Chrysalis sells loss-making books

Actress Joan Collins is among the Chrysalis stable of writers

Radio, music and publishing group Chrysalis has sold its loss-making books division to senior managers of the business for £12.5m ($21.8m).

The division lost £2.8m in the year to August 2004, on sales of £27.4m.

Chrysalis will now concentrate on its core radio stations, including Heart and Galaxy, and music publishing.

Chief executive Richard Huntingford said these areas offered "good growth prospects" and potential for developing "long-term shareholder value".

'Prolonged restructuring'

The book division has published novels by actress Joan Collins and ex-Tory Party leader Iain Duncan Smith.

It was created by the purchase of many small publishers between 1998 and 2001.

A new outfit called Anova Books Company has been created by the chief executive of the books division, Robin Wood, and senior managers.

The division has continued to experience deteriorating operating results Chrysalis Check Chrysalis' share price

The business includes fiction, lifestyle, crafts and hobbies, mind, body and spirit, maritime, popular history and sport among its genres.

Imprints include Collins & Brown, National Trust Books, Putnam Aeronautical Books, Batsford, Brassey's and Sterling.

"Since the beginning of the 2003 financial year, Chrysalis Books has undergone a prolonged period of restructuring," the group said in a statement.

"In spite of the wide-ranging changes made to the operational structure of the book publishing activities as well as a significant reduction in the number of titles published, the division has continued to experience deteriorating operating results."

Radio stations

The books division lost money in 2003 and 2004, and is expected to report underlying losses of £4.5m in the current financial year.

The sale comes after a drop in half-yearly profits for the group in May was blamed on problems at the division.

Then, it said pre-tax pre-exceptional profit fell 86% in the six months to February to £1.2m, against £3m over the same period last year.

Chrysalis is the UK's fourth largest radio group, owning the Galaxy stations around the UK as well as Heart 106.2 and LBC in London.