Quarto half year revenues down 16%

Half year revenues at Quarto are down 16% to $52m (£41m) while operating profit is down more than 50% to $3.1m (£2.5m).

The publisher said the decrease in revenue is partly due to Quarto Distribution Services & Smart Lab being discontinued. A decrease in operating profit is driven by the reduction in revenue, however Quarto stressed “strong cash generation has continued to feature”, with $14.7m (£11.6m) generated over the last 12 months to June 2023. Net cash position was $9.1m (£7.2m) against a net debt position of $5.6m (£4.4m) last year.

Alison Goff, chief executive, said: “Following the economic challenges faced towards the end of 2022 and into 2023, this is a steady set of results following on from the growth in 2022. While revenue and profits were down year on year, the results achieved are in line with our expectations for the seasonally weaker first half of the year.”

In the UK, sales experienced a decline of 6% year on year from $27.2m (£21.5m) in 2022 to $25.5m (£20.2m) in 2023, however, this is still 3% ahead of 2021. With the decline in revenue, operating profits reduced from $3.1m (£2.5m) in 2022 to $2.4m (£1.9m) in 2023, although this is still a “significant improvement” on 2021 at $1m (£791,000) Goff said. “Softness across all areas of the business contributed to this decline, as consumer demand reduced and our business to business sales slowed as customers managed their inventory.”

Bestsellers within the period include The King, a new title for 2023 in the Little People Big Dreams series and London: A Guide for Curious Wanderers also a new title in 2023.

Quarto US also saw a decline in revenue down 23% from $34.7m (£26.9m) to $26.5m (£21m). Excluding the discontinued Quarto Distribution Services and Smart Lab core trading is down 12%, with trade sales and custom down 7% and 44% respectively. Goff said: “The reduction in custom sales is purely timing of orders and we expect this to recover during the second half of 2023.” Operating profit reduced by 69% to $1.3m (£1m) from $4.1m (£3.3m), with the decline in sales.

Goff continued: “We are now focused on the second half of the year, which will be a significant period for Quarto as we expect the trading environment to continue to be challenging. However, I am confident with inflation past its recent peak and supply chain issues now easing, we have the right plans in place to capture all potential opportunities. We are confident that these plans will enable us to navigate through these uncertain times.

“The board remains focused on ensuring we keep costs under control, drive sales, and develop further growth strategies for the remainder of 2023, 2024 and beyond."