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Bloomsbury Publishing: DEEP DIVE
OVERVIEW

Harry Potter publisher Bloomsbury Publishing on track to meet full year guidance

Peel Hunt expects “superior returns" from the firm’s investment in digital capacity
Bloomsbury Publishing
OVERVIEW: BMY The Big Picture
Net cash is forecast to be about £27mln at the end of 2019
  • Bloomsbury expects 2019 results to meet its forecasts

  • Bestsellers boost second-half performance 

  • Peel Hunt recommends 'buy' on stock

 

What Bloomsbury Publishing does:

Bloomsbury Publishing PLC (LON:BMY) is an publisher of fiction, non-fiction, children’s, specialist, academic and professional titles.

Since publishing the first of a series of JK Rowling’s Harry Potter books in 1995, Bloomsbury has grown from a small, independent company into one of the most successful children’s publishers.

The FTSE SmallCap-listed company is based in London but also has offices in Oxford, New York, Sydney and New Delhi.

What it owns:

Bloomsbury owns: Absolute Press, a UK publisher of cookery and diet books; Bloomsbury Professional, which specialises in law, tax and accounting books; and Osprey Publishing, which looks after military, and fantasy novels as well as board and card games.

Inflection points:

  • Bloomsbury expects results for the year ended February 28 to meet its estimates 
  • The Non-Consumer Academic and Professional division continued its strong performance in the year just ended with organic growth in revenue and an improvement in margins.
  • In the Special Interest division, February included the international bestseller In the Closet of the Vatican, by Frédéric Martel.
  • The Consumer division delivered a number of bestsellers in the second half of the fiscal year, including Sarah Maas's Kingdom of Ash, Tom Kerridge's Fresh Start and Mary Pipher's Women Rowing North.
  • Net cash is forecast to be about £27mln at the end of 2019.
  • In January, Bloomsbury announced that it had entered into strategic sales partnerships with leading publishers Rowman & Littlefield and Manchester University Press (MUP). Sales representation through Bloomsbury will enable them to reach their core customers via Bloomsbury's extensive digital sales networks and market expertise. 

Blue Sky:

In a sector note in January, city broker Peel Hunt upgraded its recommendation on the stock to ‘buy’ from ‘add’, saying it expects the firm’s investment in digital capacity to pay off.

Peel Hunt said the publisher’s current strategy, which focuses on the acceleration of digital capacity in academic and professional publishing, had constrained near-term profit/loss progression but should build the opportunity for “superior returns in the medium term”. 

For the moment, Peel Hunt said the company’s strong growth was being fuelled by a resurgence of interest in the Harry Potter franchise coinciding with the series’ 20th anniversary, a new illustrative series, and the Fantastic Beasts film franchise.

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Bloomsbury Publishing Timeline

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