Haynes Publishing – a look at the businesses

PUBLISHED: Nov 13 2018 @ 10:30 | Comments (0) |

Analysing the different business operations of Haynes (LSE:HYNS) is not made easy because the company avoids separating revenue and profit between the books and professional sales in the UK and Europe. However, by piecing together information from elsewhere we can deduce that the sales of paper books/manuals and online manuals in the UK is in the region of £4.7m – £5.5m per year and has been for some time (roughly one-half are practical lifestyle books rather than automobile manuals).

United Kingdom

UK and Europe print sales (mostly in UK) declined by over 40% over 4-5 years from £9m in 2011 to under £5m in 2014 and 2015. At least they have climbed up from that low point to around £5.5m today.

The rise in UK sales for 2017 and 2018 you see in the table is mostly due to the purchase of two professional businesses as Haynes built up its market share in the UK professional market to around one-quarter.

Revenue and profits for the different regions – 31^st May year-ends

Revenue £000s	2018	2017	2016	2015	2014	2013
United Kingdom	8,733	6,873	4,918	4,741	5,950	6,808
Rest of Europe (mostly “HaynesPro”)	12,804	10,527	7,971	6,700	6,591	6,106
USA (manuals)	10,145	10,490	11,021	11,963	12,685	11,164
Australasia (manuals)	1,525	1,322	1,093	1,859	2,751	2,553
Rest of World (manuals)	581	526	707	802	1,307	1,001
Analysed as follows:
Printed products	16,366	17,533	17,575	19,454	22,955	22,209
Digital	16,946	11,853	7,945	6,377	6,073	5,160
Rights and licenses	476	388	190	234	256	263
Operating profit
Op. profit (UK + Europe)	4,805	2,704	1,471	623	949	890
Op. profit (N. America and Aus.)	399	643	340	1,237	2,612	1,755

Included in the UK numbers for 2017 and 2018 is OATS lubricants and professional data business bought December 2016, adding £1m to turnover in 2017 and £1.4m in 2018.

It was the E3 Technical purchase in September 2017 which catapulted HaynesPro from being a small player in supplying information to professional UK mechanics to having direct control over 25% of the market. In 8 months, October 2017 to May 2018, the E3 Technical business, added £1.9 million of revenue to Haynes, mostly in the UK.

The annual report for 2016 stated that the UK business was loss-making; at that time, it was more than 95% book-related. So that was the starting point for the revival efforts currently underway.

Impressively, in 2017 UK consumer revenue was up 13% driven by strong sales of the non-automotive titles. In particular, the “Haynes Explains” titles (amusing book

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