Latest results

• Financial highlights
• Chief Executive's statement
• Income Statement
• Balance Sheet
• Statement Of Changes In Equity
• Cash Flow Statement
• Notes

Highlights:

Bloomsbury Publishing Plc today announces six month results for the period ended 31 August 2011.

Financial highlights

The highlights for the six months ended 31 August 2011 include:

• Turnover up 16% to £44.9 million (2010: £38.6 million)
• Pre-tax profit, adjusted for highlighted items*, up 52% to £2.2 million (2010: £1.4 million)
• Pre-tax profit of £0.3 million (2010: £0.8 million)
• Interim dividend increased by 10% to 0.89 pence per share (2010: 0.81 pence)
• Basic earnings per share, adjusted for highlighted items*, up 31% to 2.07 pence (2010: 1.58 pence)
• Basic earnings per share of 0.30 pence (2010: 0.76 pence)

Operating highlights

• Unprecedented ebook sales growth
• ebook sales in the six months to 31 August 2011 increased by 564% to £2.5 million (2010: £0.4m)
• Strengthened management team
• Appointment of new Group Finance Director and Managing Director of new Children's & Educational division
• Significant development of Academic & Professional division
• Acquisition of leading Academic publisher Continuum for cash consideration of £20.1 million
• Purchase of National Archives Publishing programme backlist
• Drama online project with Faber & Faber
• Contract to publish PricewaterhouseCoopers Manual of Accounting series
• Licensing deal with Practical Law Company
• Bestsellers across the Group:
• The Finkler Question - Howard Jacobson
• Eat Pray Love - Elizabeth Gilbert
• Harry Potter series - JK Rowling
• Strong list for the second half
• River Cottage Veg Everyday! - Hugh Fearnley-Whittingstall
• Heston at Home - Heston Blumenthal
• Pigeon English - Stephen Kelman
• The Wombles - Elizabeth Beresford

* Highlighted items include amortization of intangible assets, acquisition costs, restructuring and relocation costs.

Commenting on the results, Nigel Newton, Chief Executive, said:

"We have enjoyed a strong first half to the year with both the UK and US performing above expectations. 2011 remains the year of the ebook, with our sales in the first half surging by 564%. Our early-mover advantage and the investment we have made, means we are well positioned to benefit from continued digital growth. Our Academic & Professional division was bolstered by the transforming acquisition of Continuum in July, providing us with more stable and predictable income streams.

We believe that our restructured business of one global Bloomsbury has a firm foundation and an excellent management team, which, combined with continuing ebook growth and our strong content, will enable us to deliver results in line with our expectations. In our 25th anniversary year, we believe our global strategy provides Bloomsbury with a firm foundation on which to continue to grow the business."

Chief Executive's Review
Six months ended 31 August 2011

Overview

We have had a strong first half to our financial year. Profit before tax, before taking account of highlighted items, was up 52% in the six month period to £2.2 million (2010: £1.4 million). Profit before tax was £0.3 million (2010: £0.8 million).

The UK and the US have performed above expectations, with a robust second quarter following a slow first quarter. There are huge changes taking place in the way people discover, purchase and use intellectual property and much of our success has come from managing the switch from print to ebooks and digital communities. Ebooks saw dramatic growth with year on year group ebook sales increasing 564% in the six month period to £2.5 million, representing 5.5% of total Group sales.

We are making good progress in integrating the Continuum International Publishing ("Continuum") business into Bloomsbury, following its acquisition in July 2011 and are on track to deliver our forecast synergies.

Summary of results

Profit before tax, before highlighted items, was up 52% in the six month period to £2.2 million (2010: £1.4 million). Profit before tax was £0.3 million (2010: £0.8 million). Total turnover, including the results of Continuum, which we acquired in July this year, was up 16.3% to £44.9 million. Excluding the results of Continuum, like for like turnover was up 11.9% to £43.2 million.

All four publishing divisions increased their turnover year on year for the six month period. Increased licensing and rights activity in the period contributed to a 32% increase in other income to £2.9 million, demonstrating the value inherent in our content.

The profit margin, before investment income, finance costs, tax and highlighted items, increased from 3.4% to 4.5% year on year. Within this the gross margin went down slightly year on year, but marketing and distribution and administrative costs (excluding highlighted items) were all a lower percentage of revenue year on year.

Highlighted items of £1.8 million (2010: £0.6 million) include £0.7 million (2010: £0.6 million) for the recurring amortisation of intangible assets, £0.4 million (2010: nil) of costs for the relocation of our group headquarters and £0.4 million (2010: nil) of restructuring costs relating to the strategic global reorganisation of the Group.

The effective rate of tax for the period was 32% (2010: 31%).

Adjusted earnings per share, which exclude highlighted items, were up by 31% year on year to 2.07 pence (2010: 1.58 pence). Basic earnings per share for the period were 0.30 pence (2010: 0.76 pence).

Cash reduced by £27.4 million in the six month period to 31 August 2011, mainly reflecting a net cash outflow related to the acquisition of Continuum of £19.2 million, capital expenditure of £2.8 million, payment of a dividend of £2.8 million and an outflow of £2.0 million to acquire Bloomsbury Publishing shares for the Employee Benefit Trust.

Bloomsbury Academic & Professional

Over the past six months, there has been a considerable amount of positive change in this division, seeing growth, both organically and by acquisition.

The Academic & Professional division generated 19% of Group sales (2010: 18%). Total turnover, including two months of results from Continuum, was up 26% year on year to £8.7 million, with profit before highlighted items, investment income, finance osts and taxation rising by £0.4 million to £0.9 million. Turnover excluding the results of Continuum was up 1% to £6.9 million.

In April 2011, Bloomsbury Academic announced the purchase of the backlist of The National Archives Publishing programme and a strategic agreement to co-publish a range of forthcoming titles. The National Archives is the primary source of British and world history holding over 1,000 years of government files ranging from Foreign Office and Colonial Records to Home Office and Military records. Over 80 million records are digitised, offering further opportunities for research-based publishing, as well as innovative products and services for a more general market.

In May 2011, Methuen Drama announced an ambitious new project with Faber & Faber called Drama Online. This will be launched in October 2012 and is the ultimate online resource for plays, critical analysis and performance.

In July 2011, Bloomsbury purchased Continuum International Publishing Group for a cash consideration of £19.2 million, net of £0.9 million of cash included in the business. Continuum, which is based in New York and London, is an international academic and professional publisher with a small trade list. It has first class academic lists, some of which date back over 170 years. The Continuum lists are highly complementary to Bloomsbury's existing academic lists, offering us the ability to improve revenue momentum within our Academic & Professional division, especially in the key US market, as well as opportunities for material cost synergies. Considerable work has been done in integrating the two businesses, both in UK and USA. Sales and cost synergies remain in line with management expectations.

The Group's move in August to its new London offices at 49-51 Bedford Square went smoothly. We moved Berg from Oxford into these new offices and already we are seeing greater efficiencies across all areas of that business. Berg sales were substantially up on budget at mid-year, with a solid performance across home and export territories, and a corresponding improvement to profits - helped by tight controls on overheads.

On 1 September, Berg's US distribution was successfully moved into Bloomsbury USA. The integration of Continuum's and Bloomsbury USA's sales and marketing functions will benefit the academic division once fully implemented: increased market presence; further efficiencies; a mature academic editorial, sales and marketing infrastructure in a territory with significant potential for increased sales.

The first six months have been exceptionally strong for Bloomsbury Professional, which is on course for its most successful year. In June, we were named "Supplier of the Year" by the British and Irish Association of Law Librarians. In July, Bloomsbury Professional and PricewaterhouseCoopers announced a new international relationship for the publication of the PwC Manual of Accounting series. The PwC manuals are relied upon throughout the world for the authority of their information. The contract runs for three years and will significantly raise Bloomsbury's profile in the sector whilst aligning with its strategy of delivering premium content to professional markets.

In August, we finalised a major licensing deal with Practical Law Company, the leading provider of legal know-how, transactional analysis and market intelligence for lawyers. This arrangement will provide a new channel to market for our legal content, which will give us access to the desktops of law firms and corporate and public sector legal departments via Practical Law Company's online services. This deal, together with other law and tax deals already completed in this period, will bring in revenues in excess of £2.7 million.

Our recently-launched Irish online service, which combines our strengths in Irish tax, property and company law, has been well received since its introduction in June. As well as major commercial organisations such as Ernst & Young, Deloitte and Arthur Cox, orders for multi-user licences have also been placed by a number of regulatory bodies, including the Office of the Revenue Commissioners and the Law Society of Ireland. Our UK tax service will launch this autumn, and over 400 firms have so far requested to trial the service.

Adult

Our English-language adult publishing division had a good first half. Our investments in digital conversion, marketing and distribution are reaping benefits.

The Adult division generated 49% of Group sales (2010: 52%). Sales were up by 10.5% year on year to £22.1 million, although profit before highlighted items, investment income, finance costs and taxation was down from £0.4 million in 2010 to £37,000 in 2011. This includes the Adult result in Germany where, in total, there was an increase in the loss before taxation by £0.7 million to £1.1 million. Ebook sales in Germany are at least a year behind those of Britain and the US, but should catch up as more ebook reading devices are marketed there.

Great progress was made in acquiring world rights and publishing globally and in all appropriate formats: print, ebooks, e-subscriptions and audio digital downloads.

We continue to publish authors and works of excellence and originality. Our books won considerable critical praise and recognition with numerous prize winners in the period including Frank Dikotter taking the Samuel Johnson Prize for non-fiction with Mao's Great Famine; Toby Wilkinson the Hessell-Tiltman Prize for The Rise and Fall of Ancient Egypt; Niki Segnit, the Andre Simon Food and Drink Award and the Guild of Food Writers' Award for The Flavour Thesaurus; Aminatta Forna, the Commonwealth Writers' Prize for The Memory of Love; Colum McCann, the IMPAC Award for Let the Great World Spin; Justin Cartwright, the Spear's Book Award for Other People's Money; and Helen Simonson, the Waverton Good Read Award for Major Pettigrew's Last Stand. Stephen Kelman's Pigeon English was shortlisted for the Man Booker Prize for Fiction and we have two books shortlisted for the Royal Society Winton Prize for Science Books: Alex's Adventures in Numberland by Alex Bellos and The Wavewatcher's Companion by Gavin Pretor-Pinney.

It was also a strong period for sales of our paperbacks with Chelsea Handler's My Horizontal Life passing one million copies and Elizabeth Gilbert's Eat Pray Love passing two million copies in English and 600,000 in German.

In October we acquired Absolute Press, a high quality cookery list, which includes the recent bestsellers Indian Superfood and Cooking with Kids.

We have been focusing on building digital communities and have successfully launched Reed's Nautical Online sponsored by Aberdeen Asset Management, Wisden Extra online magazine for cricket lovers, and have steadily grown. Public Library Online now serve a population of over eight million in the UK and a further 17 million elsewhere in Europe.

In Germany we have focused on cost reduction and strong marketing campaigns.

Our new office in Australia has been established. At the inaugural Sydney Writers' Festival in May, Bloomsbury had four out of the top ten bestselling authors, including the number one bestselling book of the festival, I Shall Not Hate by Izzeldin Abuelaish.

Children's and Educational

The children's market is robust and continues to grow.

The Children's division generated 28% of Group sales (2010: 27%). Sales were up by 19% year on year to £12.6 million, with profit before highlighted items, investment income, finance costs and taxation rising by £0.4 million to £0.6 million.

In the UK, Harry Potter has led the way, with strong revenue at an above average cost of sale, stimulated by the final movie, Harry Potter and the Deathly Hallows Part 2, and the announcement of the launch of www. Pottermore.com - an interactive online reading experience.

In the US, a number of new titles have performed well including Chain Reaction, the third book in Simone Elkeles Perfect Chemistry series, which was a New York Times Bestseller.

The Children's division also continued to focus efforts on its digital strategy, developing key partnerships to provide digital content, specifically 4-colour enhanced ebooks, with our first enhanced title due for simultaneous print and ebook publication later next year.

We have acquired UK, US and German rights to a major new young adult trilogy Diabolical by Yelena Black and world rights in two picture books: Archie by Domenica More Gordon and The Shape of My Heart by Mark Sperring and Alys Patterson. We also acquired world rights in tie-in publications to the new Aardman/Sony movie The Pirates! In An Adventure with Scientists.

Bloomsbury Information

The Bloomsbury Information division, which provides publishing management services and information databases, generated 4% of Group sales (2010: 3%). Sales were up by 38% year on year to £1.5 million, with profit before highlighted items, investment income, finance costs and taxation rising by £0.2 million to £0.5 million.

Following the Group reorganisation which took effect in March, Bloomsbury Information has set up a dedicated business development unit to drive this important area of the division's activities where the focus is increasingly on content creation and digital exploitation. The division operates management services contracts with the Qatar Foundation. The two businesses we service there have performed well in the period. In particular, the titles published by Bloomsbury Qatar Foundation are gaining recognition and sales both in the Middle East and internationally, with three of our Egyptian authors touring the UK in October and the academic journal QScience.com having a growing readership and subscription.

In October, Bloomsbury published Slow Finance, a book that anticipates a change in attitude to the financial sector, by Gervais Williams, the respected and award winning fund manager.

Dividend

The Directors have declared a 0.89p interim dividend which is a 10% increase on the dividend paid for the six months ended 30 June 2010 of 0.81p. The dividend will be paid on 30 November 2011 to shareholders on the register at close of business on 4 November 2011.

Outlook

Since the period end our trading in the UK and US has been good. We have a strong list for the second half including; River Cottage Veg Everyday! by Hugh Fearnley-Whittingstall; Heston at Home by Heston Blumenthal; Pigeon English by Stephen Kelman and The Wombles by Elizabeth Beresford.

Our management team remains active generating income from areas outside of print and ebook sales. Earlier in October 2011, we announced a long term licensing deal for the Wisden brand in India which has contracted revenues of US$3.2 million over five years in addition to a royalty share. This follows the deal with Practical Law Company in August, which together with other law and tax deals already completed in this period, will bring in revenues in excess of £2.7 million. We expect to continue our success in this area.

We believe that our restructured business of one global Bloomsbury has a firm foundation and an excellent management team, which, combined with continuing ebook growth and our strong content, will enable us to deliver results in line with our expectations. In our 25th anniversary year, we believe our global strategy provides Bloomsbury with a firm foundation on which to continue to grow the business.

Notes:

All comparisons to last year are made to the results for the six months ended 31 August 2010. The interim results published last year were for the six months ended 30 June 2010, following which the Company changed its year end to 28 February.

CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 31 August 2011

The notes on pages 14 to 26 form an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 August 2011

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 August 2011

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
ATTRIBUTABLE TO OWNERS OF THE PARENT
for the six months ended 31 August 2011

* Own shares held by the employee benefit trust have been reclassified from retained earnings to a separate component of equity in the period as the balance held at 31 August 2011 is material.

CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 August 2011

NOTES:

Notes to the Financial Statements are available in the printable PDF version