Coffee table book publisher Quarto (QRT) slumps 5.5% to 274p as it reports a 7.6% decline in underlying publishing revenue for the third quarter.
The relatively weak performance reflects tough comparatives with the same period in 2015 when Quarto benefited from an adult colouring book craze in full swing.
If the acquisitions of Harvard Common Press and becker&meyer, in February and August respectively, are included then publishing revenue in the three months to end of September is actually up 4.6% to $46.9m. Quarto says both acquired business are ‘integrating well’ and management remain confident of hitting full year expectations.
The cash generative company, a Shares pick, also continues to reduce borrowings despite the M&A activity. Group net debt is down 6.7% year-on-year to $75m.
House broker Stockdale reiterates its ‘buy’ recommendation and 350p price target. It comments: ‘Over the last four years, as highlighted at its recent capital markets day, the group has established a balanced, growing portfolio of 45 imprints with a global sales and marketing platform and the infrastructure to manage expansion.’
