Haynes Publishing's revenues rise on digital growth

30th Jan 2014 15:00

Haynes Publishing Group's first half revenue rose 12 per cent to 14.9m pounds, as more readers went online to source their information. The company, which publishes automotive and motorcycle repair manuals, said it would invest in developing its online offering after digital revenue increased 23%. HaynesPro, the group's supplier of digital technical information to mechanics, saw sales rise 16%. Chief Executive Eric Oakley revealed that the firm was in the early stages of developing a new website and mobile applications to address the trend towards digital. "We see digital continuing to grow," he told Digital Look/Sharecast. "Well there certainly appears to be incremental growth. We are appealing to different customers - younger people and those who don't want to wait for the next publication or don't want to have to drive to the shop to pick it up."However, he believes demand for print will not disappear as workers can turn to hard copies while getting their hands dirty without the risk of damaging electronic devices. In the six months through November 2013, the company revamped its UK business to focus on higher margin Haynes style manuals, rather than the lower margin so-called coffee table books. The group also decided to outsource its UK distribution operation to Grantham Book Services, part of the Random House Group."Handling our own distribution required quite a sizeable investment so we decided to outsource that which will be effective next Monday," Oakley said.He added that while it was "unfortunate" the restructuring led to job cuts, it was "something that had to be done to put the UK on more solid footing".In September, Haynes announced that it had completed a £5.85 acquisition of US-based motorcycle manual publisher Clymer and Intertec Manuals, which includes a range of 432 DIY instruction manuals covering farm equipment such as tractors. Oakley said that the US business contributed about £400,000 within nine weeks of the acquisition and is expected to lift revenues in the second half. Pre-tax profit, adjusted to exclude UK restructuring costs and the acquisition of Clymer, rose 78% to £1.6m in the first half from £0.9m a year earlier. Adjusted earnings before interest tax, depreciation and amortisation (EBITDA) jumped 36% to £3.4m while basic earnings per share rose 49% to 6.1p, supported by improvement in underlying trading in North America and Australia. The group declared a dividend of 3.5p, in line with 2012.Charles Stanley reiterated its 'buy' rating and raised its target price to 260p from 235p following the results. "Significant progress has been made, restoring the group to sustainable revenue and profit growth," the broker said. "The UK business is now focused toward growing the more profitable Haynes Manual style titles. The acquisition of Clymer and Intertec has added 432 new titles to its range."The analyst maintained its full-year 2014 forecast of revenues of £28.9m, pre-tax profit normalised of £4.2m and earnings per share of 18.5p.Shares rose 0.68% to 222.50p at 15:44 on Thursday.RD