Bloomsbury Publishing
Share Price: £1.64 (up 1.7%)
Bloomsbury is known for publishing the Harry Potter series, as well as selling academic books and adult titles.
The interim result is their weakest half, but today results look impressive with double-digit gains in revenue.
In fact, interim revenue has jumped from £46m in 2014 to £72m, a magnificent achievement. But, sometimes margins are more important than sales growth.
Their interim operating profit is £1.6m and has broken the million-pound mark for a very long time. For the sake of comparison, their full-year result saw operating profit at £9.4m. Any analyst worth their salt would have compared first-half profits with second-half. The conclusion is the second-half tends to produce nine times the operating profit.
So, expect the full-year to see a larger operating profit. Somewhere around £11m-£12m is expected!
Revenue divisions
The children division is their biggest division and contributes 40% of revenue. The Harry Potter series grew by 33%.
Their adult division accounts for 20% and revenue fell slightly, caused by a 10% fall in eBook sales.
Meanwhile, their Academic & Professional division saw flat growth with revenue at £16.6m.
Balance Sheet
The biggest improvement is the build-up of their cash balance from £9m to £17m. It has a minimal pension deficit of £251k and no debt.
Also, Bloomsbury has £10m to £14m in undrawn loan facility.
Cash Flow Statement
Cash flow from operations dipped from £5.6m to £3.2m due to income tax paid (£1.7m vs. zero last year). Also, both the receivables and payables saw unfavourable movements (i.e. more outflows).
But, if we ignore changes to working capital, then cash profit is higher by £1.6m to £3.9m.
OUTLOOK
A new Harry Potter book is coming out next year in October 2018.
Historical Performance
Bloomsbury has been riding the success of the Harry Potter series, so whenever Harry Potter didn’t come out, sales at Bloomsbury took a dip. Notably in 2006, 2008, 2009 and 2010. The biggest sales drop is between 2007 and 2008 when it fell from £150m to £100m. That’s because JK Rowling released her last book of the series in 2007.
Despite the success of Harry Potter and owning…
