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Unaudited Interim Results for the six months ended 31 August 2015

Bloomsbury Publishing Plc today announces results for the six months ended 31 August 2015.

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Financial highlights

  • Turnover: £52.7 million (2014: £46.6 million)
  • Adjusted profit before taxation: £1.9 million (2014: £1.7 million)
  • Profit before taxation:  £0.3 million (2014: £0.5 million)
  • Interim dividend per share: 1.06 pence (2014: 1.02 pence)
  • Adjusted diluted earnings per share: 2.06 pence (2014: 1.97 pence)
  • Diluted earnings per share: 0.36 pence (2014: 0.56 pence)

Operating highlights

  • Children's & Educational
    • Revenue for the period increased by 45% to £16.3 million (2014: £11.2 million)
    • Star performers were Paper Towns by John Green, A Court of Thorns and Roses by Sarah J. Maas, Fuzzy Mud by Louis Sachar and the new children's editions of J. K. Rowling's Harry Potter novels
    • Harry Potter and the Philosopher's Stone Illustrated Edition by J.K.Rowling and Jim Kay published on 6 October 2015, with rights now sold in the illustrations to 27 foreign language publishers

  • Adult
    • Revenue increased by 6% to £20.4 million (2014: £19.3 million) including a £3.2 million contribution from Osprey Publishing, which was acquired in December 2014
    • Key titles included Miss Carter's War by Sheila Hancock, Not Quite Nice by Celia Imrie, Chasing the Scream by Johann Hari, Killers of the King by Charles Spencer and The Valley by Richard Benson
    • Cookery list continues to thrive - Spuntino by Russell Norman, Quinntessential Baking by Frances Quinn and Hymns from the Soil: A Vegetarian Saga by Vikas Khanna. In October 2015, Bloomsbury won the Gourmand Award for Best Big Cookbook Publisher in the World for the past 20 years.

  • Academic & Professional
    • Revenue increased by 3% to £14.4 million (2014: £14.0 million)
    • Digital revenues were up by 21% to £2.5 million and now represent 17% of total revenues in the division (2014: 15%)
    • Shortlisted for Academic, Educational and Professional Publisher of the Year at the Bookseller Industry Awards, for the third year in a row

  • Strong list for the second half
    • Harry Potter and the Philosopher's Stone Illustrated Edition by J. K. Rowling
    • Sweet Caress by William Boyd
    • Tom's Table  by Tom Kerridge
    • River Cottage: Love Your Leftovers by Hugh Fearnley-Whittingstall
    • Queen of Shadows, the fourth book in the Throne of Glass series by Sarah J. Maas
    • John Le Carré: The Biography by Adam Sisman

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

"This has been a good period for Bloomsbury in both print and digital.

Our Children's and Educational division has delivered an exceptional performance, generating sales that were up 45% on the prior year. Key titles underpinning this growth were the Harry Potter Box Set and Harry Potter and the Philosopher's Stone: Illustrated Edition by J. K. Rowling, Paper Towns by John Green and several titles by Sarah J. Maas.

We have started the second half with a strong publishing list. There is tremendous interest in the illustrated edition of Harry Potter and the Philosopher's Stone and our list also includes Sweet Caress by William Boyd, Tom's Table by Tom Kerridge, River Cottage: Love Your Leftovers by Hugh Fearnley-Whittingstall, the fourth book in the Throne of Glass series by Sarah J. Maas, Queen of Shadows and the long-awaited John Le Carré: The Biography by Adam Sisman.

Traditionally, sales of trade titles peak for Christmas and sales of academic titles peak in the autumn at the beginning of the academic year. We therefore expect our sales to be significantly second-half weighted, as in the past."

 

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Overview

For the six months ended 31 August 2015, revenues were up 13% year on year to £52.7 million and adjusted profit before taxation was up 9% to £1.9 million. The Children's & Educational division was a significant contributor in the period, generating sales that were up 45% on the previous period from several key titles including the Harry Potter Box Set and Harry Potter and the Philosopher's Stone Illustrated Edition by J. K. Rowling, Paper Towns by John Green and several titles by Sarah J. Maas.

We are proud to have launched Harry Potter and the Philosopher's Stone Illustrated Edition on 6 October, which contains Jim Kay's spectacular illustrations. There is strong interest from the market for this, the first title in the illustrated Harry Potter series.

We expect our results to continue to be significantly second-half weighted, as in the past. October is the peak for academic book sales and Christmas is the peak season for the sale of general books, which this year includes cookery titles such as Tom's Table by Tom Kerridge and River Cottage: Love Your Leftovers by Hugh Fearnley-Whittingstall.

Summary of results

Adjusted profit before tax for the six months ended 31 August 2015 was £1.9 million (2014: £1.7 million). Profit before tax was £0.3 million (2014: £0.5 million). Revenue was £52.7 million (2014: £46.6 million). Within this, print sales were £41.5 million (2014: £36.6 million) and digital sales were £7.1 million (2014: £5.6 million). Digital sales grew by 57% year on year in the Children's & Educational division, and in the Academic & Professional division they now represent 17% of total sales (2014: 15%). Rights and services sales were £4.1 million (2014: £4.3 million).

An excellent sales performance in the Children's & Educational division meant the division's adjusted operating profit increased to £1.6 million from £1.0 million last year. Strong digital and rights sales in the Academic & Professional division contributed to a growth in profits. Profits were down in the Adult division which had fewer best sellers in the period.

Highlighted items of £1.5 million (2014: £1.2 million) include £0.9 million (2014: £0.9 million) of amortisation of acquired intangible assets. Other highlighted items in this period include restructuring costs (relating to acquisitions and the restructuring of the Bloomsbury Information division) of £0.6 million. The effective rate of tax for the period was 20% (2014: 19%). Adjusted diluted earnings per share were 2.06 pence (2014: 1.97 pence). Diluted earnings per share for the period were 0.36 pence (2014: 0.56 pence).

The business had £0.9 million of cash net of borrowings at 31 August 2015 (31 August 2014: £2.8 million), after an outflow of £3.5 million in cash as part payment for the acquisition of Osprey Publishing in December 2014.

Academic & Professional

Total revenues in the division were up by 3% to £14.4 million (2014: £14.0 million). Adjusted operating profit was £0.4 million (2014: £0.2 million). Digital revenues showed strong growth of 21% to £2.5 million, boosted by continuing good growth in e-book sales. Digital revenues now represent 17% of total revenues in the division (2014: 15%). Export revenues are up by 9% year-on-year in the first half, reflecting an enhanced direct Bloomsbury presence in export territories, and in line with Group strategy to reduce reliance on the UK domestic market.

In March 2015, the division was shortlisted for Academic, Educational and Professional Publisher of the Year at the Bookseller Industry Awards, for the third year in a row, having won the award in the two previous years.

Bloomsbury's law and tax business has seen multiple awards won in this period both in the UK and Ireland including Book of the Year from the Dublin Solicitors Bar Association and Practical Law Book of the Year. In the UK, Hart was awarded both first and second prize at the Society of Legal Scholars Annual Conference. Online revenues at Bloomsbury Professional continue to grow at significant double-digit levels and in mid-August we achieved the four millionth document view on Bloomsbury Professional since launch in 2011. We launched our Scottish Law Online Service in conjunction with the Law Society of Scotland in June 2015.

We continue to rapidly expand our award-winning Drama Online platform with content from leading global brands and are now introducing streaming media. In July we launched a major new content collection of 350 audio plays from L. A. Theatre Works and in September we launched 350 play texts from Nick Hern Books. At the end of October we launch our first video content for the site. Shakespeare's Globe on Screen Collection is filmed live on stage. Twenty Shakespeare plays plus The Duchess of Malfi are available for viewing in an exclusive worldwide partnership with Shakespeare's Globe Theatre.

In October, the Booksellers Association announced that the Arden Shakespeare Complete Works has been chosen as one of the final 20 Academic Books that Changed the World - a celebration of the "greatest Academic books in history".

Adult

Revenue for the period was £20.4 million (2014: £19.3 million), including £3.2 million contribution from Osprey Publishing which was acquired in December 2014. Excluding the results of Osprey, revenues in the division were down by 11% to £17.2 million, reflecting a period with fewer bestsellers than last year. Additionally our key cookery titles are being published in the second half of our financial year in 2015/16, but last year were published in the first half. The operating loss increased from £0.2 million to £0.4 million, including a £0.3 million operating profit contribution from Osprey Publishing.

Our key titles in this period were bestselling novels from two of Britain's favourite actresses - Sheila Hancock's Miss Carter's War and Celia Imrie's Not Quite Nice. Sales of James Runcie's Grantchester series, now a major TV serial in both the USA and the UK on ITV, are well over a quarter of a million and continuing to grow. In addition we continued to invest in new bestselling novelists with Hannah Rothschild's excellent The Improbability of Love being selected as a Radio 2 Book Club choice, Natasha Pulley's The Watchmaker of Filigree Street and Rebecca Dinerstein's The Sunlit Night and many others.

In non-fiction Johann Hari's Chasing the Scream has won international acclaim and generated strong sales, as have Charles Spencer's Killers of the King and Richard Benson's The Valley, which also won the James Tait Black Memorial Prize. Tim Bell's Right or Wrong was serialised in the Daily Mail, as was Muir Gray's Sod Seventy, which is the ultimate guide to living well in older age. And in religion we are proud to have published Paul Vallely's authoritative and insightful Pope Francis: Untying the Knots and our annual Lent book, this year written by Archbishop Desmond Tutu, and the biography of Swami Ramdev, an Indian bestseller.

Our new popular science imprint continued to impress and p53: The Gene that Cracked the Cancer Code was shortlisted for the BMA medical book award. Our sports list continued to grow, in particular in cycling, following the success of British cyclists and the growing popularity of the sport.

Our cookery list continues to thrive with Russell Norman's Spuntino, the follow-up to the enormously successful Polpo, Frances Quinn's Quinntessential Baking and Vikas Khanna's wonderful Hymns from the Soil: A Vegetarian Saga. In October 2015, Bloomsbury won the Gourmand Award for Best Big Cookbook Publisher in the World for the past 20 years.

The second half list includes William Boyd's Sweet Caress and Peter Frankopan's Silk Roads, both of which have entered the Sunday Times bestseller lists. Margaret Atwood's The Heart Goes Last is her first stand-alone novel since the Booker Prize-winning The Blind Assassin. Other notable forthcoming publications include Elizabeth Gilbert's Big Magic, Patti Smith's M Train, the follow-up to her bestselling Just Kids, and a major biography of John le Carré by Adam Sisman. Our dark horse for the autumn is the Guinea Pig Pride and Prejudice, already acclaimed by Salman Rushdie and Bear Grylls.

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Children's & Educational

The division continues its impressive growth trend with an excellent first half result. Revenue is up 45% to £16.3 million (2014: £11.2 million). Digital sales are up by 57% to £1.3 million. Adjusted operating profit is up from £1.0 million to £1.6 million.

In the six months to 31 August 2015, John Green's Paper Towns and J. K. Rowling's Harry Potter novels performed strongly alongside fiction launches from Louis Sachar, Sarah J. Maas, Sarah Crossan and Sibeal Pounder.

Picture book stars have been Never Tickle a Tiger by Pamela Butchart and Marc Boutavant, You Can't Take an Elephant on the Bus by Patricia Cleveland-Peck and David Tazzyman and continued strong sales of I Love you Night and Day by Smriti Prasadam-Halls and Alison Brown.

The new children's editions of J. K. Rowling's Harry Potter novels, published in August 2014, continue to show exceptional growth. Year on year sales are up 180% when compared with sales of the two previous editions. Harry Potter Book Night, an annual celebration of the books, launched last February with over 10,000 events being held worldwide. A mix of bookshops, libraries, schools and community groups took the opportunity to celebrate their love of the books. During the school summer holidays, through Nielsen bookscan UK, all seven titles showed over 100% growth on the previous two editions.

Harry Potter and the Philosopher's Stone Illustrated Edition by J. K. Rowling and Jim Kay was published on 6 October 2015. We have sold rights in the illustrations to 27 foreign language publishers making the publication a truly global event.

Paper Towns by John Green has had a strong first half due to the release of a Fox movie starring Cara Delevingne on 24 July 2015. Both the film tie-in edition (published in May 2015) and the standard edition have been in the Bookseller Top 10, with the film tie-in hitting Number 1 in the children's lists.

We published Sarah J. Maas's new series debut, A Court of Thorns and Roses, in May and it went to Number 2 in the series bestseller list of the New York Times and remained in the top ten for three weeks. We have sold rights for this new series in 12 languages.

Fuzzy Mud by Louis Sachar and One by Sarah Crossan were published in August to great critical acclaim. Witch Wars by Sibeal Pounder, illustrated by Laura Ellen Anderson, is the second bestselling debut novel in Nielsen Bookscan UK this year.

When Mr Dog Bites by Brian Conaghan and Apple and Rain by Sarah Crossan were shortlisted for the Carnegie Medal.

Bloomsbury Information

Revenue for the Information division this period was £1.5 million (2014: £2.0 million) reflecting the revenue profile on key contracts. Operating profit was £0.3 million compared to £0.6 million in 2014.

This period saw the start of the division's content marketing pilot programme with Stephens Inc. in the USA and the growth of content and users on the IZA World of Labor Knowledge Hub, a multi-year project Bloomsbury manages on behalf of the Institute for the Study of Labor, based in Bonn, Germany. We also continued to increase our business list publishing and partnerships with titles such as The Success Formula, Managing for Success and The Neuroscience of Leadership Coaching,and our partnership with Ashridge Business School resulted in the publication of Capitalism's Toxic Assumptions.

We are working with the Qatar Foundation to extend our management services agreement with them from 2016.

Dividend

The Directors have declared an interim dividend of 1.06 pence per share which is a 4% increase on the dividend paid for the six months ended 31 August 2014 of 1.02 pence per share. The dividend will be paid on 30 November 2015 to shareholders on the register at close of business on 6 November 2015.

Outlook

As well as Harry Potter and the Philosopher's Stone: Illustrated Edition by J. K. Rowling, Bloomsbury's strong second-half list includes Sweet Caress by William Boyd, Tom's Table by Tom Kerridge, River Cottage: Love Your Leftovers by Hugh Fearnley-Whittingstall, the fourth book in the Throne of Glass series by Sarah J. Maas, Queen of Shadows and Adam Sisman's long-awaited biography of John Le Carré.

As in previous years, the Group is targeting a number of new contracts from which we expect to deliver rights and services income in the second half of our financial year.

October is the peak for academic book sales and Christmas is the peak season for the sales of general books. We therefore expect our results to continue to be significantly second-half weighted, as in the past.

Bloomsbury's digital product launches continue with further services within Bloomsbury Fashion Central being launched later this financial year. This includes the Fashion Photography Archive, an updated Berg Fashion Library and a new digital service for Fairchild Books. The Group has a very strong digital service pipeline for the next three years, following significant commissioning activity in the period.

 

Note: Adjusted results are calculated before deducting highlighted items. Highlighted items comprise amortisation of acquired intangible assets, legal and other professional costs relating to acquisitions and restructuring costs.

 

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Condensed Consolidated Interim Income Statement
For the six months ended 31 August 2015

  Notes 6 months
ended
31 August
2015
£'000
6 months
ended
31 August
2014
£'000
Year
ended
28 February
2015
£'000
         
Revenue 3 52,678 46,580 111,125
Cost of sales   (24,000) (20,499) (47,800)
Gross profit   28,678 26,081 63,325
Marketing and distribution costs   (7,808) (6,896) (15,519)
Administrative expenses   (20,521) (18,696) (38,154)
Operating profit before highlighted items   1,868 1,689 12,127
Highlighted items 4 (1,519) (1,200) (2,475)
Operating profit   349 489 9,652
Finance income   5 21 46
Finance costs   (12) (1) (94)
Profit before taxation and highlighted items   1,861 1,709 12,079
Highlighted items 4 (1,519) (1,200) (2,475)
Profit before taxation 3 342 509 9,604
Taxation   (69) (97) (856)
Profit for the period attributable to owners of the Company   273 412 8,748
         
Earnings per share attributable to owners of the Company        
Basic earnings per share 6 0.37p 0.56p 11.94p
Diluted earnings per share 6 0.36p 0.56p 11.90p

The accompanying notes form an integral part of this condensed consolidated interim financial report.

 

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Condensed Consolidated Interim Statement of
Comprehensive Income
For the six months ended 31 August 2015

  6 months
ended
31 August
2015
£'000
6 months
ended
31 August
2014
£'000
Year
ended
28 February
2015
£'000
Profit for the period 273 412 8,748
Other comprehensive income
Items that may be reclassified to the income statement:
     
      Currency translation differences on foreign operations 41 228 1,954
       
Items that may not be reclassified to the income statement:      
      Remeasurements on the defined benefit pension scheme 57 (55) (106)
Other comprehensive income for the period 98 173 1,848
Total comprehensive income for the period attributable to owners of the Company 371 585 10,596

 

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Condensed Consolidated Interim Statement of Financial Position
At 31 August 2015

  Notes 31 August
2015
£'000
31 August
2014
£'000
28 February
2015
£'000
Assets        
   Goodwill   41,717 39,537 41,508
   Other intangible assets   22,016 21,290 22,578
   Property, plant and equipment   2,654 3,029 2,833
   Deferred tax assets   3,547 2,053 3,607
Total non-current assets   69,934 65,909 70,526
         
   Inventories   30,575 29,510 29,235
   Trade and other receivables 7 60,888 54,376 61,700
   Cash and cash equivalents   3,516 2,752 10,021
Total current assets   94,979 86,638 100,956
Total assets   164,913 152,547 171,482
         
Liabilities        
   Retirement benefit obligations   159 179 227
   Deferred tax liabilities   3,108 3,165 3,119
   Other payables   1,135 311 886
   Provisions   43 420 482
Total non-current liabilities   4,445 4,075 4,714
         
   Trade and other payables   32,078 31,015 37,250
   Loans and borrowing   2,600 - 2,500
   Current tax liabilities   613 554 2,841
   Provisions   434 23 23
Total current liabilities   35,725 31,592 42,614
Total liabilities   40,170 35,667 47,328
Net assets   124,743 116,880 124,154
         
Equity        
   Share capital   938 924 938
   Share premium   39,388 39,388 39,388
   Translation reserve   3,870 2,103 3,829
   Other reserves   6,298 3,708 6,056
   Retained earnings   74,249 70,757 73,943
Total equity attributable to owners of the Company   124,743 116,880 124,154

 

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Condensed Consolidated Interim Statement of Changes in Equity
For the six months ended 31 August 2015

 

Share
capital
Share
premium
Translation
reserve
Merger
reserve
Capital
redemption
reserve
Share-
based
payment
reserve
Own
shares
held by
the
EBT
Retained
earnings
Total
equity
  £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 March 2015 938 39,388 3,829 1,386 22 4,986 (338) 73,943 124,154
Profit for the period - - - - - - - 273 273
Other comprehensive income                  
  Exchange differences on translating foreign operations - - 41 - - - - - 41
  Remeasurements on the defined benefit pension scheme - - - - - - - 57 57
Total comprehensive income for the period - - 41 - - - - 330 371
Transactions with owners                  
  Deferred tax on share-based payment transactions - - - - - - - (24) (24)
  Share-based payment transactions - - - - - 242 - - 242
Total transactions with owners of the Company - - - - - 242 - (24) 218
At 31 August 2015 938 39,388 3,870 1,386 22 5,228 (338) 74,249 124,743
                   
At 1 March 2014 924 39,388 1,875 - 22 4,582 (1,202) 70,447 116,036
Profit for the period - - - - - - - 412 412
Other comprehensive income                  
  Exchange differences on translating foreign operations - - 228 - - - - - 228
  Remeasurements on the defined benefit pension scheme - - - - - - - (55) (55)
Total comprehensive income for the period - - 228 - - - - 357 585
Transactions with owners                  
  Deferred tax on share-based payment transactions - - - - - - - (47) (47)
  Share-based payment transactions - - - - - 306 - - 306
Total transactions with owners of the Company - - - - - 306 - (47) 259
At 31 August 2014 924 39,388 2,103 - 22 4,888 (1,202) 70,757 116,880
                   
  Share
capital
Share
premium
Translation
reserve
Merger
reserve
Capital
redemption
reserve
Share-
based
payment
reserve
Own
shares
held by
the
EBT
Retained
earnings
Total
equity
  £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 March 2014 924 39,388 1,875 - 22 4,582 (1,202) 70,447 116,036
Profit for the year - - - - - - - 8,748 8,748
Other comprehensive income                  
  Exchange differences on translating foreign operations - - 1,954 - - - - - 1,954
  Remeasurements on the defined benefit pension scheme - - - - - - - (106) (106)
Total comprehensive income for the year - - 1,954 - - - - 8,642 10,596
Transactions with owners                  
  Issue of shares 14 - - 1,386 - - - (3) 1,397
  Dividend to equity holders of the Company - - - - - - - (4,276) (4,276)
  Share options exercised - - - - - - 864 (749) 115
  Deferred tax on share-based payment transactions - - - - - - - (118) (118)
  Share-based payment transactions - - - - - 404 - - 404
Total transactions with owners of the Company 14 - - 1,386 - 404 864 (5,146) (2,478)
At 28 February 2015 938 39,388 3,829 1,386 22 4,986 (338) 73,943 124,154

 

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Condensed Consolidated Interim Statement of Cash Flows
For the six months ended 31 August 2015

  6 months ended 6 months ended Year ended
  31 August 31 August 28 February
  2015 2014 2015
  £'000 £'000 £'000
Cash flows from operating activities      
     
Profit before taxation 342 509 9,604
Finance income (5) (21) (46)
Finance costs 12 1 94
Operating profit 349 489 9,652
Adjustments for:    
   Depreciation of property, plant and equipment 333 329 660
   Amortisation of intangible assets 1,931 1,526 3,259
   Loss on sale of property, plant and equipment - 4 8
   Share-based payment charges 281 344 496
  2,894 2,692 14,075
Increase in inventories (1,620) (4,141) (2,443)
Decrease in trade and other receivables 1,207 2,113 272
Decrease in trade and other payables (5,124) (2,916) (246)
Cash (used in)/generated from operating activities (2,643) (2,252) 11,658
Income taxes paid (2,261) (983) (1,410)
Net cash (used in)/generated from operating activities (4,904) (3,235) 10,248
Cash flows from investing activities    
Purchase of property, plant and equipment (159) (225) (274)
Purchase of businesses, net of cash acquired (30) (2,384) (5,325)
Purchases of intangible assets (1,389) (1,487) (3,562)
Proceeds from sale of property, plant and equipment - 7 6
Interest received 5 21 26
Net cash used in investing activities (1,573) (4,068) (9,129)
Cash flows from financing activities    
Equity dividends paid - - (4,276)
Proceeds from exercise of share options - - 115
Drawdown of borrowing 100 - 2,500
Interest paid (12) (1) (68)
Net cash generated from/(used in) financing activities 88 (1) (1,729)
Net decrease in cash and cash equivalents (6,389) (7,304) (610)
Cash and cash equivalents at beginning of period 10,021 10,037 10,037
Exchange (loss)/gain on cash and cash equivalents (116) 19 594
Cash and cash equivalents at end of period 3,516 2,752 10,021

 

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Notes

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