Quarto revenues nudge up as debt falls in first half

Quarto has described the first half of 2019 as “encouraging” after global results showed group revenue edged up to $56.4m and losses declined 75% compared to the same period in 2018.

The illustrated book publisher announced its financial report for the six months ending 30th June this morning (Friday 16th August). It reported sales were up by $0.2m while adjusted operating loss fell from $4.7m to $1.2m. Net debt was also reduced by 11% to $65.0m.

Once again, the company said there had been a strong contribution from its children’s imprints, where revenue was up by 14%. However, adult sales were down by 6%, with the report blaming a challenging market, particularly on co-editions.

Revenue from the UK business actually fell, however, from $8.1m to $7.6m, although losses were slashed by $0.5m.

C.o.o. Ken Fund told The Bookseller: “We’re pleased with our results for the first half of 2019. While the adult segment remains challenging, particularly on the co-edition side, our children’s publishing programme continues to perform well, mostly led by our UK imprints. Our Little People, Big Dreams series remains a highlight with the launch of inspirational male role models and over 1.3 million copies sold in the English language to date.

“Our business is heavily second-half weighted so all of us are now focused on executing our plans for the rest of the year. The trading environment will be tough, with a soft market and uncertainties surrounding Brexit and US trade tariffs. We have exciting titles in our Autumn publishing programme so we’re doing everything we can to capture all possible opportunities.”

UK-based Frances Lincoln Children’s Books, publisher of Little People, Big Dreams, was particularly successful, while Young Quarto also “performed strongly”, selling well in the book trade, although sales to key co-edition publishers were “slower than the prior year”.

The publisher, recovering after a boardroom putsch last May, said overall increased revenues had combined with benefits from its cost out programme in 2018 – reducing costs by 65% - to lead to its reduced loss.

C.e.o. C K Lau said: “This is an encouraging set of results following a year of significant change for the group. Revenue is slightly up year on year, while both operating loss and net debt have reduced significantly during the period in what is seasonally our weak half of the year.

“We are now focused on the critical second half as we expect the trading environment to be particularly challenging, especially on the Adult co-edition side both in English and foreign language. That said, we have the right plans in place to capture all possible opportunities and ensure a satisfactory year-end.

“The board remains focused on returning the group to full health, reducing debt and defining growth strategies for 2020 and beyond.”