Bloomsbury Publishing's profits trounce expectations

Bloomsbury Publishing beat expectations on Tuesday as it achieved annual profit growth, leading the business to deliver a 24th consecutive year of dividend growth.

The publisher achieved a profit before tax and various one off charges of £14.4m for the year ended 28 February, an increase of 9% compared to the year before, as total revenue edged up by 1% to £162.7m in a year in which the business faced tough comparatives as it was up against the 20th anniversary year of its publication of the first novel in the Harry Potter series.

Broker consensus had previously pointed to a headline profit before tax of £14.0m for the year, while net cash beat pre-close guidance by £0.6m to come in at £27.6m against forecasts of £24m.

The non-consumer division drove growth, with its revenues up by 7% to £63.4m after a 13% increase in sales from the academic & professional side of the business.

Nigel Newton, chief executive of Bloomsbury, said: "A year ago, I announced the Bigger Bloomsbury strategy; we have delivered all seven initiatives, including improving our working capital by reducing inventories by £2m and growing academic and professional digital resource revenue by 42%. These initiatives focus on our key growth drivers with targeted strategies across the group to help grow our revenues and increase our margins over the next four years."

The London-listed company proposed a final dividend of 6.75p per share, making a total dividend of 7.96p per share for the year, or an increase of 6%.

Analysts from Numis said that the stock looks like good value given its increasing growth momentum, better long term profitability and good cash generation.

Meanwhile, Fiona Orford-Williams, analyst at Edison Investment Research, said: "On the trade front, it looks as if Bloomsbury has a strong slate for 2019/20 in both adult and children’s lists. The build in cash resource means that the group is in a good position to take advantage of further deals as they become available and continue to drive the expansion ex-UK.”

Bloomsbury Publishing's shares were up 0.21% at 234.50p at 1204 BST.