DELEGATES OF THE UNIVERSITY PRESS
Annual Report 1st April 1979 - 31st March 1980

The Delegacy

The Proctors for the year were Dr. R. C. Repp and Mr. V. R. Joshi. The Assessor was Dr. E. Sidebottom.
Professor J. Barr, Professor J. Boardman, and Professor D. J. Weatherall took office as Delegates on 1 October 1979 in succession to Professor W. F. Bodmer, Professor P. A. Brunt, and Dr. H. Chadwick. Professor Sir Peter Hirsch was appointed a member of Finance Committee from the same date.

General

lt was remarked in last year's report that trading conditions were 'hardly favourable'. During 1979-80 these conditions deteriorated sharply, particularly for the United Kingdom Publishing Divisions. As a result, the surplus before tax earned by the Press as a whole fell to £1.6 m. from the level of £3.7 m. for the previous year. Total sales increased from £40.6 m. in 1979 to £43.3 m. in 1980. This is an increase of 7 per cent in terms of sterling, but as sterling rose in value against most other currencies this figure understates the sales expansion achieved by our overseas offices.

The decline in surplus is to be accounted for, almost entirely, by a substantial loss recorded by the United Kingdom Publishing Divisions. This loss was itself the consequence partly of adverse market conditions from which British publishers generally have suffered and partly of certain special circumstances in which the Press finds itself.

British publishers, most of whom have announced cut-backs and redundancies, have been affected both by rising costs and by declining demand. Export demand has been depressed by the rise in the overseas value of the pound sterling which now equals $2.40 as against about $ 1.70 only three years ago. This rise owes nothing to the improved competitiveness of our manufactured exports; on the contrary, British prices, and the [page 8] cost of book production in particular, have risen more than in most other countries. The rise is the result merely of the way in which oil revenues already have improved and are further expected to improve our balance of trade. Publishers generally export a large proportion of their books and the Press in particular exports more than half its United Kingdom production. Our English Language Teaching sales have risen despite higher prices but the Academic and General Division has suffered a fall in volume sales and in margins. We have achieved economies through having more books printed overseas but this can only reduce and not wholly offset the effect of our high United Kingdom costs.

Demand has fallen also because of the reduction of library and educational spending. Educational institutions, faced with a cut in their budgets, find it easier to cut back on book purchases than on staff. In the recent past, the Press benefited from a sustained educational expansion, particularly in the United Kingdom and the United States; this expansion is now well behind us and there is no sign of its early resumption.

Falling demand has been accompanied by rising costs. In particular, interest rates rose from 7 per cent to 17 per cent over three years, a circumstance of particular importance to the Press at a time when a major investment is needed in new distribution facilities.

While suffering as do other publishers from adverse market conditions, the profitability of the Press's United Kingdom publishing has been further affected by certain special circumstances.

Our distribution facilities at Neasden are expensive and inefficient. The warehouse is old and too small and the site precludes expansion. Books have had to be stocked in several places and handling costs have been thereby increased. Given these circumstances, it was decided to close our Neasden warehouse and to establish a new distribution centre at Corby. The decision was taken only after very full consideration. The Neasden closure, regrettably, will result in a loss of jobs at that site and the Press will be obliged to make corresponding redundancy and relocation payments. Part of the cost of the new facilities will be met by the sale of the Neasden freehold site and part by borrowing. In due course operational savings will enable the total outlay to be recouped but in the shorter [page 9] term the financial burden will be heavy. This consideration, together with the risk of disruption that might be occasioned by the move, argued in favour of remaining in Neasden. Had the Press done so, however, costs, already clearly excessive, would have risen further as capital expenditure would have been needed to maintain the present buildings which are in poor repair. The alternatives were therefore to suffer slow but certain decline through remaining at Neasden or to face the costs and risks of a move. Many possible sites were carefully evaluated, Corby being in the end preferred on a balance of cost and locational convenience. Work on the site was begun in the summer of 1980 and the facilities, when complete, should provide a book distribution service second to none.

During the year steps were also taken to replace the Press's computer system. A new machine has now been installed but the changeover is not yet complete and operating costs are abnormally high.

These special costs have had an adverse effect on earnings additional to that imposed by market conditions. All publishers have now to adapt to these conditions but the nature of the Press's academic publishing, together with its particular academic obligations, make it more difficult to do so.

In the ordinary way, a company losing money would reduce its investment in lines of diminishing profitability and, at least temporarily, cease to pay a dividend to its shareholders. But there are limits to the extent to which the Press can do these things. In the field of academic publishing the investment required in any year depends on the number of books brought to completion and available for publication in that year. Frequently these books were contracted several - often many - years ago; their production costs are often higher and their market smaller than originally envisaged. When short of cash we limit the current investment in such books by deferring the publication of some of them. The publication of learned books, some of which would be unattractive to a commercial house, is the counterpart of a financial dividend to shareholders; it cannot, however, be so easily cut back when times are bad.

The present recession in British publishing is not likely to be shortlived and the Press will have to learn to live with it. The new distribution facilities, to be in operation within two years' time, will increase its ability to do this but, even so, [page 10] difficult adaptation may be called for. The Press as a whole will still benefit, of course, from the strength of its world-wide operations. Branch results, though less good than in 1978-9, were still very satisfactory. Those Branches which depend substantially on the sale of books produced in Oxford suffered, as did the United Kingdom Publishing Divisions, from the high sterling exchange rate. Nevertheless, the Branches were able once again to make a valuable educational contribution within the countries in which they operate, to finance their own operations, and, by monies remitted to Oxford, to support the Press's learned publishing programme and its general development.

O.U.P. New York faces some of the adverse market conditions experienced in the United Kingdom. The trading results nevertheless were better than in the year previous and important books were published. Following a decision taken by the Delegates, O.U.P. New York initiated a learned publishing programme in philosophy and history. lt has for many years had a distinguished list in American history which will now be extended into other fields of historical study.

The Printing Division had to contend during the year with rising costs and a weak market. Publishers generally are putting more work abroad in order to get lower prices. Despite these adverse conditions, however, the Division was able to adapt itself sufficiently well to maintain a positive cash flow and report satisfactory earnings.

The rest of this report indicates that the scale, variety, and distinction of the Press's publishing has been maintained throughout the year. But in Britain and to a lesser extent in the United States it is being confronted with economic conditions less favourable than at any time since the Second World War.

Academic and General Division

Under a scheme involving the reorganization of non-educational publishing in the United Kingdom the Academic and General Divisions were amalgamated. Six publishing units were established from the three academic units reported last year. The Science and Medical group is unchanged; to the Social Sciences group has been added Academic English; to Academic Humanities has been added Bibles. Two new groups [page 11] have been formed - Reference, excluding Oxford English Dictionaries, and a General Publishing group embracing hardback and paperback books. Music stays unchanged. Managing Editors promoted from within the Press are in charge of each group.

Academic Division

The year saw the publication of a considerably greater number of monographs than the previous period but, despite this, and largely because of a levelling off of sales in dictionaries and medical publications, total sales barely kept up with inflation. A number of factors, not least the strength of sterling and the weakness of the dollar, accounted for a result which was not disappointing only in that it had been predicted. The number of new major reference titles was less than in the previous year but included the Oxford-Duden Pictorial German-English Dictionary which got off to a good start.

The Philosophy list continues to grow steadily. A further volume (number V) was published in E. S. de Beer's edition of The Correspondence of John Locke, accompanied by a second edition of an established classic, Mossner's The Life of David Hume. An imaginative and interdisciplinary new volume was published in the series Oxford Readings in Philosophy, Philosophy and Economics, edited by M. Hollis and F. Hahn. A range of academic monographs included Doubt and Dogmatism: Studies in Hellenistic Epistemology, edited by Schofield, Burnyeat, and Barnes; Holistic Explanation by C. A. B. Peacocke; and The God of the Philosophers by A. Kenny.

A number of important new studies were published in Academic Law including P. S. Atiyah's major work, Freedom of Contract; J. Jaconelli's Enacting a Bill of Rights; J. W. Harris's Law and Legal Science; J. Raz's The Authority of Law; and J. Crawford's The Creation of States in International Law. The textbook backlist was kept up to date and competitive with new editions of Brownlie's Principles of Public International Law; Keir and Lawson's Cases in Constitutional Law; and the centenary twenty-fifth edition of Anson's Law of Contract, now edited by A. G. Guest. The Oxford Companion to Law, compiled entirely by David M. Walker, will take its place among the enduring reference books on the Oxford list. [page 12 - further publication detail omitted]

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(Signed) COOPERS & LYBRAND
Chartered Accountants

The Delegates wish to observe that:

(a) with regard to the Consolidated Balance Sheet, the short-term investment and cash position is substantially stronger at 31 March than at other times of the year;

(b) with regard to the Consolidated Profit and Loss Account for the year, the accounts have been prepared according to the historical cost convention, and thus make no allowance for the declining value of money. Informal estimates of the effect of restating the accounts on a Current Cost Accounting basis indicate that the result would show a substantial loss;

(c) as recorded in Notes D and 3, a proportion of earnings arising in certain overseas countries is not available for use elsewhere.

The Delegates wish to record that they have authorized commitments to capital expenditure amounting to £5,750,000 during the next two years for the construction of a new warehouse and offices.

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Note A. Including investments in and loans to Associated Companies.

Note B. Including amounts due from Associated Companies

Note C. Including portions of loans repayable within one year.

Note D. Including non-remittable reserves: see Note 3.

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Note 1. The contribution of the manufacturing department to the consolidated profit before tax and the share of pretax profit attributable to Associated Companies was:

Note 2. In 1980: Provision against the balance of the unsecured loan to a subsidiary of Brittains Limited, £(336). In 1979: Refunds and release of provisions for tax and deferred tax, attendant upon exemption from United Kingdom tax, totalling £6,318; gain on disposal of a Branch, £24; provision against permanent diminution in value of the investment in Brittains Limited and a subsidiary company, £(750).

Note 3. A proportion of the earnings arising in certain overseas countries is not available for use elsewhere, and represents an addition to non-remittable reserves.