Oxford University Press has recorded a 23 per cent leap in surplus in its latest financial year, but the result was still below its target of of a 10 per cent return on sales and substantially below its budgeted expectations. Sales in the year to end-March 1999 grew by 9 per cent, taking OUP to sales of £308.5 million. Its pretax surplus rose from £13 million to £16 million.
It is a partial return to form for OUP after last year's disappointing results showed a 51 per cent drop in surplus on sales up by only 1.5 per cent. Its latest result puts it on a margin of 5 per cent, about half what it achieved historically. Taking out investment in funded projects, such as the Oxford English Dictionary, the press achieved an operating margin of 7 to 8 per cent. It has now targeted a margin of 10 per cent, which it expects to achieve in the 2001/2002 fiscal year.
Secretary to the delegates and chief executive Henry Reece, who succeeded James Arnold-Baker in July last year, said the improvement in profit had been brought about by a "rigorous management of costs, particularly in the UK". He added that the surplus would have been higher had it not been for a "quite exceptionally high level of stock write-off, which was primarily caused by overpublishing in preceding years". The reduction in costs included the closure of Oxford Interactive Learning, its distance learning unit, a reduction in its activity in Russia and its decision to stop publishing contemporary poetry - now published under the OUP imprint by Carcanet.
Mr Reece said that the press had faced difficulties in many of its overseas markets, particularly in East Asia and Latin America. OUP generates 85 per cent of its sales outside the UK. He said that it had faced an environment that was changing rapidly and "not obviously to our advantage". Consolidation had created specialist businesses benefiting from economies of scale, influence over retailers and access to investment. He added that consolidation in retail had "brought with it increasing pressure on discounts and demands for more marketing support".
On the positive side the academic division performed well with sales growth of 5 per cent, and OUP USA surpassed sales of $100 million (£63 million) for the first time. The UK education division had "another excellent year". ELT had a "difficult" but "satisfactory" year. "Many of the problems that OUP has faced in 1997/98 and 1998/99 are likely to continue into the foreseeable future," Mr Reece said. This included strong sterling; depressed markets in East Asia; volatile currencies in Latin America; and further consolidation. But he added that there were indications that some of the overseas markets were picking up, with trading in the first quarter "very good". By contrast the UK high street was "difficult".
Click for Bookseller OUP accounts digest, 2001 or OUP's Annual Report and Accounts abstracts, 1999 or OUP's contributions to university, 1993 - 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.