Chief executive Nigel Newton told Proactive he was “surprised and thrilled” by how the first-half results turned out, despite the initial worries when lockdown was first announced.
All of Bloomsbury’s retail partners shut down in March, however by June people were nonetheless buying books “in quite a big way”, Newton said.
“It soon became apparent that we were not only hanging in there, but that we were doing better than we had done in a very good period this time years ago.”
Escapist titles, psychology and cookery books were most in demand among hundreds of thousands sitting at home.
Readers immersed themselves in the Greek island of Hydra with Leonard Cohen in Polly Samson’s “A Theatre for Dreamers”, or learnt that people may just be fundamentally good in “Humankind” History by Rutger Bregman.
“That touched the mood music of our time back in May when everyone was, quite rightly, clapping for the NHS right to the present, when people are feeling very gloomy about the second era of working from home,” Newton commented.
Food lovers snapped up copies of “Dishoom”, the cookbook from the popular Indian restaurant, as well as “Lose Weight for Good” by Tom Kerridge and “A Table for Friends” by Skye McAlpine.
With profit before tax climbing 60% to £4mln and revenue up 10% to £78.3mln in the six months to the end of August, the firm delivered its highest first-half earnings since 2008.
At period-end, net cash nearly doubled to £44mln compared to 2019, so the board recommended the resumption of dividends starting with an interim payout of 1.28p.
A fairytale second half?
Following an exceptional first half, the Harry Potter publisher may be on track to deliver another six months to remember.
In fact, revenue and earnings have been weighted towards the second half, driven by the consumer division around Christmas and strong sales of academic titles at the beginning of the academic year.
While the interim results didn’t provide any forward guidance, analysts at broker Numis Securities expect to increase the full-year forecast materially.
Bloomsbury is looking forward to more success with two big releases expected to shine in the key Christmas period: the illustrated edition of Quidditch Through the Ages by superstar author J.K. Rowling, and John Ferris’s Behind the Enigma, the first-ever authorised history of GCHQ, one of Britain's most secretive intelligence agencies.
Early next year New York Times bestselling author Sarah J. Maas is publishing her new title as part of the Court of Thorns and Roses fantasy series.
“Our business has adapted well to the working from home era and so our editors are at the peak of their powers commissioning the books of the future, which will be in as much demand as we have been fortunate to see with our current list,” Newton added.
Like in many other industries, the pandemic has accelerated the shift to digitalisation: in the case of Bloomsbury, it has boosted demand for digital products and their delivery, such as e-books, audiobooks, for universities, online delivering platforms for retailers such as Amazon and Waterstones.
“Despite early investor concerns over the impact of COVID-19 on demand, and Bloomsbury’s ability to fulfil it, the group’s performance continues to confound these fears, helped by management’s continued focus on operational execution,” analysts at Investec noted.
“Macro-economic challenges clearly remain, but we continue to expect Bloomsbury to emerge robustly from the crisis and that its resilient growth will gain greater recognition over time.”
Shares surged 17% to 245p on Tuesday afternoon, having recouped 37% from the March trough.