Bookseller: OUP accounts 1995 (original) (raw)

Profits slip as OUP says Hola! to Latin America

Digest of OUP's annual report and accounts in The Bookseller, Company News, 20th October 1995

A weak UK trade and a heavy investment programme put margins under pressure at Oxford University Press in the year to end-March 1995, but sales continued to grow, reflecting the press' ever broadening spread of international interests. Sales were up 7 per cent to £215.7 million, but the operating surplus was down 13 per cent to £23.4 million on the previous year. Despite this fall in income, OUP maintained the level of its contribution to the university at £9 million, including a £5 million capital transfer.

Year of investment

James Arnold-Baker, chief executive of the press and secretary to the delegates, was not concerned by the decline in profitability. "We saw this as a year of investment. I put in a plan to the delegates which was one of high investment. We have a rather unusual situation here. We said that we needed to invest in a number of things. We have doubled the size of our warehouse in Cary, North Carolina; we have bought Harla in Mexico, and we are continuing to invest in a number of reference projects."

The Mexican investment was perhaps the most significant. Harla has distributed OUP's English language teaching books for the past 10 years, and it is also involved in school and college publishing. "It was a very significant move for us because it got us into Latin America. There was a great hole in the map of the world where we had no presence at all." The downside of the acquisition was the devaluation of the Mexican peso. Just as OUP signed, the peso collapsed from 3.5 to 6.5 to the dollar. Mr Arnold-Baker described the experience as hair-raising, but he is philosophical about currency movements after a similar experience when OUP set up in Turkey last year. "The real issue is about sales volume," he said.

Among the main reference projects in which OUP is investing are the third edition of the Oxford English Dictionary and the Dictionary of National Biography, although there are other large scale scholarly works in progress. The report to the delegates shows that the amount of money spent on major reference works increased by £1.2 million to £6.5 million.

Service improvements

Central services is the third area of investment. Besides the expansion of its US warehouse, OUP has also put money into a new automated picking line at its Corby distribution centre, and it is undertaking a major review of its computer systems. OUP tends to take a very conservative view of its investments, according to Mr Arnold-Baker, and this explains why the profit and loss account has been affected by the capital expenditure programme.

The UK market was a problem for the arts and reference division, which includes dictionaries, classics, Oxford's other trade publishing, and the educational divisions. Three high profile receiverships - Dillons, Foyles Educational and Zwemmer Retail (which runs the OUP bookshop in the Charing Cross Road, London) compounded weak high street sales, and the schools market was affected by uncertainty over curriculum changes. "The UK market was very, very difficult last year, but the superstores in the US have been tremendous for us," Mr Arnold-Baker said. He denied that rising costs were a problem. "My guess about it is that our costs are probably higher than our commercial competitors', but a scholarly publisher probably has to take a lot more trouble in the way it publishes its books."

Elsewhere in the press, the scientific and medical division had "a jolly good year" boosted by the new Oxford Textbook of Surgery and the monumental Birds of the Western Palearctic. Oxford's journals on CD-ROM were well received, but Internet dissemination remained a distant goal. "We see the Internet as a great way of publicising things rather than disseminating them. It is not yet fast enough or secure enough to transmit large chunks of material. It has yet to come of age."

ELT growth

On the ELT front, most of the growth was recorded in the developing markets of Latin America, the Pacific Rim and eastern Europe, although the more established markets of Europe, Japan and the US continued their steady advance. The past year has also been a period of reorganisation. Both the sci-med and the arts and reference divisions have been restructured to bring the marketing and editorial departments in line with each other, and three redundancies were announced over the summer.

Possibly the high point of the year for the press was the meeting of the delegates at OUP's offices in New York. To Mr Arnold-Baker this meeting symbolised the end of the press' Oxford-centric view of the world. "The delegates had never met outside Oxford before", he said.

Click for Bookseller OUP accounts digest, 1996. or OUP's Annual Report and Accounts abstracts, 1995 (includes 1994 figures).

Click for related files:
The Waldock Report, OU's own investigation into its P (1970)
CUP's tax-exemption Chapter 15 of M. H. Black's Cambridge University Press 1584-1984.
Oxbridge accounts reveal assets of £2 billion Sunday Times, 16/11/97
Mammon's Imprint by Valentine Cunningham (+ leader comment and campaign), OUP fights corner in poetry row including CUP's donations to CU, US presses enjoy tax freedom, Times Higher Education Supplement, 12/2/99.
OUP to invest £87 million in university The Times Business section, 17/7/99
OUP denies breach of charity rules Oxford Times, 5/11/99
Cooking the books? Cherwell, 12/11/99
OUP profit row Cherwell, 25/2/00
A Message from India Oxford Times, 30/3/01, including admission that OUP's 1999 'donations' were bogus.

Click for OUP Accounts Index - OUP's 'Charitable status' - Oxford College Accounts - Oxford Cuttings Library - Literary Law Library - Student Law Library - Malcolm v. Oxford I - Malcolm v. Oxford II - website history - SITE INDEX.