Shares in Bloomsbury Publishing (BMY) have jumped 10% to 403p following the announcement of a positive trading update.
Revenue is expected to be comfortably ahead, and profit materially ahead of consensus expectations.
Earnings expectations have already been raised once this year, following a positive trading update from the group in late January.
SARAH J MAAS SUCCESS
The pandemic induced lockdowns prompted consumers to start reading more frequently and Bloomsbury was a key beneficiary.
There had been a concern that this change would prove to be a transitory fad, but recent results from Bloomsbury demonstrate that a renewed love for reading has become a permanent trend.
This was confirmed by Bloomsbury’s management, who highlighted that February witnessed exceptional sales driven by the new Sarah J Maas novel Crescent City: House of Sky and Breath.
This has stimulated demand for the back catalogue.
This strong performance was facilitated by the group’s ability to successfully mitigate ongoing supply challenges, given earlier printing and flexibility on printing location.
The Bloomsbury Digital Resources initiative was another key driver of better than expected earnings.
The division has exceeded their target of target of £15 million revenue and £5 million profit.
The group appears to have succeeded in developing a high-quality, high-margin revenue stream from developing digital content.
Moving forward the company is likely to benefit from two strategic acquisitions made in 2021.
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.
And the purchase of ABC-CLIO, announced in December, will accelerate Bloomsbury’s academic publishing push in North America, given its digital footprint in the American high school library market.
Commenting on today’s trading update Investec media analyst Alistair Reid ‘We increase profit before tax by 19% in 2022 and 12% in 2023’.
