HarperCollins finished a strong fiscal 2014 that ended June 30 with a 5% increase in revenue to $1.4 billion, while EBITDA (earnings before interest, taxes, depreciation, and amortization) jumped 39% to $197 million.
Divergent was the star of the year, selling more than 19 million copies. Other standout sellers were The First Phone Call from Heaven and The Pioneer Woman Cooks. Partially offsetting book gains was the sale of the event business Women of Faith. E-book sales rose 35% in the year and represented 22% of worldwide HC sales in fiscal 2014 compared to 17% in fiscal 2013. All results do not include Harlequin which HC bought at the end of fiscal 2014.
The higher profit margin was attributed to higher sales of more profitable e-books and continued operating efficiencies.
CEO Brian Murray said that, with the exception of India which suffered from the negative impacts of foreign exchange, all HC companies did well across the world.
In the U.S., in addition to the success of Divergent, adult general books also had a solid year. The U.K. saw general improvement, including lower costs. Costs were also under control in the U.S., as the company benefited from the first full year operating with one supply chain for its trade and Christian publishing groups. HC, which at one point in the recent past had four warehouses, now has one. Murray also noted that in the case of Divergent the company enjoyed a perfect storm where it had the third installment of the trilogy, a movie and also owned world rights.
The focus in fiscal 2015, as one might suspect, is on integrating Harlequin. Murray said the next three to six months will be used to develop a plan that highlights the strengths of both companies to identify best practices the can be implemented across the entire company.He noted that Harlequin does a number of things extremely well, including selling direct to consumers and exploiting its global brand. He expects that HC will be able to bring some of its resources to bear to let Harlequin take advantaged ofHC's scale.