Self-Serving List Of Best Blog

Eoin Purcell has been kind enough to include me on his list of best Blogs. I hope I can keep up with the expectations. The list was also nicely picked up by Richard Charkin. I owe someone a Guinness....

Check Prices and Get Recommendations by Phone

If you are like me then you often find yourself in a bookstore looking at a selection of books wondering which to buy. Sure you have a list but perhaps the list is slightly out of date and doesn't reflect the most recent releases, or maybe you are in the basement of the Strand innundated with potentially fantastic books but confused for choice.

This little application enables you to access pricing information (if you see second hand titles at a yard sale that you think you can sell on Alibris) and customer recommedations using your phone. It iwll be even better if you could scan the bar code.

Rowling Suing EBAY

News from The Times via Richard Charkin that J.K. Rowling has initiated a suit against Ebay in India for selling pirated copies of her work. From The Times article:

Neil Blair, Rowling’s legal adviser at the Christopher Little Literary Agency, said that she welcomed the court order. “Over the years eBay has appeared to be unwilling to control sellers on their site offering pirated or forged Harry Potter items for sale to innocent fans,” he said. “We have asked eBay on numerous occasions to assist by taking preventative steps to avoid these sales – steps that we are aware they can introduce. As these requests were not heeded we had no choice but to seek judicial intervention.

Ebay has played the innocent in other similar cases - Tiffany in NYC and Dior in Paris - suggesting that it isn't partical for them to monitor every sale to ensure that the goods are legitmate. They just don't want to do the work.

Harlequin (Torstar) Reports

Things aren't going well for the Torstar Group publisher of The Toronto Star newspaper and owner of Harlequin Books. Reuters eloquently states that profit has slumped and attribute this to the decline in fortunes at The Star and also to restructuring charges. Things don't look too good at Harlequin either but results look worse than they may be because of exchange rate issues.

On full year revenue:

Book Publishing revenue was $471.8 million in 2006, down $49.3 million from $521.1 million in 2005. Underlying revenue growth of $9.4 million was more than offset by a $30.0 million decline from the strengthening of the Canadian dollar during the year and $28.7 million from lower gains on U.S. dollar hedges year over year.

and on Operating Profit:

Book Publishing reported operating profit was $56.3 million in 2006, down $39.1 million from $95.4 million in 2005. Underlying operating profit was down only $2.5 million in the year while the strengthening Canadian dollar decreased profits by $7.9 million and lower gains on the U.S. dollar hedges decreased profits by $28.7 million year over year. Underlying results were up for North America Retail and Overseas but were more than offset by lower North America Direct-To-Consumer results.

It is difficult to discern the true impact here as there may have been some currency impact in the operating profit in 2005. Nevertheless, taking the numbers at face value, underlying revenues were up $9.4mm versus 2005 but operating profit was down $2.5mm.

Here is the short version and the long version of the press releases.

Further detail on the publishing units performance is summarized as follows:

• North America Retail increased book sales in 2006 after stabilizing in 2005. Significant efficiency improvements were made to the series business in 2006 as fewer books were printed and distributed and more books were sold.
• The North America Direct-To-Consumer revenue decline in 2006 was due to both fewer shipments of a children’s direct-to-home continuity program and from shipping disruptions experienced early in the year associated with the bankruptcy of a key supplier. Improved sales through the Internet channel partially offset this decline.
• Overseas markets had mixed results in 2006 with improvements in the United Kingdom and the Nordic Group offset by lower results in Germany. Brazil, a joint venture launched in 2005, showed improvement in 2006 selling more books and making progress towards break-even.

As far as an outlook for the Harlequin business the company says the following:

• The outlook for 2007 is for stability. Harlequin has stabilized the total number of books sold over the past three years despite difficult trends in its direct-to-consumer operations.
• Investment will continue in innovation and new products including digital initiatives in 2007.
• Cost savings of approximately $3.0 million are expected from the restructuring undertaken in late 2006.
• Harlequin will continue to be subject to the impact of changes in the value of the Canadian dollar relative to the U.S. dollar and other currencies.

Regretably, that is hardly a glowing endorsement and one would hope that the business is able to do much better during 2007 than the above statement seems to indicate. I have said it before this brand, is so strong I can't understand why they are having so much difficulty: perhaps it's the owner

Wolters Kluwer Posts Full Year

Dutch publisher Wolters Kluwer posted a top line increase of 9% (0rganic growth of 3%) and an EBITA increase of 16% to €618million for the full year.

Following is are highlights from the company press release:

• Revenues increased 9% to €3,693 million (2005: €3,374 million)
• Organic revenue growth of 3%, in line with full-year outlook
• Ordinary EBITA increased 16% to €618 million (2005: €533 million)
• Ordinary EBITA margin of 17% (2005: 16%)
• Investment in product development reached €272 million (an increase of 9% over 2005)
• Structural cost savings of €128 million (an increase of 28% over 2005)
• Strong free cash flow of €443 million (2005: €351 million)
• Ordinary diluted EPS increased 16% to €1.23 (an increase of 15% at constant currencies)
• Selective acquisitions to strengthen leading positions and enter high-growth adjacent markets

Fourth-Quarter 2006:

• Revenues increased 8% to €1,003 million (2005: €932 million)
• Organic revenue growth of 6% (2005: 3%) Ordinary EBITA increased 17% to €173 million (2005: €148 million)
• Ordinary EBITA margin of 17% (2005: 16%)
• Investment in product development reached €74 million (an increase of 7% over same period 2005)
• Structural cost savings of €37 million (an increase of 32% over same period 2005)
• Strong free cash flow of €204 million (2005: €208 million)
• Ordinary diluted EPS increased 9% to €0.34 (an increase of 15% at constant currencies)

A more detailed review is in the press release. Most of the business units are doing OK with Corporate and Financial Services showing the largest percentage revenue growth. Of Education they say the following:

Organic revenue growth of 2% with particularly strong performance in the United Kingdom following new product introductions. The review of strategic alternatives for Education announced in 2006 is expected to be completed in the first half of 2007.

The company has announced that this group may be sold and the statement seems to indicate that will be completed by the middle of the year.

The company is looking to build on the gains they have made over the past two years to migrate revenue to online, attack their cost structure and reinvigorate product development. Margin improvement was seem 2006 vs 2007 - of 1.0pt - but they are suggesting their EBITA margin will grow from 17% to closer to 20% which is significant progress.

Another Day another Deal: Springer Science

According to sources Springer Science has hired Goldman Sachs and others to prepare the company for an IPO valued at over 2.0bill Euros. Springer Science is the result of a prior combination of Bertelsmann Springer and Kluwer Academic. The company publishes of over 1400 journals and 5000 academic book titles per year. The main subject areas for both are science, medical and technology.

Simon & Schuster Strong Finish

CBS reported fourth quarter and and full year numbers this morning with the publishing unit (Simon & Schuster) up 6% over last year and as a result helping to cover some of the decline in radio at CBS.

The publishing unit revenues were $252.5 and $807mm for the quarter and year respectively and operating profit was $38.9 and $78.0mm. A full year operating margin of just short of 10% is good going in the consumer market and is virtually unchanged from last years margin performance. Penguin reported yesterday (with Pearson) and their operating marging was slightly lower than S&S at 7.8% on higher sales.

Here is more detail from the CBS press release:

For the quarter, Publishing revenues increased 7% to $252.5 million from $237.0
million, reflecting sales from top-selling fourth quarter 2006 titles, including YOU: On a Diet by Michael F. Roizen and Mehmet C. Oz, Lisey's Story by Stephen King and Joy of Cooking: 75th Anniversary Editionby Irma S. Rombauer, Marion Rombauer Becker and Ethan Becker. OIBDA increased 8% to $38.9 million from $36.1 million, and operating income increased 7% to $36.3 million from $33.9 million, reflecting the revenue increase partially offset by an increase in bad debt
expense.

For the year, Publishing revenues increased 6% to $807.0 million from $763.6 million in 2005 due to sales of top-selling titles as well as higher distribution fee income. OIBDA increased 5% to $78.0 million and operating income increased 4% to $68.5 million, reflecting the revenue increase partially offset by higher expenses, primarily resulting from an increase in bad debt expense and higher production, employee-related and selling and marketing costs. Publishing results included stock-based compensation of$1.9 million and $.5 million for 2006 and 2005, respectively.

Sounds like the AMS situation had some impact but on the other hand it looks like the bonus' this year were relatively better than last year.