Penguin Group posted record results for the first six months of 2010, with revenue up 9% to 493 million pounds ($764 million), and operating profit jumping 56%, to 44 million pounds ($68 million). Although favorable currency translations added to results, the majority of the increase came from gains in most parts of the world. Earnings in particular benefitted from the previous restructuring of its U.K. division and DK. Penguin chairman John Makinson was especially pleased with the performance given the economic uncertainty that still persists. “We posted our best-ever first half results despite uneven market conditions.” Makinson said. He attributed the gains to the company’s publishing approach that is not overly reliant on one or two authors or books, the ability to sell authors through a number of formats and better coordination of all of its publishing subsidiaries.
In the U.S. where sales and earnings were up across all of the company’s business. Bestsellers by franchise authors in particular did well, with Penguin posting a company record 1tk New York Times bestsellers in the first half of the year. Penguin pointed to excellent performances for Michael Pollan, Nora Roberts, Charlaine Harris and continuing strong sales for Kathryn Stockett’s The Help. Led by Harris, the paranormal fiction category posted strong first half gains and several imprints also had firsts in the period. Sentinel had its first #1 Times bestseller, A Patriot’s History of the United States, while Celebra, Penguin’s imprint about Hispanic personalities, had its first two bestsellers. Within the U.S., Makinson stressed, Penguin has achieved a good balance of frontlist and backlist sales and, with the improvement of the children’s division, all groups are performing well (children’s division sales were up 9% across all of Penguin, Makinson said). In the U.S., the children’s group was led by John Grisham’s first children’s book, Theodore Boone: Kid Lawyer, and Richelle Mead’s Vampire Academy series. Penguin USA also benefitted from higher international sales and the new international sales structure recently put into place by Makinson “is paying off,” said Penguin USA CEO David Shanks.
Shanks also point to strong gains across all formats as the reason for a first half that exceeded budget. Sales of print books rose in the period, e-book sales tripled and sales of downloadable audio doubled. E-books represented about 8.5% of Penguin USA’s total revenue. Shanks said while some people may be buying fewer hardcovers and even more buying fewer paperbacks, he believes there is a larger number buying both e-books and print titles. With the ease in which e-books can now be bought, Shanks added that he believes more people are also buying more books overall.
Although he doesn't expects Penguin's second half to top the first part of the year, Makinson remained optimistic that with a strong list, Penguin will have a good finish to 2010.
