SIMON BAIN
Publisher Canongate has reported £1.3million loss, after two years of £1m-plus profits, in what owner Jamie Byng called a “difficult and dispiriting year”.
The publisher bought out from administration by earl’s son Mr Byng 21 years ago, which recently signed Scottish literary giant James Kelman to join the likes of Alastair Gray and William McIlvanney, wrote off £1.2m in advances to authors for its big books of 2014.
A year ago the chief executive had hailed the autumn list as its “strongest ever”, with high hopes for Michel Faber’s The Book of Strange New Things, Russell Brand and Chris Riddell’s The Pied Piper of Hamelin, Ray Winstone’s memoir Young Winstone, Alan Cumming’s Not My Father’s Son, and the book tie-in to Channel 4’s reality show Gogglebox.
But the latest accounts just posted at Companies House show a steep fall in turnover from £10.4m to £7.9m and a £1.27m loss at operating and pre-tax level.
Chairman Sir Christopher Bland writes that the year was “extremely disappointing”.
The previous year’s cash inflow of £1.65m reversed to a £907,972 outflow, and no dividend was paid, after £522,216 in 2013.
Shareholder funds fell by £1m to £5.2mm, director remuneration was cut from £428,134 to £306,750, and the highest paid director assumed to be Mr Byng took a £40,000 pay cut to £134,334.
Writing in the report, he says the setback was due to “failure to deliver on the high expectations for a number of our big autumn titles”, with six books accounting for most of a £1.8m shortfall on the front list.
“Many other publishers reported disappointing sales for their big non-fiction titles, but this provides scant consolation,” Mr Byng says. Write-offs of author advances at £1.18m were almost double the £683,000 budgeted and close to total losses for the year.
“On a more positive note, the backlist performance was excellent, with sales 25.6per cent ahead of the budget. Sales in digital and international rights were both down against budget but remained solid, and the audio list continues to perform steadily.”
The year was also marked by the “prolonged, expensive and extremely time-consuming battle” over the title Instrumental by James Rhodes. “We felt vindicated by the Supreme Court’s unequivocal judgement on the case which was handed down in May 2015 and dismissed the attempts to injunct our publication,” the chief executive writes. “This remarkable book has since gone on to become a bestseller.”
Mr Byng, who was at the Frankfurt Book Fair yesterday, says 2015 has started well with the company ahead of budget at the half-year, led by Matt Haig’s’ Reasons to Stay Alive’ which spent 14 weeks on the bestseller list, Instrumental, and Guantanamo Diary by Mohamedou Ould Slahi.
He says after last year’s experience “we have budgeted our key Christmas 2015 titles more cautiously and at this stage things would appear to be well set up”.
Canongate has also formed a new company with film and TV production company SunnyMarch, and two of its authors Shaun Usher and Simon Garfield, to develop the Letters Live events featuring high-profile actors and musicians.
An event with Benedict Cumberbatch recently sold out and the format has been launched in the US.
Despite the difficult year, average monthly employee numbers rose from 36 to 40. Canongate ended the year with cash of £1m and no debt.
Mr Byng concludes: “Trade publishing remains unpredictable and highly competitive. The industry also remains in a state of flux as the importance of digital retailing and marketing grows and for an independent publisher the challenges are greater than ever.
“But embracing the possibilities that the new landscape offers...can result in commercial success and opens up new audiences for our books.
“As well as continuing to publish books of outstanding quality, we believe that by continuing to innovate and invest in systems, staff, our authors, and new ventures, we can further enhance our reputation as a thriving and dynamic independent publishing house.”
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