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Bloomsbury Publishing says trading ahead of expectations as book sales jump despite pandemic disruption

The uplift was boosted by a 63% surge in digital revenues, alongside an unexpectedly good performance across May and June

Bloomsbury Publishing PLC - Bloomsbury trading ahead of expectations as book sales jump despite pandemic disruption

Bloomsbury Publishing PLC (LON:BMY) said it has traded ahead of expectations in the first four months of its current year as book sales surged despite disruption from the coronavirus pandemic.

In an update for the four months to June 30, 2020, the publishing group reported that year-on-year sales in the period had risen 18% to £49.5mln, boosted by a 28% rise in consumer revenues to £31.5mln.

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Print revenues rose 9% year-on-year, while digital sales surged 63% amid a 53% jump in sales of e-books during the peak period of lockdown measures. Meanwhile, the company’s non-consumer division, which includes academic and professional publishing, was up 3% in the year to £18mln.

The strongest region of growth was the US, where revenues expanded 38% in the period. The UK, meanwhile, increased 16% while Australia fell 1% and India declined by 70% due to the impact of government lockdowns.

Looking ahead, Bloomsbury said bookshops had started to reopen in June and internet, e-book, digital resource and some bookshop sales were “doing well”.

“Our digital strategy has placed us well to benefit from increased demand for digital resources, audio and e-books during the pandemic”, the company said, adding that its positive performances in May and June “in particular were unexpected”.

While Bloomsbury said the outlook for the next eight months “remains uncertain as the pandemic continues”, its revenues and earnings were weighted towards the second half, with sales of trade titles rising for Christmas and sales of academic titles being strongest at the start of the academic year in the Autumn.

The group also said it has “sufficient liquidity to weather the impact of the coronavirus pandemic” in the long term.

In a note on Tuesday, analysts at Peel Hunt retained their ‘add’ rating and 265p price target on the firm, saying Bloomsbury’s “diversity of territory, subject matter and sales channel” had protected it against the effects of the pandemic.

“There is an element of the law of the small number. Normally these would be modest months for Bloomsbury sales, so the positive impact of demand patterns during lockdown is perhaps disproportionate. Nonetheless, +18% is a welcome start to the year”, the broker said.

“The resilience of books as a product set in a recession, a low ticket item with sturdy consumption patterns, is clear. Add to this the value of diversity at Bloomsbury (of end markets, regions, sales channels and product types), and today’s news should prompt the market to revisit the stock for its defensive characteristics and resilience in an uncertain world”, they added.

Shares in Bloomsbury surged 13% to 226p in mid-morning trading on Tuesday.

--Adds broker comment and share price--

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LSE:BMY
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