Books flying onto shelves as Booktopia demand rockets

Enthusiasm for ordering books online isn’t just the result of the global health pandemic, and Australia is accelerating to catch up.

Booktopia chief executive Tony Nash jokes that such was the massive demand for books through the worst months of COVID-19, which saw the retailer ship a record 4.2 million orders in the December half, that his company should consider starting a side business that sells bookshelves.

Meanwhile, the popular Booktopia Facebook site has been switched back on and reinstated after it along with many other retail sites and news organisations disappeared last week as a part of the social media giant’s decision to block news.

Mr Nash believes the enthusiasm for ordering books online isn’t just the result of the global health pandemic but a trend experienced overseas where there is a massive shift to online, with Australia now accelerating to catch up.

The tsunami in book sales, led by fiction, technical books, children’s books and manga graphic novels, has pushed into January and February — prompting Booktopia to believe the boom in 2020 was more than just a COVID-19 effect, and encouraging the recently listed book retailer to upgrade its revenue and earnings forecast for the full year.

Booktopia said on Monday strong ongoing demand from customers and increased distribution capacity helped Booktopia post a record first-half result for the December half and set it up for a bumper 2021.

It has upped its revenue guidance for the full year to $217.6m, from a prospectus forecast of $204.5m. Meanwhile its underlying EBITDA full-year target is now $12.9m against a prospectus forecast of $9.4m. The new guidance reflects a 31.3 per cent lift in revenue against 2020 and a 214 per cent increase in earnings on 2020.

The recently listed Booktopia reported revenue for the first half was up 51.1 per cent to $112.6m as underlying EBITDA (adjusted for the IPO) was up 502.3 per cent to $8m. It posted a statutory loss of $19.78m, up from a loss of $598,000, as more than $22m in costs relating to its float and the conversion of preference shares sank its profit.

Mr Nash was confident about the year ahead even though, as restrictions were eased and Australia began to emerge from the worst of COVID-19, there could be more competition for people’s attention and less opportunities to be lockdown at home reading a book.

“I think it is prudent for all retailers, traditional, physical, omni-channel or pure players like us, to go ‘this is the new norm’.

“And to use a metaphor; if there was a tsunami of orders coming through and inundated and then receded back to where it always was, like a tsunami does, then so be it. But this is more like a train track where a bullet train has sent us down the track and has just forwarded us to where we would have been in two or three years time,” Mr Nash told The Australian.

“Australia has been in lag. Europe and North America they are up to 20 per cent or more of online retail sales as a proportion of total retail and Australia has been 8 or 10 per cent of total retail sales.”

While in lockdown people did turn to binge watching TV shows and podcasts, but also increasingly books with Booktopia shipping a company record 4.2m orders in the first half against 3.2m orders in the first half of 2020. The average order value was also up, sitting at $69.87 from just over $60 in fiscal 2020.

“I always say we should have a little section on our website for buying for new bookcases, I think that might be a missed opportunity.

“I get in to more anecdotal conversations in the role that I have now, and they say to me we spend so much time on the phone, we are in front of our computers and when working from home even more so than ever and having a book is just time out for my eyes and brain,” Mr Nash said.

During months of lockdowns fiction was a solid seller, as were children’s books, and graphic and illustrated manga or cartoon books. He also said in the very thick of the lockdowns if a book a customer wanted was sold out they would opt for a second or third choice, rather than log off with an empty basket, which had not happened before.

In the December half Booktopia’s active customer base shot up 25 per cent to 1.71 million.

On Monday, its share price lifted 0.4 per cent to $2.80.