Bloomsbury Publishing (BMY:211p) continues to accelerate growth of digital revenues and reposition the business from primarily being a consumer publisher to a digital business-to-business (B2B) publisher in the academic and professional information market. Around 80 per cent of the 60,000 books that Bloomsbury has in print are in the academic, professional and special interest category.
The division increased annual pre-tax profits by 85 per cent to £6.7m on a margin of 10 per cent and Bloomsbury’s Digital Resources (BDR) moved into profits for the first time, having lifted revenue by a third to £8.3m. The aim is to maintain that growth rate over the next two financial years to lift BDR revenue to £15m and, with the benefit of margin growth and operational gearing, deliver a profit contribution of £5m. In turn this reduces reliance on consumer titles which last year suffered a £1.8m decline in pre-tax profits to £8.9m, primarily due to the impact of timing and fewer front lines titles from Sarah J Mass.
Coronavirus had little impact on the annual results apart from denting sales in China at the start of 2020. However, the outbreak of the pandemic in the UK, US and Australia certainly has had an impact in the new financial year. Print books account for 79 per cent of revenue and analysts at Peel Hunt have assumed a 70 per cent decline in physical sales of books during April, May and June, perhaps too cautious a prediction given that they only declined 13 per cent during March and April, highlighting greater resilience from online sales channels. The other risk to Bloomsbury’s earnings this year is a potential delay to the autumn academic year.