26th Feb 2014 13:14
LONDON (Alliance News) - Book publisher and distributor Quarto Group Inc said Wednesday profits and revenue fell in 2013, as it continues to restructure the business, but it gave a more upbeat outlook for 2014 for growth in the business and announced a new joint venture with a subsidiary of Brazil Franchising, as it looks to develop the business further internationally.
Pretax profit fell to USD5.8 million, from USD7.1 million in 2012, as the group booked higher exceptional costs associated with restructuring the business. It said the USD5.3 million in exceptional items included costs associated with business closures and severance packages, and losses on the sale of non-core assets. Quarto also left its total dividend for the year unchanged at 7.9 pence, the same it has been for the past two years.
"This is a scalable business model... size, scale and reach are distinct advantages. The tactical improvements that have been made during the course of 2013 allow Quarto to focus on its strategic priorities to deliver growth in all areas of the business for 2014 and beyond. This is the year where the group will begin to deliver its true potential," said Chief Executive Officer Marcus Leaver in a statement.
Revenues fell to USD176.3 million in 2013, compared with USD180.9 million a year earlier, which Quarto said was partly due to challenging circumstances in Australia and New Zealand.
Quarto has been restructuring the business to improve costs and establish financial and internal efficiencies. During the year it said it rebranded its publishing divisions and merged its digital market businesses in Australia and New Zealand, as they were underperforming.
The group said its publishing businesses recovered lost ground in the US, but the trading performance from its display marketing businesses in Australia and New Zealand has been disappointing.
As a result, Quarto said it decided to merge its Lifetime and Premier businesses in Australia and New Zealand to create a re-branded business called Books & Gifts Direct. By combining the businesses it said it will now be able to benefit from the operational changes.
"We have a solid strategy in place for 2014, including new management and we expect to address quickly the dramatic fall-off in performance in 2013," the company said in a statement about the Australia and New Zealand businesses.
The group also said Wednesday it has entered a joint venture with Brazil-based Grupo Nobel, a subsidiary of Brazil Franchising, for the supply of adult non-fiction books to Nobel's publishing business, which it will then distribute throughout its franchises and main book trade channels from 2014.
Quarto said with the new partnership it sees great scope for developing the market for illustrated non-fiction in Brazil by selling Brazilian language titles.
During the year Quarto said it reduced its net debt by USD10 million to USD71.0 million, and said net cashflow from operating activities increased to USD33.6 million.
Shares in the company were trading 5.9% higher Wednesday afternoon, at 172.50 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
QRT.L