PUBLISHING
An Open Book
By Wanda Jelonkiewicz
23 March 2005
The revenues of the Wydawnictwa Szkolne i Pedagogiczne (WSiP) group exceeded zl.310 million in 2004. The group is Poland's largest publisher of books and textbooks for schools, with a 29-percent share in the market for textbooks. Apart from a publishing house, the WSiP capital group involves the book wholesaler Wkra and Dom Książki in Warsaw, a retailer with a chain of 31 bookstores.
WSiP debuted on the stock exchange last November, its most important stockholders are the State Treasury (15 percent of shares), American Life Insurance and Reinsurance Company (indirectly via AIG OFE and AIG Asset Management-10.24 percent) and Pioneer Pekao Investment Management (6.60 percent); 68.16 percent of shares are available on the stock exchange.
Last year, WSiP reported a profit of zl.233.4 million from sales of products at catalogue prices, the Wkra capital group earned zl.150.6 million and the Dom Książki capital group-zl.17.1 million. The net revenues of the entire WSiP capital group from sales amounted to zl.310.54 million (pre-audit data), compared to zl.279.38 million in 2003.
WSiP is adjusting its strategy to the changing market for textbooks. Due to a population decline, in the next couple of years the market will not expand, leading WSiP to diversify by publishing a larger number of periodicals and focusing more on the book trade. The company is also seeking new acquisition opportunities.
After a failed attempt at purchasing Hungary's National Educational Publishing House (Nemzeti Tankonyvkiado) in 2004, this year WSiP has chosen Wydawnictwa Naukowo-Techniczne as a target, put up for sale by the Mazovia province governor. "We are interested in cooperation and mergers with the best publishing houses," said Jan Rurański, president of the board of WSiP. "We have received a lot of offers from weaker publishers. This year may have a few mergers in store."
"We are looking for partners abroad, mainly among educational publishing houses," said Jarosław Kusto, financial director of WSiP. "There are plenty of potential acquisition targets in Central and Eastern Europe. We are conducting preliminary negotiations with many publishing houses." WSiP wants to allocate around zl.100 million in acquisitions. It has a lot of cash waiting on back accounts for investment because the company could not spend the money before the privatization.
WSiP is exploring a new publishing area-interactive education. A special catalogue devoted to new technologies contains interactive charts and other teaching aids. In March, WSiP will launch sales of electronic editions of textbooks and guidebooks for teachers via its website. Another new group of products are interactive charts for schools that hold information in layers, enabling teachers to demonstrate consecutive stages of a problem and give quizzes.
Asked about companies possibly interested in investing in WSiP or even acquiring it, Rurański says the board would be advised in a few days about any stock purchase exceeding 5 percent of the company's capital. Today, two investment funds are stockholders in WSiP. "We have not, in turn, received information about any investor intending to buy WSiP for now," Rurański said. "I believe that large investors potentially interested in acquiring and taking control over the company will emerge when the Polish market stabilizes in both the economic and political arenas."
Moreover, investors have to become more familiar with the company, evaluate the board's plans and verify any possible threats. According to Rurański, there will be more to say about WSiP's future prospects after the first general assembly at the end of this year, when the situation in the company becomes more stable. There are plans to make WSiP's operations more efficient. "We have initiated research of the economic processes in the company, which should result in improved organization and restructuring," said Rurański.