In what was described as "another record sales year", the latest report and accounts from Oxford University Press show turnover increased by 11 percent to £278.2 million in the year to end-April 1997. This was in spite of adverse market conditions in many areas, particularly the US, as well as fluctuating exchange rates, without which sales growth would have been 17 per cent, the chairman of the finance committee said in the report.
The surplus for the year was £26.7 million, a marked improvement on the surplus last year of £19.4 million. This, said the report, was despite the cost of solving distribution problems in Corby and further investment in OUP's new management system, known as SAP, both of which made negative contributions to the results (see below). These problems had now been brought back under control, with sales "delayed rather than lost absolutely", but at the cost of "some damage to OUP's reputation", the report said. In the UK the first phase of the implementation of the core systems of SAP - finance and costings - had been "completed successfully", with the second phase - sales and distribution - planned for completion in early 1998.
James Arnold-Baker, secretary to the delegates and chief executive, declined to be drawn on how much Oxford University Press had spent on the project, but denied that there had been an overspend. "I wouldn't call it an overspend. The scope of the SAP system has changed. We have spent more, but we have added in a lot more. A lot of this was because of the year 2000 requirements," he said.
In terms of sales OUP continued to perform strongly. ELT sales showed the largest growth, up almost 26 per cent from £78 million to £98 million, with particularly strong performances in Spain and in emerging markets in Asia and eastern Europe. Growth in educational publishing was less strong, up from £69 mlllion to £77 million, with Oxed, the UK educational division, performing well in the difficult UK educational market. Academic sales were tougher, with performance in the US hit by exceptionally high returns. Sales increased from £104 million to £113 million.
Mr Arnold-Baker said that the next fiscal year could be very difficult, particularly for those publishers involved in supplying overseas markets. "There are difficulties in the Far East, which are bound to affect a number of publishers. In Europe we have the uncertainty over EMU, which is a great worry. In the UK there is some feeling that the economy is slowing down and will not repeat the growth of last year. On the educational side at least we now have a government that believes in education and appears to be sympathetic to the current situation," he said.
OUP was also continuing to invest in electronic publishing. "There has been a lot of development and it is gradually beginning to take off. The issue is which carrier to invest in - electronic publishing itself will continue to grow. CD-ROMs are not dead but they will be superseded by the Internet."
OUP has changed its accounting policy regarding the development of electronic products. It now intends to write off the costs as incurred as opposed to matching the costs to the revenue stream from the finished product. This, said the press, would give a "fairer representation of the group's results". The effect on this year's results is not shown, but the change resulted in £1.5 million being wiped off last year's quoted surplus of £20.96 million. Mr Arnold-Baker concluded that OUP was in "good shape".
News report, page 7
OUP has denied a massive overspend - rumoured to be between £10 million and £16 million - on its new SAP computer system, supplied by Siemens.
James Arnold-Baker, chief executive, told The Bookseller that there had not been an overspend. However, he admitted the system had incurred higher costs than originally planned. "We have spent more, but we've added a lot more to the system, much of which was because of the year 2000 requirements." He added that the SAP finance system had been successfully implemented last year, and that the sales and distribution system would be completed "early next year".
A reshuffle of the IT programme has led to the departure of IT director Graham Lynch. A spokesperson said the parting was amicable. "The reshuffle made the role of IT director less interesting to Mr Lynch," she said. The system is now managed by Valerie Johnston, who has been appointed programme director. David Fry, formerly a European regional manager for logistics at the Raychem Corporation, has been appointed to the new post of UK publishing services director, with responsibility for IT, distribution, finance and facilities.
Click for Bookseller OUP accounts digest, 1998 or OUP's Annual Report and Accounts abstracts, 1995 (includes 1994 figures), 1997 (includes 1996 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.
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.