Shares in Quercus Publishing (QUPP) plunged after the publisher warned that full-year profits would be "significantly below expectations" due to the non-delivery of a key Christmas title and lower re-orders than forecast. Profits fell from £7.5m to £5.9m in 2011 and estimates of £5m for 2012 will now be missed. Edison Investment Research is awaiting for results in March before revising estimates for 2013.
In a way, Quercus has been a victim of its own success after huge sales of the Steig Larsson trilogy transformed the business. Faced with its first major success, the company used the windfall to invest in longer-term growth, signing up new editors and a number of better-known authors. But growing e-book sales, a decent pipeline of new books and the launch of a US business in the autumn have yet to fully compensate for the loss of income from the Larsson books.
