Sales growth of the Harry Potter series have significantly slowed for book publisher Bloomsbury (BMY), overshadowing otherwise firm half year results.
Income from the hugely popular boy wizard series rose 5% in the six months to 31 August 2018, a far cry from the stonking 40% growth posted last year when books flew off the shelves. That was largely due to 20th anniversary celebrations for Harry Potter and the Philosopher's Stone, the series debut, with several special editions launched.
This suggests that investors should not be overly surprised by growth reverting to more normal levels in 2018. Yet Bloomsbury shares have nose-dived nearly 5% (to 190.5p) in trading on Tuesday, perhaps dragged down by the wider stock market negative mood.
The FTSE 100 has slumped back below the 7,000 mark today.
POTTER-NOMICS
Investors have for years closely watched the progress of the Harry Potter books because they are seen as a useful barometer of Bloomsbury's key Children’s Trade division, which makes almost all of then company's operating profit.
Bloomsbury remains optimistic that it can repeat its typically stronger second half. Something like 55% of revenues are earned in the latter period thanks to the return to school boost for academic books, but most importantly, the bumper Christmas run-in.
That optimism is supported by decent overall first half figures. These show pre-tax profit nudging up from £1.6m to £1.7m in the six months to 31 August, while overall revenue rose 4% to £75.3m.
Investec analyst David Amiras was particularly impressed by the performance of the Adult Trade division with sales up 22%.
