the picture is even stronger. Digital sales were further boosted by healthy double digit growth in audio downloads.”

In the fourth quarter Hachette Children’s Group recorded “continued good results” with sales successes including Cressida Cowell’s The Wizards of Once, Oi Cat! by Kes Gray and Jim Field, Dermot O’Leary’s Toto the Ninja Cat and Miranda Hart’s The Girl with the Lost Smile.

Hachette UK's most “significant” Christmas bestsellers published in the quarter included Bletchley Park Brainteasers (Headline), How to be Champion by Sarah Millican (Trapeze), Gino’s Italian Coastal Escape by Gino D’Acampo (Hodder) and Two Kinds of Truth by Michael Connelly (Orion). “Strong ongoing sales” in the period included those of Fever Tree: The Art of Mixing (Mitchell Beazley), It by Stephen King (Hodder) and Sleeping Beauties by Stephen King and Owen King (Hodder) and the TV tie-in editions of the Robert Galbraith Cormoran Strike series (Sphere).

In the last quarter of the year, Hachette UK also acquired three new companies: Kyle Books and Summersdale joined the Octopus Publishing Group and Jessica Kinglsey Publishers became part of John Murray Press.

Overall Lagardère Publishing’s revenues in the fourth quarter were up 2.8% like-for-like to €624m, and for the full year 2017 came in at €2,289 million, up 1.9% like-for-like (up 1.1% on a consolidated basis).

According to Lagardère, the unfavourable comparison effect produced in 2016 by the success of Harry Potter and the Cursed Child in the United Kingdom, and by Spain's curricular reform, were offset by a good performance from Partworks (up 8.8% in 2017, up 7.3% in Q4), especially in Argentina and Japan, and by gains made in France (up 3.4% in 2017, up 11% in Q4), boosted by the success of bestselling titles including Dan Brown's Origin, as well as a record year for Le Livre de Poche paperbacks and the success of textbook publishers amid curricular reform.

E-books accounted for 7.1% of total Lagardère Publishing revenue in fourth quarter 2017, versus 7.6% in fourth-quarter 2016.

Full year results will be made available in March.