Total revenue at Quarto rose 7% in 2010, to 113.8 million euros ($155 million) and operating profit increased 17%, to 8.2 million euros. The U.K.-based publisher and packager that does business on a global basis said currency fluctuations had little impact on results this year. It also took an undisclosed provision for the Borders bankruptcy.
In its publishing segment, sales rose 7%, to 75.1 million euros, led by backlist sales and its display marketing businesses. Publishing sales in the U.S. fell 1% as gains in better sex guides and lifestyle books were offset by weakness in Quarto’s home improvement, transportation and graphic design lists. Sales in the U.K. fell 3%. In its packaging segment, sales rose 6%, to 38.7 million euros.
In his always colorful letter to shareholders, chairman Laurence Orbach called 2010 an “encouraging” year with the company’s gains due in large part to Quarto’s strong backlist. Despite problems at retail throughout the world and the growth of digital, Orbach said the printed book will remain a substantial business for the company, noting that many of its illustrated titles will not work well in a digital setting. The company sells lots of print books through nonbook outlets, he noted, such as art and craft stores and home improvement centers. He was skeptical about the value of publishing expensive-to-produce apps into a crowded marketplace, although he said Quarto will create apps with outside developers “where the monetizing of the content is easy to determine.” The company also plans to start a couple of Internet portals aimed directly at specific markets. Orbach is also hopeful that Quarto, since it owns most of its content, will find the best way to exploit that content in digital forms.
Acquisitions remain another method to expand. Quarto has been looking for companies to acquire for several years, and Orbach said he is “more confident than in the recent past that acquisition opportunities will be available” this year
