Pavilion's turnover drops £2m following colouring books 'blip'

Pavilion Books’ turnover fell by £2m last year due to the waning of the colouring books trend, accounts recently filed at Companies House have revealed. However owner and publisher Polly Powell remains upbeat, ahead of new US distribution plans hoped to "dramatically" increase  sales.

The Companies House results for the illustrated books and digital content publisher for the year ending 28th February 2018 were “in line with directors’ expectations” but this was “largely due to the fall in popularity in colouring books throughout the world,” the report said.

As well as turnover falling by a fifth, from £12.2m the previous year to £10m, there was a two-thirds drop from £1.7m to £0.5m in EBITDA (earnings before interest, taxes, depreciation, and amortization) over the same period. Operating profit was down from £1.6m in 2017 to £0.4m between 2017 and 2018, a diminishment of around 75%, the strategic report for Pavilion Books Holdings revealed.

The firm’s results also disclosed the purchase price of The History Press imprint Pitkin in March 2017, at £535,503, as well as the acquisition of the property where Pavilion now resides in central London’s Great Ormond Street, for £3m.

The key objective, according to the report, is to build profit through “publishing good books and digital content and creating long-term value in the process by increasing its Intellectual Property library and further strengthening its imprints."

"The directors believe the group is well placed to exploit its publishing strengths, embracing new technologies in publishing and managing content, and has excellent sales opportunities around the globe."

Despite the colouring books downturn, Powell was upbeat about the results following the colouring books "blip", and revealed that the company had made preparations for the collapse of the craze.

“We were pretty pleased with the results. Anyone who’s looking at these might think, ‘Oh goodness’, but I’m delighted,” she told The Bookseller. “The reason for that is we always approached the explosion of colouring books as a blip so kept the colouring in trend distinct from the rest of our business. So what we did with all the money from the colouring books was to purchase the building, number 43 Great Ormond Street. All we ever wanted to achieve was a stable basis so buying the building was sensible.”

On the passion for colouring books, Powell said: “I think the explosion will happen again but not in colouring-in - but it has still a got a story as a genre and we still doing well with our colouring titles. That sort of thing happens once in a lifetime and you should never write a business plan based on a phenomenon like that.” 

She added: “We’re on track for £10m [in turnover] this year again. We had a number one in Amazon for MOB Kitchen, the Pitkin acquisition went well. This Christmas line-up is absolutely stonking and we will have our first Putin unofficial annual, as well as the return of the Trump and Corbyn ones.”

Pavilion will be building up its focus on heritage titles, seen as a safe bet amidst political and economic uncertainty.

“The Grey Pound and uncertainty around Brexit means heritage is a good place to be. Over the last year, we have focused heavily on two areas here– children’s and Then and Now, a trademarked US series such as New York: Then and Now,” Powell said. She added the series had sold around five million copies altogether. “This provides as close to a regular business as you can get and we’re ramping up the formats and prices of these.”

“As our sales dwindle on co-editions around the world we are streamlining our distribution,” she said and hinted at future announcements for America. "David Graham, our m.d., has been working on a new US distribution agreement which we anticipate will increase our sales dramatically in America. The full details will be revealed very shortly.”

Powell said the company’s headcount, of around 50, has stayed consistent, as has the publishing list size. “There will be about 150 titles for the year March 2019-February 2020, same as the last year."