Regulatory announcements

Annual Financial Report

22 June 2014

Bloomsbury Publishing Plc ("Company") confirms that the following documents have been sent to shareholders and, pursuant to Listing Rule 9.6.1, have been submitted to the National Storage Mechanism and will shortly be available for inspection at http://www.hemscott.com/nsm.do:

In accordance with Disclosure and Transparency Rule 6.3.5, a responsibility statement, a description of the principal risks and uncertainties and details of related party transactions are set out below in full unedited text extracted from the Annual Report and Accounts for the period ended 28 February 2014. The text below should be read in conjunction with the Company's final results for the period ended 28 February 2014 which were announced in unedited full text on 20 May 2014.

 

Enquiries:
Michael Daykin
Group Company Secretary
Bloomsbury Publishing Plc
Telephone +44(0)20 7631 5627

 

DIRECTORS' RESPONSIBILITIES STATEMENT

(From page 53 of the Directors' Report of the Annual Report and Accounts for the year ended 28 February 2014)

The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and parent Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with IFRSs as adopted by the EU and applicable law and have elected to prepare the parent Company financial statements on the same basis.

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 parent Company and of their profit or loss for that period. In preparing each of the Group and parent Company financial statements, the Directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and estimates that are reasonable and prudent;

- state whether they have been prepared in accordance with IFRSs as adopted by the EU; and

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the parent Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 

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 Annual Report and financial statements include 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 37 to 38 of the Risk Factors of the Company's Annual Report and Accounts for the year ended 28 February 2014)

The table below provides a description of risk factors that management considers relevant to the Group's business. Other factors besides those listed could also affect the Group.

Key area Risk Description Mitigation
Market Volatility of general trade book sales Sales of general consumer books for both children and adults focus on bestsellers and can be both seasonal and volatile Develop academic and professional publishing where revenues are less volatile



Develop other revenue streams including from rights and services to increase the scope for annually renewable agreements

Increased importance of internet retailing and internet retailers As bricks and mortar retailers for bestsellers reduce in number and range, internet retailing and internet retailers increase in importance Grow expert marketing teams with digital skills who understand the book buying behaviours of readers



Increase focus on developing other marketing opportunities and other revenue streams e.g. rights and services



Grow e-book sales

Increase in sales through supermarkets and other non-traditional outlets Many non-traditional retailers focus on bestsellers rather than a range of titles Reduce dependence on bestsellers by developing other revenue streams e.g. academic and professional

Decline in high-street bookshops Numbers of UK and US bookshops (both independent and chains) have declined Grow relationships with other retailers including independent booksellers, internet retailers and supermarkets



Ensure sales in the international markets are maximised to reduce dependence on domestic sales in the UK and the US



Develop other revenue streams e.g. rights and services
Rights and Services Volatility of timing of closing rights and services deals The timing for completing high margin rights and services deals can depend on the performance of multiple parties including the main customer Increase the number of rights and services deals to average the revenue recognition start point of deals

Non-renewal of larger subscription and services agreements The customer or partner might not renew agreements that generate significant on-going income Senior managers responsible for ensuring strong performance by Bloomsbury of its obligations and strong customer care



Increase the portfolio of agreements to reduce the dependency on individual agreements

Entrepreneurial risk A deal may require upfront staff time and costs but may fail to close resulting in lost investment Increase the portfolio of deals to leverage economies of scale and absorb volatility
Move to digital Shift from print E-books are increasing as a percentage of Group revenue Position Group publishing to ensure titles can be sold in digital format(s)



Broaden range of revenue streams e.g. subscription, rights and services

E-book sales plateau US e-book sales have softened. Trend may continue in other markets. Ensure Group is positioned to take advantage of e-book emergence in international markets



Use social media and other digital marketing to encourage direct sales to consumers



Continue to supply books in all formats aligned with the demands of readers
Title acquisition Retention of authors Authors (especially in general consumer) are usually commissioned on a book by book basis Broaden publishing portfolio to reduce dependence of business on bestselling authors

High advances sought by agents Agents seek high advances for some authors Publish more non-general consumer books e.g. academic and professional

World rights not acquired Agents prefer to split territorial rights for English language publishing between the US and the UK Focus acquisition on titles where world English rights are available



Concentrate on academic publishing where world rights are the norm
IP and copyright Erosion of copyright Erosion of copyright through government or other action Continue policy of support for copyright and intellectual property rights as a fundamental facet of publishing

Piracy Piracy of titles in print or digital form Adopt robust anti-piracy policies



Ensure good digital rights management protection of e-books and digital formats



Participate in key industry anti-piracy initiatives

Open access Proliferation of free online content reduces users' willingness to pay. Develop content products sponsored by third parties to be provided free users.



Develop specialist content products that can be sold, and access controlled, through subscription licences paid for by third parties.

RELATED PART TRANSACTIONS

(From the Notes to the Consolidated and Company Financial Statements for the year ended 28 February 2014)

(Extract from Note 26)

26. Related party transactions

The Group has no related party transactions other than key management remuneration as disclosed in note 5.

(Extract from Note 5)

The Group considers key management personnel as defined under IAS 24 'Related Party Disclosures' to be the Directors of the Company and those directors of the global divisions, major geographic regions and departments who are actively involved in strategic decision making.

Full details concerning Directors' remuneration are set out in the Directors' Remuneration Report on pages 65 to 81. Total emoluments for Directors and other key management personnel were:

Year ended
28 February
2014
£'000
Year ended
28 February
2013
£'000
Short-term employee benefits 3,639 3,297
Post-employment benefits 207 189
Share-based payment charges 653 500
Total 4,499 3,986

(Extract from Note 42)

42. Related parties

Trading transactions

During the year the Company entered into the following transactions and had the following balances with its subsidiaries:


28 February
2014
£'000
28 February
2013
£'000
Sale of goods to subsidiaries 3,151 2,449
Management recharges 8,562 6,913
Commission payable to subsidiaries 1 19
Finance income from subsidiaries 62 254
Amounts owed by subsidiaries at year end 20,192 16,855
Amounts owed to subsidiaries at year end 26,494 21,121

All amounts outstanding are unsecured and will be settled in cash. No provisions have been made for doubtful debts in respect of the amounts owed by subsidiaries.

Key management remuneration is disclosed in note 5.

 

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