Bloomsbury (BMY) is doing a roaring trade in ebook sales which soared 89 per cent to £4.5m in the first half. Encouragingly, the higher-margin digital business should contribute much more in the firm’s second-half results, which include both January and February. “After Christmas, e-reader gifts are empty vessels for content,” says Nigel Newton, Bloomsbury’s chief executive.
In the six month period, underlying pre-tax profits declined 36 per cent to £2.1m, but last year’s first half was a tough comparative, boosted by book sales from the final Harry Potter movie. “Take that out,” says Mr Newton, “and profits were pretty much in line.”
To secure more predictable and global revenue streams, Bloomsbury has bolstered its position in academic and professional publishing through the acquisition of Fairchild Books and Applied Visual Arts (AVA). Both purchases give the company a stronger foothold in the US market, too, while the launch of a sales and publishing operation in India provides another avenue for growth. “We’ve made strong, strategic progress,” says Mr Newton.
Bloomsbury claims an attractive line-up for the important Christmas period, including titles from Hugh Fearnley-Whittingstall, Will Self and JK Rowling. Moreover, the publisher bats out the first ever Wisden India Cricketers Almanac (2012).
BLOOMSBURY PUBLISHING (BMY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 131p | MARKET VALUE: | £96.7m | |
| TOUCH: | 130-132p | 12-MONTH HIGH: | 148p | LOW: 90.25p |
| DIVIDEND YIELD: | 4.0% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 150p* | NET CASH: | £10.6m | |
| Half-year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 42.4 | 1.45 | 1.45 | 0.89 |
| 2012 | 43.5 | 0.85 | 0.87 | 0.94 |
| % change | +3 | -41 | -40 | +6 |
Ex-div: 31 Oct Payment: 30 Nov *Includes intangible assets of £55.3m, or 75p a share | ||||
Investec Securities expects Bloomsbury will slightly increase full-year adjusted pre-tax profits and EPS to £12.2m and 12.4p, rising to £13.5m and 13.7p, respectively, in 2014.
