Carlton saw turnover fall by a quarter in 2017

Turnover at Carlton Books declined last year by 26%, caused by the end of the colouring book boom and a year of transitions, according to accounts filed on Companies House. 

For the year ended 31st December 2017, turnover fell from £14.6m in 2016 to £10.8m in 2017, a drop of 26%. 

Meanwhile, the company reported - despite an increase on its gross margin from 39.2% to 40.3% - a drop in profits. Gross profit declined 24%, from £5.7m to £4.4m, while operating profit fell 81%, from £1.5m to £283,977, and earnings before interest, tax, depreciation and amortization (EBITDA) came in at £351,000, a 78% drop on last year's £1.6m.

The directors wrote in their strategic report that they anticipated "an improved performance" in 2018. The report said: "The company has retained its existing customers and actively seeks to attract new customers by designing and timing its publications to fit and meet customer expectations. The company continues to invest in the creation of new titles and formats. The directors regard continuous investment as a prerequisite for the company's medium to long-term performance and they are anticipating an improved performance in 2018."

Jonathan Goodman Publishing, Carlton Books' and Andre Deutsch's parent, which saw turnover soar in 2016, fared similarly overall with a 25% drop in turnover last year, from £16.2m to £12.1m. Gross profit fell 22%, operating profit dropped 94% and EBITDA was down 90% on 2016.

Carlton's chairman Jonathan Goodman told The Bookseller: "We still made money [in 2017]". He said "the results were very good for a year of transition for the company".

As a result of the colouring book boom, the company "made a lot of money in 2016" said Goodman, but in 2017 not only was Carlton looking to replace turnover, retailers were too and were "in a place of paralysis", he said.

Goodman also said that having stepped back in 2016 "to hand over to a new generation", business decisions had been  "a bit slower than usual", while "internal disruption" in the form of a reburbishment of its offices, costing the best part of half a million, which had been "disruptive" and "impacted on efficiency". Meanwhile, rents increased by 36%, and the company also had to deal with costs of restaffing as different people decided to move on.

This said, Goodman said the company has since brought in new talent and was now "powering ahead". "We will have an excellent year in 2018," he forecast.

Carlton’s m.d Jim Greenhough stepped down after 20 months in the role in September 2017. At the time he conceded 2017 had been a "challenging year with a difficult market", with the international adult colouring book phenomenon "not straightforward to replace". He was subsequently replaced by Dean Chance, promoted from deputy m.d. to m.d. in April.