- Full year results ahead of expectations
- Reading trend persists
- Recent acquisitions help drive growth
Shares in Bloomsbury Publishing (BMY) jumped 5% to 399.5p following the announcement of full year results ahead of expectations. The shares have risen 19.2% over the last six months.
Sales increased by 24% to £230 million, which was marginally ahead of forecasts. Pre-tax profit of £22.2 million jumped by 28%, and was 4% above consensus estimates.
Earnings per share of 20.3p represents a 22% increase and exceeded forecasts by 10%. The group has net cash of £41.2 million, and the final dividend has increased by 24% to 9.4p.
READING REMAINS A POPULAR PURSUIT
The pandemic induced lockdowns prompted consumers to start reading more frequently which has benefited Bloomsbury.
There had been a concern that this change would prove to be a transitory fad, but today’s results would suggest otherwise.
Chief executive Nigel Newton highlighted the permanence of the popularity in reading
'The question on all of our minds was: would the pandemic surge in reading continue? We now know the answer: reading has become a reacquired habit and continues to thrive’
This trend has been helped by the popularity of authors including Sarah J Mass whose publications include the Throne of Glass, Crescent City and Roses series.
Sales of these books have soared by 86%. Another factor assisting sales has been the renewed popularity of Harry Potter books ahead of the 25th anniversary of the first title in the series.
REAPING THE GAINS FROM RECENT ACQUISITIONS
Red Global Press, picked up in spring last year, strengthens Bloomsbury’s digital resources division. It has a backlist of more than 7,000 titles and publishes more than 100 new titles a year.
The prescient nature of this acquisition was reflected today with the group beating the target for Bloomsbury Digital Resources (BDR) of £15 million revenue, and £5 million of profits.
Over the past year the division has generated revenue of £18.6million (up 50%) and £6.8 million of profit, a 134% increase.
And the purchase of ABC-CLIO, announced in December, is accelerating Bloomsbury’s academic publishing push in North America, given its digital footprint in the American high school library market.
Looking ahead, Bloomsbury said: 'Trading for 2022/23 has started in line with the board's expectations. Bloomsbury plans to invest robustly in continued organic growth and further acquisitions based on our strong financial position and proven strategy.'
According to estimates from Numis, the stock is currently trading on a 2022 price earnings ratio of 16.2 times, falling to 15.5 times next year.
