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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Bloomsbury Publishing Plc | LSE:BMY | London | Ordinary Share | GB0033147751 | ORD 1.25P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
8.00 | 1.54% | 528.00 | 523.00 | 528.00 | 529.00 | 521.00 | 529.00 | 90,244 | 16:35:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Books: Pubg, Pubg & Printing | 264.1M | 20.24M | 0.2497 | 20.87 | 422.32M |
TIDMBMY
RNS Number : 2557D
Bloomsbury Publishing PLC
27 October 2020
BLOOMSBURY PUBLISHING PLC
("Bloomsbury" or "the Company")
Unaudited Interim Results for the six months ended 31 August 2020
Record first half earnings performance
Interim dividend declared
Bloomsbury, the leading independent publisher, today announces unaudited results for the six months ended 31 August 2020.
Commenting on the results, Nigel Newton, Chief Executive, said :
"Bloomsbury experienced excellent trading in the first half with year-on-year profit growth of 60% to GBP4.0 million. This has delivered our highest first half earnings since 2008 and exceeded the Board's expectations.
Online book sales and e-book revenues were significantly higher.
The Consumer division had an excellent performance with 17% revenue growth and a GBP2.1 million increase in profit before tax and highlighted items to GBP2.7 million. Stand-out bestsellers during the period included Why I'm No Longer Talking to White People about Race, Crescent City: House of Earth and Blood, White Rage, Humankind and Such A Fun Age.
In the Non-Consumer division, our strategy of developing online academic resources, conceived five years ago, meant we were well placed to benefit from the accelerated shift by academic institutions to digital products to support remote learning. We saw 47% growth in sales of Bloomsbury Digital Resources as a result.
Bloomsbury is in a strong financial position, with net cash of GBP44.1 million at 31 August 2020, as a result of excellent trading in the first half and the swift measures taken by the Board to control costs and strengthen Bloomsbury's balance sheet. The strength of our financial position meant that we continued to operate effectively, invest in new content, and build a strong pipeline of authors and titles. Bloomsbury is well positioned for the future, with sufficient working capital and significant headroom for acquisitions opportunities.
In light of our strong financial position and the importance of our dividend policy, we are resuming an interim dividend of 1.28 pence per share, in line with last year.
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."
Financial Highlights
-- Revenues increased by 10% to GBP78.3 million (2019: GBP71.3 million)
-- Profit before taxation and highlighted items(1) grew by 60% to GBP4.0 million (2019: GBP2.5 million)
-- Profit before taxation grew by GBP1.7 million to GBP3.0 million (2019: GBP1.3 million)
-- Diluted earnings per share, excluding highlighted items(1) , grew by 55% to 4.13 pence (2019: 2.66 pence)(2)
-- Diluted earnings per share grew by 131% to 2.87 pence (2019: 1.24 pence)(2)
-- Net cash of GBP44.1 million at 31 August 2020, up GBP24.0 million from last year (2019: GBP20.1 million)
-- Interim dividend of 1.28 pence per share (2019: 1.28 pence per share)
Operational Highlights
Consumer Division
-- Consumer revenue growth of 17% to GBP48.6 million (2019: GBP41.5 million)
-- Consumer profit before taxation and highlighted items (1) increase of GBP2.1 million to GBP2.7 million (2019: GBP0.6 million)
-- Excellent Adult Trade performance, with revenue up 16% to GBP18.8 million (2019: GBP16.2 million) and profit before taxation and highlighted items (1) of GBP1.1 million (2019: GBP0.1 million loss)
-- Excellent Children's Trade performance, with revenue up 18% to GBP29.8 million (2019: GBP25.3 million) and profit before taxation and highlighted items (1) of GBP1.7 million (2019: GBP0.8 million)
-- Strong sales of Sarah J. Maas front and backlist titles; Harry Potter sales were robust; encouraging growth in other Children's titles
Non-Consumer Division
-- Non-Consumer revenues of GBP29.7 million (2019: GBP29.9 million)
-- Resilient Academic & Professional performance, with Non-Consumer revenue within 1% of 2019 and profit before taxation and highlighted items (1) of GBP1.4 million (2019: GBP1.8 million)
-- Bloomsbury Digital Resources ("BDR") revenues up 47% to GBP5.6 million
-- Strong growth in BDR products and Academic e-books, offset by an expected reduction in print sales
Note
(1) Highlighted items comprise amortisation of acquired intangible assets and legal and other professional costs and restructuring costs relating to ongoing and completed acquisitions.
(2) Restatement of earnings per share due to bonus issue of shares in the period.
For further information, please contact:
Bloomsbury Publishing Plc Nigel Newton, Chief Executive nigel.newton@bloomsbury.com Penny Scott-Bayfield, Group penny.scott-bayfield@bloomsbury.com Finance Director Hudson Sandler +44 (0) 20 7796 4133 Dan de Belder / Hattie Dreyfus bloomsbury@hudsonsandler.com
The information in this announcement has not been audited or otherwise independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this announcement, or its contents, or otherwise arising in connection with this announcement.
This announcement does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in the Company, nor shall it or any part of it or the fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation regarding the shares of the Company.
Certain statements, statistics and projections in this announcement are or may be forward looking. By their nature, forward--looking statements involve a number of risks, uncertainties or assumptions that may or may not occur and actual results or events may differ materially from those expressed or implied by the forward-looking statements. Accordingly, no assurance can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Accordingly, forward-looking statements contained in this announcement regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. You should not place undue reliance on forward-looking statements, which are based on the knowledge and information available only at the date of this announcement's preparation.
The Company does not undertake any obligation to update or keep current the information contained in this announcement, including any forward--looking statements, or to correct any inaccuracies which may become apparent and any opinions expressed in it are subject to change without notice.
References in this announcement to other reports or materials, such as a website address, have been provided to direct the reader to other sources of information on Bloomsbury Publishing Plc which may be of interest. Neither the content of Bloomsbury's website nor any website accessible by hyperlinks from Bloomsbury's website nor any additional materials contained or accessible thereon, are incorporated in, or form part of, this announcement.
Chief Executive's statement
Overview
Bloomsbury has had an excellent first half of the year. Revenue grew by 10% to GBP78.3 million (2019: GBP71.3 million), and profit before taxation and highlighted items increased by 60% to GBP4.0 million (2019: GBP2.5 million). Profit before taxation was GBP3.0 million (2019: GBP1.3 million).
The strength of demand for our titles, in print and e-book, and the surge in sales of our digital products demonstrates the strength of our long-term growth strategy.
Bloomsbury Digital Resources ("BDR") is performing very well, with 47% revenue growth year-on-year. This has positioned us well to deliver growth from the accelerated shift to digital learning, with a threefold increase in the number of new customers in the first half. The combination of excellent digital products and the strength and range of our partnerships enable us to continue to deliver growth from the high quality platforms and infrastructure we have built.
The highlighted items of GBP1.0 million (2019: GBP1.2 million) consist of the amortisation of acquired intangible assets of GBP0.9 million (2019: GBP0.9 million) and legal and other professional fees relating to acquisitions of GBP0.1 million (2019: GBP0.3 million). The effective rate of tax for the period was 23.6% (2019: 25.6%). The effective rate of tax, excluding highlighted items, was 17.3% (2019: 17.7%). Diluted earnings per share for the period, excluding highlighted items, was 4.13 pence (2019: 2.66 pence). Including highlighted items, profit before taxation was GBP3.0 million (2019: GBP1.3 million) and diluted earnings per share was 2.87 pence (2019: 1.24 pence).
Balance sheet and liquidity
The Board believes our strong balance sheet ensures we have sufficient working capital to fulfil our long-term goals and deliver on our growth strategy.
At 31 August 2020, Bloomsbury held net cash of GBP44.1 million (2019: GBP20.1 million). During the first half, our cash generation was stronger than expected, due to the combination of better than anticipated trading, reduced costs, continued focus on working capital with a GBP3.7 million (14%) reduction in inventory and good cash collection. We also received a GBP1.3 million loan from the US Government under the Paycheck Protection Program ("PPP"). This resulted in a net cash inflow, excluding the equity placing, dividends, PPP loan and acquisitions, of GBP4.8 million (2019: net outflow of GBP2.1 million). In addition, the net equity placing was GBP8.0 million (2019: nil) and the final dividend was settled by way of a bonus issue (2019: final dividend of GBP5.1 million).
Dividend
The Group's dividend policy is supported by strong cash cover. The Board has declared an interim dividend of 1.28 pence per share, in line with the interim dividend for the six months ended 31 August 2019. The dividend will be paid on 4 December 2020 to Shareholders on the register on the record date of 6 November 2020.
Acquisitions
With trading having been stronger than expected, the Board expects to be able to use the proceeds of the equity placing for future growth opportunities. We are actively considering acquisition opportunities in line with our long-term growth strategy of growing our Non-Consumer portfolio.
During the period we successfully completed the integration of Oberon Books Limited, acquired in December 2019, and the assets of Zed Books Limited, acquired in March 2020. Bloomsbury has a successful track record in strategic acquisitions, with 16 acquisitions completed since 2008.
Long-term growth strategy
Bloomsbury's long-term growth strategy is aimed at diversifying into digital channels and building quality revenues, increasing earnings and building on the success of the last five years. This has meant that we have been well placed to benefit from recent changes, including the accelerated shift to digital products to support remote learning and consumer demand for titles across multiple platforms.
Our long-term objectives include:
Non-Consumer
o Growing Bloomsbury's portfolio in Non-Consumer publishing. These are characterised by higher, more predictable margins and greater digital and global opportunities: 2020/21 H1 Progress: delivered 47% growth in Non-Consumer digital revenues
o Achieve BDR revenue of GBP15 million and profit of GBP5 million for 2021/22: 2020/21 H1 Progress: delivered GBP5.6 million revenue, up 47%, and GBP1.2m profit, up GBP1.1m
Consumer
o Discover, nurture, champion and retain high quality authors and illustrators in our Consumer division, while looking at new ways to leverage our backlist. 2020/21 H1 Progress: UK and US bestsellers included Why I'm No Longer Talking to White People about Race by Reni Eddo-Lodge, White Rage by Carol Anderson, Humankind by Rutger Bregman and Such a Fun Age by Kiley Reid
o Grow our key authors through effective publishing across all formats alongside strategic sales and marketing. 2020/21 H1 Progress: Sales of Sarah J. Maas' titles increased by 131%
o As the originating publisher of J.K. Rowling's Harry Potter, to ensure that new children discover and read it for pleasure every year. 2020/21 H1 Progress: Sales of Harry Potter titles were robust and the paperback edition of Harry Potter and the Philosopher's Stone was the fifth bestselling children's book of the year to date on UK Nielsen Bookscan, twenty-three years after it was first published
International Expansion
o Expand international revenues and reduce reliance on UK market: 2020/21 H1 Progress: delivered overseas revenue of 67% of Group revenue; 70% of Academic BDR revenue is international
Employee Experience and Engagement, Diversity and Inclusion
Our success is driven by our colleagues' expertise, passion and commitment. We understand the importance of attracting, supporting and engaging colleagues wherever they work.
o To be an attractive employer for all individuals seeking a career in publishing regardless of background or identity;
o Focus on targeted initiatives to create an environment that nurtures talent, stimulates creativity and collaboration, is respectful of difference and supports well-being; and
o Bloomsbury is committed to equality, diversity and inclusion. We condemn systemic racism in society in all its forms. We are dedicated to finding ways to improve our industry's practices and our own company.
o 2020/21 H1 Progress:
o We have expanded our Diversity and Inclusion networks globally, to ensure engagement with our staff on these vital topics;
o Working in partnership with the Black Writers' Guild to increase diversity in staff and authors;
o With our staff, we are working on recruitment, staff engagement, training and our networks;
o With our publishing, we seek to publish diverse voices. We continue to look for books that will ensure our lists represent the societies we live in. We intend to monitor our publishing so we can ensure that our list balance is representative of those societies; and partner with organisations that can help us achieve these aims; and
o Increased our focus on employee engagement, with more frequent communication across Bloomsbury, including Town Hall meetings, and continued employee voice meetings. Having transitioned to remote working we have designed our long-term strategy for flexible working.
Sustainability
Continue to switch to renewable energy across all sites, with the goal of Net Zero emissions in line with the Paris Agreement
o 2020/21 H1 Progress: We appointed a Head of Sustainability, working with the Executive Committee Sponsor, to oversee green initiatives across Bloomsbury worldwide. Our focus in H2 is to establish our targets to reduce Scope 1, 2 and 3 emissions. Scope 1 and 2 emissions are already being measured and we have appointed Trucost to further measure Scope 3 emissions. Furthermore, we have introduced our long-term flexible working policy to reduce emissions from staff travel; and
o Supporting the Woodland Trust and Reforest'Action for three years.
Consumer Division
The Consumer division consists of Adult and Children's trade publishing. The division delivered excellent revenue growth of 17% to GBP48.6 million (2019: GBP41.5 million). Profit before taxation and highlighted items increased by GBP2.1 million to GBP2.7 million (2019: GBP0.6 million). These very strong results reflect robust demand across both print and digital for front and backlist titles, and the growth and effectiveness of online sales channels. Frontlist highlights included Sarah J. Maas' bestselling Crescent City: House of Earth and Blood and the Sunday Times bestseller, Humankind by Rutger Bregman. Reni Eddo-Lodge's Why I'm No Longer Talking to White People about Race was the number one paperback Sunday Times bestseller for seven weeks and White Rage by Carol Anderson reached number eight on the New York Times bestseller list.
Our excellent publishing has been recognised with a number of awards, with Such a Fun Age by Kiley Reid and Apeirogon by Colum McCann being longlisted for the Booker Prize. Ka te Summerscale's The Haunting of Alma Fielding: A True Ghost Story was shortlisted for the Baillie Gifford Prize . The Raven Books crime and thriller imprint was shortlisted for the second year in a row for best Crime and Mystery Publisher by the Crime Writers Association ('CWA'), and Between Two Evils by Eva Dolan and The Anarchists' Club by Alex Reeve shortlisted for the prestigious CWA Dagger awards. In addition, we have been shortlisted for the Books Are My Bag Reader Awards with The Devil and the Dark Water by Stuart Turton, Humankind by Rutger Bregman, Cinderella is Dead by Kalynn Bayron, and Kiley Reid, the author of Such a Fun Age. Harry Potter and the Philosopher's Stone won the Best Book of the last 30 years at the British Book Awards in July. In addition, Bloomsbury won the IPG Award for Education Publisher of the Year for the second year in a row in September 2020.
Our excellent bestseller list performance in the last six months has continued to build the positive profile and momentum of our consumer publishing, positioning us well with a strong pipeline of authors and titles in the future.
Adult Trade
The Adult team delivered growth with a 16% increase in revenue to GBP18.8 million and a GBP1.2 million increase in profit before taxation and highlighted items to GBP1.1 million (2019: loss of GBP0.1 million).
Sunday Times bestsellers in the period included Humankind by Rutger Bregman and Kiley Reid's Such a Fun Age. Reni Eddo-Lodge's Why I'm No Longer Talking to White People about Race was the number one paperback Sunday Times bestseller for seven weeks and White Rage by Carol Anderson reached number eight on the New York Times bestseller list. Cookery success on the front and backlist included A Table for Friends, by Skye McAlpine, Dishoom, and Tom Kerridge's Lose Weight for Good.
Children's Trade
Children's sales increased by 18% to GBP29.8 million (2019: GBP25.3 million). There was strong demand for our classic titles, led by J.K. Rowling's Harry Potter series, as well as Sarah J. Maas' latest bestseller, Crescent City: House of Earth and Blood.
Sales of Harry Potter titles were robust. Harry Potter and the Philosopher's Stone was the UK's fifth bestselling children's book of the year to date, twenty-three years after it was first published. We are delighted that every year these classics reach a new generation of readers. UK print sales of Harry Potter books increased by 8% between mid-July and the end of September, according to Nielsen Bookscan.
Sarah J. Maas revenues grew by 131%, reflecting her new bestselling hardback title, Crescent City: House of Earth and Blood and strong sales of her backlist titles. Last year there were no new titles in the first half. We will publish two new titles this financial year: Crescent City: House of Earth and Blood, published in March 2020, and one in the second half: A Court of Silver Flames, publishing in February 2021.
Revenues for the rest of the Children's division grew by 6% year-on-year. H ighlights in the Children's list included The Wild Way Home by Sophie Kirtley, The Great Godden by Meg Rosoff and the fourth in the bestselling series, Kid Normal and the Final Five by Greg James and Chris Smith, illustrated by Erica Salcedo.
Non-Consumer Division
The Non-Consumer division consists of Academic & Professional and Special Interest. Revenues in the division were within 1% of last year at GBP29.7 million (2019: GBP29.9 million). Profit before taxation and highlighted items for the Non-Consumer division was GBP1.4 million (2019: GBP1.8 million).
Academic & Professional revenues increased by 1% to GBP20.1 million (2019: GBP19.6 million) and profit was GBP1.8 million (2019: GBP1.8 million). The accelerated demand for digital products and swift adoption of digital learning by academic institutions helped drive the excellent performance of BDR and accelerated demand for e-books, which offset reduced print sales.
We are focused on delivering growth from accelerating our established and most successful products, including the award-winning Drama Online, building partnerships and launching new products. We delivered a 297% increase in the number of new customers year-on-year, and maintained our existing customer retention rate at over 90%. With Taylor & Francis we have delivered two modules and with Human Kinetics, we delivered the new product and a further module will be launched in the second half. New partnerships include the Yale University Press, the Liverpool University Press and the Stratford Festival. In total, we delivered two new products and two new modules in the first half and are on track to launch a further four new modules in the second half as planned.
Special Interest generated revenues of GBP9.6 million (2019: GBP10.0 million), with resilient demand for wildlife titles, Wisden and Osprey games during the period. The result was a GBP0.3 million loss (2019: breakeven).
Social initiatives
As part of Bloomsbury's ongoing commitment to the wider community, we have undertaken further charitable initiatives. We published The Book of Hopes: Words and Pictures to Comfort, Inspire and Entertain Children , edited by Katherine Rundell, with contributions from more than 110 children's writers and illustrators. Free to read online, this collection of short stories, poems, essays and pictures is also published as a hardback gift edition, with a donation from the sale of each book going to NHS Charities Together. During Waterstones' Book of the Month promotion, we donated 10% of their sales of Reni Eddo-Lodge's Why I'm No Longer Talking to White People About Race between BTEG and Inquest. These new initiatives are in addition to our three-year partnership with the National Literacy Trust with a particular focus on Hastings, one of the UK's most deprived local authority areas. We gave many copies of Harry Potter and the Philosopher's Stone through the National Literacy Trust in Hastings. In addition, for every copy of Dishoom: From Bombay with Love sold, we donate towards the price of a meal for a hungry child to both of Dishoom's chosen charities, Magic Breakfast and The Akshaya Patra Foundation.
Recent trading and outlook
Our results for the first half were excellent and demonstrate the strength of our long-term strategy and resilient demand for our titles, in both print and digital formats.
Bloomsbury is in a strong financial position, with net cash of GBP44.1 million, thanks to the support of our shareholders, robust cash generation and stronger than anticipated trading in the first half. We are actively considering acquisition opportunities, in line with our long-term growth strategy.
We have continued to trade well during the first six weeks of the second half. In previous years, our revenue and earnings have been weighted towards the second half, with sales of trade titles rising for Christmas and sales of academic titles being strongest at the beginning of the academic year in the Autumn.
Our strong Consumer book list for the second half includes Quidditch Through the Ages by J.K. Rowling, illustrated by Emily Gravett, Fantastic Beasts and the Wonder of Nature in association with the Natural History Museum exhibition, Sarah J. Maas' A Court of Silver Flames, the fourth in the Court of Thorns and Roses series and GCHQ: Behind the Enigma - The Authorised History of GCHQ by John Ferris. Front and backlist Sunday Times bestsellers in the second half to date include Piranesi by Susanna Clarke - also a Washington Post bestseller - and the paperback editions of Why I'm No Longer Talking to White People about Race by Reni Eddo-Lodge, Three Women by Lisa Taddeo, The Madness of Crowds by Douglas Murray and The Anarchy by William Dalrymple. Highlights in Children's include the third in Brigid Kemmerer's Cursebreaker series, A Vow so Bold and Deadly.
We are confident about the future of publishing. The short-term is difficult to predict because of the pandemic.
Condensed Consolidated Interim Income Statement
For the six months ended 31 August 2020
6 months 6 months Year ended ended ended 31 August 31 August 29 February 2020 2019 2020 Notes GBP'000 GBP'000 GBP'000 ---------------------------------------- ------ ----------- ------------ ------------- Revenue 3 78,287 71,341 162,772 Cost of sales (37,051) (34,512) (74,978) ---------------------------------------- ------ ----------- ------------ ------------- Gross profit 41,236 36,829 87,794 Marketing and distribution costs (9,842) (9,779) (21,373) Administrative expenses (28,013) (25,580) (52,949) Share of result of joint venture (39) - - Operating profit before highlighted items 4,343 2,684 15,947 Highlighted items 4 (1,001) (1,214) (2,475) ---------------------------------------- ------ ----------- ------------ ------------- Operating profit 3,342 1,470 13,472 Finance income 71 75 270 Finance costs (378) (244) (513) ---------------------------------------- ------ ----------- ------------ ------------- Profit before taxation and highlighted items 4,036 2,515 15,704 Highlighted items 4 (1,001) (1,214) (2,475) ---------------------------------------- ------ ----------- ------------ ------------- Profit before taxation 3 3,035 1,301 13,229 Taxation (715) (333) (2,728) ---------------------------------------- ------ ----------- ------------ ------------- Profit for the period attributable to owners of the Company 2,320 968 10,501 ---------------------------------------- ------ ----------- ------------ ------------- Earnings per share attributable to owners of the Company Basic earnings per share (1) 6 2.89p 1.25p 13.58p Diluted earnings per share(1) 6 2.87p 1.24p 13.40p ---------------------------------------- ------ ----------- ------------ -------------
The accompanying notes form an integral part of this condensed consolidated interim financial report.
(1) Restatement of earnings per share due to the bonus issue of shares (note 8).
Condensed Consolidated Interim Statement of Comprehensive Income
For the six months ended 31 August 2020
6 months 6 months Year ended ended ended 31 August 31 August 29 February 2020 2019 2020 GBP'000 GBP'000 GBP'000 ------------------------------------------- ----------- ----------- ------------- Profit for the period 2,320 968 10,501 Other comprehensive income Items that may be reclassified to the income statement: Exchange differences on translating foreign operations (1,176) 3,550 856 Items that may not be reclassified to the income statement: Remeasurements on the defined benefit pension scheme 4 (112) (115) ------------------------------------------- ----------- ----------- ------------- Other comprehensive income for the period net of tax (1,172) 3,438 741
------------------------------------------- ----------- ----------- ------------- Total comprehensive income for the period attributable to owners of the Company 1,148 4,406 11,242 ------------------------------------------- ----------- ----------- -------------
Items in the statement above are disclosed net of tax.
Condensed Consolidated Interim Statement of Financial Position
At 31 August 2020
Notes 31 August 31 August 29 February 2020 2019 2020 GBP'000 GBP'000 GBP'000 ------------------------------------- ------ ---------- ---------- ------------ Assets Goodwill 44,865 45,254 45,030 Other intangible assets 21,881 21,048 21,630 Investments 477 300 516 Property, plant and equipment 1,774 2,020 1,914 Right-of-use assets 12,333 13,052 13,343 Deferred tax assets 2,960 2,579 2,756 Trade and other receivables 7 1,092 1,338 1,237 ------------------------------------- ------ ---------- ---------- ------------ Total non-current assets 85,382 85,591 86,426 ------------------------------------- ------ ---------- ---------- ------------ Inventories 26,375 31,204 27,164 Trade and other receivables 7 85,734 85,959 84,805 Cash and cash equivalents 44,058 20,090 31,345 ------------------------------------- ------ ---------- ---------- ------------ Total current assets 156,167 137,253 143,314 ------------------------------------- ------ ---------- ---------- ------------ Total assets 241,549 222,844 229,740 ------------------------------------- ------ ---------- ---------- ------------ Liabilities Retirement benefit obligations 139 217 185 Deferred tax liabilities 2,435 2,328 2,347 Borrowings 12,698 12,679 12,945 Provisions 202 148 182 ------------------------------------- ------ ---------- ---------- ------------ Total non-current liabilities 15,474 15,372 15,659 ------------------------------------- ------ ---------- ---------- ------------ Trade and other payables 64,347 62,589 61,844 Borrowings 2,442 1,650 1,585 Current tax liabilities - - 328 Provisions 665 43 651 ------------------------------------- ------ ---------- ---------- ------------ Total current liabilities 67,454 64,282 64,408 ------------------------------------- ------ ---------- ---------- ------------ Total liabilities 82,928 79,654 80,067 ------------------------------------- ------ ---------- ---------- ------------ Net assets 158,621 143,190 149,673 ------------------------------------- ------ ---------- ---------- ------------ Equity Share capital 1,020 942 942 Share premium 47,319 39,388 39,388 Translation reserve 8,331 12,201 9,507 Other reserves 8,682 7,201 7,778 Retained earnings 93,269 83,458 92,058 ------------------------------------- ------ ---------- ---------- ------------ Total equity attributable to owners of the Company 158,621 143,190 149,673 ------------------------------------- ------ ---------- ---------- ------------
Condensed Consolidated Interim Statement of Changes in Equity
At 31 August 2020
Own Capital Share-based shares Share Share Translation Merger redemption payment held by Retained Total capital premium reserve reserve reserve reserve the EBT earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 -------------------- -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- At 1 March 2020 942 39,388 9,507 1,803 22 6,724 (771) 92,058 149,673 Profit for the period - - - - - - - 2,320 2,320 Other comprehensive income Exchange differences on translating foreign operations - - (1,176) - - - - - (1,176) Remeasurements on the defined benefit pension scheme - - - - - - - 4 4 -------------------- -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- Total comprehensive income for the period - - (1,176) - - - - 2,324 1,148 Transactions with owners Issue of share capital 47 7,931 - - - - - - 7,978 Bonus issue of share capital 31 - - - - - - (31) - Purchase of shares by the Employee Benefit Trust - - - - - - (536) - (536) Share options exercised - - - - - - 1,017 (1,017) - Deferred tax on share-based payment transactions - - - - - - - (65) (65) Share-based payment transactions - - - - - 423 - - 423 -------------------- -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- Total transactions with owners of the Company 78 7,931 - - - 423 481 (1,113) 7,800 -------------------- -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- At 31 August 2020 1,020 47,319 8,331 1,803 22 7,147 (290) 93,269 158,621 -------------------- -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- Own Capital Share-based shares Share Share Translation Merger redemption payment held by Retained Total capital premium reserve reserve reserve reserve the EBT earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 -------------------- -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- At 1 March 2019 942 39,388 8,651 1,803 22 6,095 (802) 87,639 143,738 Profit for the period - - - - - - - 968 968 Other comprehensive income Exchange differences on translating foreign operations - - 3,550 - - - - - 3,550 Remeasurements on the defined benefit pension scheme - - - - - - - (112) (112) -------------------- -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- Total comprehensive income for the period - - 3,550 - - - - 856 4,406 Transactions with owners Dividends to equity holders of the Company - - - - - - - (5,051) (5,051) Share options exercised - - - - - - 2 - 2 Deferred tax on share-based payment
transactions - - - - - - - 14 14 Share-based payment transactions - - - - - 81 - - 81 -------------------- -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- Total transactions with owners of the Company - - - - - 81 2 (5,037) (4,954) -------------------- -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- At 31 August 2019 942 39,388 12,201 1,803 22 6,176 (800) 83,458 143,190 -------------------- -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- Own Capital Share-based shares Share Share Translation Merger redemption payment held by Retained Total capital premium reserve reserve reserve reserve the EBT earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------------------------ -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- At 1 March 2019 942 39,388 8,651 1,803 22 6,095 (802) 87,639 143,738 Profit for the period - - - - - - - 10,501 10,501 Other comprehensive income Exchange differences on translating foreign operations - - 856 - - - - - 856 Remeasurements on the defined benefit pension scheme - - - - - - - (115) (115) ------------------------------------------------ -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- Total comprehensive income for the period - - 856 - - - - 10,386 11,242 Transactions with owners Dividends to equity holders of the Company - - - - - - - (6,009) (6,009) Share options exercised - - - - - - 31 (4) 27 Deferred tax on share-based payment transactions - - - - - - - 46 46 Share-based payment transactions - - - - - 629 - - 629 ------------------------------------------------ -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- Total transactions with owners of the Company - - - - - 629 31 (5,967) (5,307) ------------------------------------------------ -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- At 29 February 2020 942 39,388 9,507 1,803 22 6,724 (771) 92,058 149,673 ------------------------------------------------ -------- -------- ------------ --------- ----------- ------------ -------- --------- -------- Condensed Consolidated Interim Statement of Cash Flows For the six months ended 31 August 2020 6 months 6 months ended Year ended ended 31 August 31 August 29 February 2020 2019 2020 GBP'000 GBP'000 GBP'000 ----------------------------------------- ---------- --------------- ------------ Cash flows from operating activities Profit for the period 2,320 968 10,501 Adjustments for: Depreciation 226 247 502 Depreciation of right-of-use assets 908 860 1,775 Amortisation of intangible assets 2,402 2,149 4,301 Finance income (71) (75) (270) Finance costs 378 244 513 Share of loss of joint venture 39 - 7 Share-based payment charges 456 100 761 Tax expense 715 333 2,728 ----------------------------------------- ---------- --------------- ------------ 7,373 4,826 20,818 Decrease/(increase) in inventories 874 (3,571) (620) Increase in trade and other receivables (1,029) (2,638) (4,385) Increase in trade and other payables 2,800 1,310 2,489 ----------------------------------------- ---------- --------------- ------------ Cash generated from/(used in) operating activities 10,018 (73) 18,302 Income taxes paid (1,910) (622) (1,706) ----------------------------------------- ---------- --------------- ------------ Net cash generated from/(used in) operating activities 8,108 (695) 16,596 ----------------------------------------- ---------- --------------- ------------ Cash flows from investing activities Purchase of property, plant and equipment (89) (131) (294) Purchases of intangible assets (1,299) (1,226) (3,137) Purchase of business, net of cash acquired - (310) (310) Purchase of rights to assets (1,490) - (1,213) Purchase of share of joint venture - - (223) Interest received 71 75 254 Net cash used in investing activities (2,807) (1,592) (4,923) ----------------------------------------- ---------- --------------- ------------ Cash flows from financing activities Equity dividends paid - (5,051) (6,009) Purchase of shares by the Employee (536) - - Benefit Trust Proceeds from exercise of share options - 2 27 Proceeds from share issue 7,978 - - New loan advances 1,450 - - Repayment of lease liabilities (583) (560) (1,531) Lease liabilities interest paid (235) (242) (492) Other interest paid (143) (2) (3) Net cash generated from/(used in) financing activities 7,931 (5,853) (8,008) ----------------------------------------- ---------- --------------- ------------ Net increase/(decrease) in cash and cash equivalents 13,232 (8,140) 3,665 Cash and cash equivalents at beginning of period 31,345 27,580 27,580 Exchange (loss)/gain on cash and cash equivalents (519) 650 100 ----------------------------------------- ---------- --------------- ------------ Cash and cash equivalents at end of period 44,058 20,090 31,345 ----------------------------------------- ---------- --------------- ------------
Notes to the Condensed Consolidated Interim Financial Statements
1. Reporting entity
Bloomsbury Publishing Plc (the "Company") is a Company domiciled in the United Kingdom. The condensed consolidated interim financial statements of the Company as at and for the six months ended 31 August 2020 comprise the Company and its subsidiaries (together referred to as the "Group"). The Group is primarily involved in the publication of books and other related services.
2. Significant accounting policies a) Basis of preparation
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34 'Interim Financial Reporting' as adopted by the European Union ("EU"). They are unaudited and do not constitute statutory accounts. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 29 February 2020.
Except as described below, the condensed set of financial statements have been prepared on a consistent basis with the financial statements for the year ended 29 February 2020 and should be read in conjunction with the Annual Report 2020. The annual consolidated financial statements of the Group are prepared in accordance with International Financial Reporting Standards ("IFRS") and International Financial Reporting Interpretations Committee ("IFRIC") pronouncements as adopted by the EU. The 2020 Annual Report refers to other new standards effective from 1 March 2020. None of these standards have had a material impact in these financial statements.
The comparative financial information for the year ended 29 February 2020 does not constitute statutory accounts for that financial year. This information was extracted from the statutory accounts for the year ended 29 February 2020, a copy of which has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not include a reference to any matters to which the auditor drew attention by way of emphasis of matter and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The condensed consolidated interim financial statements were approved and authorised for issue by the Board of Directors on 27 October 2020.
b) Going concern
The Directors are confident that the Group has adequate resources to continue in operational existence and will have sufficient funds to meet its liabilities as they fall due for at least 12 months from the date of approval of the condensed consolidated interim financial statements and therefore have prepared the condensed consolidated interim financial statements on a going concern basis. The factors taken into account in developing this expectation include the level of cash within the business, the Group's bank facilities, continuing sources of revenue and principal risks including the impact of coronavirus.
The Board has modelled a severe but plausible pessimistic downside scenario, including the continued impact of coronavirus. This assumes:
-- Print sales drop by 25% due to continued uncertainty in the retail sector and economic pressure;
-- Digital sales 5% lower due to economic pressure; and
-- Downside assumptions about extended debtor days to February 2022.
Under this severe but plausible downside scenario, the Group has sufficient liquidity to be able to manage these downside assumptions. This process supports the view that for the period to 28 February 2022, the Group is expected to be able to operate within the level of its current financing and meet its covenant requirements.
The Group's bank facilities consist of a GBP8 million to GBP12 million committed revolving loan facility (amount dependent on time during the year to match Bloomsbury's cash flow cycle) which expires in May 2022 and an uncommitted incremental term loan facility of up to GBP6 million. At 31 August 2020, the Group had not drawn the facility.
c) Uses of estimates and judgments
The preparation of condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets liabilities, income and expenses. Actual results may differ from these estimates. Critical judgments and areas where the use of estimates is significant are set out in the 2020 Annual Report.
3. Segmental analysis
The Group is comprised of two worldwide publishing divisions: Consumer and Non-Consumer, reflecting the core customers for our different operations. The Consumer division is further split out into two operating segments: Children's Trade and Adult Trade. Non-Consumer is split between two operating segments: Academic & Professional and Special Interest.
Each reportable segment represents a cash-generating unit for the purpose of impairment testing. We have allocated goodwill between reportable segments.
These divisions are the basis on which the Group primarily reports its segment information. Segments derive their revenue from book publishing, sale of publishing and distribution rights, management and other publishing services. The analysis by segment is shown below:
Children's Adult Consumer Academic Special Non-Consumer Unallocated Total Trade Trade & Interest Professional Six months GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ended 31 August 2020 GBP'000 GBP'000 GBP'000 ---------------- ----------- -------- --------- ------------- --------- ------------- ------------ --------- External revenue 29,767 18,836 48,603 20,083 9,601 29,684 - 78,287 Cost of sales (16,002) (9,205) (25,207) (7,014) (4,830) (11,844) - (37,051) ---------------- ----------- -------- --------- ------------- --------- ------------ --------- Gross profit 13,765 9,631 23,396 13,069 4,771 17,840 - 41,236 Marketing and distribution costs (3,824) (2,647) (6,471) (1,945) (1,426) (3,371) - (9,842) ---------------- ----------- -------- --------- ------------- --------- ------------ --------- Contribution before administrative expenses 9,941 6,984 16,925 11,124 3,345 14,469 - 31,394 Administrative expenses excluding highlighted items (8,212) (5,887) (14,099) (9,273) (3,640) (12,913) - (27,012) Share of joint venture - - - - - - (39) (39) ---------------- ----------- -------- --------- ------------- --------- ------------ --------- Operating profit/(loss) before highlighted items 1,729 1,097 2,826 1,851 (295) 1,556 (39) 4,343 Amortisation of acquired intangible assets - (9) (9) (767) (107) (874) - (883) Other highlighted items - - - - - - (118) (118) ---------------- ----------- -------- --------- ------------- --------- ------------ --------- Operating profit /(loss) 1,729 1,088 2,817 1,084 (402) 682 (157) 3,342 Finance income - - - 26 - 26 45 71 Finance costs (51) (43) (94) (98) (42) (140) (144) (378) ---------------- ----------- -------- --------- ------------- --------- ------------ --------- Profit/(loss) before taxation and highlighted items 1,678 1,054 2,732 1,779 (337) 1,442 (138) 4,036 Amortisation of acquired intangible assets - (9) (9) (767) (107) (874) - (883) Other highlighted items - - - - - - (118) (118) ---------------- ----------- -------- --------- ------------- --------- ------------ --------- Profit/(loss) before taxation 1,678 1,045 2,723 1,012 (444) 568 (256) 3,035 Taxation - - - - - - (715) (715) ---------------- ----------- -------- --------- ------------- --------- ------------ --------- Profit/(loss) for the period 1,678 1,045 2,723 1,012 (444) 568 (971) 2,320 ---------------- ----------- -------- --------- ------------- --------- ------------- ------------ --------- Children's Adult Consumer Academic Special Non-Consumer Unallocated Total Trade Trade & Interest(1) Professional(1) Six months GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ended 31 August 2019 GBP'000 GBP'000 GBP'000 ---------------- ----------- -------- --------- ---------------- ------------ ------------- ------------ --------- External revenue 25,280 16,187 41,467 19,866 10,008 29,874 - 71,341 Cost of sales (13,981) (8,913) (22,894) (6,521) (5,097) (11,618) - (34,512)
---------------- ----------- -------- --------- ---------------- ------------ ------------ --------- Gross profit 11,299 7,274 18,573 13,345 4,911 18,256 - 36,829 Marketing and distribution costs (3,665) (2,600) (6,265) (2,179) (1,335) (3,514) - (9,779) ---------------- ----------- -------- --------- ---------------- ------------ ------------ --------- Contribution before administrative expenses 7,634 4,674 12,308 11,166 3,576 14,742 - 27,050 Administrative expenses excluding highlighted items (6,753) (4,768) (11,521) (9,297) (3,548) (12,845) - (24,366) ---------------- ----------- -------- --------- ---------------- ------------ ------------ --------- Operating profit/(loss) before highlighted items 881 (94) 787 1,869 28 1,897 - 2,684 Amortisation of acquired intangible assets - (9) (9) (748) (107) (855) - (864) Other highlighted items - - - - - - (350) (350) ---------------- ----------- -------- --------- ---------------- ------------ ------------ --------- Operating profit /(loss) 881 (103) 778 1,121 (79) 1,042 (350) 1,470 Finance income - - - 33 - 33 42 75 Finance costs (89) (49) (138) (71) (33) (104) (2) (244) ---------------- ----------- -------- --------- ---------------- ------------ ------------ --------- Profit/(loss) before taxation and highlighted items 792 (143) 649 1,831 (5) 1,826 40 2,515 Amortisation of acquired intangible assets - (9) (9) (748) (107) (855) - (864) Other highlighted items - - - - - - (350) (350) ---------------- ----------- -------- --------- ---------------- ------------ ------------ --------- Profit/(loss) before taxation 792 (152) 640 1,083 (112) 971 (310) 1,301 Taxation - - - - - - (333) (333) ---------------- ----------- -------- --------- ---------------- ------------ ------------ --------- Profit/(loss) for the period 792 (152) 640 1,083 (112) 971 (643) 968 ---------------- ----------- -------- --------- ---------------- ------------ ------------- ------------ --------- Children's Adult Consumer Academic Special Non-Consumer Unallocated Total Trade Trade & Interest(1) Professional(1) Year ended 29 February 2020 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------------- ----------- --------- --------- ---------------- ------------ ------------- ------------ --------- External revenue 59,354 37,416 96,770 43,123 22,879 66,002 - 162,772 Cost of sales (30,840) (19,627) (50,467) (13,606) (10,905) (24,511) - (74,978) ------------------------------------- ----------- --------- --------- ---------------- ------------ ------------ --------- Gross profit 28,514 17,789 46,303 29,517 11,974 41,491 - 87,794 Marketing and distribution costs (8,269) (5,619) (13,888) (4,636) (2,849) (7,485) - (21,373) ------------------------------------- ----------- --------- --------- ---------------- ------------ ------------ --------- Contribution before administrative expenses 20,245 12,170 32,415 24,881 9,125 34,006 - 66,421 Administrative expenses excluding highlighted items (12,845) (10,503) (23,348) (19,975) (7,151) (27,126) - (50,474) ------------------------------------- ----------- --------- --------- ---------------- ------------ ------------ --------- Operating profit/(loss) before highlighted items 7,400 1,667 9,067 4,906 1,974 6,880 - 15,947 Amortisation of acquired intangible assets - (18) (18) (1,504) (214) (1,718) - (1,736) Other highlighted items - - - - - - (739) (739) ------------------------------------- ----------- --------- --------- ---------------- ------------ ------------ --------- Operating profit /(loss) 7,400 1,649 9,049 3,402 1,760 5,162 (739) 13,472 Finance income - - - 116 - 116 154 270 Finance costs (110) (94) (204) (201) (88) (289) (20) (513) ------------------------------------- ----------- --------- --------- ---------------- ------------ ------------ --------- Profit/(loss) before taxation and highlighted items 7,290 1,573 8,863 4,821 1,886 6,707 134 15,704 Amortisation of acquired intangible assets - (18) (18) (1,504) (214) (1,718) - (1,736) Other highlighted items - - - - - - (739) (739) ------------------------------------- ----------- --------- --------- ---------------- ------------ ------------ --------- Profit/(loss) before taxation 7,290 1,555 8,845 3,317 1,672 4,989 (605) 13,229 Taxation - - - - - - (2,728) (2,728) ------------------------------------- ----------- --------- --------- ---------------- ------------ ------------ --------- Profit/(loss) for the year 7,290 1,555 8,845 3,317 1,672 4,989 (3,333) 10,501 ------------------------------------- ----------- --------- --------- ---------------- ------------ ------------- ------------ ---------
(1) The Content Services division has been moved into the Special Interest Division; digital projects moved to the Academic & Professional division.
Children's Adult Consumer Academic Special Non-Consumer Unallocated Total Trade Trade & Professional Interest Six months GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ended 31 August 2020 GBP'000 GBP'000 GBP'000 ---------------- ----------- -------- --------- --------------- ---------- ------------- ------------ -------- Operating profit / (loss) before highlighted items 1,729 1,097 2,826 1,851 (295) 1,556 (39) 4,343 Depreciation 303 228 531 411 192 603 - 1,134 Amortisation of internally generated intangibles 228 166 394 988 137 1,125 - 1,519 ---------------- ----------- -------- --------- --------------- ---------- ------------ -------- EBITDA before highlighted items 2,260 1,491 3,751 3,250 34 3,284 (39) 6,996 ---------------- ----------- -------- --------- --------------- ---------- ------------ -------- Children's Adult Consumer Academic Special Non-Consumer Unallocated Total Trade Trade & Interest(1) Professional(1) Six months GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ended 31 August
2019 GBP'000 GBP'000 GBP'000 -------------- ----------- -------- --------- ---------------- ------------ ------------- ------------ -------- Operating profit / (loss) before highlighted items 881 (94) 787 1,869 28 1,897 - 2,684 Depreciation 387 253 640 319 148 467 - 1,107 Amortisation of internally generated intangibles 186 95 281 909 95 1,004 - 1,285 -------------- ----------- -------- --------- ---------------- ------------ ------------ -------- EBITDA before highlighted items 1,454 254 1,708 3,097 271 3,368 - 5,076 -------------- ----------- -------- --------- ---------------- ------------ ------------ -------- Children's Adult Consumer Academic Special Non-Consumer Unallocated Total Trade Trade & Interest(1) Professional(1) Year ended 29 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 February 2020 GBP'000 GBP'000 GBP'000 -------------- ----------- -------- --------- ---------------- ------------ ------------- ------------ -------- Operating profit / (loss) before highlighted items 7,400 1,667 9,067 4,906 1,974 6,880 - 15,947 Depreciation 821 515 1,336 626 315 941 - 2,277 Amortisation of internally generated intangibles 360 210 570 1,817 178 1,995 - 2,565 -------------- ----------- -------- --------- ---------------- ------------ ------------ -------- EBITDA before highlighted items 8,581 2,392 10,973 7,349 2,467 9,816 - 20,789 -------------- ----------- -------- --------- ---------------- ------------ ------------ --------
(1) The Content Services division has been moved into the Special Interest Division; digital projects moved to the Academic & Professional division.
External revenue by product type
Six months Six months Year ended ended ended 31 August 31 August 29 February 2020 2019 2020 GBP'000 GBP'000 GBP'000 -------------------- ---------- ---------- ------------ Print 57,687 56,609 129,115 Digital 17,625 11,264 24,135 Rights and services 2,975 3,468 9,522 -------------------- ---------- ---------- ------------ Total 78,287 71,341 162,772 -------------------- ---------- ---------- ------------
Rights and services revenue includes revenue from copyright and trademark licences, management contracts, advertising and publishing services.
Total assets 31 August 31 August 29 February 2020 2019(1) 2020 GBP'000 GBP'000 GBP'000 ------------------------- ---------- --------------------- ------------ Children's Trade 9,312 13,086 11,016 Adult Trade 7,469 7,782 6,747 Academic & Professional 59,109 59,210 59,128 Special Interest 13,800 14,479 13,492 Unallocated 151,859 128,287 139,357 ------------------------- ---------- --------------------- ------------ Total assets 241,549 222,844 229,740 ------------------------- ---------- --------------------- ------------
Unallocated primarily represents centrally held assets including system development, property, plant and equipment, receivables and cash.
(1) The Content Services division has been moved into the Special Interest Division; digital projects moved to the Academic & Professional division.
4. Highlighted items Six months Six months Year ended ended ended 31 August 31 August 29 February 2020 2019 2020 GBP'000 GBP'000 GBP'000 ------------------------------------- ----------- ----------- ------------- Legal and other professional fees 87 350 461 Coronavirus onerous costs - - 180 Restructuring costs 31 - 98 Other highlighted items 118 350 739 Amortisation of acquired intangible assets 883 864 1,736 ------------------------------------- ----------- ----------- ------------- Total highlighted items 1,001 1,214 2,475 ------------------------------------- ----------- ----------- -------------
Highlighted items charged to operating profit comprise significant non-cash charges and the cost of major one-off initiatives, which are highlighted in the income statement because, in the opinion of the Directors, separate disclosure is helpful in understanding the underlying performance of the business and future profitability of the business.
For the six months ended 31 August 2020 legal and other professional fees of GBP87,000 were incurred as a result of the Zed Books acquisition (six months ended 31 August 2019: GBP350,000 and year ended 29 February 2020: GBP461,000 has been incurred as a result of the Group's acquisition of rights, primarily that of Oberon Books Limited and the joint venture; Beijing CYP & Gakken Education Development Co., Ltd).
For the six months ended 31 August 2020, restructuring costs of GBP31,000 were incurred as a result of the acquisition of Oberon Books Limited and Zed Books (year ended 29 February 2020 restructuring costs of GBP98,000 relate to the acquisition of Oberon Books Limited and I.B. Tauris & Co. Limited).
For the year ended 29 February 2020, Coronavirus onerous costs of GBP180,000 are irrecoverable costs crystallised in the year associated with book fairs and conferences that were cancelled due to the coronavirus.
5. Dividends Six months Six months Year ended ended ended 31 August 31 August 29 February 2020 2019 2020 GBP'000 GBP'000 GBP'000 --------------------------------- ----------- ----------- ------------ Amounts paid in the period Prior period final dividend - 5,051 5,051 Interim dividend - - 958 --------------------------------- ----------- ----------- ------------ Total dividend payments in the period - 5,051 6,009 Amounts arising in respect of the period Interim dividend for the period 1,045 958 958 Final dividend for the year - - - --------------------------------- ----------- ----------- ------------ Total dividend for the period 1,045 958 958 --------------------------------- ----------- ----------- ------------
The proposed interim dividend of 1.28 pence per ordinary share will be paid to the equity Shareholders on 4 December 2020 to Shareholders registered at close of business on 6 November 2020.
For the year ended 29 February 2020, Bloomsbury made a bonus issue to Shareholders in lieu of, and with a value equivalent to, its proposed final cash dividend of 6.89 pence per ordinary share.
6. Earnings per share
The basic earnings per share for the six months ended 31 August 2020 is calculated using a weighted average number of Ordinary Shares in issue of 80,190,832 (31 August 2019: 77,343,137 and 29 February 2020: 77,345,922) after deducting shares held by the Employee Benefit Trust.
The diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares to take account of all dilutive potential Ordinary Shares, which are in respect of unexercised share options and the performance share plan.
6 months ended 6 months ended Year ended 31 August 31 August 29 February 2020 2019 2020 Number Number Number restated* restated* Weighted average shares in issue 80,190,832 77,343,137 77,345,922 Dilution 725,819 640,005 1,026,939 --------------------------------- --------------- --------------- ------------ Diluted weighted average shares in issue 80,916,651 77,983,142 78,372,861 --------------------------------- --------------- --------------- ------------ GBP'000 GBP'000 GBP'000 --------------------------------- --------------- --------------- ------------ Profit after tax attributable to owners of the Company 2,320 968 10,501 --------------------------------- --------------- --------------- ------------ Basic earnings per share 2.89p 1.25p 13.58p Diluted earnings per share 2.87p 1.24p 13.40p --------------------------------- --------------- --------------- ------------ Adjusted profit attributable to owners of the Company 3,339 2,071 12,720 --------------------------------- --------------- --------------- ------------ Adjusted basic earnings per share 4.16p 2.68p 16.45p Adjusted diluted earnings per share 4.13p 2.66p 16.23p --------------------------------- --------------- --------------- ------------
Adjusted profit is derived as follows:
Profit before tax 3,035 1,301 13,229 Amortisation of acquired intangible assets 883 864 1,736 Other highlighted items 118 350 739 ------------------------------------- ------ ------ ------- Adjusted profit before tax 4,036 2,515 15,704 ------------------------------------- ------ ------ ------- Tax expense 715 333 2,728 Deferred tax movements on goodwill and acquired intangible assets (21) 110 202 Tax expense on other highlighted items 3 1 54 Adjusted tax 697 444 2,984 ----------------------------------- ----- ---- ------ Adjusted profit 3,339 2,071 12,720 ----------------- ------ ------ -------
The Group includes the benefit of tax amortisation of intangible assets in the calculation of adjusted tax as this more accurately aligns the adjusted tax charge with the expected cash tax payments.
*Restatement of earnings per share due to the bonus issue of shares (note 8).
7. Trade and other receivables 31 August 31 August 29 February 2020 2019 2020 Non-current GBP'000 GBP'000 GBP'000 ------------------------------------------ ----------- ----------- ------------- Prepayments and accrued income 1,092 1,338 1,237 ------------------------------------------ ----------- ----------- ------------- Non-current trade and other receivables 1,092 1,338 1,237 ------------------------------------------ ----------- ----------- ------------- Current Gross trade receivables 56,292 54,803 54,252 Less: loss allowance (3,371) (1,682) (1,832) ------------------------------------------ ----------- ----------- ------------- Net trade receivables 52,921 53,121 52,420 Income tax recoverable 1,108 1,582 481 Other receivables 2,740 1,607 1,510 Prepayments and accrued income 4,067 4,289 5,551 Royalty advances 24,898 25,360 24,843 ------------------------------------------ ----------- ----------- ------------- Current trade and other receivables 85,734 85,959 84,805 ------------------------------------------ ----------- ----------- ------------- Total trade and other receivables 86,826 87,297 86,042 ------------------------------------------ ----------- ----------- -------------
Trade receivables principally comprise amounts receivable from the sale of books due from distributors. Most trade debtors are secured by credit insurance and in certain territories by third party distributors.
A provision is held against gross advances payable in respect of published titles advances which may not be fully earned down by anticipated future sales. As at 31 August 2020 GBP6,239,000 (31 August 2019 GBP6,389,000 and 29 February 2020 GBP5,604,000) of royalty advances relate to titles expected to publish after more than 12 months.
8. Restatement of earnings per share due to the bonus issue of shares in the period
On 28 August 2020 a bonus issue in lieu of final dividend of 2,513,674 Ordinary Shares of 1.25 pence each, were provided to Shareholders on the register on the record date of 31 July 2020. This bonus issue was made to Shareholders in lieu of, and with a value equivalent to, the final dividend Bloomsbury would have declared in the absence of coronavirus.
Six months Six months Year Year ended ended 31 August 31 August ended ended 2019 2019 29 February 29 February (restated) 2020 2020 (restated) --------------------------------- ------------ ----------- ------------- ------------- Basic earnings per share 1.25p 1.29p 13.58p 14.03p Diluted earnings per share 1.24p 1.28p 13.40p 13.84p Adjusted basic earnings per share 2.68p 2.77p 16.45p 17.00p Adjusted diluted earnings per share 2.66p 2.74p 16.23p 16.77p Weighted average number of shares used in basic earnings per share calculation 77,343,137 74,828,480 77,345,922 74,830,714 Weighted average number of shares used in diluted earnings per share calculation 77,983,142 75,468,485 78,372,861 75,857,653 9. Related parties
The Group has no related party transactions in the current or prior periods other than key management remuneration.
Responsibility Statement of the Directors in Respect of the Interim Financial Statements
Directors --------------------- ------------------------------------- Sir Richard Lambert Independent Non-Executive Chairman --------------------- ------------------------------------- Nigel Newton Chief Executive --------------------- ------------------------------------- John Warren Independent Non-Executive Director Senior Independent Director Chair of the Audit Committee --------------------- ------------------------------------- Leslie-Ann Reed Independent Non-Executive Director --------------------- ------------------------------------- Steven Hall Independent Non-Executive Director Chair of the Remuneration Committee --------------------- ------------------------------------- Penny Scott-Bayfield Group Finance Director --------------------- -------------------------------------
We confirm that to the best of our knowledge:
-- The condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.
-- The interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By order of the Board
Nigel Newton Penny Scott-Bayfield
27 October 2020
Principal risks and uncertainties
Bloomsbury has a systematic and embedded risk management process for identifying and addressing the short to long-term risks and uncertainties for its operations worldwide. The strategy implemented by the Board aims to mitigate the main risks and exploit opportunities to create sustainable returns for shareholders. A summary of the principal risks and uncertainties to the business are as follows:
-- Market: including market volatility due to the impact of the coronavirus pandemic, increased dependence on internet retailing, sales of used books and rental of text books;
-- Importance of digital publishing: BDR revenues and profit; -- Acquisitions: Risk of delivering lower than expected return on investment; -- Title acquisition: Commercial viability of titles acquired;
-- Information and technology systems: Cybersecurity and the risk of malware attack, and the risk of inadequate internal access controls or security measures;
-- Financial valuations: Judgemental valuation of assets and provisions; -- Intellectual property: Erosion of copyright and infringement of IP by third parties;
-- Reliance on key counterparties: Failure of key counterparties or breakdown in key counterparty relationships;
-- Talent management: Failure to retain key talent and create the conditions in which employees can thrive;
-- Legal and compliance: Breach of key contracts by the Company and failure to comply with applicable regulations; and
-- Reputation: Investor confidence.
Further information about the principal risks and mitigation of those risks included in the 2020 Annual Report and Accounts.
INDEPENDENT REVIEW REPORT TO BLOOMSBURY PUBLISHING PLC
Conclusion
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 August 2020 which comprises the condensed consolidated interim income statement, the condensed consolidated interim statement of comprehensive income, the condensed consolidated interim statement of financial position, the condenses consolidated interim statement of changes in equity, the condensed consolidated interim statement of cash flows and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 August 2020 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and the Disclosure Guidance and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with International Financial Reporting Standards as adopted by the EU. The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the company in accordance with the terms of our engagement to assist the company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company for our review work, for this report, or for the conclusions we have reached.
Sarah Styant
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London
E14 5GL
27 October 2020
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