Latest results

• Highlights
• Chief Executive's statement
• Income Statement
• Statement of other Comprehensive Income
• Balance Sheet
• Statement Of Changes In Equity
• Cash Flow Statement
• Notes

Highlights:

• Profit before investment income and amortisation of intangible assets £1.2m (2008, £3.5m)
• Investment income £0.8m (2008, £1.9m)
• Basic earnings per share 1.70 pence (2008, 4.97 pence)
• Interim dividend up 4.0% to 0.78p per share (2008, 0.75p)
• Strong publishing lists for second half and beyond
• Cash balance of £48.4m (31 December 2008, £51.9m)
• Important acquisitions made in July in academic and professional publishing including Tottel Publishing, a leading law and tax publisher
• Well positioned for further organic and acquisition-related growth

Commenting on the results and prospects for Bloomsbury, Nigel Newton, Chief Executive, said:

'Bloomsbury continues to perform well in difficult markets with the first half of 2009 laying good foundations for the full year. Despite the high comparative figure due to the timing of last year's release of Harry Potter and the Deathly Hallows in paperback, we have enjoyed strong underlying growth.

The balance of the Group's business has shifted as we maintain our expansion in academic and specialist publishing which is less susceptible to the vicissitudes of the consumer market and therefore less risky for the Group. Since the period end, we have completed the acquisitions of Tottel Publishing and the Hodder Higher Education lists in Media and Communications, History and English Literature.

The market risks highlighted at the year-end remain but we have entered the second half of the year with a strong Autumn list. We will also see the financial benefits from our recent acquisitions.'

Chief Executive's statement

OVERVIEW

An increasing proportion of Bloomsbury's revenue is now being generated from publishing which is less susceptible to the vicissitudes of the consumer economy, namely academic, professional and specialist publishing and income from long-term database contracts. Revenues in this area will be augmented by the acquisitions of Tottel Publishing, a specialist publisher in law and tax and the Hodder Higher Education textbook lists in Media and Communications, History and English Literature. These acquisitions were completed in July.

2009 started with The Suspicions of Mr. Whicher reaching number one on the UK paperback bestseller list. We have a strong publishing program for this year. In the first half we published books by Sue Miller, TC Boyle, Anne Michaels and Jay McInerney. We have a particularly strong list in the second half, with books being published by some of our highest selling authors such as Margaret Atwood, John Irving, William Boyd, Elizabeth Gilbert, Heston Blumenthal and Hugh Fearnley-Whittingstall. Overall the impact of the global recession on the general book market is leading to slightly reduced volumes across the industry and continued pressure on margins. We have continued to focus on reducing our operating costs to maintain margins, and good progress is being made through a tougher book acquisition process, reductions in initial print runs, more focused marketing, greater use of print on demand and alternative raw materials for printing. The landscape of trade publishing is changing and there are exciting opportunities ahead as new technology allows the book to reach the consumer in electronic form. We are creating an infrastructure that will enable us to benefit from revenue streams from electronic publishing as they start to achieve critical mass in the coming years.

Revenue for the first six months was £35.3m compared to £42.1m in 2008. The comparative figure in 2008 was high due to the level of sales of A Thousand Splendid Suns, The Kite Runner and the release of Harry Potter and the Deathly Hallows in paperback. Gross margin increased to 51.0% (2008, 46.1%) as a result of lower royalties, lower advance provisions and an increased contribution from long-term database and management contracts.

Marketing and distribution costs were 2.9% lower at £6.6m (2008, £6.8m). Applying constant exchange rates for the USD and Euro, the marketing and distribution costs for 2009 would have been £6.1m. Administrative expenses increased 13.2% to £10.3m (2008, £9.1m). At constant exchange rates administrative expenses would have been £9.5m. £0.7m of overhead costs related to acquisitions made in 2008 (2008, £0.1m). Following the four acquisitions made in 2008, the amortisation charge for intangible assets under IAS38 is becoming more significant and is shown separately on the condensed consolidated income statement for the first time. The amortisation charge for the first six months of 2009 was £0.16m (2008, £0.03m)

Profit before investment income and amortisation of intangible assets was £1.2m (2008, £3.5m).

Investment income decreased by 57.9% to £0.8m (2008, £1.9m) primarily as a result of lower interest rates and, to a much lesser extent, due to lower average cash balances held during the six month period.

Profit before tax was £1.8m (2008, £5.4m).

The Group's effective tax rate for the year ending 31 December 2009 is expected to be 31.1%, compared with 32.6% for the year ended 31 December 2008. The reduction in the rate is partly due to the full twelve months' impact of the cut in the UK statutory rate of corporation tax from 30% to 28% which took effect from 1 April 2008.

The tax rate has also been reduced by the impact of share options. The tax effect of the clawback of share option charges posted in prior years in respect of options granted which will not meet the vesting conditions, the charges in respect of new options granted, other movements in the charges and the share price have resulted in a deferred tax credit to the income statement exceeding the current tax charge in respect of share options.

Basic earnings per share was 1.70 pence (2008, 4.97 pence).

Net cash outflow from operations for the first six months of the year was £1.4m (the six months ended 30 June 2008 saw an inflow of £8.0m). The operating cash outflow was primarily due to lower revenues and key movements within working capital in the first half which included payments of royalties to authors on book and subsidiary rights sales made in the last six months of 2008. Net cash balances at 30 June decreased 6.7% to £48.4m (31 December 2008, £51.9m). As at 30 June 2009, the Group had under contract 1,161 titles (31 December 2008, 1,139) for future publication, with a gross investment of £24.9m (31 December 2008, £26.4m). After payment of the initial tranches of advances to authors, our commitment for future cash payments on these contracted titles as at 30 June 2009 was £14.5m (31 December 2008, £15.6m).

Since books sold are often returnable by distributors, the Group makes a provision against books sold in the accounting period. The unused provision at the period end is then carried forward as an offset to trade receivables in the balance sheet, in anticipation of further book returns of previous sales subsequent to the period end. A provision for the Group of £6.2m (31 December 2008, £7.8m) for future returns relating to the six-month period to 30 June 2009 and prior year sales has been carried forward in trade receivables in the balance sheet at 30 June 2009. Within trade and other receivables, prepayments and accrued income decreased 6.6% to £24.0m (31 December 2008, £25.7m) due to increases in provisions of £1.3m (twelve months to 31 December 2008, £9.1m) against advances to authors on titles published (‘advance provisions').

INTERIM DIVIDEND

The Directors have declared a 4.0% increase in the interim dividend to 0.78 pence per share (2008, 0.75 pence per share), which will be paid on 20 November 2009 to shareholders on the register at close of business on 23 October 2009.

OPERATIONAL REVIEW

UK

The UK operation's performance in the first half of 2009 is working against a high comparative in 2008 which saw the huge success of Harry Potter and the Deathly Hallows in paperback, the then recently released paperback edition of A Thousand Splendid Suns and continued ongoing sales of The Kite Runner.

In the first half of this year, the fiction list was led by Sue Miller's The Senator's Wife, a Richard and Judy Summer Read selection, and the quirky and affectionate epistolary novel by Mary Ann Shaffer and Annie Barrows, The Guernsey Literary and Potato Peel Pie Society in paperback. In April 2009 we published Wisden Cricketers' Almanack for the first time since the purchase of John Wisden and Co. in November last year. Published every year since 1864, Wisden is synonymous with cricket and with the best in cricket writing. We will be adding a number of new titles to the Wisden imprint. The first of these, ‘Wisden on the Ashes', was published in May 2009 and sold out of the first printing before publication. The 2009 Wisden Cricketers' Almanack will be available in e-book format for the first time this year along with a ‘shelf' of other Wisden titles, including the seven most recent Almanacks. A new edition of Wisden on The Ashes is being rushed to press for the Christmas market following England's Ashes victory and the timing couldn't be better.

Bloomsbury USA

We are continuing to reduce our costs in the US whilst at the same time building book and rights revenues. As part of Bloomsbury's global publishing initiative, Bloomsbury USA is now managing the publishing and distribution of academic and reference titles from, Bloomsbury Specialist with the aim of building a platform for what will become a substantial component of future US sales. A&C Black's publishing programme will move to Bloomsbury USA in 2010.

The US trade in general is still experiencing difficulties but a number of titles are continuing to perform well. Chelsea Handler's My Horizontal Life has been a New York Times bestseller for almost a year. The paperback of Kate Summerscale's The Suspicions of Mr. Whicher appeared on the New York Times extended bestseller list.

This Autumn sees the publication of several titles shared with Bloomsbury UK, including Meltdown Iceland, the story of Iceland's economic collapse, by The Times correspondent Roger Boyes, and Logicomix, the unparalleled graphic novel about Bertrand Russell and his quest for logic in mathematics. History is at the centerpiece of Bloomsbury Press with Half Moon, the story of Henry Hudson's historic voyage, and Walker & Company's On Hallowed Ground, a biography of Arlington National Cemetery.

Bloomsbury and Walker children's published two instant books that seized upon ‘presidential fever': Our Children Can Soar, a book derived from a seed poem associated with the 2008 Obama campaign, and Now Hiring: White House Dog, which was inspired by the country's fascination with the First Family's quest for a dog.

Two titles for teenagers in the US children's division helped drive revenue in the first half of 2009: Walker's Perfect Chemistry has 85,000 copies in print, while Bloomsbury's Need is now in its 8th printing and boasts 55,000 copies in print. The books reflect key trends in the US marketplace, paperback original publishing and paranormal respectively, that remain central to the children's publishing plan this year and into 2010.

The film of The Frog Princess by E.D. Baker will be released on December 11th. The animated feature film, now called ‘The Princess and the Frog', will introduce Disney's first ever African-American princess and includes voices from Anika Noni Rose, John Goodman and Oprah Winfrey. Rights sales have been particularly strong for this book this year.

Berlin Verlag

The first half performance reflected the economic uncertainty in Germany. The company is also working against a high 2008 comparative figure which benefited from sales of The Kite Runner and Jonathan Littell's bestseller Die Wohlgesinnten. However, first half sales this year were dominated by the paperback edition of A Thousand Splendid Suns in German which rapidly made its way to the top of the bestseller list. The two Khaled Hosseini titles have sold over 500,000 in Germany in the year to date. This success was augmented by the German editions of Anne Michaels' Winter Vault, Helen Garner's The Spare Room and Andrew Davidson's Gargoyle. Paradiso, the debut novel by Thomas Klupp, has been hailed as the most exciting book of the Spring and has won several first-novel prizes. Margo Jefferson's Michael Jackson has seen a surge in sales which will continue throughout the year. We have undertaken a further cost reduction exercise in Germany with the intention that the savings made will offset any decline in revenues.

The children's list was awarded several prizes for outstanding works of fiction and non-fiction including Kathrin Hahnemann's Charles Darwin, Wolfgang Korn's Die Weltreise einer Fleeceweste and Daniel Höra's young adult novel Gedisst. Celia Rees' new novel Sovay generated impressive sales as did Franziska Biermann's illustrated, multimedia picture book, Zirkus.

The Autumn list reflects our strategy of publishing authors both in English and German and includes new titles such as William Boyd's Ordinary Thunderstorms, Margaret Atwood's The Year of the Flood, Mary Hooper's The Betrayal and Kamila Shamsie's Burnt Shadows.

Berlin Verlag's entry into the e-book market is imminent, with rights cleared, technical requirements fulfilled and contracts with major trading partners in place. This exciting step into new territory will open up many opportunities for substantial growth beyond traditional publishing channels. As an example, we are partnering with major Berlin libraries, where we will launch BOB (the Berlin Online Bibliothek) this August, to offer access to our titles through the public library system. Negotiations with other major libraries are underway.

Specialist Publishing Division

The expansion of the Specialist Division in 2009 has been facilitated by a number of strategic acquisitions, an increase in revenues from long-term database contacts and management, partnerships involving our new academic and professional companies, and solid organic growth from A&C Black throughout the world.

In times of increased economic turbulence and budget cuts, the Specialist division's mix of ‘must have' professional, academic and specialist publications provides a robust counterweight to the Group's consumer-driven trade publishing business. The higher percentage of international sales in academic and specialist publishing reduces our exposure to the UK economy.

Acquisitions in 2009 have included:

Tottel Publishing, acquired in July 2009 for £9.96m, a specialist publisher in law and tax. For the twelve-month period ended 28 February 2009, Tottel generated revenue of £6.25m, operating profit of £0.93m and EBITDA of £1.19m (before amortisation of acquisition goodwill of £0.249m). Tottel is the leading independent publisher in its field and produces an extensive range of books, journals and loose-leaf services for academics and students as well as for lawyers, accountants and tax advisers in private practice and business. Its list includes many authoritative titles which have been market-leaders, many, from Butterworths and Tolleys, including Clinical Negligence by Powers and Harris, Parker's Modern Wills and Rayney's Tax Planning for Owner Managed Companies as well as Irish Conveyancing Precedents and The Irish Constitution and, in Scotland, The Court of Sessions Practice. It has had great success with recent new publishing initiatives, including its core Tax list.

Much of its revenue is subscription-based and in dynamic and fast-moving areas, making its information ideal for online delivery. The company already has a number of valuable online agreements in place and will be seeking to build on these as it migrates its revenue online over the next two to three years. It already has an extensive e-book programme. The acquisition of Tottel is an important step in the development of the Group's academic and professional publishing, with the added benefits that come from developing a robust presence in the professional sector. Subscription-based businesses such as this are fundamentally stable with good repeat revenues, and these particular markets have significant online potential. We are pursuing further acquisition opportunities in this area.

The Hodder Higher Education textbook lists in Media and Communications, History and English Literature were acquired in July. The lists generate annual revenues of £0.4m. These lists include the original Edward Arnold titles in these fields which have been updated and published in numerous new editions incorporating new approaches and methodologies. These titles provide the teaching elements in subject areas where Bloomsbury Academic has been building its research-led books. The list will be incorporated into the organic Bloomsbury Academic list which was launched in 2008.

Good progress has been made on the integration of the four businesses we acquired in 2008. The development of the Berg Fashion Library is proceeding according to plan. In June Berg Publishers and the Victoria and Albert Museum, the world's leading museum of fashion and the visual arts, announced a new partnership, making 1,600 images from the V&A fashion collection available digitally through the Berg Fashion Library, the new online resource being launched in May 2010.

V&A images will be indexed alongside other content including books and journals, according to an extensive classification system created for the Berg Fashion Library. The classification system will make it easier for students, scholars and curators throughout the world to see clothing and related objects that they might not otherwise know existed. Users will be able to search and browse for specific items of dress and to move between text and related images with ease.

Arden Shakespeare, the most authoritative Shakespeare series in print, which has been continuously re-edited by scholars since 1898, was purchased from Cengage Learning in December 2008. It has been integrated into the Methuen Drama list. We expect sales to benefit from the attention of our specialist sales and marketing for Methuen Drama in the UK. In the USA specialist marketing has been strengthened by the appointment of a new academic marketing manager at Bloomsbury USA. In 2010 A&C Black's specialist and academic sales, currently handled by a third party US agent, will be consolidated to form the beginning of a new specialist/academic division of Bloomsbury USA.

Our focus for the second half of the year will be to develop further print, on-line, e-book and mixed media products in our specialist areas, to build new associations with partners in these areas and to continue to develop sources of revenue in addition to print sales. Publishing highlights for the second half include Business Essential, a compact guide to the world of work in paperback and e-book format, derived from our Business database; Singing Express and Art Express, mixed media courses for schools, following the extremely successful format of our Music Express series; and the 42nd edition of Black's Medical Dictionary.

The two year development phase of QFINANCE -- The Ultimate Resource, our partnership with the Qatar Financial Centre Authority, has been completed on schedule with the first copies having come off the press last week. The launch in Doha on 29 September will be attended by international financiers and government ministers.

Our partnership with Qatar Foundation to publish books in Arabic and English and to promote reading in the Middle East is flourishing. Bloomsbury Qatar Foundation Publishing has now published its first book and its reading development programme has achieved notable success including the launch of the World Book Day Qatar and the Bloomsbury Qatar Literary Salon.

We are delighted that Kathy Rooney, Managing Director of Bloomsbury Information Ltd, won the Kim Scott Walwyn Prize in recognition of her publishing achievements at Bloomsbury.

Trade Publishing Division

Adult

Bloomsbury's long-term strategy of publishing fiction and non-fiction of the highest quality has allowed the Trade Publishing Division to flourish even in difficult economic times. The Adult Division's performance in the first half of 2009 is working against a strong comparative figure in 2008 which saw the huge success of A Thousand Splendid Suns and continued ongoing sales of The Kite Runner.

The biggest new development has been the critical mass achieved by our food and cookery list with Heston Blumenthal's The Big Fat Duck Cookbook gaining sales and prizes on both sides of the Atlantic, including the Guild of Food Writers Book of the Year; the continuing growth of Hugh Fearnley-Whittingstall's River Cottage Handbooks series and Fish; and the re-launch of the celebrated Leith Cookery Bibles.

2009 is a big year for our international fiction programme with prize-winning books from Jumpa Lahiri, Daniyal Mueenuddin and Kamila Shamsie. In addition we have published major new titles from T.C. Boyle, Jay McInerney, Anne Michaels and Liz Jensen.

The second half is very strong with new fiction titles such as Margaret Atwood's The Year of the Flood, William Boyd's Ordinary Thunderstorms, Justin Cartwright's To Heaven by Water, John Irving's Last Night in Twisted River, Colum McCann's Let the Great World Spin and Arthur Miller's Collected Stories: Presents. On the non-fiction side we have Heston Blumenthal's two new editions In Search of Total Perfection and the compact edition of The Big Fat Duck Cookbook, William Dalrymple's Nine Lives, Michael Mansfield's Memoirs of a Radical Lawyer, David Kynaston's Family Britain, 1951-7, and Monty Don's The Ivington Diaries. Buzz Aldrin's Magnificent Desolation was published to coincide with the 40th anniversary of the lunar landings. First time best-selling novelist Gil Adamson's The Outlander has been optioned for a big screen adaptation by Canadian film makers Xingu Films, Strada Fims and Triptych Media.

Our two major reference authors Ben Schott, with the latest edition of Schott's Almanac, and Christopher Lloyd with his new What on Earth Evolved?, continue to develop new and exciting works making an impact in many countries around the world.

Digital delivery of books is gaining momentum through e-book reader sales and more recently through the launch of Bloomsbury Library Online, which offers access to collections of our books through the public library system where readers can read the book online, search the text, access author interviews, reviews and press features as well as reading group guides if applicable. The service includes themed digital bookshelves such as children's history books, teen fiction, international fiction, books in translation, prize winners, crime, thrillers, history, sports and Shakespeare. Wisden, Writers on Writers, Our Environment and Childhood are the next themed shelves scheduled for release and have been chosen by the British Library for inclusion in its New Ways of Reading section featuring a dedicated Bloomsbury Library Online computer terminal, a Sony Reader and a Cool-er Reader http://www.coolreaders.com/.

Access to the content will be through public libraries using their existing technology both within the libraries and remotely with the use of a library card on home computers and Internet-enabled devices. Early purchasers include the library authorities of Essex, Thurrock, Southend and Poole - and also the British Library

Children's

The Children's Division is working against a high comparative figure with Harry Potter and the Deathly Hallows having been released in paperback in the first half of 2008. Children's publishing in the UK is increasingly author and series-led. This year has seen new publications and movies from some of our key authors: Neil Gaiman with the release of the top-grossing movie of Coraline and the continuing success of The Graveyard Book, winner of the prestigious the Hugo Novel of the Year Prize; Sue Limb's wonderful teenage novels newly re-designed; the paperback of Celia Rees's Sovay and the re-design of her historical adventure books; the world premiere of JK Rowling's Harry Potter and the Half-Blood Prince which has become the highest grossing film in UK history followed on the re-launch of her Comic Relief charity books, Fantastic Beasts & Where to Find them and Quidditch Through the Ages; the paperback release of Angie Sage's Magykal Quest; and Mark Walden's World Book Day selection Interception and the growing popularity of his H.I.V.E. series. David Frankel, the director of Marley and ME has been signed by Warner Bros. to develop Septimus Heap: Magyk, which the studio hopes will launch the next global fantasy franchise. The film will be based on the popular seven-volume children's books by UK author Angie Sage. Bloomsbury has the UK and Commonwealth publishing rights to the series.

New talent is a vital component of our publishing and we are delighted that BR Collins and her Bloomsbury editor, Emma Matthewson, won the prestigious Branford Boase Award which celebrates debut writers and their editors.

We have participated in the UK Government's scheme which promotes reading through providing a book to all new Year 7 students at secondary schools and we shall be offering Underworld by Cathy MacPhail and Derek the Sheep by Gary Northfield.

Outlook

We are seeing more company acquisition opportunities and are fortunate to have made two strategically significant acquisitions with Tottel and the Hodder Higher Education lists.

As indicated in our full year results statement, we have several major database projects under consideration by interested third parties and our annual result for the year will be affected by the outcome of these negotiations as well as general consumer book market conditions in the run-up to Christmas 2009.

In recent months we have focused on the two major relationships with the Qatar Financial Centre and Qatar Foundation and look forward to the worldwide launch of QFINANCE -- The Ultimate Resource in Qatar on 29 September.

The significant market risks pertaining to the recession highlighted at the year-end remain. of bestselling authors selling below budgets; backlist high sellers selling fewer copies; potentially reduced rights, database and management contract income; bad debts and loss of distribution channels and decreased government spending on books in schools, universities and libraries. Further details of the principal risks and uncertainties facing the Group are given on page 24 of the 2008 Annual Report.

2009 started auspiciously with The Suspicions of Mr. Whicher reaching number one on the UK paperback bestseller list. We have a strong publishing programme for this year. In the first half we published new books by Sue Miller, TC Boyle, Anne Michaels and Jay McInerney. We have a particularly strong list in the second half, with new books from some of our highest selling authors including Margaret Atwood, John Irving, William Boyd, Elizabeth Gilbert, Heston Blumenthal and Hugh Fearnley-Whittingstall. Overall the impact of the global recession on the general book market is leading to slightly reduced volumes of about 3% across the industry and continued pressure on margins. We have continued to focus on reducing our operating costs to maintain margins, and good progress is being made through a tougher book acquisition process, reductions in initial print runs, highly focused marketing, greater use of print on demand and alternative raw materials for printing. The landscape of trade publishing is changing and there are exciting opportunities ahead as new technology allows the book to reach the consumer in electronic form. We are creating an infrastructure that will enable us to benefit from revenue streams from electronic publishing as they start to achieve critical mass in future years.

We have a very strong list for Autumn 2009 and are confident of generating good sales from a number of titles.

Nigel Newton

Chief Executive
27 August 2009

CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2009

The notes on pages 15 to 23 form an integral part of these condensed consolidated interim financial statements.

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
for the six months ended 30 June 2009

CONDENSED BALANCE SHEET
at 30 June 2009

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2009

CONDENSED CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2009

NOTES:

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