It’s been a disappointing week on UK share markets. In the past five trading days, fears over the spread of Covid-19 have kept investor confidence under pressure. As I type the FTSE 100 is down 1% in Friday business and, at 6,460 points, has basically lost all of the gains it enjoyed during the strong start to 2021.
Investor appetite for Bloomsbury Publishing (LSE: BMY) hasn’t dimmed during the past week, though. In fact it’s just surged to fresh multi-year peaks on Friday.
At 327p per share, Bloomsbury was trading at its highest since August 2016 before settling lower. It’s now dealing 8% higher from the prior close. The UK share has exploded thanks to a positive reaction to fresh financials.
Bloomsbury is on the march!
Bloomsbury’s made a habit out of confounding expectations in recent months. And it was at it again on Friday thanks to roaring trade at its Consumer division.
Indeed, the publisher said that “revenue is expected to be ahead and profit well ahead of market expectations” for the current financial year ending February 2020.
This is based on market expectations that revenue would slip to £161.8m this year from £162.8m last time around, Bloomsbury said. The UK share added that broker estimates also assume that profits before tax and exceptional items would come in at £12.1m. This compares with profits of £15.7m in financial 2020.
Bloomsbury has continued to enjoy “continued strong trading” at its Consumer unit, it said. It added that both its Adult and Children’s categories have been performing well. The business noted Nielsen data showing the sale of print book volumes rising 5.2% year on year in 2020 as the Covid-19 pandemic struck. Incidentally, Bloomsbury had announced back in October that first-half profits had come in at their highest since 2008.
The UK share also said today that its Academic and Professional unit continues to make “good progress” in line with its strategic objectives. The company said that “our strategy of developing digital resources means we are well placed to benefit from demand from academic institutions during lockdown.”
A UK share I’d happily buy
There are risks to Bloomsbury’s profits outlook, of course. The economic pressures created by the ongoing Covid-19 crisis could damage broader consumer spending levels. And this could dent demand for its books in 2021. On top of this, the public health emergency might dent enrolment rates at academic institutions in the short-to-medium term. This would deal a blow to sales at its Academic and Professional division.
On the other side of the coin, Bloomsbury could benefit from the prospect of Covid-19 restrictions persisting well into 2021. It can also rely on the evergreen appeal of its Harry Potter franchise to keep the money rolling in and cash generation moving at eye-popping levels.
I’d happily buy this UK share in my Stocks and Shares ISA. But it’s not the only top stock I’m thinking of adding to my shares portfolio today.