REG - BloomsburyPublishing - Audited Preliminary Results
15/06/2022 07:00
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RNS Number : 8911O Bloomsbury Publishing PLC 15 June 2022
BLOOMSBURY PUBLISHING PLC
("Bloomsbury" or "the Company")
Audited Preliminary Results for the year ended 28 February 2022
Highest ever sales and profit
Bloomsbury, the leading independent publisher, today announces audited results
for the year ended 28 February 2022.
Commenting on the results, Nigel Newton, Chief Executive, said:
"Bloomsbury achieved its highest ever results with sales up 24% to £230.1
million and profits up 40% to £26.7 million. Sales were up 41% and profits up
70% from two years ago. Both the Consumer and Non-Consumer divisions gave
outstanding and resilient performances, highlighting Bloomsbury's unique
strength in combining general and academic publishing.
The question on all of our minds was: would the pandemic surge in reading
continue? We now know the answer: reading has become a reacquired habit and
continues to thrive. The pandemic made us all re-evaluate how we spend our
time and this has resulted in an increase in sales of books that enable us to
explore our hobbies and personal interests such as cooking, fitness, history
and reading novels for enlightenment and escape. Our Academic sales have
benefitted from the structural shift to online learning. Our success continues
to this date with good sales for Bloomsbury's first quarter. The surge in
reading, which seemed to be one of the only rays of light in the darkest days
of the pandemic is perhaps now being revealed as permanent, with the simple
act of reading shedding light and giving joy to millions of people.
The Consumer division revenue grew by 25%, continuing the momentum of last
year, and achieved a 25% increase in profit before tax and highlighted
items(1) to £17.8 million. The Non-Consumer division saw 23% revenue growth
and a 68% increase in profit before tax and highlighted items(1) to £9.1
million. Consumer revenue was 53% higher and Non-Consumer revenue 24% higher
than two years ago. Bloomsbury Digital Resources ("BDR") outperformed the
target set six years ago of £15 million of sales and £5 million of profit,
with sales of £18.6 million, up 50% on last year, and profit of £6.8
million, up £3.9 million on last year. Following this success, we have set
ambitious new growth targets for BDR.
Supporting our strong organic growth, we made three acquisitions during the
year of ABC-CLIO LLC, the Red Globe Press list and Head of Zeus Limited.
In recognition of our strong performance and in line with our progressive
dividend policy, the Board proposes a 24% increase in our final dividend to
9.40 pence per share.
Trading for 2022/23 has started in line with the Board's expectations.
Bloomsbury plans to invest robustly in continued organic growth and further
acquisitions based on our strong financial position and proven strategy."
Financial Highlights
2021/22 2020/21 2019/20 Growth 2021/22 vs 2020/21 Growth 2021/22 vs 2019/20
Revenue £230.1 million £185.1 million £162.8 million 24% 41%
Organic revenue(2) £212.7 million £185.1 million £162.8 million 15% 31%
Profit before taxation and highlighted items(1) £26.7 million £19.2 million £15.7 million 40% 70%
Profit before taxation £22.2 million £17.3 million £13.2 million 28% 68%
Adjusted diluted earnings per share 25.94 pence 18.68 pence 16.23 pence 39% 60%
Diluted earnings per share 20.33 pence 16.71 pence 13.40 pence 22% 52%
Net cash £41.2 million £54.5 million £31.3 million (24)% 32%
Final dividend 9.40 pence per share 7.58 pence per share Bonus issue, value equivalent to 6.89 pence per share 24% 36%
Operational Highlights
Consumer Division
● Consumer revenue growth of 25% to £148.2 million (2020/21: £118.3 million)
● Consumer profit before taxation and highlighted items(1) increased by 25% to
£17.8 million (2020/21: £14.2 million)
● Organic revenue growth was 18% and organic profit growth was 24%
● Adult Trade revenue up 26% to £55.2 million (2020/21: £43.7 million) and
profit before taxation and highlighted items(1) of £2.0 million (2020/21:
£3.9 million)
● Children's Trade revenue growth of 25% to £93.0 million (2020/21: £74.6
million) and profit before taxation and highlighted items(1) up 52% to £15.8
million (2020/21: £10.4 million)
● Sales growth of Sarah J. Maas' titles of 86%; Harry Potter sales still growing
by 5% as the 25(th) anniversary approaches
● Acquisition of Head of Zeus Ltd ("HoZ") in June 2021, providing a strong
addition to the Consumer division. HoZ contributed £9.0 million revenue and
£0.1 million profit before taxation and highlighted items(1) to Adult Trade
in the nine months since acquisition
Non-Consumer Division
● Non-Consumer revenue growth of 23% to £81.9 million (2020/21: £66.8 million)
● Non-Consumer profit before taxation and highlighted items(1) increased by 68%
to £9.1 million (2020/21: £5.4 million)
● Organic revenue growth was 10% and organic profit growth was 40%
● Academic & Professional revenue growth of 34% to £59.3 million (2020/21:
£44.3 million) and profit before taxation and highlighted items(1) up 111% to
£9.1 million (2020/21: £4.3 million)
● Bloomsbury Digital Resources ("BDR") revenue growth of 50% to £18.6 million
(2020/21: £12.4 million) and profit of £6.8 million (2020/21: £2.9 million)
● BDR performance beat the target, set six years ago, of £15 million of revenue
and £5 million of profit by the end of 2021/22
● Acquisition of ABC-CLIO, LLC ("ABC-CLIO") in December 2021 for £16.7 million,
further strengthening BDR and significantly accelerating Bloomsbury's academic
publishing in North America, growing international revenues
● Acquisition of the assets of Red Globe Press ("RGP") completed in June 2021
for £3.2 million, accelerating our digital growth and our significant
presence in humanities and social sciences academic publishing
● RGP contributed £6.2 million revenue and £1.0 million profit before taxation
and highlighted items(1) and ABC-CLIO, contributed £2.2 million revenue and
£0.6 million profit before taxation and highlighted items(1) to Academic
& Professional
Notes
( )
(1) Highlighted items comprise amortisation of acquired intangible assets and
legal and other professional costs relating to ongoing and completed
acquisitions and restructuring costs. (2020/21 also included a grant under the
US Government Paycheck Protection Program.)
(2) Organic revenue for 2021/22 is defined as total revenue of £230.1m less
revenue attributable to the acquisitions of HoZ, RGP and ABC-CLIO in the year.
Organic profit for 2021/22 is defined as total profit before taxation and
highlighted items of £26.7 million less profit attributable to the
acquisitions of HoZ, RGP and ABC-CLIO in the year.
For further information, please contact:
Bloomsbury Publishing Plc
Nigel Newton, Chief Executive nigel.newton@bloomsbury.com (mailto:nigel.newton@bloomsbury.com)
Penny Scott-Bayfield, Group Finance Director penny.scott-bayfield@bloomsbury.com
Hudson Sandler +44 (0) 20 7796 4133
Dan de Belder / Hattie Dreyfus bloomsbury@hudsonsandler.com (mailto:bloomsbury@hudsonsandler.com)
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 achieved its highest ever performance in the year ended 28 February
2022, with revenue growth of 24% £230.1 million (2020/21: £185.1 million)
and a 40% increase in profit before taxation and highlighted items to £26.7
million (2020/21: £19.2 million). Profit before taxation increased by 28% to
£22.2 million (2020/21: £17.3 million).
Growth in organic revenue was 15%, with the three strategic acquisitions,
ABC-CLIO, RGP and HoZ, contributing revenue of £17.4 million. Growth in
organic profit before taxation and highlighted items was 28%, with ABC-CLIO,
RGP and HoZ contributing £1.7 million.
The strength of demand for Bloomsbury titles and the excellent sales of our
digital products, demonstrate the strength of our long-term growth strategy,
the publishing judgement of our editors and the strength of our sales and
marketing. During the year, Bloomsbury authors have won three of the most
important prizes in the literary world - The Nobel Prize in Literature, the
Pulitzer Prize in Biography and The Women's Prize - which were won by
Abdulrazak Gurnah, Winfred Rembert and Erin I. Kelly and Susanna Clarke
respectively. We are immensely proud to publish them.
We achieved the major milestone for Bloomsbury Digital Resources ("BDR") of
significantly exceeding the target announced six years ago of £15 million of
sales and £5 million of profit by the year ending 28 February 2022. We beat
this target with sales of £18.6 million and profit of £6.8 million (2020/21:
£2.9 million). Achieving this goal of building high margin, quality
revenues, demonstrates the strength and successful execution of our digital
strategy. We saw growth due to the shift to digital learning, excellent
digital products, platforms and infrastructure, with an 18% increase in the
number of customers year-on-year. We have strengthened BDR with the
acquisitions of RGP and ABC-CLIO.
The highlighted items of £4.6 million (2020/21: £1.8 million) consist of the
amortisation of acquired intangible assets of £2.8 million (2020/21: £1.8
million), one-off legal and other professional fees relating to the three
acquisitions and restructuring costs of £1.8 million (2020/21: £1.3 million)
and, in 2020/21 only, a one-off US Government grant under the Paycheck
Protection Program of £1.3 million. The effective rate of tax for the year
was 24% (2020/21: 21%). The adjusted effective rate of tax, excluding
highlighted items, was 19% (2020/21: 20%). Diluted earnings per share,
excluding highlighted items, grew 39% to 25.94 pence (2020/21: 18.68 pence).
Including highlighted items, profit before tax was £22.2 million (2020/21:
£17.3 million) and diluted earnings per share grew 22% to 20.33 pence
(2020/21: 16.71 pence).
Strategy
Bloomsbury's long-term growth strategy is aimed at continuing our success in
building digital channels, increasing quality revenues and earnings. To
achieve this, we are focused the following long-term strategic objectives:
· Non-Consumer Publishing and BDR
o Grow Bloomsbury's portfolio in Non-Consumer publishing. Non-Consumer
publishing is characterised by higher, more predictable margins, is less
reliant on retailers and presents greater digital and global opportunities.
2021/22: delivered 23% growth in Non-Consumer revenue.
o Achieve BDR target of £15 million of sales revenue and £5 million of
profit by 2021/22.
2021/22: delivered £18.6 million revenue, up 50%, and profit of £6.8
million, up £3.9 million.
o New BDR target is to achieve further 50% organic growth and 30% margin
over the five years from 2022/23.
· Consumer
o Discover, nurture, champion and retain high-quality authors and
illustrators, while looking at new ways to leverage existing title rights.
2021/22: Bestsellers included Piranesi by Susanna Clarke, The Priory of the
Orange Tree by Samantha Shannon, Tom Kerridge's Outdoor Cooking, and The Song
of Achilles and Circe, both by Madeline Miller.
o Grow our key authors through effective publishing across all formats
alongside strategic sales and marketing.
2021/22: 86% growth in sales of Sarah J. Maas title sales, with her new title:
Crescent City: House of Sky and Breath reaching Number 1 on the New York Times
bestseller list. Winner of the 2022 IPG Bookseller Marketing Award.
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.
2021/22: 5% growth in Harry Potter title sales, 24 years after first
publication. Harry Potter and the Philosopher's Stone was the 6(th)
bestselling children's book of the year on UK Nielsen Bookscan.
· International Expansion
o Expand international revenues and reduce reliance on the UK market.
Continuing our international growth in order to take advantage of the biggest
academic market in the USA and reduce reliance on the UK market.
2021/22: increased overseas revenues to 66% of Group revenue; 78% of
Academic BDR sales are international. US revenues increased to 30% of Group
revenue. Acquisition of ABC-CLIO significantly accelerates Bloomsbury's
academic publishing in North America, further growing international revenues.
· Employee Experience and Engagement; Diversity, Equity and Inclusion
o Our success is driven by the expertise, passion and commitment of our
employees, highlighting the importance of attracting, supporting and engaging
our colleagues. We value diversity of thought, perspectives and experience in
shaping our culture and strategy, driving our long-term success and informing
the ways in which we fulfil our social purpose.
o Be an attractive employer for individuals seeking a career in publishing,
regardless of background or identity, adding cultural value to our business
operations and performance.
o Focus on initiatives to create an environment that promotes diversity,
nurtures talent, stimulates creativity and collaboration, supports well-being
and is inclusive and respectful of difference.
o Implement Bloomsbury's Diversity, Equity and Inclusion Action Plan
(DEIAP).
2021/22:
o Developed our employee bonus scheme, ensuring the rewards of our financial
success are fairly shared across all of our employees.
o Increased focused resource with the appointment of our Diversity and
Inclusion and Training Administration Manager, with training pilots across the
Company and a Leadership and Management Diploma for UK staff.
o Launched and begun implementation of our DEIAP, focusing on recruitment,
retention, training and development, education, engagement and inclusion,
publishing and communication.
o Became an official partner of the 'Lit in Colour' initiative with The
Runnymede Trust and Penguin Random House.
o Winner of two major industry diversity awards, the Inclusivity in
Publishing Award at the 2022 London Book Fair International Excellence Awards
and Winner of the Diversity Award at the 2022 IPG Awards.
· Sustainability
o Maximise our use of sustainable resources while seeking to reduce carbon
emissions in line with our science-based targets. We recognise our
responsibility to conserve the Earth's resources and we are committed to
monitoring and improving the environmental impact of our operations.
2021/22:
o Set science-based targets, validated by the Science Based Targets
Initiative (SBTi), to reduce carbon emissions in line with the goals of the
Paris Agreement.
o Committed to a 46% reduction in our Scope 1 and 2 emissions by 2030; this
reduction is aligned with pursuing efforts to limit global warming to 1.5(o)
C. We have achieved a 40% reduction since 2019/20.
o Our Scope 3 target is a 20% reduction in emissions by 2035. This reduction
is in line keeping global temperature increase below 2(o) C.
o Completed qualitative analysis of climate-related risks and opportunities
for our business and operations and progressed adoption of the Task Force on
Climate-Related Financial Disclosures (TCFD).
Consumer Division
The Consumer division consists of Adult and Children's trade publishing. The
Consumer division generated revenue growth of 25% to £148.2 million (2020/21:
£118.3 million). Organic revenue growth was 18%. Profit before taxation and
highlighted items increased by 25% to £17.8 million (2020/21: £14.2
million). Profit before taxation increased to £17.5 million (2020/21: £14.2
million). The excellent performance was from both the Adult and Children's
divisions, across front and backlist titles, and includes £9.0 million
revenue and £0.1 million profit before taxation and highlighted items from
HoZ, for the nine months since June 2021.
Adult Trade
The Adult division achieved a 26% increase in revenue to £55.2 million
(2020/21: £43.7 million) and profit before taxation and highlighted items of
£2.0 million (2020/21: £3.9 million). Profit before taxation was £1.7
million (2020/21: £3.8 million). This was driven by bestsellers from our
front and backlist, and includes the revenue and profit generated by the
acquisition of HoZ.
UK bestsellers in the year included Piranesi by Susanna Clarke, Tom Kerridge's
Outdoor Cooking, Animal by Lisa Taddeo, The Song of Achilles and Circe, by
Madeline Miller, Gino's Italian Family Adventure by Gino D'Acampo, Humankind
by Rutger Bregman and The Wolf Den by Elodie Harper. US bestsellers in the
year included The Priory of the Orange Tree by Samantha Shannon. This Is How
They Tell Me The World Ends by Nicole Perlroth won the FT & McKinsey
Business Book of the Year.
We are proud that Bloomsbury authors have won three of the most important
prizes in the literary world - The Nobel Prize for Literature, the Pulitzer
Prize in Biography and The Women's Prize - which were won by Abdulrazak
Gurnah, Winfred Rembert and Erin I. Kelly and Susanna Clarke respectively. We
congratulate them all.
Children's Trade
Children's sales saw growth of 25% to £93.0 million (2020/21: £74.6
million). Profit before taxation and highlighted items increased by 52% to
£15.8 million (2020/21: £10.4 million). Profit before taxation was £15.8
million (2020/21: £10.4 million). High demand continued the momentum from
last year, with excellent sales of Sarah J. Maas' new and backlist titles.
Sales of the Harry Potter titles increased by 5%. Harry Potter and the
Philosopher's Stone was the 6(th) bestselling children's book of the year on
UK Nielsen Bookscan, twenty-four years after it first began, showing the
enduring appeal of this classic series.
Sarah J. Maas' sales grew by 86% compared to last year, with Crescent City:
House of Sky and Breath, published in February 2022, reaching number one on
the New York Times and Sunday Times bestseller lists, and strong backlist
sales.
Sarah J. Maas is the bestselling author of the Crescent City, Court of Thorns
and Roses and Throne of Glass series, with all of her 15 titles published by
Bloomsbury, since her first novel, Throne of Glass, in 2012. Hulu is
developing a television adaptation of the Court of Thorns and Roses series for
its streaming service.
Non-Consumer Division
The Non-Consumer division consists of Academic & Professional, including
Bloomsbury Digital Resources, and Special Interest. Revenues in the division
increased by 23% to £81.9 million (2020/21: £66.8 million). Profit before
taxation and highlighted items for the Non-Consumer division increased by 68%
to £9.1 million (2020/21: £5.4 million). Profit before taxation increased by
81% to £6.6 million (2020/21: £3.6 million). Organic revenue growth was 10%
and organic profit growth was 55%, with RGP and ABC-CLIO contributing £8.4
million revenue and £1.6 million profit before taxation and highlighted
items.
Academic & Professional revenues increased by 34% to £59.3 million
(2020/21: £44.3 million) and profit before taxation and highlighted items
increased by 111% to £9.1 million (2020/21: £4.3 million). Profit before
taxation was £6.7 million (2020/21: £2.7 million). Strong demand for our
digital products delivered 50% growth in BDR revenue and print sales recovered
well from last year, up 29%.
We are focused on achieving BDR growth by accelerating our most successful
products, including Drama Online, leveraging platforms and content from
acquisitions, building partnerships and launching new products. We achieved an
18% increase in the number of customers in the year, and maintained our
existing customer retention rate at over 90%. We have further strengthened our
portfolio of products with the acquisition of ABC-CLIO's 32 digital databases
and RGP's three digital platforms.
In recognition of these achievements, we were voted Academic Publisher of the
Year at the 2021 British Book Awards and Education Publisher of the Year at
the 2022 IPG Awards.
Special Interest revenue grew by 1% to £22.6 million (2020/21: £22.5
million), and broke even before taxation and highlighted items (2020/21: £1.1
million profit), with resilient demand for wildlife titles, Wisden and Osprey
Games during the year.
Acquisitions
In June 2021, we achieved another key step in the delivery of our growth
strategy for our Non-Consumer business, with the completion of the acquisition
of certain assets of RGP, the academic imprint, from Springer Nature Group as
previously announced. These RGP titles are a good strategic fit, strengthen
Bloomsbury's existing academic publishing, and establish new areas of academic
publishing in Business and Management, Study Skills and Psychology. RGP's
digital product Cite them Right has been migrated to BDR's own platform with
further digital product migrations to follow. RGP's relevant content will also
be added to Bloomsbury Collections. The consideration was £3.2 million, of
which £1.8 million was satisfied in cash on completion in June 2021 and £1.3
million was satisfied in cash post completion during the year, with an
expected further £0.1 million to be satisfied post completion and post year
end subject to assignment of certain contracts. The integration of RGP is
going well and contributing as projected.
In June 2021, we completed the acquisition of the issued share capital of HoZ,
the independent trade publisher, as previously announced. This acquisition
provides a strong addition to Bloomsbury's Consumer division and support our
long-term Consumer growth strategy, with new high-quality authors and
effective publishing across all formats, including ebook and audio. The
consideration, net of pre-existing loans, was £7.0 million, of which £5.5
million was satisfied in cash at completion, with £1.1 million paid in cash
post completion, and £0.4 million of deferred consideration payable in cash
subject to achievement of Netflix release targets. HoZ won Publisher of the
Year at the CWA Daggers Awards and The Wolf Den by Elodie Harper was a number
one Times bestseller. Popular writers from HoZ include Dan Jones, Cixin Liu,
Nadine Dorries, Victoria Hislop and Lesley Thomson. Cixin Liu's bestselling
science trilogy, The Three-Body Problem, is currently being filmed for Netflix
by David Benioff and D.B. Weiss, creators of HBO's Game of Thrones. HoZ is
contributing as planned.
In December 2021, we completed the purchase of the members' interests of
ABC-CLIO, as previously announced. ABC-CLIO is an established academic
publisher of reference, non-fiction, online curriculum and professional
development materials in both print and digital formats for schools, academic
libraries and public libraries, primarily in the USA. Founded in 1955,
ABC-CLIO is based in Santa Barbara, California. ABC-CLIO has four imprints and
32 databases that provide curriculum-aligned content and lesson plans,
professional development support and student activities to US schools and
academic institutions. It has more than 23,000 titles in its portfolio. The
consideration was £16.7 million, of which £16.6 million was satisfied in
cash on completion and up to £0.1 million will be satisfied in cash post
completion.
Bloomsbury has a successful track record in strategic acquisitions, with 18
completed since 2008. We are actively targeting further acquisition
opportunities in line with our long-term growth strategy.
Cash and Financing
Bloomsbury's cash generation was strong with cash at the year end of £41.2
million (2021: £54.5 million) and cash conversion of 194% (2020/21: 142%).
During the year we invested £26.6 million in cash consideration net of cash
acquired for the acquisitions of ABC-CLIO (£16.3 million), HoZ (£6.6
million) and RGP (£3.1 million) and £1.0 million of capital expenditure in
BDR. We also paid £7.9 million for the 2020/21 special dividend.
The Group has an unsecured revolving credit facility with Lloyds Bank Plc. The
facility comprises a committed revolving loan facility of £10.0 million and
an uncommitted incremental term loan facility of up to £6.0 million. At 28
February 2022, the Group had no draw down (2021: £nil) of this facility.
Dividend
The Group has a progressive dividend policy aiming to keep dividend earnings
cover in excess of two times, supported by strong cash cover. The Board is
recommending a final dividend of 9.40 pence per share, totalling £7.7
million. Together with the interim dividend, this makes a total dividend for
the year ended 28 February 2022 of 10.74 pence per share, a 21% increase on
the 8.86 pence value of the dividend for the year ended 28 February 2021.
Subject to Shareholder approval at our AGM on 20 July 2022, the final dividend
will be paid on 26 August 2022 to Shareholders on the register on the record
date of 29 July 2022.
Including the proposed 2021/22 final dividend, over the past ten years, the
dividend has increased at a compound annual growth rate of 8%.
Board Changes
As announced in March 2022, John Bason joined the Board as a Non-Executive
Director on 1 April 2022. John also became a member of the Remuneration,
Nomination and Audit Committees. We welcome John to the Board.
Steven Hall will step down from the Board at the conclusion of Bloomsbury's
2022 AGM taking place on 20 July 2022. Steven joined the Board in 2017 and is
the Chair of the Remuneration Committee. It is intended that Steven will be
succeeded by John Bason as Chair of the Remuneration Committee.
Sir Richard Lambert, Chairman of Bloomsbury, said: "Steve Hall joined the
Bloomsbury Board five years ago, and his deep knowledge of the world of
academic and professional publishing has been an invaluable support to the
Company as it has built its presence in this sector. He has been a rigorous
Chair of the Remuneration Committee, and a lively contributor to Board
discussion. We owe him a big vote of thanks."
Future Publishing
Our strong Consumer publishing list for 2022/23 includes the Illustrated
edition of the fifth Harry Potter title, Harry Potter and the Order of the
Phoenix, Paul Hollywood's Bake, A Visible Man by Edward Enninful, This Wicked
Fate by Kalynn Bayron, The House of Fortune by Jessie Burton, A Life in Light
by Mary Pipher and Essex Dogs by Dan Jones. The next new Sarah J. Maas novel,
the third in the Crescent City series, will be published in 2023/24.
2022 is the 25(th) anniversary of the original publication of the first Harry
Potter, with a special anniversary edition publishing in June 2022 and a
series of exciting marketing activities to celebrate this milestone.
Our BDR strategic initiatives include bringing ABC-CLIO's 32 databases into
Bloomsbury Digital Resources, enabling Bloomsbury to scale ABC-CLIO's digital
offering globally. In addition, we will expand Bloomsbury Collections to
include the RGP titles and migrate RGP's digital products to BDR's own
platform.
Outlook
Trading for 2022/23 has started in line with the Board's expectations.
Bloomsbury aims to deliver continued success, given the strength and
resilience of our proven strategy, combined with our strong financial
position, which enables us to invest in continued organic growth and further
acquisition opportunities. Digital sales continue to materially increase and
are a growing proportion of both revenue and profits.
Audited Consolidated Income Statement
FOR THE YEAR ENDED 28 FEBRUARY 2022
Year ended Year ended
28 February 28 February
2022 2021
Notes £'000 £'000
Revenue 2 230,110 185,136
Cost of sales (107,948) (85,533)
Gross profit 122,162 99,603
Marketing and distribution costs (29,808) (23,393)
Administrative expenses (69,675) (58,267)
Share of result of joint venture (117) (110)
Operating profit before highlighted items 27,112 19,637
Highlighted items 3 (4,550) (1,804)
Operating profit 22,562 17,833
Finance income 105 120
Finance costs (486) (604)
Profit before taxation and highlighted items 26,731 19,153
Highlighted items 3 (4,550) (1,804)
Profit before taxation 22,181 17,349
Taxation 4 (5,291) (3,652)
Profit for the year attributable to owners of the Company 16,890 13,697
Earnings per share attributable to owners of the Company
Basic earnings per share 6 20.72p 16.94p
Diluted earnings per share 6 20.33p 16.71p
Audited Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 28 FEBRUARY 2022
Year ended Year ended
28 February 28 February
2022 2021
£'000 £'000
Profit for the year 16,890 13,697
Other comprehensive income
Items that may be reclassified to the income statement:
Exchange differences on translating foreign operations 1,497 (2,877)
Items that may not be reclassified to the income statement:
Remeasurements on the defined benefit pension scheme (10) 89
Other comprehensive income for the year net of tax 1,487 (2,788)
Total comprehensive income for the year attributable to the owners of the 18,377 10,909
Company
Items in the statement above are disclosed net of tax.
Audited Consolidated Statement of Financial Position
AS AT 28 FEBRUARY
2022
28 February 28 February
2022 2021
Notes £'000 £'000
Assets
Goodwill 47,910 44,688
Other intangible assets 40,323 21,337
Investments 45 162
Property, plant and equipment 2,319 1,846
Right-of-use assets 10,628 11,433
Deferred tax assets 7,168 3,904
Trade and other receivables 9 923 1,005
Total non-current assets 109,316 84,375
Inventories 33,816 26,774
Trade and other receivables 9 104,879 93,542
Cash and cash equivalents 41,226 54,466
Total current assets 179,921 174,782
Total assets 289,237 259,157
Liabilities
Retirement benefit obligations - 14
Deferred tax liabilities 3,696 2,386
Lease liabilities 9,961 11,135
Provisions 297 232
Total non-current liabilities 13,954 13,767
Trade and other liabilities 103,028 74,341
Lease liabilities 2,265 1,808
Current tax liabilities 433 456
Provisions 588 536
Total current liabilities 106,314 77,141
Total liabilities 120,268 90,908
Net assets 168,969 168,249
Equity
Share capital 1,020 1,020
Share premium 47,319 47,319
Translation reserve 8,127 6,630
Other reserves 8,765 9,623
Retained earnings 103,738 103,657
Total equity attributable to owners of the Company 168,969 168,249
Audited Consolidated Statement of Changes in Equity
AS AT 28 FEBRUARY 2022
Share capital £'000 Share premium £'000 Translation reserve Merger reserve £'000 Capital redemption reserve Share-based payment reserve £'000 Own shares held by EBT £'000 Retained Total equity £'000
£'000 £'000 earnings £'000
At 29 February 2020 942 39,388 9,507 1,803 22 6,724 (771) 92,058 149,673
Profit for the year - - - - - - - 13,697 13,697
Other comprehensive income
Exchange differences on translating foreign operations - - (2,877) - - - - - (2,877)
Remeasurements on the defined benefit pension scheme - - - - - - - 89 89
Total comprehensive income for the year - - (2,877) - - - - 13,786 10,909
Transactions with owners
Issue of share capital 47 7,931 - - - - - - 7,978
Bonus issue of share capital 31 - - - - - - (31) -
Dividends to equity holders of the Company - - - - - - - (1,045) (1,045)
Purchase of shares by the Employee Benefit Trust
- - - - - - (674) - (674)
Share options exercised - - - - - - 1,298 (1,114) 184
Deferred tax on share-based payment transactions - - - - - - - 3 3
Share-based payment transactions - - - - - 1,221 - - 1,221
Total transactions with owners of the Company 78 7,931 - - - 1,221 624 (2,187) 7,667
At 28 February 2021 1,020 47,319 6,630 1,803 22 7,945 (147) 103,657 168,249
Profit for the year - - - - - - - 16,890 16,890
Other comprehensive income
Exchange differences on translating foreign operations - - 1,497 - - - - - 1,497
Remeasurements on the defined benefit pension scheme - - - - - - - (10) (10)
Total comprehensive income for the year - - 1,497 - - - - 16,880 18,377
Transactions with owners
Dividends to equity holders of the Company - - - - - - - (15,157) (15,157)
Purchase of shares by the Employee Benefit Trust
- - - - - - (4,489) - (4,489)
Share options exercised - - - - - - 2,084 (2,050) 34
Deferred tax on share-based payment transactions - - - - - - - 408 408
Share-based payment transactions - - - - - 1,547 - - 1,547
Total transactions with owners of the Company - - - - - 1,547 (2,405) (16,799) (17,657)
At 28 February 2022 1,020 47,319 8,127 1,803 22 9,492 (2,552) 103,738 168,969
Audited Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 28 FEBRUARY 2022
Year ended Year ended
28 February 28 February
2022 2021
£'000 £'000
Cash flows from operating activities
Profit for the year 16,890 13,697
Adjustments for:
Depreciation of property, plant and equipment 512 473
Depreciation of right-of-use assets 1,889 1,806
Amortisation of intangible assets 7,505 5,485
Impairment of investments - 300
Loss on disposal on intangible assets 65 -
Finance income (105) (120)
Finance costs 486 604
Share of loss of joint venture 117 110
Share-based payment charges 2,054 1,416
Tax expense 5,291 3,652
34,704 27,423
Increase in inventories (2,745) (357)
Decrease/(increase) in trade and other receivables 1,205 (11,281)
Increase in trade and other liabilities 14,572 13,789
Cash generated from operating activities 47,736 29,574
Income taxes paid (7,927) (4,406)
Net cash generated from operating activities 39,809 25,168
Cash flows from investing activities
Purchase of property, plant and equipment (644) (422)
Purchase of intangible assets (3,693) (3,804)
Purchase of business, net of cash acquired (22,913) -
Purchase of rights to assets (3,650) (1,547)
Purchase of share in a joint venture - (56)
Interest received
92 110
Net cash used in investing activities (30,808) (5,719)
Cash flows from financing activities
Equity dividends paid (15,157) (1,045)
Purchase of shares by the Employee Benefit Trust (4,489) (674)
Proceeds from exercise of share options 34 184
Proceeds from share issue - 7,978
Repayment of borrowing (1,097) -
Repayment of lease liabilities (1,862) (1,451)
Lease liabilities interest paid (419) (442)
Other interest paid (55) (149)
Net cash (used in)/generated from financing activities (23,045) 4,401
Net (decrease)/increase in cash and cash equivalents (14,044) 23,850
Cash and cash equivalents at beginning of year 54,466 31,345
Exchange gain/(loss) on cash and cash equivalents 804 (729)
Cash and cash equivalents at end of year 41,226 54,466
NOTES
1. Accounting policies
a) Basis of Preparation
The financial information set out above does not constitute the company's
statutory accounts for the years ended 28 February 2022 or 28 February 2021
but is derived from those accounts. Statutory accounts for 2021 have been
delivered to the registrar of companies, and those for 2022 will be delivered
in due course. The auditor has reported on those accounts; their reports were
(i) unqualified, (ii) did not include a reference to any matters to which the
auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The Group financial statements were prepared in accordance with UK-adopted
international accounting standards ("UK-adopted IFRS") and the requirements of
the Companies Act 2006. Except as described below, the accounting policies
applied in the year ended 28 February 2022 are consistent with those applied
in the financial statements for year ended 28 February 2021 with the exception
of a number of new accounting standards and amendments which have not had a
material impact on the Group's results.
b) Going concern
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence at least 12 months from the
date of this preliminary announcement, being the period of the detailed going
concern assessment reviewed by the Board, and therefore continue to adopt the
going concern basis of accounting in preparing the condensed consolidated
financial statements.
The Board has modelled a severe but plausible downside scenario. This assumes:
· Print revenues are reduced by 20% during 2022/2023, with recovery
during 2023/2024;
· Digital revenues are reduced by 20% during 2022/2023, with recovery
during 2023/2024;
· Print costs are increased by 15% from 2022/2023 and staff costs are
increased by 5% from 2023/2024;
· Downside assumptions about extended debtor days during 2022/2023,
with recovery during 2023/2024;
· Cash preservation measures implemented and variable costs reduced.
At 28 February 2022, the Group had available liquidity of £51.2m, comprising
central cash balances and its undrawn £10.0m Revolving Credit Facility (RCF).
The RCF agreement is to October 2024. Under the severe but plausible downside
scenario, the Group would maintain sufficient liquidity headroom even before
modelling the mitigating effect of actions that management would take in the
event that these downside risks were to crystallise.
The Group has an unsecured revolving credit facility with Lloyds Bank Plc. At
28 February 2022, the Group had £nil draw down (2021: £nil) of this facility
with £10.0 million of undrawn borrowing facilities (2021: £8.0 million)
available.
The facility comprises a committed revolving credit facility of £10 million,
and an uncommitted incremental term loan facility of up to £6 million. The
facilities are subject to two covenants, being a maximum net debt to EBITDA
ratio of 2.5x and a minimum interest cover covenant of 4x.
2. Revenue and 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 split into two operating segments: Children's Trade and
Adult Trade, and Non-Consumer is split into 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 Trade Adult Trade Consumer Academic & Professional Special Interest Non-Consumer Unallocated Total
Year ended 28 February 2022 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
External revenue 93,039 55,157 148,196 59,328 22,586 81,914 - 230,110
Cost of sales (46,759) (29,106) (75,865) (20,945) (11,138) (32,083) - (107,948)
Gross profit 46,280 26,051 72,331 38,383 11,448 49,831 - 122,162
Marketing and distribution costs (12,812) (8,271) (21,083) (5,335) (3,390) (8,725) - (29,808)
Contribution before administrative expenses 33,468 17,780 51,248 33,048 8,058 41,106 - 92,354
Administrative expenses excluding highlighted items (17,506) (15,732) (33,238) (23,907) (7,980) (31,887) - (65,125)
Share of result of joint venture - - - - - - (117) (117)
Operating profit/(loss) before highlighted items/segment results 15,962 2,048 18,010 9,141 78 9,219 (117) 27,112
Amortisation of acquired intangible assets - (272) (272) (2,349) (214) (2,563) - (2,835)
Other highlighted items - - - - - - (1,715) (1,715)
Operating profit/(loss) 15,962 1,776 17,738 6,792 (136) 6,656 (1,832) 22,562
Finance income - - - 62 - 62 43 105
Finance costs (162) (94) (256) (115) (48) (163) (67) (486)
Profit/(loss) before taxation and highlighted items 15,800 1,954 17,754 9,088 30 9,118 (141) 26,731
Amortisation of acquired intangible assets - (272) (272) (2,349) (214) (2,563) - (2,835)
Other highlighted items - - - - - - (1,715) (1,715)
Profit/(loss) before taxation 15,800 1,682 17,482 6,739 (184) 6,555 (1,856) 22,181
Taxation - - - - - - (5,291) (5,291)
Profit/(loss) for the year 15,800 1,682 17,482 6,739 (184) 6,555 (7,147) 16,890
Operating profit/(loss) before highlighted items/segment results 15,962 2,048 18,010 9,141 78 9,219 (117) 27,112
Depreciation 914 632 1,546 604 251 855 - 2,401
Amortisation of internally generated intangibles 455 508 963 3,405 302 3,707 - 4,670
EBITDA before highlighted items 17,331 3,188 20,519 13,150 631 13,781 (117) 34,183
Children's Trade Adult Trade Consumer Academic & Professional Special Interest Non-Consumer Unallocated Total
Year ended 28 February 2021 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
External revenue 74,599 43,761 118,360 44,307 22,469 66,776 - 185,136
Cost of sales (37,128) (20,812) (57,940) (16,767) (10,826) (27,593) - (85,533)
Gross profit 37,471 22,949 60,420 27,540 11,643 39,183 - 99,603
Marketing and distribution costs (9,386) (6,278) (15,664) (4,678) (3,051) (7,729) - (23,393)
Contribution before administrative expenses 28,085 16,671 44,756 22,862 8,592 31,454 - 76,210
Administrative expenses excluding highlighted items (17,543) (12,706) (30,249) (18,494) (7,420) (25,914) (300) (56,463)
Share of result of joint venture - - - - - - (110) (110)
Operating profit/(loss) before highlighted items/ segment results 10,542 3,965 14,507 4,368 1,172 5,540 (410) 19,637
Amortisation of acquired intangible assets - (17) (17) (1,578) (214) (1,792) - (1,809)
Other highlighted items - - - - - - 5 5
Operating profit/(loss) 10,542 3,948 14,490 2,790 958 3,748 (405) 17,833
Finance income - - - 51 - 51 69 120
Finance costs (161) (105) (266) (117) (59) (176) (162) (604)
Profit/(loss) before taxation and highlighted items 10,381 3,860 14,241 4,302 1,113 5,415 (503) 19,153
Amortisation of acquired intangible assets - (17) (17) (1,578) (214) (1,792) - (1,809)
Other highlighted items - - - - - - 5 5
Profit/(loss) before taxation 10,381 3,843 14,224 2,724 899 3,623 (498) 17,349
Taxation - - - - - - (3,652) (3,652)
Profit/(loss) for the year 10,381 3,843 14,224 2,724 899 3,623 (4,150) 13,697
Operating profit/(loss) before highlighted items/ segment results 10,542 3,965 14,507 4,368 1,172 5,540 (410) 19,637
Depreciation 912 528 1,440 556 283 839 - 2,279
Amortisation of internally generated intangibles 446 383 829 2,586 261 2,847 - 3,676
EBITDA before highlighted items 11,900 4,876 16,776 7,510 1,716 9,226 (410) 25,592
External revenue by source
United Kingdom North America Australia India Total
£'000 £'000 £'000 £'000 £'000
Year ended 28 February 2022 143,192 69,651 13,133 4,134 230,110
Year ended 28 February 2021 117,429 53,872 11,084 2,751 185,136
During the year sales to one customer exceeded 10% of Group revenue (2021: one
customer). The value of these sales was £67,811,000 (2021: £68,597,000).
External revenue by product type
Year ended 28 February 2022 Children's Trade Adult Trade £'000 Consumer £'000 Academic & Professional Special Interest £'000 Non-Consumer £'000 Total
£'000 £'000 £'000
Print 79,053 42,702 121,755 29,996 18,632 48,628 170,383
Digital 10,511 10,511 21,022 27,150 2,354 29,504 50,526
Rights and Services(1) 3,475 1,944 5,419 2,182 1,600 3,782 9,201
Total 93,039 55,157 148,196 59,328 22,586 81,914 230,110
Year ended 28 February 2021 Children's Trade Adult Trade £'000 Consumer £'000 Academic & Professional Special Interest £'000 Non-Consumer £'000 Total
£'000 £'000 £'000
Print 63,708 34,644 98,352 23,267 18,200 41,467 139,819
Digital 7,636 8,298 15,934 19,015 2,730 21,745 37,679
Rights and Services(1) 3,255 819 4,074 2,025 1,539 3,564 7,638
Total 74,599 43,761 118,360 44,307 22,469 66,776 185,136
(1) Rights and Services revenue includes revenue from copyright and trademark
licences, management contracts, advertising and publishing services.
Total assets
28 February 28 February
2022 2021
£'000 £'000
Children's Trade 13,633 10,361
Adult Trade 13,513 7,495
Academic & Professional 78,096 58,527
Special Interest 13,170 12,773
Unallocated 170,825 170,001
Total assets 289,237 259,157
Unallocated primarily represents centrally held assets including system
development, property plant and equipment, right-of-use assets, receivables
and cash.
Analysis of non-current assets (excluding deferred tax assets) by geographic
location
28 February 28 February
2022 2021
£'000 £'000
United Kingdom (country of domicile) 79,708 73,711
North America 22,196 6,633
Other 244 127
Total 102,148 80,471
3. Highlighted items
Year ended Year ended
28 February 28 February
2022 2021
£'000 £'000
Legal and other professional fees 1,317 203
Integration and restructuring costs 398 1,076
Paycheck Protection Program grant - (1,284)
Other highlighted items 1,715 (5)
Amortisation of acquired intangible 2,835 1,809
assets
Total highlighted items 4,550 1,804
Highlighted items charged to operating profit comprise significant non-cash
charges and 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 and future profitability
of the business.
All highlighted items are included in administrative expenses in the income
statement.
For the year ended 28 February 2022, legal and other professional fees of
£1,317,000 were incurred as a result of the Group's acquisitions, including
ABC-CLIO, LLC, Head of Zeus Limited and certain assets of Red Globe Press.
Integration and restructuring costs primarily relate to the integration of the
above acquisitions including restructuring and other restructuring in both
divisions.
For the year ended 28 February 2021, legal and other professional fees of
£203,000 were incurred as a result of the Group's ongoing and completed
acquisitions, including certain assets of Red Globe Press and Zed Books
Limited. Restructuring costs primarily relate to restructuring in both
divisions. The Paycheck Protection Program grant was received from the US
Government's Small Business Administration.
4. Taxation
Factors affecting tax charge for the year
The tax on the Group's profit before tax differs from the standard rate of
corporation tax in the United Kingdom of 19.00% (2021: 19.00%). The reasons
for this are explained below:
Year ended Year ended
28 February 2022 28 February 2021
£'000 % £'000 %
Profit before taxation 22,181 100.0 17,349 100.0
Profit on ordinary activities multiplied by the standard rate of corporation 4,214 19.0 3,296 19.0
tax in the UK of 19.00% (2021: 19.00%)
Effects of:
Non-deductible revenue expenditure 16 0.1 80 0.5
Non-taxable income (383) (1.7) (131) (0.8)
Movement in unrecognised temporary differences - - (52) (0.3)
Different rates of tax in foreign jurisdictions 946 4.3 444 2.6
Tax losses (212) (1.0) 217 1.2
Movement in deferred tax rate 144 0.7 132 0.8
Adjustment to tax charge in respect of prior years
Current tax (173) (0.8) 289 1.7
Deferred tax 512 2.3 (391) (2.3)
Tax charge for the year before disallowable costs on highlighted items 5,064 22.9 3,884 22.4
Highlighted items:
Disallowable costs 227 1.0 38 0.2
Disallowable credits - - (270) (1.6)
Tax charge for the year 5,291 23.9 3,652 21.0
Different rates of tax in foreign jurisdictions is where we are paying tax at
higher rates in the US and Australia as well as paying state taxes in the US.
Tax losses relate to the recognition of previously unrecognised tax losses or
losses in the year that have not been recognised as deferred tax assets.
Adjustments to prior periods primarily arise where an outcome is obtained on
certain tax matters which differs from expectations held when the related
provision was made. Where the outcome is more favourable than the provision
made, the difference is released, lowering the current year tax charge. Where
the outcome is less favourable than our provision, an additional charge to
current year tax will occur.
For the year ended 28 February 2021 the disallowable credits relate to the US
Government Paycheck Protection Program grant.
We are not aware of any significant unprovided exposures that are considered
likely to materialise.
5. Dividends
Year ended Year ended
28 February 28 February
2022 2021
£'000 £'000
Amounts paid in the year
Prior period 7.58p final dividend per share (2021: -p) 6,141 -
Prior period 9.78p special dividend per share for the year (2021: -p) 7,923 -
Interim 1.34p dividend per share (2021: 1.28p) 1,093 1,045
Total dividend payments in the year 15,157 1,045
Amounts arising in respect of the year
Interim 1.34p dividend per share for the year (2021: 1.28p) 1,093 1,045
Proposed 9.40p final dividend per share for the year (2021: 7.58p) 7,671 6,182
Proposed -p special dividend per share for the year (2021: 9.78p) - 7,976
Total dividend 10.74p per share for the year (2021: 18.64p) 8,764 15,203
The Directors are recommending a final dividend of 9.40 pence per share,
which, subject to Shareholder approval at the Annual General Meeting, will be
paid on 26 August 2022 to Shareholders on the register at close of business on
29 July 2022.
For the year ended 29 February 2020, Bloomsbury made a bonus issue to
Shareholders in lieu of, and with a value equivalent to, it's proposed final
cash dividend of 6.89 pence per ordinary share.
6. Earnings per share
The basic earnings per share for the year ended 28 February 2022 is calculated
using a weighted average number of Ordinary shares in issue of 81,532,620
(2021: 80,867,938) 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.
Year ended Year ended
28 February 28 February
2022 2021
Number Number
Weighted average shares in issue 81,532,620 80,867,938
Dilution 1,530,573 1,082,577
Diluted weighted average shares in issue 83,063,193 81,950,515
£'000 £'000
Profit after tax attributable to owners of the Company 16,890 13,697
Basic earnings per share 20.72p 16.94p
Diluted earnings per share 20.33p 16.71p
£'000 £'000
Adjusted profit attributable to owners of the Company 21,548 15,310
Adjusted basic earnings per share 26.43p 18.93p
Adjusted diluted earnings per share 25.94p 18.68p
Adjusted profit is derived as follows:
Year ended Year ended
28 February 28 February
2022 2021
£'000 £'000
Profit before taxation 22,181 17,349
Amortisation of acquired intangible assets 2,835 1,809
Other highlighted items 1,715 (5)
Adjusted profit before tax 26,731 19,153
Tax expense 5,291 3,652
Deferred tax movements on goodwill and acquired intangible assets (207) (41)
Tax expense on other highlighted items 99 232
Adjusted tax 5,183 3,843
Adjusted earnings 21,548 15,310
( )
( )
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.
7. Business combinations
Head of Zeus Limited
On 2 June 2021 the Group acquired the issued share capital of Head of Zeus
Limited ("HoZ"). The consideration, net of pre-existing third party loans is
£7.0 million, of which £5.5 million was satisfied in cash at completion,
with £1.1 million paid in cash post completion, and £0.4 million of deferred
consideration payable in cash subject to achievement of Netflix release
targets. The latter element is discounted.
HoZ is an independent publisher of genre fiction and narrative non-fiction and
children's books, based in London. It has published many bestsellers, won
literary prizes and industry awards. The business will operate within
Bloomsbury's Consumer division.
The table below summarises the provisional fair values to the Group included
in the consolidated financial statements of the major categories of assets and
liabilities of HoZ at the date of acquisition.
Net assets acquired Fair value to the Group
£'000
Assets
Other intangible assets 2,800
Property, plant and equipment 52
Right-of-use assets 275
Deferred tax assets 130
Total non-current assets 3,257
Inventories 2,202
Trade and other receivables 6,654
Cash and cash equivalents 37
Total current assets 8,893
Total assets 12,150
Liabilities
Deferred tax liabilities 700
Lease liabilities 137
Total non-current liabilities 837
Trade and other liabilities 3,578
Borrowings 1,097
Lease liabilities 165
Current tax liabilities 51
Total current liabilities 4,891
Total liabilities 5,728
Identifiable net assets 6,422
579
Goodwill
Total 7,001
Identifiable intangible assets of £2,800,000 consist of publishing rights and
imprints. The publishing rights have a useful life of 8 years and imprints
have a useful life of 8 years. The goodwill arising of £579,000 is
attributable to the expected profitability of the acquired business and the
synergies expected to arise after the acquisition.
The gross contractual trade and other receivables at acquisition is
£6,691,000 of which, as at the acquisition date, £37,000 is the best
estimate of the contractual cash flows that are not expected to be collected.
Transaction costs of £242,000 have been expensed in the year within
administrative expenses.
From 2 June 2021, revenue of £9.0 million and profit attributable to owners
of the Company of £0.1 million have been included in the consolidated income
statement for the period ended 28 February 2022 in relation to HoZ.
If the acquisition had occurred on 1 March 2021 the revenue and profit
attributable to shareholders of the combined entity for the current period
would have been £11.5 million and £0.2 million respectively. These pro forma
amounts do not include any possible synergies from the acquisition. The pro
forma information is provided for comparative purposes only and does not
necessarily reflect the actual results that would have occurred, nor is it
necessarily indicative of future results of operations of the combined
companies.
ABC - CLIO, LLC
On 15 December 2021 the Group acquired the members' interest of ABC - CLIO,
LLC ("ABC-CLIO"). The consideration, is £16.7 million, of which £16.6
million was satisfied in cash at completion, with £0.1 million payable in
cash post completion, subject to working capital and other considerations.
ABC-CLIO is an established academic publisher of reference, nonfiction, online
curriculum and professional development materials in both print and digital
formats for schools, academic libraries and public libraries, primarily in the
USA. This acquisition further strengthens Bloomsbury Digital Resources and
significantly accelerates Bloomsbury's academic publishing in North America,
growing international revenues. ABC-CLIO will operate within Bloomsbury's
Academic & Professional division.
The table below summarises the provisional fair values to the Group included
in the consolidated financial statements of the major categories of assets and
liabilities of ABC-CLIO at the date of acquisition.
Net assets acquired Provisional fair value to the Group
£'000
Assets
Other intangible assets 16,572
Property, plant and equipment 284
Right-of-use assets 357
Deferred tax assets 962
Total non-current assets 18,175
Inventories 552
Trade and other receivables 3,354
Cash and cash equivalents 342
Total current assets 4,248
Total assets 22,423
Liabilities
Lease liabilities 184
Total non-current liabilities 184
Trade and other liabilities 7,564
Lease liabilities 173
Current tax liabilities 254
Total current liabilities 7,991
Total liabilities 8,175
Identifiable net assets 14,248
2,497
Goodwill
Total 16,745
Identifiable intangible assets of £16,572,000 consist of publishing rights,
imprints and product development. The publishing rights have a useful life of
6-7 years, imprints have a useful life of 7 years and product development have
a useful life of 10 years. The goodwill arising of £2,497,000 is
attributable to the expected profitability of the acquired business and the
synergies expected to arise after the acquisition.
The gross contractual trade and other receivables at acquisition is
£3,445,000 of which, as at the acquisition date, £91,000 is the best
estimate of the contractual cash flows that are not expected to be collected.
Transaction costs of £630,000 have been expensed in the year within
administrative expenses.
From 16 December 2021, revenue of £2.2 million and profit attributable to
owners of the Company of £0.4 million have been included in the consolidated
income statement for the period ended 28 February 2022 in relation to
ABC-CLIO.
If the acquisition had occurred on 1 March 2021 the revenue and profit
attributable to shareholders of the combined entity for the current period
would have been £10.9 million and £1.3 million respectively. These pro forma
amounts do not include any possible synergies from the acquisition. The pro
forma information is provided for comparative purposes only and does not
necessarily reflect the actual results that would have occurred, nor is it
necessarily indicative of future results of operations of the combined
companies.
8. Rights to Assets
Red Globe Press
On 23 April 2021, the Group announced the acquisition of certain assets of Red
Globe Press ("RGP"), the academic imprint, from Macmillan Education Limited, a
part of Springer Nature Group. The transaction completed on 1 June 2021.
The consideration was £3.2 million, of which £1.8 million was satisfied in
cash at completion and £1.3 million was satisfied in cash post completion
during the year, with an expected further £0.1 million to be satisfied
post-year end subject to assignment of certain contracts.
RGP specialises in high-quality publishing for Higher Education students
globally in Humanities and Social Sciences, Business and Management, and Study
Skills. RGP has a backlist of more than 7,000 titles and publishes more than
100 new titles per year, with content including digital platforms, textbooks,
research-driven materials and general academic publishing. The acquired RGP
titles are a good strategic fit, strengthen Bloomsbury's existing academic
publishing, and establish new areas of academic publishing in Business and
Management, Study Skills and Psychology. RGP's three digital products will be
migrated to Bloomsbury Digital Resources' own platform and its content added
to Bloomsbury Collections. The assets will operate within Bloomsbury's
Academic & Professional division. There are opportunities for profit
enhancements following the integration of the assets into Bloomsbury.
The Group has taken on Inventories, Advances and intangible assets associated
with taking on the titles and digital products. No cash or trade receivables
transferred as part of the acquisition.
9. Trade and other receivables
28 February 28 February
2022 2021
£'000 £'000
Non-current
Accrued income 923 1,005
Current
Gross trade receivables 68,764 61,897
Less: loss allowance (3,551) (3,230)
Net trade receivables 65,213 58,667
Income tax recoverable 1,392 171
Other receivables 2,431 3,623
Prepayments 2,672 1,072
Accrued income 4,494 5,219
Royalty advances 28,677 24,790
Total current trade and other receivables 104,879 93,542
Total trade and other receivables 105,802 94,547
Non-current receivables relate to accrued income on long-term rights deals.
Trade receivables principally comprise amounts receivable from the sale of
books due from distributors. The majority of 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
title advances which may not be fully earned down by anticipated future sales.
As at 28 February 2022, £7,145,000 (2021: £7,260,000) of royalty advances
are expected to be recovered after more than 12 months.
10. Annual General Meeting
The Annual General Meeting will be held on 20 July 2022.
11. Report and Accounts
Copies of the Annual Report and Financial Statements will be circulated to
shareholders in July and can be viewed after the posting date on the
Bloomsbury website.
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