Bloomsbury is diverse (geography, format, revenue type, subject matter, sales channel), with a very strong underpinning both financially (£54m cash) and IP (unvalued publishing rights), says the broker.
Its performance through the pandemic was very strong, reflecting the appeal of its products and the benefits of the diversity it has achieved.
“The company has a clear strategy which it has pursued consistently over time. It remains in our view an excellent company that is well managed.
Peel Hunt expects revenues this year to grow to £195mln and profits to £19.5mln, a 10% increase, which would represent growth on the very strong 2021.
Investec said the impressive performance over the past year reflected a combination of strong customer demand and high-quality content.
“Management’s strategy continues to demonstrate that ongoing organic investment can deliver attractive shareholder returns in terms of both resilient growth, and cash generation to be deployed for both M&A and capital returns. “
In the year to February, revenue grew 14% to £185.1mln, 4% ahead of Investec‘s forecast, with PBT growing 22% to £19.2m (also 4% ahead).
Strong cash conversion led to net cash of £54.5mln, which underpinned both 10% growth in the final dividend and the announcement of a 9.78p special dividend.
The consumer arm was the stand-out, but non-consumer grew 1%, supported by 3% growth in the Academic & Professional business with 49% growth in Bloomsbury Digital Resources highlighting structural acceleration in university demand.
Shares rose 9.4% to 338p.