HarperCollins reports record profits as global revenue grows 19%

HarperCollins has reported “record profits”, with global revenues growing 19% in the financial year ending 30th June 2021, according to figures from parent firm News Corp.

Full-year revenues increased $319m (£229m) to $2bn (£1.4bn), from $1.7bn (£1.2bn) the previous year, the report said. Segment earnings before interest, taxes, depreciation and amortisation (EBITDA) increased $89m (£63.9m), or 42% from the previous year, “primarily due to higher revenues... partially offset by higher costs related to increased sales volume, higher employee costs and increased costs associated with the acquisition of Houghton Mifflin Harcourt (HMH)”.

The revenue growth was primarily due to strong backlist sales, the report said. This included the series of Bridgerton titles by Julia Quinn (issued by Hachette in the UK but HC in the US), The Guest List by Lucy Foley and The Boy, the Mole, the Fox and the Horse by Charlie Mackesy (published by Ebury in the UK and HC in the US), and the success of new titles such as The Order by Daniel Silva and Code Name Bananas by David Walliams.

An acquisition in Europe and the acquisition of HMH’s Books and Media segment also contributed $32m (£23m) and $23m (£16.5m), respectively, to the revenue growth. HarperCollins UK bought the children's publisher Egmont in May 2020, now rebranded as Farshore.

Digital sales increased 16% compared to the prior year, driven by higher e-book sales and the continued growth in downloadable audiobook sales. Digital sales represented 22% of consumer revenues for the year. UK sales were not broken out.

Revenues in the quarter increased $86m (£61.8m), or 21%, compared to the prior year, reflecting "continued strong consumption trends", the acquisition of HMH and a $15m (£10.8m) positive impact from foreign currency fluctuations.

The revenue growth was driven by higher frontlist and backlist sales, the company said. However, digital sales declined 3% compared to the same period last year, as growth in downloadable audiobook sales was "more than offset" by lower e-book sales following a surge for the format in 2020, which has been attributed to new listeners turning to the format during the Covid-19 lockdowns.

News Corp as a whole posted a revenue increase of 4% to $9.4bn (£6.7bn) compared to $9bn (£6.5bn) in the prior year, reflecting a 30% increase in the fourth quarter.

Chief executive Robert Thompson said: "Fiscal year 2021 was the most profitable year since we created the new News Corp in 2013”, adding “profitability improved by 26% for the year, when we had a record number of digital subscriptions, record revenue and profits at Move and record traffic at realtor.com, record profits at HarperCollins and the largest profit at Dow Jones since its acquisition in 2007."