23.04.13 | Joshua Farrington - The BooksellerHowever, the company's report shows that non-Larsson publishing revenues increased 18% on a like for like basis over 2012, and Quercus' e-book revenues has grown by 137%.
Overall revenue for Quercus for the year ended 31st December 2012 was £20.4m, down from £24.8m in 2011, a drop of 18%. Operating profit, which in 2011 was £5.9m, dropped to £1.5m, a fall of 75%.
Quercus c.e.o. Mark Smith [pictured] said that while Larsson sales had declined faster than expected, the company had still produced "good revenues and good profits".
He said: "While we thought we would do slightly better, the Larsson fall-off really accelerated when Fifty Shades of Grey was published. We thought we would get more out of it than we did, but even with that lower contribution, we still produced good revenues and good profits."
He added: "What we have been trying to do with the benefit of Larsson is reinvest that windfall, and make sure that we have in place a good infrastructure, a diverse publishing list and lots of strength in the company."
One area of strength was the company's e-book revenues, which were £6.4m in 2012, up from £2.7m in 2011. This represented 31.5% of group revenue, up from 11% in 2011.
Titles which performed well for the company included Hilary Boyd's Thursdays in the Park and Alice Peterson's Monday to Friday Man, both of which were included in Sony and Amazon's 20p promotions.
Smith said: "The 20p promotion disproportionately benefitted the publishers, and was obviously very popular with consumers. But even if that were stripped out, I think our digital side performed very strongly, and would have been 25% of revenue. The promotion just gave an extra kick."
He added: "Ever since we started in 2004 we knew digital would be important and have always signed e-book rights. I think the market is settling so growth in the area may slow this year, but we can't predict what promotions might come next."
In the autumn, Quercus Publishing Inc will launch in the USA, with 25 titles planned for the first four months and 85 slated for 2014. Smith said: "My view is that Quercus needs to be publishing where we have world English language rights, maximising benefits for our authors and for our own team. It has huge growth potential, but we will take it slow and steady and grow organically, just as we have developed the team here. Appointing Colin Adams and Jane Harris in the past year has been a godsend to us, and we have a well balanced team in place going forwards."
Also in the past year, Quercus launched a direct to consumer service, selling books on its website. Smith said that although it had not "moved the needle" yet, "dipping our toe in that area is very important. It's hard to be a good consumer good company if you don't know who your consumer is, and with the high street struggling, it will be increasingly important for publishers to have routes like this open to them."
He added: "2013 has started very well for us, and we expect it to be an exciting year. We want to do what we have always done and maintain the culture of an independent, publishing debut authors and nurturing them, and seeing them stay with us for a long time. As well as that, we will grow and be able to buy big, powerful titles, and publish those successfully as well."
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