BLOOMSBURY PUBLISHING PLC
("Bloomsbury" or "the Company")
Unaudited Interim Results for the six months ended 31 August 2022
Record first half earnings
Interim dividend increased
Bloomsbury, the leading independent publisher, today announces unaudited results for the six months ended 31 August 2022.
Commenting on the results, Nigel Newton, Chief Executive, said:
"Bloomsbury achieved very strong results in the first half with year-on-year revenue growth of 22% to £122.9 million and profit growth of 23% to £15.9 million. These are our highest ever first half sales and profits. These results demonstrate the strength and resilience of our strategy of publishing for both the consumer and academic markets, our growth of digital revenues and our global diversification.
Throughout this cost of living crisis, books remain an affordable treat. Reading offers a form of escapism and an ideal - and inexpensive - therapy for dealing with the stresses and strains of day-to-day life.
The success of Bloomsbury Digital Resources ("BDR") accelerated, with revenue growth of 69% driven by organic and acquired assets. This drove the Non-Consumer division's revenue growth of 24% and a 54% increase in profit before tax and highlighted items1 to £7.1 million. Resilient demand saw the Consumer division revenue grow by 21%, achieving a 6% increase in profit before tax and highlighted items1 to £8.9 million.
Our financial position is strong, with net cash of £41.5 million. This gives us significant opportunities for further acquisitions and investment in organic growth.
In recognition of our performance and in line with our dividend policy, we are announcing a 5% increase in our interim dividend to 1.41 pence per share.
The strong first half performance means that we are confident of achieving the Board's expectations for the year ending 28 February 2023.* The strength and resilience of Bloomsbury's strategy and financial position means the Board is confident in its ability to achieve continued success. Bloomsbury plans to invest in further acquisitions and organic growth."
* The Board considers current consensus market expectation for the year ending 28 February 2023 to be revenue of £242.6 million and profit before taxation and highlighted items of £26.9 million.
Financial Highlights
|
| 2022 | 2021 | 2020 | Growth 2022 vs 2021 | Growth 2022 vs 2020 |
| Revenue | £122.9 million | £100.7 million | £78.3 million | 22% | 57% |
| Organic revenue2 | £108.1 million | £96.3 million | £78.3 million | 12% | 38% |
| Profit before taxation and highlighted items1 | £15.9 million | £12.9 million | £4.0 million | 23% | 295% |
| Profit before taxation | £12.9 million | £11.1 million | £3.0 million | 17% | 327% |
| Diluted earnings per share, excluding highlighted items1 | 15.30 pence | 12.82 pence | 4.13 pence | 19% | 270% |
| Diluted earnings per share | 12.30 pence | 10.41 pence | 2.87 pence | 18% | 329% |
| Net cash | £41.5 million | £43.7 million | £44.1 million | (5)% | (6)% |
| Interim dividend | 1.41 pence per share | 1.34 pence per share | 1.28 pence per share | 5% | 10% |
Operational Highlights
Non-Consumer Division
| ● | Non-Consumer revenue growth of 24% to £46.6 million (2021: £37.8 million). Organic revenue growth was 2% |
| ● | Non-Consumer profit before taxation and highlighted items1 increased by 54% to £7.1 million (2021: £4.6 million) |
| ● | Academic & Professional revenue growth of 38% to £36.5 million (2021: £26.4 million) and profit before taxation and highlighted items1 up 85% to £7.3 million (2021: £3.9 million) |
| ● | Bloomsbury Digital Resources ("BDR") revenue growth of 69% to £13.6 million (2021: £8.0 million) and profit of £6.6 million (2021: £2.8 million) |
| ● | On track for our new BDR target of 50% organic growth and 30% margin over the next five years |
| ● | ABC-CLIO LLC ("ABC-CLIO") and Red Globe Press ("RGP") contributed £9.9 million revenue (2021: £1.7 million) to Academic & Professional |
Consumer Division
| ● | Strong Consumer revenue growth of 21% to £76.3 million (2021: £62.9 million). Organic revenue growth was 19% |
| ● | Consumer profit before taxation and highlighted items1 increased by 6% to £8.9 million (2021: £8.4 million) |
| ● | Adult Trade revenue up 7% to £25.7 million (2021: £23.9 million) and profit before taxation and highlighted items1 was £0.2 million (2021: £1.3 million) |
| ● | Children's Trade revenue growth of 30% to £50.6 million (2021: £39.0 million) and profit before taxation and highlighted items1 up 23% to £8.7 million (2021: £7.1 million) |
| ● | Sales growth of Sarah J. Maas' titles of 45%; Harry Potter sales increased by 35% during the 25th anniversary year |
| ● | Head of Zeus Limited ("HoZ"), acquired in June 2021, contributed £4.9 million revenue (2021: £2.7 million) to Adult Trade |
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.
2 Organic revenue for the half year is defined as total revenue of £122.9m (2021: £100.7m) less revenue attributable to the acquisitions of HoZ, RGP and ABC-CLIO.
For further information, please contact:
| Bloomsbury Publishing Plc | |
| Nigel Newton, Chief Executive | 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 / Amelia Craddock / Emily Brooker | bloomsbury@hudsonsandler.com |
The information in this announcement has not been audited or otherwise independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company or any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this announcement, or its contents, or otherwise arising in connection with this announcement.
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 had a very strong first half. Revenue grew by 22% to £122.9 million (2021: £100.7 million), and profit before taxation and highlighted items increased by 23% to £15.9 million (2021: £12.9 million). Profit before taxation was £12.9 million (2021: £11.1 million).
Growth in organic revenue was 12%, with the three strategic acquisitions completed during 2021/22, ABC-CLIO, RGP and HoZ, contributing revenue of £14.8 million (2021: £4.4 million).
The strength and resilience 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.
Bloomsbury Digital Resources ("BDR") was the stand-out performer during the period, with 69% revenue growth year-on-year and profit of £6.6 million, an increase of 134%. We continue to demonstrate the strength of our digital strategy of building high margin, quality revenues, accelerating our growth with the acquisitions of RGP and ABC-CLIO. Our strategy enables us to continue to deliver growth from the ongoing shift to digital learning, accelerating the breadth and depth of our excellent digital products and the quality of platforms and infrastructure, with a 12% increase in the number of organic customers year-on-year.
The highlighted items of £3.0 million (2021: £1.8 million) consist of the amortisation of acquired intangible assets of £2.7 million (2021: £1.0 million), one-off legal and other professional fees relating to ongoing and completed acquisitions and restructuring costs of £0.3 million (2021: £0.8 million). The effective rate of tax for the period was 22% (2021: 23%). The adjusted effective rate of tax, excluding highlighted items, was 21% (2021: 18%). Diluted earnings per share for the period, excluding highlighted items, grew by 19% to 15.30 pence (2021: 12.82 pence). Including highlighted items, profit before taxation grew by 17% to £12.9 million (2021: £11.1 million) and diluted earnings per share grew by 18% to 12.30 pence (2021: 10.41 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 on the following long-term strategic objectives:
· Non-Consumer Publishing and BDR
o Goal: Grow Bloomsbury's portfolio in Non-Consumer publishing. Non-Consumer publishing is characterised by higher, more predictable margins and greater digital and global opportunities.
Achieved - H1 2022/23: delivered 24% growth in Non-Consumer revenue.
o Goal: BDR: Further 50% organic revenue growth and 30% margin over the five years from 2022/23.
Achieved - H1 2022/23: delivered 41% organic growth and 45% margin.
· Consumer
o Goal: Discover, nurture, champion and retain high quality authors and illustrators, while looking at new ways to leverage existing title rights.
Achieved - H1 2022/23: UK and US bestsellers included Stolen Focus by Johan Hari, BAKE by Paul Hollywood, Dirtbag, Massachusetts by Isaac Fitzgerald and Outdoor Cooking by Tom Kerridge.
o Goal: Grow our key authors through effective publishing across all formats alongside strategic sales and marketing.
Achieved - H1 2022/23: 45% growth in Sarah J. Maas' title sales.
o Goal: As the originating publisher of J.K. Rowling's Harry Potter, to ensure that new children discover and read it for pleasure every year.
Achieved - H1 2022/23: Sales of Harry Potter titles were strong, up 35%, and the paperback edition of Harry Potter and the Philosopher's Stone was the 2nd bestselling children's book of the year to date on UK Nielsen Bookscan, 25 years after it was first published.
· International Expansion
o Goal: Expand international revenues and reduce reliance on UK market. Continuing our international growth in order to take advantage of the biggest academic market in the USA.
Achieved - H1 2022/23: increased overseas revenues to 73% of Group revenue (2021/22 H1: 65%); 70% of Academic BDR sales are international. US revenues increased to 36% of Group revenue.
· Employee Experience and Engagement; Diversity, Equity and Inclusion
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 Goal: 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 Goal: 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 Goal: Implement Bloomsbury's Diversity, Equity and Inclusion Action Plan ("DEIAP").
Achieved - H1 2022/23:
o All employees at Bloomsbury received a permanent salary increase of £1,000 per annum effective from 1 October to help with cost of living;
o First cohort of senior managers successfully completed their Diploma in Leadership and Management, and our second cohort have started their programme;
o Rollout of new next stage of employee voice programme;
o Focusing on increasing our diversity through expanding our reach, including through Creative Access, Diversify.io, and The Dots;
o Increasing our commitment as an official partner of The Runnymede Trust's Lit in Colour initiative, supporting the increase in students' access to books by writers of colour and those from minority ethnic backgrounds, drawing on our world-leading drama list from Methuen Drama.
· Sustainability
o Goal: Maximise our use of sustainable resources while seeking to reduce carbon emissions in line with our science-based targets. We recognize our responsibility to conserve the Earth's resources and we are committed to monitoring and improving the environmental impact of our operations.
Achieved - H1 2022/23:
o Implemented improvements including removal of plastic shrink wrap from all Harry Potter paperback boxsets, piloting removing dust jackets and plastic finishes and introducing changes to backlist printing to reduce carbon emissions;
o Completed the CDP Climate Change questionnaire;
o Developed our quantitative and qualitative analysis of climate-related risks and opportunities;
o Supporting the Woodland Trust and Reforest'Action for three years.
Non-Consumer Division
The Non-Consumer division consists of Academic & Professional, including BDR, and Special Interest. Revenues in the division grew by 24% to £46.6 million (2021: £37.8 million). Profit before taxation and highlighted items for the Non-Consumer division grew by 54% to £7.1 million (2021: £4.6 million). Organic revenue growth was 2%, with ABC-CLIO and RGP, acquired in December 2021 and June 2021 respectively, contributing £9.9 million (2021: £1.7 million) revenue.
Academic & Professional revenues increased by 38% to £36.5 million (2021: £26.4 million) and profit before taxation and highlighted items increased by 85% to £7.3 million (2021: £3.9 million). This was driven by the strength of our BDR strategy, with 69% revenue growth from the acquisition of ABC-CLIO and increased demand for our existing digital products.
Our BDR growth strategy is focused on accelerating our established and most successful products, leveraging content and platforms from our acquisitions, building partnerships and launching new products. We increased the breadth and depth of our portfolio with the acquisition of ABC-CLIO's 32 digital databases and accelerated growth by expanding international sales using our global infrastructure. We delivered 41% organic revenue growth from a 12% increase in the number of organic customers year-on-year, increased our organic subscription revenue by 30% and maintained our existing customer retention rate at over 90%.
Special Interest revenues were £10.1 million (2021: £11.3 million), with bestsellers during the period including Wisden Cricketers Almanack, Reeds Nautical Almanac, The Happy Me Project by Holly Matthews and Osprey Games' Stargrave and Crescent Moon. The loss before taxation and highlighted items for the period was £0.1 million (2021: £0.7 million profit before taxation and highlighted items).
Consumer Division
The Consumer division consists of Adult and Children's trade publishing. The Consumer division achieved strong revenue growth of 21% to £76.3 million (2021: £62.9 million). Organic revenue growth was 19%. Profit before taxation and highlighted items increased by 6% to £8.9 million (2021: £8.4 million). The strong performance was driven by the Children's division, across front and backlist titles, and includes £4.9 million revenue (2021: £2.7 million) from HoZ, completed in June 2021.
Adult Trade
The Adult division revenue grew by 7% to £25.7 million (2021: £23.9 million) and profit before taxation and highlighted items was £0.2 million (2021: £1.3 million). Revenue growth was driven by the strength of the backlist and includes £4.9 million (2021: £2.7 million) revenue from HoZ, completed in June 2021.
Sunday Times bestsellers in the period included Paul Hollywood's BAKE, Galatea by Madeline Miller, Old Rage by Sheila Hancock, The Weekend Cook by Angela Hartnett and Tom Kerridge's Outdoor Cooking. New York Times bestsellers included Dirtbag, Massachusetts by Isaac Fitzgerald and Paul Hollywood's BAKE.
Children's Trade
Children's revenue increased by 30% to £50.6 million (2021: £39.0 million) and profit before taxation and highlighted items increased by 23% to £8.7 million (2021: £7.1 million). High demand for our strong titles continued the momentum from last year, with excellent sales of Sarah J. Maas' titles.
Sales of Harry Potter titles were strong, up 35%. Harry Potter and the Philosopher's Stone was the 2nd bestselling children's book of the year to date on UK Nielsen Bookscan, on the 25th anniversary of its first publication, showing the enduring appeal of this classic series.
Sarah J. Maas revenues grew by 45%, reflecting her latest bestselling frontlist title, Crescent City: House of Sky and Breath, published in February 2022, and strong backlist sales. House of Sky and Breath, House of Earth and Blood, and Throne of Glass were all New York Times bestsellers during the period. 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.
Revenues for the rest of the Children's division were also good. Highlights in the Children's list included Katya Balen's October, October, which won the Yoto Carnegie Medal, New York Times bestsellers This Wicked Fate by Kalynn Bayron and Ways to Make Sunshine by Renee Watson and Sunday Times bestsellers We're Going on an Egg Hunt and Five Little Easter Bunnies.
Acquisitions
Bloomsbury has a strong and 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 31 August 2022 of £41.5 million (2021: £43.7 million). During the period we invested £0.9 million of capital expenditure in BDR.
We have increased our international revenues, in particular from the US, during the period. This has enabled us to benefit from the change in exchange rates.
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 31 August 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 has declared an interim dividend of 1.41 pence per share, 5% above the interim dividend for the six months ended 31 August 2021. The dividend will be paid on 2 December 2022 to Shareholders on the register on the record date of 4 November 2022.
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. As announced in June 2022, Steven Hall stepped down from the Board at the conclusion of Bloomsbury's 2022 AGM on 20 July 2022. John Bason succeeded Steven as Chair of the Remuneration Committee.
Future Publishing
In Non-Consumer, 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. The acquisition of ABC-CLIO expands Bloomsbury's reach into the lucrative US High School library market. We see significant opportunity in cross selling existing school and university level digital resources, such as our bestselling platform Drama Online, to US high schools which have well-funded budgets for digital teaching aids. We will also invest in new ABC-CLIO originated high school products. In addition, we will expand Bloomsbury Collections to include both ABC-CLIO and RGP titles as well as migrate RGP's digital products to BDR's own platform.
Our strong Consumer publishing list for the second half includes the Illustrated edition of the fifth Harry Potter title, Harry Potter and the Order of the Phoenix, Tom Kerridge's Real Life Recipes, A Visible Man by Edward Enninful, Best of Friends by Kamila Shamsie, Illuminations by Alan Moore, The Story of Russia by Orlando Figes, Defend the Dawn by Brigid Kemmerer and The Lost Girl King by Catherine Doyle. The Three-Body Problem by Cixin Liu, a HoZ title, has been filmed by the creators of Game of Thrones and will be shown on Netflix in 2023. The next Sarah J. Maas novel, the third in the Crescent City series, will be published in 2023/24.
Outlook
The strength of the first half performance means that we are confident of achieving market expectations for the year ending 28 February 2023.*
Bloomsbury's strong and resilient strategy, combined with the strength of our financial position, means the Board is confident in Bloomsbury's ability to achieve continued success. Bloomsbury plans to invest in further acquisitions and organic growth.
* The Board considers current consensus market expectation for the year ending 28 February 2023 to be revenue of £242.6 million and profit before taxation and highlighted items of £26.9 million.
Condensed Consolidated Interim Income Statement
For the six months ended 31 August 2022
|
| Notes | 6 months ended 31 August 2022 £'000 |
6 months ended 31 August 2021 £'000 | Year ended 28 February 2022 £'000 |
| | |
| | |
| Revenue | 3 | 122,910 | 100,656 | 230,110 |
| Cost of sales | | (56,804) | (43,967) | (107,948) |
| Gross profit | | 66,106 | 56,689 | 122,162 |
| Marketing and distribution costs | | (14,886) | (13,561) | (29,808) |
| Administrative expenses | | (38,041) | (31,831) | (69,675) |
| Share of result of joint venture | | (67) | (54) | (117) |
| Operating profit before highlighted items | | 16,091 | 13,072 | 27,112 |
| Highlighted items | 4 | (2,979) | (1,829) | (4,550) |
| Operating profit | | 13,112 | 11,243 | 22,562 |
| Finance income | | 46 | 54 | 105 |
| Finance costs | | (213) | (214) | (486) |
| Profit before taxation and highlighted items | | 15,924 | 12,912 | 26,731 |
| Highlighted items | 4 | (2,979) | (1,829) | (4,550) |
| Profit before taxation | 3 | 12,945 | 11,083 | 22,181 |
| Taxation | | (2,834) | (2,495) | (5,291) |
| Profit for the period attributable to owners of the Company | | 10,111 | 8,588 | 16,890 |
|
| |
| | |
| Earnings per share attributable to owners of the Company | |
| | |
| Basic earnings per share | 6 | 12.49p | 10.54p | 20.72p |
| Diluted earnings per share | 6 | 12.30p | 10.41p | 20.33p |
The accompanying notes form an integral part of this condensed consolidated interim financial report.
Condensed Consolidated Interim Statement of Comprehensive Income
For the six months ended 31 August 2022
|
| 6 months ended 31 August 2022 £'000 | 6 months ended 31 August 2021 £'000 | Year ended 28 February 2022 £'000 |
| Profit for the period | 10,111 | 8,588 | 16,890 |
|
Other comprehensive income Items that may be reclassified to the income statement: |
| |
|
| Exchange differences on translating foreign operations | 10,270 | 373 | 1,497 |
|
|
| |
|
| Items that may not be reclassified to the income statement: |
| |
|
| Remeasurements on the defined benefit pension scheme | - | (10) | (10) |
| Other comprehensive income for the period net of tax | 10,270 | 363 | 1,487 |
| Total comprehensive income for the period attributable to owners of the Company |
20,381 |
8,951 | 18,377 |
|
|
| | |
Items in the statement above are disclosed net of tax.
Condensed Consolidated Interim Statement of Financial Position
At 31 August 2022
| | Notes | 31 August 2022 £'000 | 31 August 2021 £'000 | 28 February 2022 £'000 |
| Assets | |
| | |
| Goodwill | | 48,868 | 45,326 | 47,910 |
| Other intangible assets | | 40,329 | 25,712 | 40,323 |
| Investments | | 161 | 108 | 45 |
| Property, plant and equipment | | 2,562 | 1,804 | 2,319 |
| Right-of-use assets | | 10,022 | 10,950 | 10,628 |
| Deferred tax assets | | 8,953 | 4,588 | 7,168 |
| Trade and other receivables | 9 | 1,008 | 934 | 923 |
| Total non-current assets | | 111,903 | 89,422 | 109,316 |
| | |
| |
|
| Inventories | | 44,324 | 37,203 | 33,816 |
| Trade and other receivables | 9 | 114,921 | 100,152 | 104,879 |
| Cash and cash equivalents | | 41,451 | 43,663 | 41,226 |
| Total current assets | | 200,696 | 181,018 | 179,921 |
| Total assets | | 312,599 | 270,440 | 289,237 |
|
| |
| |
|
| Liabilities | | | |
|
| Retirement benefit obligations | | - | 12 | - |
| Deferred tax liabilities | | 3,830 | 3,417 | 3,696 |
| Lease liabilities | | 9,191 | 10,511 | 9,961 |
| Provisions | | 318 | 249 | 297 |
| Total non-current liabilities | | 13,339 | 14,189 | 13,954 |
| | |
| |
|
| Trade and other liabilities | | 112,797 | 91,345 | 103,028 |
| Lease liabilities | | 2,388 | 1,875 | 2,265 |
| Current tax liabilities | | 999 | 453 | 433 |
| Provisions | | 982 | 497 | 588 |
| Total current liabilities | | 117,166 | 94,170 | 106,314 |
| Total liabilities | | 130,505 | 108,359 | 120,268 |
| Net assets | | 182,094 | 162,081 | 168,969 |
| | | | |
|
| Equity | |
| |
|
| Share capital | | 1,020 | 1,020 | 1,020 |
| Share premium | | 47,319 | 47,319 | 47,319 |
| Translation reserve | | 18,397 | 7,003 | 8,127 |
| Other reserves | | 11,064 | 10,453 | 8,765 |
| Retained earnings | | 104,294 | 96,286 | 103,738 |
| Total equity attributable to owners of the Company | | 182,094 | 162,081 | 168,969 |
Condensed Consolidated Interim Statement of Changes in Equity
At 31 August 2022
|
| Share capital | Share premium | Translation reserve |
Merger reserve | Capital redemption reserve | Share-based payment reserve | Own shares held by the EBT | Retained earnings | Total equity |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| At 1 March 2022 | 1,020 | 47,319 | 8,127 | 1,803 | 22 | 9,492 | (2,552) | 103,738 | 168,969 |
| Profit for the period | - | - | - | - | - | - | - | 10,111 | 10,111 |
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
| Exchange differences on translating foreign operations | - | - | 10,270 | - | - | - | - | - | 10,270 |
| Total comprehensive income for the period | - | - | 10,270 | - | - | - | - | 10,111 | 20,381 |
| Transactions with owners |
|
|
|
|
|
|
|
|
|
| Dividends to equity holders of the Company | - | - | - | - | - | - | - | (7,604) | (7,604) |
| Purchase of shares by the Employee Benefit Trust | - | - | - | - | - | - | (375) | - | (375) |
| Share options exercised | - | - | - | - | - | - | 2,015 | (2,014) | 1 |
| Deferred tax on share-based payment transactions | - | - | - | - | - | - | - | 63 | 63 |
| Share-based payment transactions | - | - | - | - | - | 659 | - | - | 659 |
| Total transactions with owners of the Company | - | - | - | - | - | 659 | 1,640 | (9,555) | (7,256) |
| At 31 August 2022 | 1,020 | 47,319 | 18,397 | 1,803 | 22 | 10,151 | (912) | 104,294 | 182,094 |
|
| Share capital | Share premium | Translation reserve |
Merger reserve | Capital redemption reserve | Share-based payment reserve | Own shares held by the EBT | Retained earnings | Total equity |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| At 1 March 2021 | 1,020 | 47,319 | 6,630 | 1,803 | 22 | 7,945 | (147) | 103,657 | 168,249 |
| Profit for the period | - | - | - | - | - | - | - | 8,588 | 8,588 |
| Other comprehensive income |
|
|
|
|
|
|
|
|
|
| Exchange differences on translating foreign operations | - | - | 373 | - | - | - | - | - | 373 |
| Remeasurements on the defined benefit pension scheme | - | - | - | - | - | - | - | (10) | (10) |
| Total comprehensive income for the period | - | - | 373 | - | - | - | - | 8,578 | 8,951 |
| Transactions with owners |
|
|
|
|
|
|
|
|
|
| Dividends to equity holders of the Company | - | - | - | - | - | - | - | (14,064) | (14,064) |
| Purchase of shares by the Employee Benefit Trust | - | - | - | - | - | - | (1,973) | - | (1,973) |
| Share options exercised | - | - | - | - | - | - | 2,047 | (2,031) | 16 |
| Deferred tax on share-based payment transactions | - | - | - | - | - | - | - | 146 | 146 |
| Share-based payment transactions | - | - | - | - | - | 756 | - | - | 756 |
| Total transactions with owners of the Company | - | - | - | - | - | 756 | 74 | (15,949) | (15,119) |
| At 31 August 2021 | 1,020 | 47,319 | 7,003 | 1,803 | 22 | 8,701 | (73) | 96,286 | 162,081 |
|
| Share capital | Share premium | Translation reserve |
Merger reserve | Capital redemption reserve | Share-based payment reserve | Own shares held by the EBT | Retained earnings | Total equity |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| At 1 March 2021 | 1,020 | 47,319 | 6,630 | 1,803 | 22 | 7,945 | (147) | 103,657 | 168,249 |
| Profit for the period | - | - | - | - | - | - | - | 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 period | - | - | 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 |
| Condensed Consolidated Interim Statement of Cash Flows For the six months ended 31 August 2022 | |||
| | 6 months ended | 6 months ended | Year ended |
| | 31 August | 31 August | 28 February |
| | 2022 | 2021 | 2022 |
| | £'000 | £'000 | £'000 |
| Cash flows from operating activities | | | |
|
|
| | |
| Profit for the period | 10,111 | 8,588 | 16,890 |
| Adjustments for: |
| |
|
| Depreciation of property, plant and equipment | 314 | 239 | 512 |
| Depreciation of right-of-use assets | 902 | 794 | 1,889 |
| Amortisation of intangible assets | 4,774 | 3,114 | 7,505 |
| Loss on disposal on intangible assets | - | - | 65 |
| Finance income | (46) | (54) | (105) |
| Finance costs | 213 | 214 | 486 |
| Share of loss of joint venture | 67 | 54 | 117 |
| Share-based payment charges | 874 | 1,021 | 2,054 |
| Tax expense | 2,834 | 2,495 | 5,291 |
| | 20,043 | 16,465 | 34,704 |
| Increase in inventories | (6,886) | (7,165) | (2,745) |
| (Increase)/decrease in trade and other receivables | (4,351) | 1,667 | 1,205 |
| Increase in trade and other liabilities | 3,640 | 10,383 | 14,572 |
| Cash generated from operating activities | 12,446 | 21,350 | 47,736 |
| Income taxes paid | (3,970) | (3,456) | (7,927) |
| Net cash generated from operating activities | 8,476 | 17,894 | 39,809 |
| Cash flows from investing activities |
| |
|
| Purchase of property, plant and equipment | (485) | (143) | (644) |
| Purchases of intangible assets | (2,301) | (1,806) | (3,693) |
| Purchase of business, net of cash acquired | - | (5,736) | (22,913) |
| Purchase of rights to assets | - | (2,992) | (3,650) |
| Purchase of share in a joint venture | (182) | - | - |
| Interest received | 46 | 54 | 92 |
| Net cash used in investing activities | (2,922) | (10,623) | (30,808) |
| Cash flows from financing activities |
| |
|
| Equity dividends paid | (7,604) | (14,064) | (15,157) |
| Purchase of shares by the Employee Benefit Trust | (375) | (1,973) | (4,489) |
| Proceeds from exercise of share options | 1 | 16 | 34 |
| Repayment of borrowing | - | (1,112) | (1,097) |
| Repayment of lease liabilities | (990) | (897) | (1,862) |
| Lease liabilities interest paid | (187) | (200) | (419) |
| Other interest paid | (26) | (14) | (55) |
| Net cash used in financing activities | (9,181) | (18,244) | (23,045) |
| Net decrease in cash and cash equivalents | (3,627) | (10,973) | (14,044) |
| Cash and cash equivalents at beginning of period | 41,226 | 54,466 | 54,466 |
| Exchange gain on cash and cash equivalents | 3,852 | 170 | 804 |
| Cash and cash equivalents at end of period | 41,451 | 43,663 | 41,226 |
Notes to the Condensed Consolidated Interim Financial Statements
1. Reporting entity
Bloomsbury Publishing Plc (the "Company") is a Company domiciled in the United Kingdom. The condensed consolidated interim financial statements of the Company as at and for the six months ended 31 August 2022 comprise the Company and its subsidiaries (together referred to as the "Group"). The Group is primarily involved in the publication of books and other related services.
2. Significant accounting policies
a) Basis of preparation
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34 'Interim Financial Reporting'. They are unaudited and do not constitute statutory accounts. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended 28 February 2022.
Except as described below, the condensed set of financial statements have been prepared on a consistent basis with the financial statements for the year ended 28 February 2022 and should be read in conjunction with the Annual Report 2022. The annual consolidated financial statements of the Group are prepared in accordance with UK-adopted International Accounting Standards and the requirements of the Companies Act 2006. The 2022 Annual Report refers to other new standards effective from 1 March 2022. None of these standards have had a material impact in these financial statements.
The comparative financial information for the year ended 28 February 2022 does not constitute statutory accounts for that financial year. This information was extracted from the statutory accounts for the year ended 28 February 2022, a copy of which has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified and did not include a reference to any matters to which the auditor drew attention by way of emphasis of matter and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The condensed consolidated interim financial statements were approved and authorised for issue by the Board of Directors on 25 October 2022.
b) Going concern
The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for at least 12 months from the date of approval of the condensed consolidated interim financial statements, 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 interim financial statements.
The Board has modelled a severe but plausible pessimistic downside scenario, including the impact of coronavirus. This assumes:
· Sales drop by 20% with recovery during 2024/25;
· Downside assumptions about extended debtor days with recovery during 2024/25; and
· Cash preservation measures implemented and variable costs reduced.
Under this severe but plausible downside scenario, the Group has sufficient liquidity to be able to manage these downside assumptions.
The Group has an unsecured revolving credit facility with Lloyds Bank Plc. 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. The agreement is to October 2024. At 31 August 2022, the Group had no draw down of this facility.
c) Uses of estimates and judgments
The preparation of condensed consolidated interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets liabilities, income and expenses. Actual results may differ from these estimates. Critical judgments and areas where the use of estimates is significant are set out in the 2022 Annual Report.
3. 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 further split out into two operating segments: Children's Trade and Adult Trade. Non-Consumer is split between 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 |
| |
| Six months ended 31 August 2022 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| |
| External revenue | 50,607 | 25,685 | 76,292 | 36,481 | 10,137 | 46,618 | - | 122,910 |
| |
| Cost of sales | (26,453) | (13,809) | (40,262) | (11,529) | (5,013) | (16,542) | - | (56,804) |
| |
| Gross profit | 24,154 | 11,876 | 36,030 | 24,952 | 5,124 | 30,076 | - | 66,106 |
| |
| Marketing and distribution costs | (6,567) | (3,995) | (10,562) | (2,929) | (1,395) | (4,324) | - | (14,886) |
| |
| Contribution before administrative expenses | 17,587 | 7,881 | 25,468 | 22,023 | 3,729 | 25,752 | - | 51,220 |
| |
| Administrative expenses excluding highlighted items | (8,863) | (7,617) | (16,480) | (14,739) | (3,843) | (18,582) | | (35,062) |
| |
| Share of joint venture result | - | - | - | - | - | - | (67) | (67) |
| |
| Operating profit/(loss) before highlighted items/ segment results | 8,724 | 264 | 8,988 | 7,284 | (114) | 7,170 | (67) | 16,091 |
| |
| Amortisation of acquired intangible assets | - | (175) | (175) | (2,381) | (107) | (2,488) | - | (2,663) |
| |
| Other highlighted items | - | - | - | - | - | - | (316) | (316) |
| |
| Operating profit/(loss) | 8,724 | 89 | 8,813 | 4,903 | (221) | 4,682 | (383) | 13,112 |
| |
| Finance income | - | - | - | 26 | - | 26 | 20 | 46 |
| |
| Finance costs | (70) | (37) | (107) | (59) | (21) | (80) | (26) | (213) |
| |
| Profit/(loss) before taxation and highlighted items | 8,654 | 227 | 8,881 | 7,251 | (135) | 7,116 | (73) | 15,924 |
| |
| Amortisation of acquired intangible assets | - | (175) | (175) | (2,381) | (107) | (2,488) | - | (2,663) |
| |
| Other highlighted items | - | - | - | - | - | - | (316) | (316) |
| |
| Profit/(loss) before taxation | 8,654 | 52 | 8,706 | 4,870 | (242) | 4,628 | (389) | 12,945 |
| |
| Taxation | - | - | - | - | - | - | (2,834) | (2,834) |
| |
| Profit/(loss) for the period | 8,654 | 52 | 8,706 | 4,870 | (242) | 4,628 | (3,223) | 10,111 |
| |
| | | | | | | |||||
| | Children's Trade | Adult Trade | Consumer
| Academic & Professional | Special Interest | Non-Consumer | Unallocated | Total |
| |
| Six months ended 31 August 2021 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| |
| External revenue | 38,990 | 23,928 | 62,918 | 26,411 | 11,327 | 37,738 | - | 100,656 |
| |
| Cost of sales | (18,094) | (12,001) | (30,095) | (8,775) | (5,097) | (13,872) | - | (43,967) |
| |
| Gross profit | 20,896 | 11,927 | 32,823 | 17,636 | 6,230 | 23,866 | - | 56,689 |
| |
| Marketing and distribution costs | (5,663) | (3,755) | (9,418) | (2,569) | (1,574) | (4,143) | - | (13,561) |
| |
| Contribution before administrative expenses | 15,233 | 8,172 | 23,405 | 15,067 | 4,656 | 19,723 | - | 43,128 |
| |
| Administrative expenses excluding highlighted items | (8,104) | (6,833) | (14,937) | (11,120) | (3,945) | (15,065) | - | (30,002) |
| |
| Share of joint venture result | - | - | - | - | - | - | (54) | (54) |
| |
| Operating profit/(loss) before highlighted items/ segment results | 7,129 | 1,339 | 8,468 | 3,947 | 711 | 4,658 | (54) | 13,072 |
| |
| Amortisation of acquired intangible assets | - | (49) | (49) | (829) | (107) | (936) | - | (985) |
| |
| Other highlighted items | - | - | - | - | - | - | (844) | (844) |
| |
| Operating profit/(loss) | 7,129 | 1,290 | 8,419 | 3,118 | 604 | 3,722 | (898) | 11,243 |
| |
| Finance income | - | - | - | 38 | - | 38 | 16 | 54 |
| |
| Finance costs | (75) | (42) | (117) | (58) | (25) | (83) | (14) | (214) |
| |
| Profit/(loss) before taxation and highlighted items | 7,054 | 1,297 | 8,351 | 3,927 | 686 | 4,613 | (52) | 12,912 |
| |
| Amortisation of acquired intangible assets | - | (49) | (49) | (829) | (107) | (936) | - | (985) |
| |
| Other highlighted items | - | - | - | - | - | - | (844) | (844) |
| |
| Profit/(loss) before taxation | 7,054 | 1,248 | 8,302 | 3,098 | 579 | 3,677 | (896) | 11,083 |
| |
| Taxation | - | - | - | - | - | - | (2,495) | (2,495) |
| |
| Profit/(loss) for the period | 7,054 | 1,248 | 8,302 | 3,098 | 579 | 3,677 | (3,391) | 8,588 |
| |
|
| | | | | | |||||
| | 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 joint venture result | - | - | - | - | - | - | (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 Other highlighted items | - - | (272) - | (272) - | (2,349) - | (214) - | (2,563) - | - (1,715) | (2,835) (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 |
| |
|
| Children's Trade | Adult Trade | Consumer
| Academic & Professional | Special Interest | Non-Consumer | Unallocated | Total |
| Six months ended 31 August 2022 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Operating profit/(loss) before highlighted items | 8,724 | 264 | 8,988 | 7,284 | (114) | 7,170 | (67) | 16,091 |
| Depreciation | 429 | 229 | 658 | 440 | 118 | 558 | - | 1,216 |
| Amortisation of internally generated intangibles | 223 | 292 | 515 | 1,428 | 168 | 1,596 | - | 2,111 |
| EBITDA before highlighted items | 9,376 | 785 | 10,161 | 9,152 | 172 | 9,324 | (67) | 19,418 |
|
| Children's Trade | Adult Trade | Consumer
| Academic & Professional | Special Interest | Non-Consumer | Unallocated | Total |
| Six months ended 31 August 2021 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Operating profit/(loss) before highlighted items | 7,129 | 1,339 | 8,468 | 3,947 | 711 | 4,658 | (54) | 13,072 |
| Depreciation | 405 | 229 | 634 | 274 | 125 | 399 | - | 1,033 |
| Amortisation of internally generated intangibles | 217 | 228 | 445 | 1,556 | 128 | 1,684 | - | 2,129 |
| EBITDA before highlighted items | 7,751 | 1,796 | 9,547 | 5,777 | 964 | 6,741 | (54) | 16,234 |
|
| 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 |
| Operating profit/(loss) before highlighted items | 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 |
External revenue by product type
|
| Six months ended 31 August 2022 £'000 | Six months ended 31 August 2021 £'000 | Year ended 28 February 2022 £'000 |
| | 85,709 | 74,635 | 170,383 |
| Digital | 32,529 | 22,239 | 50,526 |
| Rights and services | 4,672 | 3,782 | 9,201 |
| Total | 122,910 | 100,656 | 230,110 |
Rights and services revenue includes revenue from copyright and trademark licences, management contracts, advertising and publishing services.
| Total assets | 31 August 2022 £'000 | 31 August 2021 £'000 | 28 February 2022 £'000 |
| Children's Trade | 21,337 | 16,247 | 13,633 |
| Adult Trade | 15,061 | 14,469 | 13,513 |
| Academic & Professional | 80,141 | 60,463 | 78,096 |
| Special Interest | 13,267 | 13,383 | 13,170 |
| Unallocated | 182,793 | 165,878 | 170,825 |
| Total assets | 312,599 | 270,440 | 289,237 |
Unallocated primarily represents centrally held assets including system development, property, plant and equipment, right-of-use assets, receivables and cash.
4. Highlighted items
| | Six months ended 31 August 2022 £'000 | Six months ended 31 August 2021 £'000 | Year ended 28 February 2022 £'000 |
| |
| | |
| Legal and other professional fees | 111 | 566 | 1,317 |
| Integration and restructuring costs | 205 | 278 | 398 |
| Other highlighted items | 316 | 844 | 1,715 |
| Amortisation of acquired intangible assets | 2,663 | 985 | 2,835 |
| Total highlighted items | 2,979 | 1,829 | 4,550 |
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.
For the six months ended 31 August 2022 legal and other professional fees of £111,000 were incurred as a result of the acquisition of certain assets of Red Globe Press and the ABC-CLIO, LLC acquisition. For the six months ended 31 August 2021 integration and restructuring costs of £205,000 were incurred as a result of the integration of the above acquisitions and the Head of Zeus Limited acquisition.
For the six months ended 31 August 2021 legal and other professional fees of £566,000 were incurred as a result of the Red Globe Press and Head of Zeus Limited acquisitions. For the six months ended 31 August 2021 restructuring costs of £278,000 were incurred as a result of acquisitions and restructuring in both divisions.
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.
5. Dividends
| | Six months ended | Six months ended | Year ended |
| | 31 August | 31 August | 28 February |
| | 2022 | 2021 | 2022 |
| | £'000 | £'000 | £'000 |
| Amounts paid in the period |
|
| |
| Prior period final dividend | 7,604 | 6,141 | 6,141 |
| Prior period special dividend | - | 7,923 | 7,923 |
| Interim dividend | - | - | 1,093 |
| Total dividend payments in the period | 7,604 | 14,064 | 15,157 |
| Amounts arising in respect of the period |
| | |
| Interim dividend for the period | 1,147 | 1,093 | 1,093 |
| Final dividend for the year | - | - | 7,671 |
| Total dividend for the period | 1,147 | 1,093 | 8,764 |
The proposed interim dividend of 1.41 pence per ordinary share will be paid to the equity Shareholders on 2 December 2022 to Shareholders registered at close of business on 4 November 2022.
6. Earnings per share
The basic earnings per share for the six months ended 31 August 2022 is calculated using a weighted average number of Ordinary Shares in issue of 80,921,019 (31 August 2021: 81,492,631 and 28 February 2022: 81,532,620) 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.
| | 6 months ended | 6 months ended | Year ended |
| | 31 August | 31 August | 28 February |
| | 2022 | 2021 | 2022 |
| | Number
| Number
| Number
|
| Weighted average shares in issue | 80,921,019 | 81,492,631 | 81,532,620 |
| Dilution | 1,314,336 | 976,492 | 1,530,573 |
| Diluted weighted average shares in issue | 82,235,355 | 82,469,123 | 83,063,193 |
| |
| | |
| | £'000 | £'000 | £'000 |
| Profit after tax attributable to owners of the Company | 10,111 | 8,588 | 16,890 |
| Basic earnings per share | 12.49p | 10.54p | 20.72p |
| Diluted earnings per share | 12.30p | 10.41p | 20.33p |
|
|
| | |
| Adjusted profit attributable to owners of the Company | 12,579 | 10,572 | 21,548 |
| Adjusted basic earnings per share | 15.54p | 12.97p | 26.43p |
| Adjusted diluted earnings per share | 15.30p | 12.82p | 25.94p |
Adjusted profit is derived as follows:
| Profit before tax | 12,945 | 11,083 | 22,181 |
| Amortisation of acquired intangible assets | 2,663 | 985 | 2,835 |
| Other highlighted items | 316 | 844 | 1,715 |
| Adjusted profit before tax | 15,924 | 12,912 | 26,731 |
| Tax expense | 2,834 | 2,495 | 5,291 |
| Deferred tax movements on goodwill and acquired intangible assets | 484 | (208) | (207) |
| Tax expense on other highlighted items | 27 | 53 | 99 |
| Adjusted tax | 3,345 | 2,340 | 5,183 |
| Adjusted profit | 12,579 | 10,572 | 21,548 |
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
There have been no acquisitions in the 6 months to 31 August 2022.
On 2 June 2021 the Group acquired the issued share capital of Head of Zeus Limited. The consideration, net of pre-existing 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.
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.
The table below summarises the fair values to the Group included in the consolidated financial statements of the major categories of assets and liabilities of these acquisitions at the date of acquisition. Amounts are provisional for ABC-CLIO as management finalise reviews of the asset valuation.
| |
| Fair value to the Group | |||
|
Net assets acquired |
| 6 months ended 31 August 2022 £'000 | 6 months ended 31 August 2021 £'000 | 12 months ended 28 February 2022 £'000 | |
| Assets | |
|
|
| |
| Other intangible assets | | - | 2,800 | 19,372 | |
| Property, plant and equipment | | - | 52 | 336 | |
| Right-of-use assets | | - | 275 | 632 | |
| Deferred tax assets | | - | 130 | 1,092 | |
| Total non-current assets | | - | 3,257 | 21,432 | |
| | | | | | |
| Inventories | | - | 2,202 | 2,754 | |
| Trade and other receivables | | - | 6,654 | 10,008 | |
| Cash and cash equivalents | | - | 37 | 379 | |
| Total current assets | | - | 8.893 | 13,141 | |
| Total assets | | - | 12.150 | 34,573 | |
|
| | | | | |
| Liabilities | | | | | |
| Deferred tax liabilities | | - | (700) | (700) | |
| Lease liabilities | | - | (137) | (321) | |
| Total non-current liabilities | | - | (837) | (1,021) | |
| | | | | | |
| Trade and other liabilities | | - | (3,578) | (11,,142) | |
| Borrowings | | - | (1,097) | (1,097) | |
| Lease liabilities | | - | (165) | (338) | |
| Current tax liabilities | | - | (51) | (305) | |
| Total current liabilities | | - | (4,891) | (12,882) | |
| Total liabilities | | - | (5,728) | (13,903) | |
| Identifiable net assets | | - | 6,422 | 20,670 | |
|
| |
| | | |
| Goodwill | | - | 579 | 3,076 | |
| Total | | - | 7,001 | 23,746 | |
| Satisfied by: | |
| | | |
| Cash consideration | | - | 5,775 | 22,448 | |
| Deferred consideration | | - | 1,226 | 1,298 | |
| Total consideration | | - | 7,001 | 23,746 | |
|
|
|
|
|
| |
8. Rights to Assets
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, with an expected further £0.1 million to be satisfied post-completion subject to assignment of certain contracts. 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
| | 31 August | 31 August | 28 February |
| | 2022 | 2021 | 2022 |
| Non-current | £'000 | £'000 | £'000 |
| Accrued income | 1,008 | 934 | 923 |
| |
| |
|
| Current |
| |
|
| Gross trade receivables | 75,666 | 65,145 | 68,764 |
| Less: loss allowance | (3,463) | (3,414) | (3,551) |
| Net trade receivables | 72,203 | 61,731 | 65,213 |
| Income tax recoverable | 1,967 | 1,039 | 1,392 |
| Other receivables | 2,645 | 2,228 | 2,431 |
| Prepayments | 2,469 | 1,896 | 2,672 |
| Accrued income | 3,992 | 3,859 | 4,494 |
| Royalty advances | 31,645 | 29,399 | 28,677 |
| Total current trade and other receivables | 114,921 | 100,152 | 104,879 |
| Total trade and other receivables | 115,929 | 101,086 | 105,802 |
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 titles advances which may not be fully earned down by anticipated future sales. As at 31 August 2022 £8,909,000 (31 August 2021 £7,700,000 and 28 February 2022 £7,145,000) of royalty advances are expected to be recovered after more than 12 months.
10. Related parties
The Group has no related party transactions in the current or prior periods other than key management remuneration.
Responsibility Statement of the Directors in Respect of the Interim Financial Statements
| Directors |
|
| Sir Richard Lambert | Independent Non-Executive Chairman Chair of the Nomination Committee |
| Nigel Newton | Chief Executive |
| Leslie-Ann Reed | Senior Independent Director Chair of the Audit Committee |
| John Bason | Independent Non-Executive Director Chair of the Remuneration Committee |
| Baroness Lola Young of Hornsey | Independent Non-Executive Director |
| Penny Scott-Bayfield | Group Finance Director |
We confirm that to the best of our knowledge:
· The condensed set of financial statements has been prepared in accordance with UK-adopted International Accounting Standard 34 'Interim Financial Reporting'.
· The interim management report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.
By order of the Board
Nigel Newton Penny Scott-Bayfield
26 October 2022
Principal risks and uncertainties
Bloomsbury has a systematic and embedded risk management process for identifying, evaluating and managing risk, with the goal of supporting the Group in meeting its strategic and operational objectives.
The principal risks fpr the Group's business are summarised as follows:
· Market: including market volatility, post pandemic consumer behaviour, impact of economic instability, increased dependence on internet retailing, open access, sales of used books and rental of textbooks;
· Importance of digital publishing: BDR revenues and profit;
· Acquisitions: return on investment;
· Title acquisition (Consumer publishing): Commercial viability;
· Information and technology systems: Cybersecurity and malware attack, and internal access controls or security measures;
· Financial valuations: Judgemental valuation of assets and provisions;
· Intellectual property: Erosion of copyright and infringement of Group IP by third parties;
· Reliance on key counterparties: Failure of key counterparties or breakdown in key counterparty relationships;
· Talent management: Failure to attract and retain key talent and create an inclusive and supportive environment in which the Group's employees can thrive;
· Legal and compliance: Breach of key contracts by the Group and failure to comply with applicable regulations;
· Reputation: Investor confidence; and
· Inflation: Print supply costs.
Further information about the principal risks and risk management is included in the 2022 Annual Report and Accounts.
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