- Organic full year revenue flat at £341.2 million
- 5% year-on-year increase in final dividend
- Shares down 18% year-to-date
Shares in Bloomsbury Publishing (BMY) fell 14% to 544p after the Harry Potter publisher company reported a 14% drop in pre-tax profit for the year to 28 February.
Investors were unnerved by the company's outlook which is ‘expected to be broadly in line with the current consensus expectation in constant currency.’ As investment director Russ Mould at AJ Bell pointed out, ‘Broadly’ is not a term that investors like, as it implies the company is on the verge of missing expectations.’
The Bloomsbury board considers consensus market expectation (before this publication) for the year ending 28 February 2026 to be revenue of £349.2 million pre-tax profit and highlighted items of £45.1 million.
It also said it was ‘cognisant of the uncertain macroeconomic backdrop,’ adding ‘books remain exempt from US tariffs.’
On the upside the company said it has a progressive dividend policy and over the past ten years the dividend per share has increased at a CAGR (compound annual growth rate) of 9.7%.
Also, BDR (Bloomsbury Digital Resources) sales increased 2% to £27 million. The company is targeting £41 million revenue in 2027/28.
Bloomsbury was voted Publisher of the year 2025 at the recent British Book Awards and won Publicity campaign of the year for Gillian Anderson’s title Want.
The company said it would be further expanding into Asia this year by opening an office in Singapore, building on offices already in India and Australia.
‘Bloomsbury will be well placed geographically and structurally to benefit from student growth alongside the continued shift to digital learning,’ it added.
ACADEMIC LET DOWN
Russ Mould said: ‘Among mid-caps, Bloomsbury Publishing dived after saying trading for the new year is expected to be ‘broadly’ in line with market expectations.
‘Its academic arm has let the side down, with Bloomsbury blaming US and UK budgetary pressures. Recent revenue growth rates for its consumer arm also look lacklustre.’
Analysts at Berenberg commented: ‘The shares trade on a full year 2026 P/E (price to earnings) ratio of 17.3 times, and a FCF (free cash flow) yield of 5.5%.
‘We continue to believe that a higher multiple is warranted given improving cash conversion, a doubling of ROCE (return on capital employed) over the last five years and the potential earnings growth from bestselling author Sarah J Maas’s next title, which is not yet reflected in consensus.
‘The business continues to explore the monetisation of its academic content through AI deals, which could provide a source of upside to our numbers.
‘Bloomsbury maintains its revenue target of £41 million for Bloomsbury Digital Resources, with the Rowman & Littlefield integration progressing well and expected to help accelerate growth.’
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DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Martin Gamble) own shares in AJ Bell.
