29 Apr 2009 07:00
Wednesday April 29, 2009
THE QUARTO GROUP, INC
Interim Management Statement
"Satisfactory trading performance in traditionally quiet quarter"
Quarto announces unaudited results for the three months, and twelve months, ended March 31, 2009 as part of its Interim Management Statement for the period since December 31, 2008.
3 months ended March 31, 2009
Operating profit in Q1 2009 was flat, at £0.25 million (2008: £0.27 million), on revenue down 5% at £19.8 million (2008: £20.7 million).
The normal seasonal loss was unchanged at £0.7 million.
UK publishing sales up marginally, international co-edition revenues down, but forward order book for 2009 up 7%, with particularly strong performance from QED, our supplementary education unit.
Warehouse and back office consolidation impacted US performance adversely during the period, but is now mostly completed. The benefits of the move should flow through in the second half of the year.
All major markets subdued, and showing no overall tangible signs of recovery.
12 months ended March 31, 2009
Revenue up 7% at £111.6 million (2008: £103.8 million), and operating profit climbed 6% to £11.3 million (2008: £10.3 million).
The pre-tax profit increased by 2% to £7.6 million.
EBITDA up 10% to £22.6 million (2008: £20.5 million).
Net debt declined by 14% to $91.3 million (2008: $105.7 million). Borrowing facilities, committed to 2012 and beyond, total $165 million.
Interest charged did not decline in line with market rates because $64 million of loans had been hedged by 2007, and carry a cost of approximately 3.7% above current floating rates.
"We are satisfied with the trading performance during what is traditionally our slowest quarter, " commented Laurence F Orbach, chairman and chief executive officer. "The US remains pivotal to our performance for the full year. No harbingers of spring are in the air, but there are signs of stability in pockets of the economy. Our co-edition forward order book is encouraging, and last week's London Book Fair confirmed that, even if the froth has gone out of the market, underlying demand remains substantial. With the cost-containment measures that have been taken across the group, and regular analysis of performance in all our activities, we hope to weather the storm successfully."
A summarised trading statement to March 31, 2009 (before amortization of non-current intangibles and exceptional items) is set out below:
| | Three months | | Trailing 12 months | ||||
| | 2009 | | 2008 | | 2009 | | 2008 |
| | £000 | | £000 | | £000 | | £000 |
| Revenue | 19,769 | | 20,956 | | 111,556 | | 103,819 |
| Gross profit | 6,769 | | 7,141 | | 38,704 | | 37,046 |
| Overheads | (6,517) | | (6,873) | | (27,370) | | (26,360) |
| Operating profit | 252 | | 268 | | 11,334 | | 10,686 |
| Interest | (929) | | (919) | | (3,696) | | (3,228) |
| Pre-tax result | (677) | | (651) | | 7,638 | | 7,458 |
| EBITDA | 3,440 | | 2,797 | | 22,611 | | 20,476 |
| | | | | | | | |
There has been no material change in the financial position of the Group since December 31, 2008.
Notes for Editors:
Quarto is an international book publisher and producer with two principal strands of activity: its Publishing segment publishes books, under imprints owned by the Group, in the US, Australia and the UK; and its Co-Edition Publishing segment creates books that are licensed to other publishers for publication under their own imprints in many languages around the world.
For the year ended December 31, 2008, Quarto increased revenues by 13% to £112.7 million and adjusted EBITDA by 10% to £22.0 million. Pre-tax profit was flat at £7.7 million but adjusted diluted earnings per share increased by 9% to 26.5p. Unchanged total dividends per share of 7.15p were proposed.
Enquiries:
The Quarto Group, Inc. 020-7700 9004
Laurence Orbach (Chairman and CEO)
Mick Mousley (CFO)
Bankside Consultants Limited 020-7367 8851 Charles Ponsonby