Driven by its acquisition of Harlequin, revenue rose 20% at HarperCollins in the second quarter ended December 31, 2014 over the comparable period in fiscal 2014, hitting $469 million. EBITDA increased 13%, to $77 million. Parent company News Corp noted that using adjusted results, which exclude the Harlequin purchase, sales rose by $1 million to $392 million, but EBITDA dropped to $65 million from $68 million.
The addition of Harlequin helped to offset lower sales from the Divergent series which had huge sales in the 2013 holiday season. Higher backlist sales in general books and children’s also helped to lessen the impact of a drop in Divergent sales. Harlequin also helped to provide a boost to e-book sales and e-book revenue rose 14% in the quarter over the comparable period last year and comprised 17% of consumer revenue.
The gain in earnings was due to higher sales, a higher contribution to profits from-books and operational efficiencies, News said.
For the first six months of fiscal 2015, total revenue was up 22%, to $875 million, and EBITDA rose 19% to $132 million. Without Harlequin, which was acquired August 1, 2014, sales were up 3% in the six months, and EBITDA rose 6%.
HC CEO Brian Murray said Divergent sales held up better than expected and he is hoping that the release of the Insurgent film in March will give another boost to sales. But he emphasized that the company had lots of books that helped to make up for the drop in Divergent results. Amy Poehler's Yes Please did better than expected, and HC had a large number of backlist books that sold very well over the holidays. Murray noted that orders for backlist came from both physical and online retailers, something he believes "is very good for the industry."
Late in December, HC began benefiting from the tremendous interest in the American Sniper movie and sales of the book have been extremely strong in the current quarter, Murray said, noting that the book is #1 in a number of countries and that the enhanced e-book edition of the title has sold over 150,000 copies.
Murray said he is "very happy" where HC is in terms of integrating Harlequin, although he said there is still more work to do. One of the items on the agenda is rolling out more foreign-language publishing operations in Harlequin offices similar to what HC did in Germany last fall. More announcements are expected this spring.
Asked about the dust-up over HC's signing of Harper Lee's recently discovered manuscript, Murray said the company knew there would be some controversy around the deal, but said he is confident publication of Go Set a Watchman is something that Lee wants. Publication of the book "will be a huge event," Murray said, adding that the work "will stand on its own."