19 June 2017
Bloomsbury Publishing Plc confirms that the following documents are being sent to shareholders and, pursuant to Listing Rule 9.6.1, are being submitted to the National Storage Mechanism and will 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 2017. The text below should be read in conjunction with the Company's final results for the period ended 28 February 2017 which were announced in unedited full text on 18 May 2017.
Group Company Secretary
Bloomsbury Publishing Plc
Telephone +44(0)20 7631 5627
DIRECTORS' RESPONSIBILITIES STATEMENT
(From page 40 of the Directors' Report of the Annual Report and Accounts for the year ended 28 February 2017)
Statement of Directors' responsibilities
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 International Financial Reporting Standards("IFRSs") as adopted by the European Union ("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:
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, www.bloomsbury-ir.co.uk. Legislation in the United Kingdom ("UK") governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
We consider the Annual Report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Group's position and performance, business model and strategy.
Responsibility statement of the Directors in respect of the annual financial report
We confirm that to the best of our knowledge:
Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
By order of the Board
PRINCIPAL RISKS AND UNCERTAINTIES
From pages 24 to 26 of the Risk Factors of the Company's Annual Report and Accounts for the year ended 28 February 2017.
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.
During the financial year ended 28 February 2017, the Principal Risks have not changed substantially. The launch of the Bloomsbury 2020 digital resource growth strategy increases the focus on developing the sales of digital resources, which changes the significance rather than the nature of the risk labelled as "Growth of digital".
The risks relating to Britain's exit of the European Union ("EU") are not considered Principal Risks to Bloomsbury. Bloomsbury is exposed to fluctuations in the value of sterling, in particular:
Each of these factors tends to negate the other over time albeit Bloomsbury's paper purchase contracts typically fix the price for a period of time, which delays the full financial impact of exchange rate movements being reflected in the Income Statement. The business has capacity to adapt to longer term changes in exchange rates by shifting its focus between different global regions in the selection of works to publish, through marketing efforts and in the location of where it employs staff. The level of sales into Continental Europe are minor to Bloomsbury's Group revenue. Whilst there is uncertainty as to whether Brexit will positively or negatively impact on Bloomsbury's EU sales, Brexit is not expected to have a major impact on Bloomsbury.
|Market||Volatility of consumer book sales||Sales of books to the consumer market can be seasonal and volatile.||Develop special interest, academic and professional publishing where revenues are less volatile.|
|Develop other revenue streams, including from rights and services, increasing the scope to enter annually renewing agreements.|
|Increased dependence on internet retailing||Readers might not discover, and so buy, Bloomsbury's print and e-books sold through internet retailers who may control discoverability.||Grow expert marketing teams skilled in internet sales.
Engage with multiple internet retailers.
|Increase focus on developing other marketing opportunities and other revenue streams, e.g. Academic & Professional digital products, rights and services.
Grow e-book sales.
|Rights and services||Dependence on timing of closing rights and services deals||The timing for completing high margin rights and services deals can depend on the performance by multiple parties including the main customer.||Increase the number of rights and services deals to reduce the dependency on individual deals.|
|Generating new/non-renewal of subscription and services agreements||The pipeline of new products and agreements might be uneven
A customer or partner might not renew larger agreements that generate significant ongoing income.
|Senior managers are responsible for ensuring strong performance by Bloomsbury of its obligations and strong customer care.
Increase the portfolio of products and agreements to grow income and reduce the dependency on individual agreements.
|Entrepreneurial risk||A deal may require upfront staff time and costs but fail to close resulting in lost investment.||Similar to ordinary publishing risks: increase the portfolio of deals to leverage economies of scale and reduce volatility.|
|Financial valuations||Judgemental valuation of assets and provisions||Significant assets and provisions in the balance sheet depend on judgemental assumptions e.g. goodwill, advances, intangible rights, inventory and returns provisions.||Consistent and evidence based approach to assumptions.
Board approval of key assumptions.
Rigorous audit of valuations.
|Information and technology systems||Productivity of IT systems and data||Continuing to improve staff efficiency depends on the IT systems and data keeping pace with the needs of the business.||Board level representation on steering IT strategy, implementation and IT operations.|
|Cyber security||Unauthorised access could be made to Bloomsbury's systems to perpetrate a fraud or cause damage.||Clear responsibility for systems, increasing use of the cloud, monitoring security risks, internal control reviews of the systems and up to date anti-virus software are amongst the measure in place.|
|Growth of digital||Digital development||Unforeseen hold ups may delay development of new online content services and revenue for the services may not grow in line with our stretching targets.||Develop high quality novel online content services in markets we understand well.
Standardise the digital delivery platform to simplify and speed up the development and implementation of new online content services.
|Development of the digital book market||Consumer e-book prices may not hold up in the longer term. Possible emergence of not yet known reading technology.||Continue to supply books in all formats through multiple digital delivery systems aligned with the demands of readers.
Ensure the Group is positioned to take advantage of e-book (or any new format) growth in international markets.
Use social media and other digital marketing to encourage direct sales to consumers.
Develop Non-Consumer offering where revenues are less volatile and there is a direct relationship with the customers.
|Rise of alternative book supply arrangements||US readers may licence books from retailers for a limited period at a lower cost to buying books, with no revenues or royalty paid to the publisher.||Develop digital platforms to deliver on a subscription basis the content that readers demand.|
|Title acquisition||High advances sought by agents. World rights not acquired||Agents seek high advances for some authors.
Agents prefer to split territorial rights for English language publishing between US and UK.
|Publish more special interest trade books.
Focus acquisition on titles where world English rights are available
Concentrate on academic publishing where world rights are the norm
|Reputation||Product and service quality||Publishing mistakes e.g. publishing a book that causes offence.||Careful selection and rigorous review of titles by broad teams of experienced publishers, planning of the title pipeline to focus on publishing strengths.|
|Errors in books and digital content.||Rigorous production procedures and planning of titles and digital resource content.|
|Information security||Being hacked and theft of intellectual property e.g. key illustrations before publication.||Security awareness in teams and additional security measures to protect high value assets and data.|
|Investor confidence||City confidence undermined by events outside of Bloomsbury's control e.g. collapse of a retailer.||Diversify the portfolio of products and services to reduce dependencies on individual customers, sales channels and markets.|
|IP and copyright||Erosion of copyright||Erosion of traditional copyrights.||Continue policy of support for copyright and intellectual property rights as a fundamental facet of publishing.|
|Open access.||Develop digital services that deliver mixed open access and proprietary content in the form that customer's demand and will continue to pay for.|
|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.|
|Overseas operations||Overseas offices||Growing offices in the US, India and Australia may increase the operational risks and demands on management.||One Global Bloomsbury structure of global publishing divisions supported by Group functions provides an effective internal control framework and oversight of the overseas offices. Keep under review the management resources deployed within this structure as the business evolves.|
RELATED PART TRANSACTIONS
(From the Notes to the Consolidated and Company Financial Statements for the year ended 28 February 2017)
(Extract from Note 25)
25. Related party transactions
As at 28 February 2017 the Group owed £32,000 to Faber & Faber, a company in which a Bloomsbury Director shares a common directorship. Key management remuneration is 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 Executive 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 individual Directors' remuneration are set out in the audited part of the Directors' Remuneration Report on pages 50 to 67. The total remuneration of the Directors was £2,163,000 (2016: £1,508,000).
Total emoluments for Executive Directors and other key management personnel were: Total emoluments for Executive Directors and other key management personnel were:
|Short-term employee benefits||3,446||2,887|
|Share-based payment charge||155||472|
(Extract from Note 43)
43. Related Parties
During the year the Company entered into the following transactions and had the following balances with its subsidiaries:
|Sale of goods to subsidiaries||7,177||4,200|
|Commission payable to subsidiaries||-||1|
|Finance income from subsidiaries||303||68|
|Amounts owed by subsidiaries at year end||11,293||17,952|
|Amounts owed to subsidiaries at year end||29,524||30,547|
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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