It is easy to look at Bloomsbury Publishing PLC (LON:BMY) as a one trick pony: Harry Potter.
Because, of course, it gave life to the novels of JK Rowling and has done pretty well on the back of it.
A big budget spin-off from the franchise, Fantastic Beasts and Where to Find Them, starring Eddie Redmayne, hits cinema screens early next month, providing a further reminder.
And in the run up to Christmas, Bloomsbury plans the launch of the illustrated edition of Harry Potter and the Chamber of Secrets.
The latest results, which were out at the end of October, are a reminder that there is more to this company than the boy wizard, or a single author for that matter.
Under chief executive Nigel Newton there has been a concerted effort to diversify the revenue stream, and there has been a decisive move into higher-margin professional and academic publishing, where the focus is digital.
The numbers themselves revealed the company performing solidly during the transition.
Revenues grew just under a fifth to £62.7mln in the first half of the financial year, while adjusted profits were £1.5mln.
Publishing is a back-ended loaded business with most of the earnings pouring in during the run-up to Christmas. Analysts predict full-year profits will be in the order of £12mln.
The headline figures, though, don’t tell the full story.
A growth initiative called Bloomsbury 2020 appears to be gaining traction.
It is digital in focus and as mentioned earlier aimed at the academic and professional publishing market. These new, ‘non-consumer’ services are more profitable than the traditional business with operating margins of 25-40% versus 8-18% for print products, and because of this, professional publishing businesses of this kind are highly prized by investors.
The interim results statement showed the split between consumer and non-consumer stands at 59-41%, but as Bloomsbury 2020 continues to take shape, so the balance will even-up.
“The academic side is catching up and we are aiming for the split to be 50-50,” chief executive Newton said.
The City broker Numis reckons Bloomsbury 2020 will increase both “quality and quantity of earnings” after an initial investment period.
Interesting from an investing standpoint are a few factors.
The results themselves revealed that Bloomsbury could be one of a handful of Brexit winners as it has strong dollar earnings.
In fact, Numis reckons the foreign exchange rate lift was in the order of 5% in the wake of the UK’s vote to leave the EU in June.
The company is also a defensive stock that tends to be relatively robust in times of economic turmoil.
One leading media analyst said that among the stocks he followed, it was the second best performer during the last downturn.
“Books are so cheap at an average price of £5,” said Newton, who suspects reading is one of the few discretionary activities that isn’t affected when household spending is cut.
“History suggests we would weather an economic downturn well.”
Finally, for income hunters, Bloomsbury is a very solid play with a dividend yield of around 4.5% and a decent record of maintaining and growing the pay-out.
Steve Liechti, of the broker Investec, hailed the “sales momentum” witnessed in the last results as he said initiatives such as Bloomsbury 2020 would provide a longer-term boost to the business.
CEO Newton added: “We are making the investment because there is terrific upside potential for shareholders to have a part in best-seller publishing when things take off and on the other hand the higher margin, steadier income of non-consumer.”
In other words it is not just about Harry Potter.