Investors who like turnaround stories should look at book publisher Quarto (QRT). Finals (26 Feb) on the face of it show a business treading water with falling revenues and which is not generating profit or dividend growth. Dig deeper and you will discover that management has stabilised the firm which is now poised for a recovery.

Chief executive officer Marcus Leaver has been busy working through numerous challenges since his December 2012 appointment after a shareholder coup. His next task is to return the £33 million cap to growth and further drive down debt following 2013’s London office consolidation - these are feasible ambitions given the internal restructuring, efficiency plans and the company’ s rich intellectual property (IP).

Quarto specialises in illustrated books, photo-heavy DIY/gardening/art guides and children’s titles. These areas do not have the same competition from digital e-books as standard fiction or biography works. Approximately two-thirds of the firm’s revenue comes from a back catalogue of books that are still popular decades after original publication.

For example, it took $807,000 in sales of All New Square Foot Gardening last year, a title that first came out in 1981.

This year will see Quarto accelerate IP investment, picking up the rights to more books. A joint venture with Nobel will see it access a valuable distribution network for Brazil where the market is poorly served with local language illustrated titles.

Consensus forecasts of 28.9p in earnings per share for 2014 equate to a 5.9 PE ratio and underscore the recovery potential at 170p.