Bookseller: OUP accounts 1998 (original) (raw)

OUP's profits take a dive

As its chief executive stands down, OUP records a "very disappointing" year

Digest of OUP's annual report and accounts in The Bookseller, lead story, 7th August 1998

In what it described as "very disappointing results", the latest accounts from Oxford University Press show a 51 per cent drop in surplus, on sales up 1.5 per cent, in the year to end-March 1998. Sales rose from £278 million to £282 million. The surplus before tax was £13 million compared with £26.7 million last year. It is OUP's lowest level of profit since the 1990-91 fiscal year, when it reported a surplus of £11.7 million on sales of £138.1 million.

The results will cast a shadow over the conclusion of the five-year reign of James Arnold-Baker, secretary to the delegates and chief executive. In his time he has presided over sales growth of more than 50 per cent. But these latest figures appear to confirm the impression that his decision to leave the press was based on its faltering performance. The university attributed the performance to "tough trading conditions and high internal costs."

The internal costs related to the installation of the UK business' computer system, designed by SAP. There have been consistent rumours of an "overspend" on the system, which OUP has denied. Sir Keith Thomas, chairman of the OUP finance committee, said there had been a "one-off surge in administrative costs" caused by the need to replace the computer system in addition to the worldwide costs of Year 2000 remedial work. Roger Boning, group finance director, conceded that the project was "proving to be more expensive than original estimates". The project had been rebudgeted last year and spending was well within the revised plan, Mr Boning added.

Very heavy "unplanned costs" were incurred through the continued restructuring of the former Harla companies in Latin America, which were bought by OUP in 1995. The results were also hit by a number of external factors, including the high value of the pound and the economic crisis in Asia. More than 80 per cent of OUP's sales are made outside the UK. Mr Boning said adverse currency movements accounted for £6 million of the reduction in surplus. Divisionally, the worst affected was the ELT division, where sales fell from £98 million to £92 million. At constant exchange rates sales rose 5 per cent. Unit sales were increased and market share was maintained, but margins were reduced to compensate for the strength of sterling.

A better performance was put in by the academic division, where sales grew by 7 per cent to £119 million. This was thanks in part to "good progress" in the US, its major market. The education division saw sales rise from £77 million to £79 million, with the UK educational division having its "most successful year ever".

Click for Bookseller OUP accounts digest, 1999 or OUP's Annual Report and Accounts abstracts, 1998.

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. 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.