11 July 2011
Bloomsbury Publishing Plc ("Company") announces that the Company's Annual Report and Accounts for the period ended 28 February 2011, Notice of Annual General Meeting on 11 August 2011 at 12 noon and Proxy Form have been submitted to the National Storage Mechanism for inspection at: http://www.Hemscott.com/nsm.do.
The Annual Report and Accounts, Notice of AGM and Proxy Form have been sent to shareholders. The Annual Report and Accounts and Notice of AGM are available on Bloomsbury's website at http://www.bloomsbury-ir.co.uk/.
In accordance with Disclosure and Transparency Rule 6.3.5, the information in the attached Appendix consisting of a Directors' Responsibility Statement, principal risks and uncertainties and related party transactions has been extracted unedited from the Annual Report and Accounts for the period ended 28 February 2011 and should be read in conjunction with the Company's final results for the period ended 28 February 2011 which were announced in unedited full text on 27 May 2011.
Group Company Secretary
Bloomsbury Publishing Plc
Telephone 020 7440 2468
DIRECTORS' RESPONSIBILITIES STATEMENT (from page 30 of the Directors' Report of the Company's Annual Report and Accounts)
The Directors are responsible for preparing the Directors' Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare group and company financial statements for each financial period. The Directors are required under the Listing Rules of the Financial Services Authority to prepare Group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") and have elected under company law to prepare the company financial statements in accordance with IFRS as adopted by the EU. The financial statements are required by law and IFRS adopted by the EU to present fairly the financial position of the group and the company and the financial performance of the group. The Companies Act 2006 provides in relation to such financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing the group and company financial statements, the Directors are required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and estimates that are reasonable and prudent;
c. state whether they have been prepared in accordance with IFRSs adopted by the EU;
d. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the company will continue in business;
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Directors' statement pursuant to the Disclosure and Transparency Rules
Each of the Directors, whose names and functions are listed in the Directors' Report confirms that, to the best of their knowledge:
a. the financial statements, prepared in accordance with IFRS as adopted by the EU give a true and fair view of the assets, liabilities, financial position and profit of the company and the undertakings included in the consolidation taken as a whole; and
b. the Directors' Report contained in the Annual Report includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole together with a description of the principal risks and uncertainties that they face.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website, www.bloomsbury-ir.co.uk. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
PRINCIPAL RISKS AND UNCERTAINTIES (from pages 17 - 18 of the Business Review in the Annual Report and Accounts)
Evolution of the market
Book publishing is entering a period of change that we anticipate will be transformational as consumers worldwide migrate from printed books to digital formats. Other changes are also impacting on high street bookshops. Amongst the actions taken by management to exploit the potential opportunities, with effect from March 2011 we have restructured the business ahead of the anticipated changes in the market into four separate worldwide publishing divisions each capable of adapting quickly to their specific markets.
Significant risk factors:
- Demise of high street bookshop chains: Generalist high street bookshop retail chains across the World are facing strong competition from internet retailers and, particularly in the UK, alternative high street retail outlets such as supermarkets and news agents. Bloomsbury is not solely dependent on any one sales channel or distributor for trade sales. We anticipate sales lost to bookshops being substituted by sales made through the other channels such as internet and the alternative high street retailers. Bloomsbury has limited financial exposure to trade receivables owned / book stocks held by the high street bookshops should any fail financially (as explained in more detail in note 22). The changes being experienced by high street bookshops have limited impact on sections of Bloomsbury's other sales such as to educational establishments where Bloomsbury already sells directly to the customer.
- Ascendency of internet retailers: The increasing significance of internet retailers provides opportunities to generate additional revenues by selling a wider range of titles. Marketing must be tailored to maximise the sales of books through the internet retailers. Internet retailers react quickly to changes in consumer demand and minimise their stock levels so require shorter lead times for the fulfilment of book orders. Bloomsbury has publishing and marketing teams specialised in working with the internet retailers. The Group subcontracts printing of books to world class suppliers that have capacity to accommodate 'on-demand' ordering whilst maintaining low costs.
- Digital e-books: Worldwide sales of personal electronic e-book readers such as Amazon's Kindle and Apple's iPad have grown rapidly. The rising number of consumers owning these devices is driving a strong surge in the demand for downloads of e-books especially for adult fiction and general non-fiction titles. Risks include that e-book downloads could substitute printed book purchases and that authors might be unwilling to sell both the digital and print publishing rights to the same publisher. Bloomsbury is well prepared and has for a number of years published books as e-books so has the teams and knowhow in place to capitalise on any sudden increase in demand for downloads. The Group sells its e-books through robust third party platforms and distributors such as Amazon.
- Ascendency of alternative high street retail outlets: Alternative retain outlet chains (such as supermarkets and news agents in the UK) focus on high volume sales of adult and children's titles. Compared to the generalist high street bookshops, alternative retail outlet chains concentrate on smaller lists of best seller books. The larger alternative retail outlet chains have a stronger bargaining position and can demand greater discounts from publishers offset by increased sales volumes. The opportunities to realise high sales volumes drives competition between publishers to acquire the best titles of leading authors and celebrities. Bloomsbury has publishing teams that specialise in working with the alternative retail outlet chains, publishing experts who are effective at finding bestselling titles and strong controls over the acquisition of titles to ensure margins are protected and the risk of making acquisitions that do not perform as well as expected is minimised.
- Globalisation: The advent of internet retailers and digital e-books increases the opportunities to sell books into a global market. With effect from 1 March 2011, Bloomsbury has structured its business into four worldwide publishing divisions supported by a global sales function. Sales and publishing teams based at Bloomsbury's local country offices ensure the local needs of authors and customers are supported. For printed books, the Group has developed a multinational network of high quality printers, distributors and partners capable of delivering books to customers quickly and at low cost worldwide.
- Copyright protection: The advent of e-books increases the existing risk of revenue being undermined by the unauthorised copying and publication of Bloomsbury's books by third parties. Wide scale file sharing experienced by the music industry has not arisen as a major problem so far with e-books. Bloomsbury monitors, as do other parties, unauthorised publication of e-books on the internet and where discovered employs external specialists who effectively use the existing protocols with Internet Service Providers and others to have offending web pages and content removed. This ensures that illegal downloading is limited to a small proportion of titles and has a limited impact on sales.
Business systems and infrastructure
There is a risk that the business infrastructure - including management information, production & delivery workflow and the network infrastructure - might not be capable of supporting the growth of the business. In particular, globalisation and growth of the business together with the increasing number of its digital content dependent assets places increasing dependency on Bloomsbury's IT systems. The Group is making significant investment in implementing a new centralised publishing and distribution workflow system to replace its disparate systems. It is also implementing a new accounting and management information system across the Group. The Executive Committee is monitoring the projects to replace these systems closely to minimise risk, and to ensure that the short and long term benefits of the new systems are realised.
This risk encompasses the payment of advances to authors to acquire new titles that subsequently remain unearned. The risk is mitigated by strong controls when considering the acquisition of rights to new titles which includes an initial purchase evaluation process carried out and signed off at a senior level. New titles are supported by sales and marketing resources to ensure a successful launch. There is also a system of continuous review, analysis and feedback on title performance to better inform future acquisitions.
RELATED PART TRANSACTIONS (Page 102 and page 103 of the Notes to the Company's Annual Report and Accounts)
During the period the Company entered into the following transactions and had the following balances with its subsidiaries:
|28 February 2011 £'000||31 December 2009 £'000|
|Sale of goods||750||-|
|Amounts owed by subsidiaries at period end||16,892||14,088|
|Amounts owed to subsidiaries at period end||5,050||4,208|
Commission payable were based on the Group's usual list prices. The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in respect of the amounts owed by subsidiaries. Write down of investments is disclosed in note 10.
Remuneration of key management personnel
The remuneration of the key management personnel, which comprises the Board and other Directors of subsidiary companies who are actively involved in strategic decision making, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. Further information about the remuneration of individual Directors is provided in the auditable part of the Directors' Remuneration Report on pages 44 to 45 (of the Company's Annual Report and Accounts).
|14 months ended 28 February 2011 £'000||Year ended 31 December 2009 £'000|
|Short-term employee benefits||3,568||3,278|
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