The Quarto Group (LSE:QRT) Chief Executive Officer Marcus Leaver caught up with DirectorsTalk for an exclusive interview to discuss the outlook for Quarto, dividend increase and the launch of a new business
Q1: You’ve got an announcement today, what’s your take on it?
A1: After being the CEO for 2 years, I’m very pleased with the progress that the company is making. We’ve always been a creatively-independent company with a portfolio of independently creative imprints, that is lists of different kinds of books that we make and I think the performance shows that not only have we making great books but we’re beginning to sell the books very well around the world through different channels and pull more profit out for our shareholders.
Q2: So even with all the technology, the internet self-publishing, things are picking up for you?
A2: We are the world’s largest illustrated publisher and we believe that our technology which is the book is pretty perfect and we haven’t seen a lot of cut-through in our space with digital products. That’s not to say we don’t keep up to date with how digital could impact on our business and in fact, we’ve got some pretty interesting announcements that we’re making today about some projects that we have moving forward but no, our core business which is making fantastic illustrated books and putting them in customers hands around the world, in whatever format it may be, is very strong and we’re very pleased with the results today.
Q3: In terms of the various parts of the business, what are the highlights amongst the divisions?
A3: I think that the profit growth in both the co-edition business, which is our contract publishing business whereby we come up with ideas for third party publishers, and also in our UK publishing business is very gratifying. As well as the resilient comeback by our US publishing business in the second half of the year, they had some trouble in the first half with a wholesaler to the speciality retail trade that went bust but we managed to turn that weakness into a positive when we’ve actually gone direct and we are now the vendor of record, so as I say turned a negative into a positive.
Q4: And in terms of the rest of the year, it seems to be a good start for 2015, what are your expectations and what should shareholders and others look forward to?
A4: As far as 2015 is concerned, I think that we’ll build on the steady progress we made in 2014 and we have a platform and it could well position for organic growth and potentially further acquisitions. You will see PBT growth in 2015, I think we’ve increased second half waiting. There’s some headwind to navigate, obviously currency fluctuation and that brings about both the trading and the translation issue for us, trading in terms of deals are longer to confirm because people are nervous about currency fluctuation and translation because obviously the budget is a certain level and who knows where the level’s going to be in terms of the currency. Overall, we will see growth and we will have resolute focus on debt reduction as we have for the last 2 years and dividend growth which we’re very pleased to announce today that we’re increasing the dividend by 5%.
Q5: Obviously book and book delivery seems to be changing all the time, are there any new technological developments or any other new highlights that you think are going to come into focus over the next few months in terms of that area?
A5: We are undeniable a content-led business and we have huge amounts of intellectual property, both that we’ve invested in the last year and that we have in our 40 year existence. We’re very excited about a new business that we’re launching in the next few weeks called thisisyourcookbook.com and that is a technology that we have built ourselves. What it is is the ability to take what is our print based content and it turns it from web to print so this is us personalising a cookbook within 30 minutes. You go on to our website, you customise the cover, you add a ion, you add your own images, you choose from thousands of recipes that we’ve got or even upload your own and within 7 days, you get a 96-page full colour book hand delivered to you in the UK and rolling out in the US in the 4th quarter. We think this is a fantastic use of our content through the web but what is essentially print business which is what we understand best.
