By Jim Milliot
Total sales at Penguin Group rose 1% for 2012, to £1.05 billion pounds, although operating profit declined 12%, to £98 million. Figures benefited slightly from currency exchange fluctuations. Penguin chairman John Makinson said a strong second half of 2012, led by a “really good” fourth quarter around the world, helped to overcome a soft first six months. Given how well Penguin performed in 2011 and the difficult retail environment in the last year, Makinson said he thinks Penguin “came out pretty good.”
E-book sales doubled in the U.K. in the year and increased 30% in the U.S. and accounted for 17% of Penguin’s worldwide sales and almost 30% of sales in the U.S. Penguin Group CEO David Shanks said he expects e-book sales in 2013 to increase at a slower rate than the 30% posted in 2012, but said Penguin’s e-book sales were ahead of forecasts in the first two months of 2013. Among the digital initiatives that did well in 2012 was the new InterMix imprint that sold over 1 million units; the Penguin Specials now has over 100 titles and its top seller The 7th Month has sold more than 145,000 copies; and the launch of the Mad Lib app generated “lots of interest” and sales, Shanks said, though he remains convinced that for an app to succeed it needs to be a branded property.
Makinson pointed to global highlights that included a strong performance by the children’s divisions in both the U.S. and U.K. and a “good start” to Author Solutions which Penguin bought in July. Makinson said he believes growth in Author Solutions will be driven be gains in international markets, including India where the company just launched the self-publishing unit, Partridge.
Makinson said the merger between Penguin and Random House is still on track to be completed in the second half of the year. Penguin parent company Pearson’s financial statement contained a one-time charge of 32 million pounds which it said are connected to the formation of Penguin Random House including a provision for the settlement of litigation associated with the e-book price-fixing settlements.