The Bookseller.com

1st December 2008

« Headlines

Penguin hails 20% surge in UK profits

04.03.08 Benedicte Page

Penguin UK's profits rose by over 20% in 2007, according to chief executive Peter Field. The achievement came despite the publisher's sales dip of 0.8% through Nielsen BookScan.

Speaking as Penguin announced its worldwide annual results, with a 3% sales growth and a 20% increase in profits overall, Field ascribed the UK performance to "working smarter under the radar". He said cost control and supply chain improvements meant the company could deliver higher profits without spectacular sales leaps. "There's a lot of good housekeeping. We've held firm on terms and we talk with each customer to achieve improved profitability in the way we work together." Children's books and licensing were particularly strong in 2007, with bestsellers from BBC branded spin-offs to "In The Night Garden" and Dr Who.

The Memory Keeper's Daughter and Marian Keyes' Anybody Out There led a strong field for fiction, with a high number of repeat bestsellers. Jamie Oliver and Jeremy Clarkson topped non-fiction, with Oliver generated £9.5m through BookScan throughout the year, representing 12% of the cookery market. Travel also had a strong year in the UK, with premium illustrated publishing such as the Christmas Rough Guides hit Make The Most Of Your Time on Earth.

Meanwhile Penguin Group chairman and c.e.o. John Makinson said the figures put the company in line to achieve its target of a 10% margin in 2008. Performance was said to be strong across the board, with rapid growth in the emerging markets, including sales up 70% in India (where Penguin also distributes Bloomsbury). Strong growth of 7% in the US was powered by Khaled Hosseini, Ken Follett and hit titles such as Elizabeth Gilbert's Eat, Pray, Love and Kim Edwards' The Memory Keeper's Daughter.

Global publishing, exemplified by Alan Greenspan's international hit The Age of Turbulence, was an important feature. A "flattish" year at DK was due to weakness in the computer games market via the BradyGames division, said Makinson, rather than DK's "lively and eye-catching" publishing.

Makinson acknowledged that the US economic downturn was being felt: "We are in a more uncertain climate than we can remember for years and backlist reorder levels are down in the US. However the message we are getting from the retail chains is that our frontlist position is strong, with the success of Eckhart Tolle [an Oprah pick and Penguin's fastest ever selling book]. And historically books do OK in tough times."

Financial International US Benedicte Page Penguin pearson Peter Field John Makinson Home