Digital growth helps Haynes to half-year profit rise

Car manual publisher Haynes saw group profit before tax boom by almost a quarter (23%) for the six months ending 30th November 2018.

The boost in profits was helped through increased digital revenue which, at 53% up from 2017 year-on-year, represented more than half of the group revenue for the first time, continuing the publisher’s upward trend over the last few years. 

The company's half-year trading update on Thursday (24th January) showed that group revenue was up 7% from £17.1m to £18.3m. Meanwhile group profit before tax soared by 23% from £1.3m to £1.6m year-on-year. Group operating profit was up a significant 19% from £1.6m to £1.9m in the same time period with earnings before interest, tax, depreciation and amortisation (EBITDA) boosted by 15% from £5.5m to £6.3m.

There was however a dip in Haynes Explained titles (with no new titles released in the six-month period) in the UK consumer business’ lifestyle section, though the Bluffers Guides has received a “great” response, c.e.o. J Haynes said, since the acquisition in April 2018.

Looking internationally, on a like-for-like basis revenue North America and Australia operations ended the six-month period down 4%, partly due to a closure of small printing business in Australia, consisting of only a few employees. Local US revenue ended the six-month period down 5%, primarily due to lower sales of its print manuals sold through bricks and mortar retailers – this was largely due to a fall in sales of the Chilton brand of repair manuals, Haynes told The Bookseller.

He said: “It’s great to tell the world how our trading has been recently. I think the team has done an excellent job. It’s interesting that our digital continues to grow… at 53% it is the first time that over half our revenue is digital. One of the advantages of the digital revenue is that it is returning and highly visible… and in turn that enables us to further invest in our business with £4.4m.” While he predicts a growth in both print and digital, he believes digital will grow quicker, he said.

There was however a dip in the UK consumer business’ practical lifestyle division: combined with a 4% lift in automative titles, the UK consumer business was down 2% on the previous year. However Haynes said that practical lifestyle titles were up 5% like-like- excluding the impact of the lower sales of Haynes Explains.

“Obviously we saw a significant reduction in our Haynes Explains series but our Bluffers Guide were very well received in the market and received great support from our retail clients," he said. "[Haynes Explained} was very much a piece fashion publishing around the whole parody genre.”

He declined to give sales figures for Bluffers Guide, but said: “I think it’s best to wait for the full year before we think about numbers but.. the sales information we’ve had back is very positive. Our plans for the future are to expand that range.” There will be a further three titles published by the end of March, bringing the full list up to 26, The Bookseller was told. The guides were the first publishing list acquisition that Haynes has made in 20 years, and its first outside the automotive books sector, it was revealed last year.

Haynes said the most significant geographical expansion over the next few months was the expansion of the WorkshopData module into the Australian market next month, the first time it will be fully launched outside of Europe.

James Bunkum, Haynes' c.o.o., said that the weaker sterling’s effect was “an interesting point” but that the sales were generally not affected, except for Scandinavia, and that they were contemplating the impact of Brexit.

“Since the 2016 Brexit vote and the sterling has slid down we have seen growth in the Scandinavian market but that is fairly small. We haven’t seen a great explosion from it but as an international business we are not so exposed to Brexit as others.

“For us, we’ve looked at Brexit and talked to our suppliers and where we’re bringing in things from outside of Europe – our printing is done in Malaysia – it’s not about bringing the books in, but there might be issues at ports and we’ve also got short-run digital printing in the UK and we’ve talked to our supplier there and if we need to step up printing there we can do. We have been building up our inventory a bit in preparation.”

On future issues, Haynes said: “There are always challenges, there’s nothing presently that’s keeping me awake at night. There are lots of opportunities I’m excited about… the Australian Opendata launch, the expansion our oil business in the US, we’ve just signed a significant contract in the US, and we recently renewed our contract with Shell… we’ve also signed with a parts manufacturer which is part of our expansion into that area so there are many opportunities.”

On the “significant” newly signed contract, he said he could not share further details but would update in the full year. He added there are plans to take on another 20 employees over the next six months, up from the 300-strong workforce.

In the company report, Eddie Bell, chairman of Haynes Group, wrote: “During the first six months of 2018/19, the Group delivered another strong set of results as we continue to build and grow our global automotive content, data and solutions business. A solid performance from our underlying operations resulted in the seventh consecutive six-month period of headline revenue growth.

“The transition of Haynes continues to gather momentum and we enter the second half of the year with a clear strategic vision for delivering sustainable revenue and profit growth.” 

The results follows positive postings in recent years, with full year results from the company in September 2018 showing an increased group revenue of 13%, with the previous year seeing a 16% revenue rise.