2nd May 2007 11:00
Quarto Group Inc02 May 2007 Wednesday May 2, 2007 THE QUARTO GROUP, INC. Q1 Trading Update and Annual Meeting Statement "in line with our expectations" At the AGM in London this morning of Quarto, the fully listed independent bookproducer and publisher, based in London, Laurence F. Orbach, Chairman and ChiefExecutive, will state: "The first quarter of the year is traditionally very quiet, typicallycontributing less than one-fifth of annual revenue and a small loss, and thisyear is no exception. In the UK, and some continental European countries,business remains a little subdued, but it has continued reasonably strongly inthe US and Australia. Happily, our operating profit in the quarter improvedmarginally, in spite of the substantial decline of the US dollar, our principaltrading currency. Two important book fairs, which are normally held in March, the London Book Fairand the Bologna Children's Book Fair, took place this year in April. Initialreports from these events are very encouraging, and we are working to convertthe strong response to our forthcoming titles into firm orders. At the LondonBook Fair, our new JR Books imprint, run by veteran publisher Jeremy Robson,announced an entertaining new book by Michael Winner, Fat Pig Diet, to bepublished later this year. His new list has a strong line up of titles. In our international co-edition book publishing segment, the bankruptcy of AMS,on the last business day of 2006, left a hole in the sales of our children'simprint, Q+. We had previously decided strategically to re-orient the unit'stitles towards a trade, rather than warehouse club, market. AMS's bankruptcy hasonly accelerated that shift. Thankfully, the re-energized publishing list wasstrongly supported at both the London and Bologna book fairs. Our quarterlypublication, The World of Fine Wine, received the Art Vinum "Best Media" awardat a glittering ceremony in Stuttgart. The publishing segment, which operates mostly in the US and Australia, performedwell. Book returns were down on the prior year and there were solid salesimprovements, in local currencies. At some of our special interest publishingunits in the US, Amazon.com has become our largest customer, displacing theretailing book giant, Barnes & Noble. This is an interesting development,perhaps not yet indicative of a sea change in consumer habits, but of a trendthat's worth following. For the first quarter, to March 31, 2007, unaudited operating profits* of£142,000 (2006: £132,000) are up 8%, on revenue of £17.2 million (2006: £18.0million), down 4% as a result of the substantial decline in the US dollar(average rate in the period 1.95, compared to 1.75 last year). On a constantcurrency basis, revenue was up 4%. The trading performance in the first quarterwas in line with our expectations. For the 12 months' ended March 31, 2007operating profits* increased by 2% to £9.6 million (2006: £9.4 million). Asummarised trading statement is set out below: March 31, 2007 Three months Trailing 12 months 2007 2006+ 2007 2006+ £000 £000 £000 £000Revenue 17,244 17,951 92,906 95,975Gross profit 5,745 6,041 32,708 33,209Overheads (5,603) (5,909) (23,141) (23,831)Operating profit 142 132 9,567 9,378Interest (600) (608) (2,287) (2,342)Pre-tax result (458) (476) 7,280 7,036EBITDA 2,335 2,265 18,047 17,904 + restated for a change of accounting policy from expensing the pre-pressdevelopment costs of creating a new title to capitalizing them and writing themoff over a three-year period following the first delivery of a new title. Thisaccounting policy was first adopted with the 2006 full year results. * before amortization of non-current intangibles and non-recurring items." Notes for Editors: Quarto is an international book producer and publisher with two principalstrands of activity: it publishes, under imprints owned by the Group, books andart prints in the US, the UK, and Australia; and it creates books that arelicensed to other publishers for publication under their own imprints in manylanguages around the world. In 2006, Quarto increased adjusted pre-tax profit by 9% to £7.3 million andadjusted diluted earnings per share by 6% to 22.5p, proposing total dividendsper share up 4% at 6.75p. Enquiries: The Quarto Group, Inc.Laurence Orbach (Chairman & CEO) 020-7700 9003Mick Mousley (Finance Director) 020-7700 9004 Bankside Consultants LimitedCharles Ponsonby 020-7367 8851 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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