Bloomsbury Publishing Share Discussion Threads

[saltwood] 29/7/2023 19:25

It is indeed a great business - and thank you for sharing the article. I also am intrigued about how they will use the cash pile. I do also think at current levels it
is a good long-term buy - the dividend is an added bonus and the annual increase, prioritised by the Board, is confirmation of a well-run business.

[adamb1978] 27/7/2023 08:38

Thanks CWA1. So the 3p mark down so far would be a good outcome.

Still waiting for wake up one morning and see what they've splurged the cash pile on. It was already looking large at the last balance sheet date, so once the FCF from the last period is added, even post dividends, its starting to look huge.

Cant help but feel they must have a meaningful acquisition target in their sights

[cwa1] 27/7/2023 08:20

XD today for 10p+. Pay day 25/8

[adamb1978] 24/7/2023 15:16

Thanks for sharing that link. BMY is a very good business who's metrics are improving with each year. The sort of metrics which its showing could, in a better market, lead to a multiple of 20x. As with some other companies which I hold, in these difficult market conditions it pays to try to focus on the operational performance of the company rather than share price.

[nigelog] 08/6/2023 13:08

What a difference a week makes dips below £4 and now over £4.50, surely if someone wanting to bid now is the time?

[adamb1978] 07/6/2023 17:44

Hopefully won't see 405p again!

My base case is 600p on a 2 year basis, with scope for outperformance if they get something of a re-rating now that ROCE is getting into the high-teens, or from using their cash pile (and other cashflow) for M&A

[johndoe23] 07/6/2023 17:22

Missed out at 405p here, not sure that'll be revisited!

[riverman77] 07/6/2023 17:13

Need to have a listen to that call on replay and do a bit more work on this generally. The thing I'd like to better understand is their exposure to the Harry Potter franchise. There must be huge licencing deals for all the movies and merchandise, but presumably BMY aren't getting much (or any) of this, otherwise their profits would surely be a lot higher than they are. Presumably they just take a slice of the book sales?

[jimmywilson612] 07/6/2023 17:03

I remember seeing on one of their acquisitions - the company mentioned that they were attracted to Bloomsbury due to knowing their CEO / Company for 20 years and knowing they'll look after the brand well.

You have to remember, alot of publishers know the industry. Bloomsbury CEO will know alot of people within the sector and they have a good reputation. This is what the CEO brings - knowledge of the people, companies and the publishing sector. That is what excites me about this company.

[adamb1978] 07/6/2023 12:39

I thats probably right riverman. I'd imagine a larger publisher should have a pile of synergies too. BMY have £90m admin costs vs £30m EBIT so I think an competitor could produce a meaningful uplift on that £30m from synergies.

Was a bit surprised on this morning's call that there was the mention of trading multiples of peers - not specific figures but its not territory which is often broached on these calls. Gave the impression when hearing it that they were thinking about what the company might be worth, or could be worth

[riverman77] 07/6/2023 12:30

I have a feeling that BMY will eventually be snapped up by a larger publisher or media company, rather than going down the PE route. I'm sure that would also be the preference of the CEO, who I suspect would not want to see his company swallowed up by a PE outfit and all that would entail (loaded up with debt, costs cut to the bone, etc)

[adamb1978] 07/6/2023 12:24

Terry - there's a world of difference between the Wandisco CEO and BMY CEO!!

Probably 99.9% of the CEO population live between those extremes!

[trident5] 07/6/2023 12:22

Jeez - the CEO is the founder here who built the company from scratch. Most PE staff are just salaried suits riding the favourable tax regime pumped with other people's money.

[adamb1978] 07/6/2023 11:19

So yes, would refer boring to someone shady. I should have said 'reduces' the offer of a PE bid. Ideally a fund would want a CEO who has a degree of vision, someone who inspires, someone who can sell the company and its qualities to customers, someone who gives you confidence that they're going to exploit growth opportunities which are available etc. The current CEO is none of those.

That said, the BMY team have done a very good job improving margins and returns. In that respect, I'd class them as an operational team and they're not necessarily a negative to the investment case but you wouldnt invest in the company as a result of them.

Anyway, the CEO is 67 so will be interesting to see if another person in the management team starts to get put in front of investors to suggest a succession plan in place.

[terry236] 07/6/2023 11:05

Just look at Wandisco for a highly promoting CEO and see how that ended….

Happy with the CEO and CFO here and the results they bring.

[riverman77] 07/6/2023 10:46

Would much rather have a dull but highly competent and honest CEO than a 'charismatic' charlatan. I've seen plenty of them - you could say we had one running the country not so long ago - and do my best to avoid them. Also, why on earth would it prevent a private equity deal taking place? PE dealmakers are very smart and wouldn't be swayed by the personality of the CEO (unless they thought be looked dodgy).

[adamb1978] 07/6/2023 10:08

I'm on this investor call at the moment. I like management teams which under-promise and over-deliver but jeez the CEO and CFO of BMY are as un-showy and dull as you could possibly imagine!

Upside is that it probably brings a low risk culture but I do wonder whether it turns some investors off. Would certainly prevent a private-equity offer for the company

[strollingmolby] 02/6/2023 16:21

Bloomsbury: survival of publishers points to AI prophecy overkill
Printed books continue to dominate sales over digital formats

[gswredland] 02/6/2023 13:59

NED? Sorry non exec directors?

[adamb1978] 02/6/2023 12:03

Nice NED purchase announced!!£40k...helps highlight the value here if NEDs are seeing it

[adamb1978] 02/6/2023 08:11

Hi Saltwood

Agreed on the market sentiment point. Its frustrating but small-caps have all been hit in the last 6-12 months.

I also agree with your point 2 that BMY massively underpromise such that they can over-deliver - this is good in that it means that reduces the chances of profit warnings but it does the price back and management here are supremely conservative.

I also agree that a large acquisition is likely in the offing, and we might see more about that in hte next month or two

Adam

[saltwood] 01/6/2023 20:42

Four thoughts I have:
1. General market sentiment - hard to avoid and provides opportunity to top up
2. Seems to be a consistent strategy to under promise and over deliver - so very undemanding guidance to the market for 23/4 - will there be upgrades?
3. It feels like they have a plan for the £50m plus of cash otherwise I think they would have paid a special dividend. Need to wait and see what any future acquisition or acquisitions look like
4. I do wonder what the long term plan is - BMY was established by Nigel Newton in the 1980s - is he positioning the business for a takeover? Looking at the presentation on the website everything seems to be neatly ‘packaged̵7;. Just a thought, but it has crossed my mind a few times in the last couple of years.

I added the day before the results. Those with greater patience will be rewarded no doubt!! Good luck all.

[adamb1978] 01/6/2023 20:03

There's been a general re-rating of small and even mid cap UK companies over recent months. BMY is no different to a bunch of others.

All you can do if hold companies which are trading well, adding value and generating cash and then that work which they're doing in growing themselves should be rewarded properly when the market turns.