Bloomsbury Publishing (BMY) has bewitched millions of readers worldwide with its Harry Potter series. But investors were less enthralled by its first-half figures, sending its shares down 5 per cent. Operating profit sank by more than half to £0.5m, reflecting restructuring costs and a one-off boost from bestseller 'And the Mountains Echoed' last year.
The upshot was a small operating loss at its adult division, while profit (before exceptional costs and amortisation) at its academic division slumped four-fifths to £171,000 due to lower net sales at US arm Fairchild Books. However, Bloomsbury's digital efforts - which included launching a scholarly e-book platform and digitising older titles - drove a two-thirds increase in the academic division's digital sales to £2m.
But the half-year numbers only serve as a preface; the real story will be how Bloomsbury's academic and consumer titles sell during the critical Christmas and back-to-school periods. The recent release of the Harry Potter book series with new jackets, an upcoming stage play and "robust signs of life" in bookstore sales have made Bloomsbury chief Nigel Newton bullish in the short term. He expects the upcoming trilogy of Harry Potter spin-off films, based on 'Fantastic Beasts and Where to Find Them', to act as "one big commercial" for the series.
Broker Numis Securities forecasts full-year pre-tax profit of £12m, giving EPS of 13.1p, down from £13m and 14.2p in 2013-14.
| BLOOMSBURY PUBLISHING (BMY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 153p | MARKET VALUE: | £113m | |
| TOUCH: | 153-155p | 12-MONTH HIGH: | 190p | LOW: 143p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 158p* | NET CASH: | £2.8m | |
| Half-year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 49.2 | 1.1 | 1.2 | 0.98 |
| 2014 | 46.6 | 0.5 | 0.6 | 1.02 |
| % change | -5 | -55 | -54 | +4 |
Ex-div: 6 Nov Payment: 4 Dec *Includes intangible assets of £60.8m, or 82p a share | ||||
