Pandemic reading habits continue to lift Bloomsbury earnings
Bloomsbury Publishing reported a 29% improvement in revenue in its unaudited interim results on Wednesday, to £100.7m, while profit before tax rocketed 265% to £11.1m.
The London-listed independent publisher said diluted earnings per share were ahead 210% year-on-year for the six months ended 31 August at 10.41p.
Net cash at period end was 1% weaker at £43.7m, while the board declared an interim dividend of 1.34p per share, up 5% on the first-half distribution last year.
In the consumer division, Bloomsbury reported strong revenue growth of 29% to £62.9m, with profit before tax and highlighted items increasing by £5.6m to £8.4m.
Organic revenue growth was 24%, and organic profit growth was £5.2m, with Head of Zeus, acquired in June, contributing £2.7m in revenue and £0.4m of profit before tax and highlighted items to the adult trade unit.
Bloomsbury recorded a “strong” adult trade performance, with revenue up 27% to £23.9m and profit rising 23% to £1.3m.
It also reported an “excellent” children's trade performance, with revenue growth of 31% to £39m and profit before tax ahead £5.4m at £7.1m.
Strong sales were seen among the front and backlist titles by author Sarah J Maas, with 130% growth, while Harry Potter sales were described as “good”, and growth of 10% reported in other children's titles.
The acquisition of Head of Zeus in June provided a “strong addition” to the “thriving” consumer division, supporting the firm’s long-term consumer growth strategy.
Looking at the non-consumer division, Bloomsbury reported an “excellent” performance, with revenue growth of 27% to £37.7m, and profit before tax and highlighted items rising 220% to £4.6m.
Organic revenue growth came in at 21%, and organic profit growth was 211%, with RGP, acquired in June, contributing £1.7m revenue and £0.4m profit before tax and highlighted items to the academic and professional unit.
Bloomsbury recorded a “strong” academic and professional performance, with revenue growth of 32% to £26.4m and profit before tax up 121% at £3.9m.
The company’s Bloomsbury Digital Resources (BDR) operation saw revenue rise 44% to £8m and profit improve to £2.8m from £1.2m, with the firm on track to achieve its five-year BDR ambition for revenue of £15m and profit of £5m for the 2021-2022 period.
It set a new BDR target from 2022-2023 of achieving a further 50% organic growth and 30% margin over the next five years.
“Our strong financial position and cash generation give us significant opportunities for further acquisitions and investment in organic growth,” said chief executive officer Nigel Newton.
“Retailers and online booksellers have significantly increased stock levels over previous years to ensure they have sufficient stock for Christmas given the supply chain problems.”
The company’s first-half revenues had thus been boosted by customers ordering earlier than in previous years, Newton said.
“Whilst the board remains mindful of the external environment, including impediments in the supply chain and the possibility of higher returns of the increased stock ordered early, the strength of the first half performance means that we are confident in achieving market expectations for the year ending 28 February.”
AJ Bell investment director Russ Mould said that for some time Bloomsbury was “like a magician with only a single trick” with the Harry Potter series one of the biggest single phenomena in publishing history, although once the series ended, the company’s share price and sales went into steady decline.
“After a few years of decent progress, building up a diversified business, the pandemic hit fast forward on Bloomsbury’s return to prominence as people picked up the book reading bug in large numbers,” he said.
“Today’s statement represents a continuation of the positive momentum and helps lift the shares to within touching distance of their recent highs and in line with the heights attained during the peak of Pottermania.”
Mould said a record first half showing suggested people were sticking with their reading habits.
“Bloomsbury saw success in its consumer-focused arm, driven by a range of bestsellers across different categories, and its academic publishing division, which has become an increasingly important part of the strategy in recent years as it looks to boost subscription-based revenue.
“Digital sales also form a growing chunk of the overall mix and acquisitions have done some of the lifting too.
“The company seems to have managed supply chain challenges quite effectively to date - printing books early ahead of its usual peak periods in the run up to Christmas and the start of the academic year in the autumn.”
At 0924 BST, shares in Bloomsbury Publishing were up 4.83% at 369p.