AGM Statement

Quarto Group Inc
02 May 2006


 

 
                             THE QUARTO GROUP, INC.                             
                                     
                            CHAIRMAN'S AGM STATEMENT                            

                          'an excellent start to 2006'                          

At the AGM in London this afternoon of Quarto, the fully listed independent book
producer and publisher, based in London, Laurence F. Orbach, Chairman and Chief
Executive, will state:

'We've made an excellent start to 2006, in the face of trading conditions in our
major markets that continue to be demanding.

For the first quarter, to March 31, 2006, unaudited operating profits* of
£731,000 (2005: £255,000) are at a record level, and up 187%, on revenue of
£18.0 million(2005: £17.0 million), up 6%. For the 12 months ended March 31,
2006 operating profits* increased by 28% to £9.3 million (2005: £7.2 million). A
summarised trading statement is set out below:
 
                                                March 31                       
                                 Three months           Trailing 12 months     
                                  2006         2005         2006         2005  
                                  £000         £000         £000         £000  
Revenue                         17,951       17,014       95,975       82,167  
                                ______       ______       ______       ______  
                                ========     ========     ========     ========
Gross profit                     6,640        5,937       33,082       28,155  
                                                                               
Overheads                       (5,909)      (5,682)     (23,831)     (20,909) 
                                ______       ______       ______       ______  
Operating profit                   731          255        9,251        7,246  
                                                                               
Interest                          (608)        (489)      (2,342)      (1,786) 
                                ______       ______       ______       ______  
Pre-tax profit                     123         (234)       6,909        5,460  
                                ______       ______       ______       ______  
                                ========     ========     ========     ========

 
Our international co-edition segment showed particularly strong results, and, on
the publishing side, sales in the UK moved into slightly more positive
territory. Publishing sales in the US remained unexciting, but this has more to
do with changes in distribution arrangements in the primary channels that we
serve than to any market weakness. The new arrangements should be settling in
during the next quarter.

'The first quarter is, traditionally, our weakest quarter for revenue, but
current indications are that 2006 overall will be stronger than last year. As
noted in my Chairman's letter on last year's results, we have been having
difficulty with some of our magazine titles, published in the UK. I am happy to
announce that we disposed of these titles today. Last year, at about this time,
we restructured our marketing services units in the UK. I am pleased to report
that the savings we expected are being achieved.'

*before amortization of intangibles and non-recurring items

 
Notes for Editors:

Quarto is an international book producer and publisher with two principal
strands of activity: it publishes, under imprints owned by the Group, books and
art prints in the US, the UK, and Australia; and it creates books that are
licensed to other publishers for publication under their own imprints in many
languages around the world.

In 2005, Quarto increased adjusted pre-tax profit by 12% to £6.6m and reported
adjusted diluted earnings per share of 20.8p (21.5p at constant tax rates, which
would have represented a seventh successive annual increase).
 

Enquiries:
 
The Quarto Group, Inc.                                                          
Laurence Orbach (Chairman & CEO)                                 020-7700 9003  
Mick Mousley (Finance Director)                                  020-7700 9004  
                                                                                
Bankside Consultants Limited                                                    
Charles Ponsonby                                                 020-7367 8851  

 



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