The Bookseller.com

1st December 2008

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UK 'outperforms', as Random sales slip

28.08.08 Philip Jones

Random House Worldwide has registered a decline in first-half sales and operating profits, according to its parent Bertelsmann, but the UK arm was praised after it "outperformed its marketplace" over the period.

Random House Worldwide recorded sales of €766m (£617m) in the six months to 30th June 2008, compared with €832m (£670m) a year earlier. Bertelsmann said the fall was "mainly due to unfavourable currency exchange rates, a slowdown in consumer spending in some key markets, as well as such ongoing economic pressures as rising shipping and marketing costs". Operating profits fell to €31m (£25m), from €44m (£35m) a year earlier.

But Random House UK is understood to have performed well over the period. According to Nielsen BookScan figures, the UK business has grown by 9.2%, compared with market growth of 4.3% through the Total Consumer Market, with RHUK's market share now up to 15.1%, compared with 14.4% in the first six months of 2007. Bertelsmann said: "The London-based Random House Group outperformed its marketplace, accounting for over 30% of all bestsellers listed in the Sunday Times."

At Bertelsmann's book clubs business, Direct Group, sales slipped marginally to €570m (£459m), with a loss of €11m (£8.9m) recorded. The club businesses in Germany and France were stable, Bertelsmann noted, as it continued its "strategic realignment toward German-and French-language countries and Southern European countries".

Overall, Bertelsmann's revenues from continuing operations fell by 1.2% to €7.6bn,  with consolidated net income in the first six months of 2008 reaching €372m (£300m) compared with €51m (£41m) last year.

Hartmut Ostrowski, chairman and c.e.o. of Bertelsmann, said: "In view of the difficult economic conditions, we are satisfied with our business performance for the first six months of the year. Strategically, we are now concentrating on growth initiatives, following the portfolio measures, in order to sustainably increase the value of our enterprise."

Thomas Rabe, Bertelsmann’s chief financial officer, added: “For 2008, we are aiming for higher revenues than in the comparable period of the previous year for continuing activities." But in "the subdued economic outlook" operating EBIT was estimated to come in slightly lower year-on-year.

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