Waterstones bookstore saw sales and profits rise last year as sales of stationery, gifts, food and coffee boosted business.
Recently released accounts show that Waterstones’ revenue rose 1.8% to £392.8 million ($510 million) in the 12 months to April 27, 2019. Pre-tax profit rose 33% to £26.5 million.
The increase in sales and profit came despite “a period without any major bestsellers”. Waterstones said sales were boosted by “non-book items” such as stationery, board games, notebooks and other gifts, as well as food and drink sales at Cafe W stores.
The highest-paid director, whose name was not disclosed, earned £1.7 million during this period.
Waterstones has 277 bookstores and cafes across the UK and employs nearly 3,200 people.
The bookseller was acquired by the renowned US hedge fund Elliott Advisors in April 2018 for an undisclosed sum. The financial statements, which were submitted to the commercial register this week, provide a first insight into the company’s development under its new owners.
The accounts show that Elliott led a refinancing of the company by taking out a £165 million loan at 6% plus LIBOR and arranging a £25 million credit facility.
Elliott Advisors UK makes its money from fees for advising and assisting Waterstones and other investments. Waterstones’ accounts show that at the end of the period it owed £56.9 million in loans and payments to group companies, up from £39.5 million in 2018.
Elliott manages more than $40 billion in investor money worldwide and is known as an “activist” investor. He buys shares in companies and then puts pressure on management to change strategy or sell parts of the company.
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However, James Daunt, CEO of Waterstones, said at the time of the takeover that Elliott had acquired the bookseller as a traditional investment.
Waterstones invested £7 million in training its staff and improving its stores in the twelve months to 27 April 2019, compared to £8.8 million in the previous financial year.
Elliott’s other investments in Europe include Italian soccer club AC Milan, Telecom Italia and British shopping center operator Hammerson (HMSO.L). Last year, Elliott also bought U.S. bookseller Barnes & Noble for $683 million.
