BLOOMSBURY PUBLISHING PLC

("Bloomsbury" or "the Company")

Unaudited Interim Results for the six months ended 31 August 2021

Record first half earnings performance

Sales up 29% as reading surge continues

Interim dividend increased

Bloomsbury, the leading independent publisher, today announces unaudited results for the six months ended 31 August 2021.

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

"Bloomsbury delivered excellent results in the first half with year-on-year revenue growth of 29% to £100.7 million and profit growth of 225% to £12.9 million. These are our highest ever first half sales and profits. These results demonstrate the strength and resilience of our strategy of publishing for both the consumer and academic markets, and our growth of digital revenues.

During the first half, we successfully mitigated print supply chain challenges. This included earlier printing, well in advance of our usual peaks in the run up to Christmas and the beginning of the academic year in the Autumn. Other measures taken included agility about where we print.

Both divisions had outstanding performances. The Consumer division continued the momentum of last year with 29% revenue growth and a £5.6 million increase in profit before tax and highlighted items to £8.4 million. Bestsellers during the period included Tom Kerridge's Outdoor Cooking, Piranesi by Susanna Clarke, A Court of Silver Flames by Sarah J. Maas, The Priory of the Orange Tree by Samantha Shannon and The Song of Achilles by Madeline Miller. Since the period end Bloomsbury authors have won two of the most important prizes in the literary world, The Nobel Prize for Literature and The Women's Prize, which were won by Abdulrazak Gurnah and Susanna Clarke respectively. We congratulate them both.

The Non-Consumer division saw 27% growth and a £3.2 million increase in profit before tax and highlighted items to £4.6 million. Bloomsbury Digital Resources grew by 44% in addition to a very strong recovery in print sales, which grew by 34%. The focus on our online academic digital resource strategy means we are well placed to continue to benefit from the accelerated shift by academic institutions to digital products to support hybrid learning.

We completed two acquisitions in the period, as previously announced. We achieved another key step in the delivery of our long-term growth strategy expanding our Non-Consumer business, with the acquisition of the Red Globe Press ("RGP") list. Acquiring these complementary lists accelerates our digital growth and our significant presence in humanities and social sciences academic publishing. Our acquisition of Head of Zeus Limited ("HoZ") has provided a strong addition to Bloomsbury's thriving Consumer division and supports our long-term Consumer growth strategy.

Our strong financial position and cash generation give us significant opportunities for further acquisitions and investment in organic growth. In recognition of our strong performance and in line with our dividend policy, we are announcing a 5% increase in our interim dividend to 1.34 pence per share.

Retailers and online booksellers have significantly increased stock levels over previous years to ensure they have sufficient stock for Christmas given the supply chain problems. Our first half revenues have therefore been boosted by customers ordering earlier than in previous years.

Whilst the Board remains mindful of the external environment, including impediments in the supply chain and the possibility of higher returns of the increased stock ordered early, the strength of the first half performance means that we are confident in achieving market expectations for the year ending 28 February 2022.*"

* The Board considers current consensus market expectation for the year ending 28 February 2022 to be revenue of £193.4 million and profit before taxation and highlighted items of £19.3 million.

Financial Highlights

Operational Highlights 

Consumer Division

Non-Consumer Division 

Note

¹ Highlighted items comprise amortisation of acquired intangible assets, legal and other professional costs relating to ongoing and completed acquisitions and restructuring costs.

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Chief Executive's statement

Overview

Bloomsbury had an outstanding first half. Revenue grew by 29% to £100.7 million (2020: £78.3 million), and profit before taxation and highlighted items increased by £8.9 million to £12.9 million (2020: £4.0 million). Profit before taxation was £11.1 million (2020: £3.0 million).

Growth in organic revenue was 23%, with the two strategic acquisitions completed during the first half, RGP and HoZ, contributing revenue of £4.4 million. Growth in organic profit before taxation and highlighted items was £8.1 million, with RGP and HoZ contributing £0.8 million.

The strength of demand for our titles, in print and e-book, and for our digital products, demonstrates the strength of our long-term growth strategy and the good choices made by our editors and our sales and marketing strength. Since the period end, Bloomsbury authors have won two of the most important prizes in the literary world - The Nobel Prize for Literature and The Women's Prize - which were won by Abdulrazak Gurnah and Susanna Clarke respectively. We congratulate them both.

Bloomsbury Digital Resources ("BDR") achieved 44% revenue growth year-on-year and is on track to deliver our five year target of £15 million revenue for the full year. Our strategy enables us to deliver growth from the ongoing shift to digital learning, excellent digital products and the quality of platforms and infrastructure, with a 56% increase in the number of customers year-on-year.

The highlighted items of £1.8 million (2020: £1.0 million) consist of the amortisation of acquired intangible assets of £1.0 million (2020: £0.9 million) and legal and other professional fees relating to ongoing and completed acquisitions and restructuring costs of £0.8 million (2020: £0.1 million). The effective rate of tax for the period was 23% (2020: 24%). The adjusted effective rate of tax, excluding highlighted items, was 18% (2020: 17%). Diluted earnings per share for the period, excluding highlighted items, grew by 210% to 12.82 pence (2020: 4.13 pence). Including highlighted items, profit before taxation grew by 265% to £11.1 million (2020: £3.0 million) and diluted earnings per share grew by 263% to 10.41 pence (2020: 2.87 pence).

Strategy

Bloomsbury's long-term growth strategy is aimed at diversifying into digital channels and building quality revenues, increasing earnings and building on the success of the last six years. To achieve this, we are focused on a number of long-term strategic objectives, which include:

·    Non-Consumer

·    Consumer

International Expansion 

Employee Experience and Engagement

Our success is driven by our colleagues' expertise, passion and commitment. We understand the importance of attracting, supporting and engaging colleagues wherever they work. 

Sustainability 

Supply Chain and Operations

During the first half, we successfully mitigated print supply chain challenges. This included earlier printing, well in advance of our usual peaks before Christmas and at the beginning of the academic year in the Autumn. Other measures taken included agility about where we print.

As widely reported, retailers and online booksellers have significantly increased stock levels over previous years to ensure they have sufficient stock for Christmas. Our first half revenues have therefore been boosted by customers ordering earlier than in previous years.

Consumer Division

The Consumer division consists of Adult and Children's trade publishing. The Consumer division achieved excellent revenue growth of 29% to £62.9 million (2020: £48.6 million). Organic revenue growth was 24%. Profit before taxation and highlighted items increased by £5.6 million to £8.4 million (2020: £2.7 million). The excellent performance was from both the Children's and Adult divisions, across front and backlist titles, and includes £2.7 million revenue and £0.4m profit before taxation and highlighted items from HoZ, completed in June 2021.

Adult Trade

The Adult division achieved strong growth with a 27% increase in revenue to £23.9 million (2020: £18.8 million) and a 23% increase in profit before taxation and highlighted items to £1.3 million (2020: £1.1 million). This was driven by bestsellers from our front and backlist and includes £2.7 million revenue and £0.4m profit contribution from HoZ, completed in June 2021.

Sunday Times bestsellers in the period included Tom Kerridge's Outdoor Cooking, Piranesi by Susanna Clarke, Animal by Lisa Taddeo, The Song of Achilles by Madeline Miller and The Wolf Den by Elodie Harper, from HoZ. New York Times bestsellers included The Priory of the Orange Tree by Samantha Shannon.

We are incredibly proud that Bloomsbury's author Abdulrazak Gurnah has been awarded the 2021 Nobel Prize in Literature. His remarkable work has been published and championed by Bloomsbury and our very long-standing commitment to this author has been rewarded. The judges remarked upon "his uncompromising and compassionate penetration of the effects of colonialism and the fate of the refugee in the gulf between cultures and continents."

Children's Trade

Children's sales increased by 31% to £39.0 million (2020: £29.8 million) and profit before taxation and highlighted items increased by £5.4 million to £7.1 million (2020: £1.7 million). High demand for our strong titles continued the momentum from last year, with excellent sales of Sarah J. Maas' new and backlist titles.

Sales of Harry Potter titles were good. Harry Potter and the Philosopher's Stone was the UK's fourth bestselling children's book of the year to date, twenty-four years after it was first published. We are delighted that every year these classics reach a new generation of readers.

Sarah J. Maas revenues grew by 130%, reflecting her latest bestselling frontlist title, A Court of Silver Flames, published in February 2021, and strong sales of her backlist titles. Last year there was one new title in the first half. We will publish one new title in the second half: Crescent City: House of Sky and Breath, in February 2022.

Sarah J. Maas is the number one New York Times and internationally bestselling author of the Throne of Glass, Court of Thorns and Roses and Crescent City series, with all of her 14 titles published by Bloomsbury, since her first novel, Throne of Glass, in 2012. Her first novel for adults, Crescent City: House of Earth and Blood, published in March 2020, debuted at number 1 on The New York Times bestseller list. Hulu is developing an adaptation of the Court of Thorns and Roses series for its streaming service with Ron D. Moore, who has worked on many successful shows including Outlander, also adapted from a bestselling book series.

Revenues for the rest of the Children's division grew by 10% year-on-year. Highlights in the Children's list included This Poison Heart by Kalynn Bayron and Defy the Night by Brigid Kemmerer.

Non-Consumer Division

The Non-Consumer division consists of Academic & Professional and Special Interest. Revenues in the division grew by 27% to £37.7 million (2020: £29.7 million). Profit before taxation and highlighted items for the Non-Consumer division grew by £3.2 million to £4.6 million (2020: £1.4 million). Organic revenue growth was 21% and organic profit growth was 211%, with RGP, acquired in June 2021, contributing £1.7 million revenue and £0.4 million profit.

Academic & Professional revenues increased by 32% to £26.4 million (2020: £20.1 million) and profit before taxation and highlighted items increased by 121% to £3.9 million (2020: £1.8 million). Strong demand for our digital products delivered 44% growth in BDR revenue and print sales recovered well from last year, up 34%.

We are focused on delivering growth from accelerating our established and most successful products, including the award-winning Drama Online, leveraging content and platforms from our acquisitions, building partnerships and launching new products. We delivered a 56% increase in the number of customers year-on-year, and maintained our existing customer retention rate at over 90%.

We have further strengthened our portfolio of products with the acquisition of RGP's three digital products, Cite Them Right, Skills for Study and Social Work Toolkit. We extended our partnerships with Taylor & Francis and Human Kinetics, in addition to new partnerships with Eerdmans and Icon Books, and we have delivered one new product and five new modules in the first half.

Special Interest revenues increased by 18% to £11.3 million (2020: £9.6 million), with bestsellers during the period including Wisden Cricketers Almanack, Reeds Nautical Almanac, the Writers' and Artists' Yearbook and Osprey Games' Imperium Legends. The profit was £0.7 million (2020: £0.3 million loss).

Acquisitions

In June 2021, we achieved another key step in the delivery of our strategic growth strategy and driving our Non-Consumer business, with the completion of the acquisition of certain assets of RGP, the academic imprint, from Springer Nature Group as previously announced. The acquired RGP titles are a good strategic fit, strengthen Bloomsbury's existing academic publishing, and establish new areas of academic publishing in Business and Management, Study Skills and Psychology. RGP's three digital products will be migrated to BDR's own platform and its content will be added to Bloomsbury Collections. The consideration was £3.2 million, of which £1.8 million was satisfied in cash on completion in June 2021 and £1.2 million was satisfied in cash post completion, with an expected further £0.2 million to be satisfied post completion subject to assignment of certain contracts. The integration of RGP is going well and contributing as projected.

In June 2021, we completed the acquisition of the issued share capital of HoZ, the independent trade publisher, as previously announced. This acquisition will provide a strong addition to Bloomsbury's thriving Consumer division and support our long term Consumer growth strategy, with new high quality authors and effective publishing across all formats, including e-book and audio. The consideration, net of pre-existing loans, was £7.0 million, of which £5.5 million was satisfied in cash at completion, with £1.1 million paid in cash post completion, and £0.4 million of deferred consideration payable in cash subject to achievement of Netflix release targets. HoZ won Publisher of the Year at the CWA Daggers Awards and The Wolf Den by Elodie Harper was a number 1 Times bestseller. Popular writers from HoZ include Dan Jones, Cixin Liu, Nadine Dorries, Victoria Hislop and Lesley Thomson.  Cixin Liu's bestselling science trilogy, The Three-Body Problem, is being adapted for Netflix by David Benioff and D.B. Weiss, creators of HBO's Game of Thrones. HoZ is contributing as planned, with the integration planned for 2022/23.

Bloomsbury has a strong and successful track record in strategic acquisitions, with 18 acquisitions completed since 2008. We are actively targeting further acquisition opportunities in line with our long-term growth strategy.

Cash and Financing

Bloomsbury's cash generation was strong with cash at 31 August 2021 of £43.7 million (2020: £44.1 million), and cash conversion of 173% (2020: 258%). During the period we invested £3.0 million in the acquisition of RGP, £5.8 million in the acquisition of HoZ and £0.4 million of capital expenditure in BDR. The Group has an unsecured revolving credit facility with Lloyds Bank Plc. The facility comprises a committed revolving loan facility of £10 million and an uncommitted incremental term loan facility of up to £6 million. At 31 August 2021, the Group had no draw down (2020: £nil) of this facility.

Dividend

The Group's dividend policy is supported by strong cash cover. The Board has declared an interim dividend of 1.34 pence per share, 5% above the interim dividend for the six months ended 31 August 2020. The dividend will be paid on 3 December 2021 to Shareholders on the register on the record date of 5 November 2021.

Social initiatives

As part of Bloomsbury's ongoing commitment to our wider communities, and in addition to our focus on promoting literature, literacy and education, we actively support numerous organisations worldwide. These include our three-year partnership with the National Literacy Trust, centred in Hastings, one of the UK's most deprived areas.  The partnership focuses on raising the literary aspirations of primary school children and helps adults to access the support they need to improve their own literacy skills. Bloomsbury has worked with 18 schools, distributed books and reached a live audience of 2,765 children through live author events. In the US, we are a corporate partner for 'A Year of Connection for Black Storytellers & Bridge-Building for Children's Book Publishing Teams to Amplify Black Stories'. Renee Watson, author of Bloomsbury titles including Piecing Me Together, is an advocate and spokesperson for this programme. In addition, we donated four set texts for teaching GCSE and A Level English Literature with The Runnymede Trust's Lit in Colour campaign.

Board Changes

As announced in June 2021, John Warren stepped down from the Board at the conclusion of Bloomsbury's 2021 AGM on 21 July 2021. Leslie-Ann Reed succeeded John as Chair of the Audit Committee and Senior Independent Director.

Future Publishing

Our strong Consumer publishing list for the second half includes Lost Focus by Johan Hari, Gino's Italian Family Adventure by Gino D'Acampo, Dan Jones' Power and Thrones: A New History of the Middle Ages and Celia Imrie's Orphans of the Storm. Susanna Clarke's Piranesi won the Women's Prize in September, returning to the bestseller lists. Abdulrazak Gurnah, whose title Afterlife has just been published in paperback, won the Nobel Prize for Literature in October, the world's most prestigious literary prize. We will be publishing Sarah J. Maas' second Crescent City title, House of Sky and Breath, in February 2022. Our Children's frontlist for the second half includes Harry Potter - A Magical Year: The Illustrations of Jim Kay, a beautiful new gift book with a moment for every day of the year and Defy the Night, the much anticipated new series from Brigid Kemmerer, which reached number 3 on the New York Times bestseller list on release in September.

Our Bloomsbury Digital Resources ("BDR") strategic initiatives include the launch of a new Drama Online collection from the market leading US drama publisher Theatre Communications Group. In September, we strengthened our digital content by acquiring certain assets of Artfilms, the video streaming service of Contemporary Arts Media. Artfilms offers over 2,000 films from top artists and independent filmmakers, mainly aimed at arts education and arts practitioners. The international collection includes masterclasses, documentaries, interviews: content that entertains, educates and informs. In addition, we will expand Bloomsbury Collections to include the RGP titles and migrate RGP's three digital products to BDR's own platform. In addition, Bloomsbury's strategic content partnership with Spotify went live. On Spotify's The 33 ⅓ Podcast, legendary producer Prince Paul explores some of the greatest albums ever made, using the source material of the 33 ⅓ book series.

Outlook

Print supply chain challenges are ongoing. We are continuing to mitigate these risks through a number of measures including working with suppliers to print earlier, working with customers to deliver earlier and being agile about where we print.

During the first half, these measures enabled us to make earlier print sales to customers, well in advance of our historical peaks in the run up to Christmas and at the beginning of the academic year in the Autumn. Retailers and online booksellers significantly increased stock levels over previous years to ensure they have sufficient stock for Christmas given the supply chain problems. Our first half revenues have therefore been boosted by customers ordering earlier than in previous years.

Our strategy of not delaying title launches throughout the last 18 months has benefitted our performance to date and means that we are less reliant on the 2021 Christmas season, which is expected to be competitive for Consumer titles. Tom Kerridge's latest title, Outdoor Cooking, was launched in the first half rather than the second half, which was the case for our previous Tom Kerridge titles.

The strength of our long-term strategy, including growing digital formats, has been and continues to be demonstrated by our results. We are confident that our strategy will continue to bear fruit over the long term, despite current external factors affecting supply.

Supply chain issues have no impact on our digital sales, which continue to materially increase and are a growing proportion of both revenue and profits. Digital and non-print sales accounted for 26% of revenue in the first half. Reflecting this, we are also on target to achieve our five year ambition for BDR revenue of £15 million and profit of £5 million for 2021/22. Our new BDR target from 2022/23 is to achieve a further 50% organic growth and 30% margin over the next five years.

Whilst the Board remains mindful of the external environment, including impediments in the supply chain and the possibility of higher returns of the increased stock ordered early, the strength of the first half performance means that we are confident of achieving market expectations for the year ending 28 February 2022.*

* The Board considers current consensus market expectation for the year ending 28 February 2022 to be revenue of £193.4 million and profit before taxation and highlighted items of £19.3 million.

Condensed Consolidated Interim Income Statement

For the six months ended 31 August 2021

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

Condensed Consolidated Interim Statement of Comprehensive Income

For the six months ended 31 August 2021

Items in the statement above are disclosed net of tax.