Total revenue at Penguin group fell 5% in the first half of 2007, dropping to £367 million ($741 million), while profits held even at £18 million ($36 million). The weak dollar hurt the overall figures, and without currency fluctuations, revenue was ahead 1% and profits were up 11%. Penguin chairman John Makinson said he was “very pleased” with results given the challenges in the book market in both the U.S. and U.K. (Sales in emerging markets were up 30%.) He noted that while online sales have grown nicely, it’s been tough going in bookstores, particularly in the U.K. There has been “real heat” on the bookstore chains in the U.K., Makinson noted.
In the U.S., overall results were up, CEO David Shanks said, led by frontlist sales, which included A Thousand Splendid Suns and The Assault on Reason. Backlist sales, which were up a total of 15% in 2006, were flat. Sales through online stores rose a robust 23% in the first half. Mass market paperback sales continued to be led by sales of the Premium format, and beginning in 2008 Penguin will add backlist titles of brand-name authors to the program.
Noting that Penguin’s second-half list is stronger than was the first six months’ list, Shanks said he was generally optimistic about the balance of the year, although he said he has a couple of concerns. He noted that while sales are up, “units haven’t been great,” with even sales of the top-selling titles not matching those of a few years ago. The volatile economy could hurt sales in the second half, particularly if the stock market continues to drop and consumers begin worrying about their 401-ks. “That could really hurt,” Shanks said.
Penguin is counting heavily on Alan Greenspan’s The Age of Turbulence to be its big fall book, and the title is being released simultaneously in the U.S. and U.K. Other major nonfiction titles include Arthur Schlesinger’s Journals, Michael Pollan’s In Defense of Food and A New America by Lou Dobbs. In fiction, new books are due out from Patricia Cornwell, Sue Grafton and Ken Follett.
Makinson said the group as a whole is on track to post higher profits for the full year on sales that will generally be flat.
On the education side, total revenue increased 4%, to £1.02 billion, driven by a 6% increase in school group sales, to £665 million, which countered a 5% decline in higher education sales, to £195 million. Professional group sales were up 4%, to £163 million.