A revenue increase of 3.5%, to C$618.1 million ($414 million), combined with better operating efficiencies to produce record operating profits of C$119.2 million ($80 million) at Harlequin in 2002, parent company Torstar reported. Torstar executives were particularly pleased with the fourth quarter, when revenue increased by 8.6%, to C$164 million, and operating profit jumped 31.7%, to C$30.8 million.
The North American retail market was Harlequin's strongest unit with profits up C$10 million due to higher unit shipments and steady sell-through. Single titles accounted for 50% of retail sales and series for the other half. Direct mail profits increased C$5 million in the year due to lower spending on Internet development and promotion. Unit sales, which were down in the first nine months of the year, increased in the fourth period, resulting in flat unit growth for 2002.
In Harlequin's overseas operations, profits were up C$2 million for the quarter and the year due entirely to favorable changes in foreign currency exchange, as local operating profits were flat. Results in Germany and Latin America were down because of soft economies, while the U.K. business was affected by higher postage.
In a conference call, Torstar president Rob Prichard predicted that Harlequin will have another year of solid growth in 2003. He said the publishing schedule is the opposite of 2002, with the strongest growth projected for the first six months of this year, particularly in the second quarter. Prichard is also looking for more improvement in its international operations. A new management team in Japan has begun to turn around results in that country, and Harlequin is planning to take its Mira and Red Dress Ink imprints overseas. An acquisition, however, is not likely. "We like where we are," Prichard said.
