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Bloomsbury's posts full-year results that beat market expectations

The group continues to reduce its reliance on the UK market, with overseas revenues accounting for 64% of total revenue last year, up two percentage points on the year before

The strategic growth initiative BDR 2020 has made Bloomsbury into a leading B2B publisher in the academic and professional information market

Bloomsbury Publishing PLC (LON:BMY) has posted full-year results ahead of market expectations and hailed its strong financial position and excellent cash generation.

Profit before taxation and various one-off charges in the year to the end of February grew by 9% to £14.4mln, up from £13.2mln the year before. The consensus forecast among brokers covering the stock was for a headline profit before tax of £13.96mln.

READ Bloomsbury Publishing pushes higher with book firm firing on all cylinders

Reported profit before tax improved to £12.05mln, up from £11.64mln the year before. Revenues in the full-year rose to £162.7mln, up from £161.5mln the year before, but that was a shade below the market expectation for £163.2mln.

The group said it has made progress on all seven initiatives that comprised its “Bigger Bloomsbury” project announced a year ago.

The initiatives focus on the group's key growth drivers with targeted strategies across the group to help grow revenues and increase margins over the next four years.

It was another year of strong cash growth, with the cash conversion rate - a measure of a company's ability to turn net profit into cash - clocking in at 128%, excluding the impact of the acquisition of IB Taurus (IBT) last May, compared to a cash conversion rate of 161% the year before.

The publisher ended February with net cash of £27.6mln, up from £25.4mln the year before.

The board has proposed a final dividend of 6.75p, up 6% year-on-year. If approved, the final dividend payment will take the total pay-out up to 7.96p, compared to 7.51p the year before, marking the 24th consecutive year of dividend growth.

Not just Pottering about

The group's non-consumer division had a good year, with revenues up 7% to £63.4mln from £59.3mln the year before, driven by a 13% increase in revenues from the Academic & Professional side of the business.

The company, which is best known for publishing the Harry Potter series of books, has been investing some of the profits from that phenomenally successful series into boosting its digital footprint and that investment looks to be paying off, with Bloomsbury Digital Resources 2020 (BDR 2020) Academic & Professional revenues up 42% on a like-for-like basis, excluding the impact of the switch to the IFRS 15 accountancy reporting standard.

IBT, which was acquired in May, delivered £2.5mln of revenue and £0.4mln of profit before highlighted items for the first ten months of ownership.

Consumer division proves resilient

With the previous financial year including the 20th anniversary of the first Harry Potter book, the consumer division was going up against tough comparatives.

Against that backdrop, the division's underlying profit eased to £10.7mln from £11.4mln, largely as a result of the Children's category seeing a decline in underlying profit to £9.8mln from £11.6mln the year before.

Nigel Newton, the chief executive of Bloomsbury, said the group had enjoyed “a very strong year”.

He noted: “We had an exceptional result in our Adult division, where profit before tax and highlighted items grew by £1.1mln, in a year in which we had many novels, works of narrative non-fiction and cookery titles including Fresh Start by Tom Kerridge, hit the bestseller lists in our core publishing area.

“Our strong financial position and excellent cash generation, with cash of £27.6 million and cash conversion of 128%, give us great opportunities for further acquisitions and investment in organic growth,” Newton added.

In early trading, Bloomsbury's shares were 0.4% higher at 235p.

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Quick facts: Bloomsbury Publishing PLC

Price: 201 GBX

Market: LSE
Market Cap: £164.03 m

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