Numis Securities has upgraded Bloomsbury Publishing PLC (LON:BMY) to ‘buy’ after the Harry Potter publisher’s interims on Tuesday.
Although Bloomsbury’s results are traditionally second-half weighted, the first half showing still represented “a very strong performance” in the view of Numis.
Adjusted profit before tax of £2.5mln was well ahead of the £1.4mln Numis had forecast, and the Bloomsbury 2020 digital publishing initiative is “firmly on track”.
In fact, Bloomsbury will launch two new digital resources in the second half of the financial year, which is one more than originally anticipated.
Despite getting the first half profit projection wrong by some distance, Numis has stuck to its full-year forecast of £12mln, but concedes that there is “risk to the upside”, or, in everyday language, there is more chance of this forecast being too low than too high.
A lower tax rate prompted an upgrade to the earnings per share forecast to 12.8p from 12.0p previously, and the net cash estimate is lifted to £20mln from the previous forecast of £17.6mln.
The target price is nudged up to 210p from 205p and the recommendation moves from ‘add’ to ‘buy’.
Shares in Bloomsbury currently trade at around 165p, up 2% on the day.