Bloomsbury Publishing says half-year earnings top expectations

Bloomsbury Publishing PLC’s (LON:BMY) interim results statement was a real page-turner with a happy ending, as earnings came in ahead of management’s expectations.

Adjusted profit before tax shot up to £4.04mln in the six months to the end of August, 2020, from £2.51mln in the same period of 2019. Reported profit before tax soared to £3.04mln from £1.30mln the previous year, with the difference between the adjusted and reported figures being largely accounted for by £883,000 (2019: £864,000) of amortisation of acquired intangible assets.

Revenues rose by 10% to £78.3mln from £71.3mln the year before, driven by strong online book sales and e-book purchases.

The publisher’s Consumer division saw top-line growth of 17% and a £2.1mln increase in adjusted profit before tax, while the decision over the last five years to beef up the online academic resources offering in the Non-Consumer division looks set to benefit from the switch by academic institutions to more online learning; sales in the Bloomsbury Digital Resources division were up 47% year-on-year.

Net cash at the end of August had risen to £44.1mln from £24.0mln a year earlier, with cash generation stronger than expected. This has encouraged the board to recommend the resumption of dividend payments, starting with an interim dividend of 1.28p, the same as was paid at the interim stage last year before the coronavirus pandemic introduced uncertainty into consumers’ behaviour.

The board is also considering acquisition opportunities to broaden the range of its Non-Consumer division.

“Bloomsbury experienced excellent trading in the first half with year-on-year profit growth of 60% to £4.0 million. This has delivered our highest first-half earnings since 2008 and exceeded the board’s expectations,” said Nigel Newton, the chief executive officer of Bloomsbury in the results statement.

“I would like to thank our staff, authors, illustrators, distributors and suppliers for their resilience, initiative and determination. They continue to be motivated, adaptable and effective, which is demonstrated by the strength of our first-half performance. This, together with the strength of our publishing strategy supported by our solid financial position, gives me confidence in Bloomsbury’s future performance,” he added.