Covid-19 lockdowns have helped light a fire under trade at Bloomsbury Publishing (LSE: BMY) over the past year. The UK share has risen 58% in value during the past 12 months as favourites like Harry Potter have flown off the (often online) shelves. Indeed, Bloomsbury rose to fresh 15-year highs around 342p per share today following the release of more bubbly trading news.
In the financial year to February, Bloomsbury saw revenues rocket 14% to a record £185.1m. It’s a result which smashed the 2% increase which the Publishers’ Association says the broader book market grew by in 2020.
As a consequence, pre-tax profits at the publisher soared 31% year-on-year to £17.3m. Bloomsbury also reported a large upswing in net cash on the balance sheet, which rose to £54.5m from £31.3m in fiscal 2020.
Bloomsbury therefore raised the final dividend 10% year-on-year to 7.58p per share. This took the total full-year payout to 8.86p, an 8% increase. The company also proposed to pay a 9.78p special dividend for fiscal 2021.
What Bloomsbury said
“These results are ahead of expectations and represent our third upgrade this year,” commented Bloomsbury chief executive Nigel Newton. He added that fiscal 2021’s robust numbers “demonstrate the strength and resilience of our strategy of publishing for both the general and academic market.”
What’s more, Newton indicated that the books giant has got the current fiscal year off to a flyer. He added: “The ongoing momentum and strength of our business” means that the company “expects revenue to be ahead and profit to be comfortably ahead of market expectations.”
Strength across the board
At its Consumer division, sales and profit before tax and exceptional items rose 22% in the last financial year, Bloomsbury said. Highlighting the reasons for its success, the company said that “our diverse consumer portfolio included backlist titles which really struck a chord with readers throughout the pandemic on themes such as humanity, social inclusion, escapism, fantasy, cookery and baking.”
Adult sales at its Consumer unit rose 17% year-on-year to £43.7m, Bloomsbury said, while revenues from its Children’s books soared 26% on fiscal 2020 to £74.6m.
Meanwhile, the publisher’s Bloomsbury Digital Resources (or BDR) division enjoyed a 49% revenues uplift in the period. It said that “our academic digital growth also significantly outperformed the UK market” in a year in which Covid-19 restrictions forced students online and away from the classroom.
Why I’d buy Bloomsbury
There’s a lot to like about Bloomsbury Publishing, in my opinion. Of course there are many publishers trying to get us to fill our bookshelves with their products. And that poses a threat to future profits, of course. But this particular UK share has a packed stable of popular titles and franchises which continue to deliver the goods.
Sales of Harry Potter books, for instance, rose 7% last year. I also like the company’s attempts to embrace the structural shift to online learning through its BDR division. I’d happily buy Bloomsbury shares for my Stocks and Shares ISA today.