Connect cautions on performance of books division

8th Jul 2014 09:21

Distribution firm Connect Group disappointed investors with news that its Books division would be below expectations, although overall group performance remained "broadly" on course.Connect, which in April changed its name from Smiths News, said revenues climbed 0.2% year-on-year in the 44 weeks ended July 5th. Divisionally, Books revenue climbed 2.6%, lifted by recent acquisitions and the continued strong performance of online bookshop Wordery. However, like for like (LFL) revenue decreased by 3.2%, reflecting increased pressure across other channels."Recent recovery actions expected to reduce costs and increase margins are being delivered, although as a result of continued sales pressure particularly in Library services and Academic markets we expect full year performance will be below previous expectations," it warned.Within the Connect News & Media division, the News business is expected to deliver a full year performance above expectations after revenue climbed 0.1% on the back of strong World Cup sticker sales. However, Media revenues decreased by 3.2% and on a LFL basis by 2.8%.The third division, Connect Education & Care, saw revenue rise 2.2% on a LFL basis, with core LFL revenue up 4.4% after the Education and Early Years channels performed more strongly than the smaller Care channel. "Momentum is building for the key peak trading period which has started as planned and full year performance remains in line with previous expectations," it said. Shares had fallen 6.4% to 177.69p by 09:18.NR