HarperCollins revenue down 2% in latest quarter
HarperCollins’ parent company News Corp has reported the publisher’s global revenue fell two percent year-on-year for the three months ending 31 March, as News Corp announced all its businesses are embarking on cost-cutting programs.
Regarding the impact of Covid-19, News Corp CEO Robert Thomson said, ‘Clearly the pandemic will have an impact on our results in the fourth quarter,’ adding that ‘all of our businesses are embarking on cost-cutting programs intended to deal with short-term need but also to ensure that the company is well-equipped to prosper in a decidedly different business environment after the crisis abates’.
News Corp said measures taken to offset the impact of Covid-19 include significant reductions in discretionary spending, non-essential capital expenditures and headcount, and transitioning certain newspaper operations to digital-only. Thomson also noted that senior executives will be taking pay reductions. As previously reported by Books+Publishing, in April HarperCollins UK placed a number of its staff on furlough.
HarperCollins’ revenue fell to US$412m (A$635m) from US$421m (A$649m) in the same period last year. Despite the drop in revenue, EBITDA (earnings before interest, tax, depreciation and amortisation) was up 4%, from US$53m (A$82m) to US$55m (A$85m).
News Corp attributed US$3m (A$4.6m) of HarperCollins’ global revenue decline to negative impact from foreign currency fluctuations, saying the remainder of the decline was primarily due to ‘the difficult comparisons to the prior year’, which had higher sales of blogger and motivational speaker Rachel Hollis’ titles. However, the company stated this sales decline was partially offset by new titles including Open Book (Jessica Simpson), Find Your Path (Carried Underwood) and Profiles in Corruption (Peter Schweizer).
Digital sales were up three percent compared to the previous year, primarily due to sales growth of downloadable audiobooks, which accounted for 23% of consumer revenues.
On the impact of Covid-19 on book publishing, News Corp said: ‘The retail market continued to be adversely affected by government restrictions globally. However, online sales have been strong in recent weeks and e-books have returned to growth.’
Books+Publishing did not hear back from HarperCollins Australia before deadline.
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