Final Results

Bloomsbury Publishing PLC 20 March 2003 BLOOMSBURY PUBLISHING PLC Preliminary Results for the Year Ended 31 December 2002 London, 20 March 2003: Bloomsbury Publishing Plc is pleased to announce preliminary results for the year ended 31 December 2002. STRONG RESULTS CONFIRM BENEFITS OF BROADER PORTFOLIO AND PREVIOUS INVESTMENT • Turnover increased 11.3% to £68.02m (2001, £61.14m); sales of Adult titles increased 62.3% to £17.2m (2001, £10.6m) and of Reference titles increased 36.6% to £12.7m (2001, £9.3m). • Pre-tax profit before goodwill amortisation increased 18.9% to £11.12m (2001, £9.35m). • Basic earnings per share before goodwill amortisation increased 20.2% to 46.17p (2001, 38.41p). • Strong operating cash flows of £12.01m (2001, £12.51m). Net Cash balances increased 23.8% to £18.58m (2001, £15.01m). • Dividend increased by 13.8% to 7.17p (2001, 6.30p). • Investment in future titles at the year end up 55.5% at £11.09m (2001, £7.13m). • Four acquisitions made in 2002, all performing to expectation. • Future prospects - new hardbacks from Margaret Atwood, Sophie Dahl and Ben Schott and paperbacks from Donna Tartt, Ethan Hawke and Jeffrey Eugenides projected to drive further growth in 2003. JK Rowling's Harry Potter and the Order of the Phoenix is set to meet huge levels of demand from readers. Commenting on the results and prospects for Bloomsbury, Nigel Newton, Chairman, said: The 2002 publishing programme for Bloomsbury was one of our strongest. Not only did we achieve bestsellers with works by established authors including Joanna Trollope's Girl From The South and Donna Tartt's The Little Friend but our ongoing strategy to identify talented new authors showed notable success with Schott's Original Miscellany by Ben Schott. The levels of cash being generated from Bloomsbury's operations was driven by the strength of our publishing programme. At the end of the year, the Group had increased its net cash balances by 23.8% to £18.58m (2001, £15.01m). During 2003, the Group's strong balance sheet and cash flow will support increased investment in the Group's portfolio to drive both organic and acquisition-led growth. The Group is currently performing to the Board's expectations and 2003 is expected to show further growth, supported by continued strong cash generation. We look forward to the future with confidence. Enquiries: Tim Spratt / Charles Palmer Finanical Dynamics 020 7831 3113 Sandy Karon, PA to the Chairman Bloomsbury Publishing Plc 020 7494 6015 Chairman's statement Overview The 2002 publishing programme for Bloomsbury was one of our strongest and this was reflected in our results with pre-tax profit before goodwill amortisation increasing by 18.9% to £11.12m (2001, £9.35m) on turnover up 11.3% to £68.02m (2001, £61.14m). During the year, the Group continued to implement its well-defined growth strategy based on its three core areas of adult, children's and reference publishing. For 2002, the breakdown of turnover for these areas was as follows: adult 25% (2001, 17%), reference 19% (2001, 15%) and children's 56% (2001, 68%). Sales of Adult titles increased 62.3% to £17.2m (2001, £10.6m) and of Reference titles increased 36.6% to £12.7m (2001, £9.3m). Children's sales decreased by 7.3% to £38.15m (2001, £41.22). Not only did we achieve bestsellers with works by established authors including Joanna Trollope's Girl From The South, and Donna Tartt's The Little Friend, but our ongoing strategy to identify talented new authors showed notable success with Schott's Original Miscellany by Ben Schott. In addition to growing our front and backlist revenues, we are always looking at ways to develop new organic revenue streams in each of our business areas. In reference we successfully published Business - The Ultimate Resource. Non-exclusive electronic rights were sold to Economist.com, London Business School and eight other partners. We have also sold rights in six languages: German, Italian, Japanese, Chinese, Russian and Korean. The launch of a children's list in the USA is another excellent opportunity to grow the business in this important market where we are already successfully building our adult list and developing a strongly branded backlist. Currently, US sales account for nearly 6% of the Group's turnover and we are confident that this will now grow significantly in the years to come. At 31 December 2002, Bloomsbury had under contract 433 (2001, 412) titles for future publication, with a gross investment of £11.09m (2001, £7.13m). After payment of the initial tranches of the advances to authors, our cash commitment at that date was £6.57m (2001, £4.16m). During 2002 we made four strategic acquisitions which complement our current portfolio: Whitaker's Almanack, T&D Poyser, Peter Collin and Thomas Reed. In January 2003 we made a fifth acquisition of the educational publisher, Andrew Brodie. The total consideration for the five acquisitions was £2.8m and all are performing to our expectation. Financial Performance Turnover increased by 11.3% to £68.02 million (2001, £61.14 million). £0.98m (2001, £nil) was generated from acquisitions made during the year. The remaining growth came from the increase in backlist revenues and a strong frontlist publishing programme. Profit before tax and goodwill for the Group increased 18.9% to £11.12m (2001, £9.35m) with £0.24m (2001, £nil) being contributed by acquisitions. Basic earnings per share before goodwill amortisation increased by 20.2% to 46.17 pence (2001, 38.41 pence). Fully diluted earnings per share, before goodwill amortisation, increased by 21.0% to 43.32 pence (2001, 35.80 pence). Contributions from investment in our 2002 publishing list and backlist titles generated net cash flow from operating activities of £12.01m (2001, £12.51m). The level of cash generated from Bloomsbury's operations was driven by the strength of our publishing programme. At the end of the year the Group had increased net cash balances by 23.8% to £18.58m (2001, £15.01m). This represented 38.5% of our net assets (2001, 34.4%). The net cash balances exclude £0.59m (2001, £1.78m) set aside for loan note holders from the A&C Black acquisition in 2000. The cash is being used to fund future organic growth through acquiring new authors and by making strategic acquisitions, which complement our three core activities of adult, reference and children's publishing. Adult 2002 was an excellent year for the Adult list. Turnover increased 62.3% to £17.2m (2001, £10.6m). Adult publishing accounted for 25% of the Group's turnover (2001, 17%). Three books reached the bestseller list: Joanna Trollope's Girl From the South; Donna Tartt's The Little Friend, and first time author Ben Schott's Schott's Original Miscellany. The strategy for the division is to identify talented new authors and build up its stable of established authors. The Little Friend was on the bestseller list for ten weeks and was our second highest revenue-generating book in the year. Schott's Original Miscellany was published in October, became a bestseller, and was our third highest revenue-generating book. The profile of the adult list continues to grow in the UK as well as the US, attracting both new and more established authors. Major book acquisitions for 2003 and 2004 include Sophie Dahl's debut book, The Man with the Dancing Eyes, Margaret Atwood's Oryx and Crake, David Guterson's Our Lady Of The Forest and Joanna Trollope's Brother and Sister. We have also acquired the biography of John Thaw by his wife Sheila Hancock, and Death by Hollywood, a thriller by Steven Bochco, the scriptwriter for LA Law, Hill Street Blues and NYPD Blue. We have just acquired world rights in Jonathan Strange and Mr Norrell, a first novel of exceptional potential, by Susanna Clarke. We believe this will be a huge seller in 2004 and we will publish it ourselves in the USA. Reference Reference turnover increased 36.6% to £12.7m (2001, £9.3m) and accounted for 19% of the Group's turnover (2001, 15%). Reference and Electronic Media The key success for the Reference and Electronic Media Division in 2002 was the worldwide publication of Business - The Ultimate Resource in September. The book went on to the business books' bestseller lists, in particular on Amazon both in the UK and US. Non-exclusive electronic rights were sold to Economist.com, London Business School and eight other partners. We sold the rights in six languages, including German, Italian, Japanese, Chinese, Russian and Korean. Business was shortlisted for the 2003 WHSmith 'People's Choice' Book Award for Business Books and the book's dedicated website www.ultimatebusinessresource.com was shortlisted for the Innovation Award at the British Book Awards in 2003. The Macmillan English Dictionary was published worldwide in March 2002 in print and electronic form and has been a major critical and commercial success. It won the Duke of Edinburgh's English Speaking Union Book Award, which is given annually for innovative publishing in the field of English Language Teaching. Our Encarta Dictionary programme continues to grow with publication of the Encarta Pocket Dictionary and Encarta Pocket Thesaurus during the year. The strategic acquisition of Peter Collin Publishing Ltd. in September has given us a well respected list of over 120 subject dictionaries, dictionaries for learners and second-language users of English, bilingual and multilingual content. We control world print and electronic rights in all titles. A&C Black In 2002, A&C Black produced good growth in turnover, generated by increased book sales, rights and commission income and also helped by the acquisition of three new lists. In line with our strategy to become the market leader in our niche areas, we acquired Whitaker's Almanack, a well established brand. We also acquired the prestigious ornithology list T&D Poyser and the long established Reed's nautical list. A&C Black now dominates the UK book market in these areas and we are now the natural home for the best writers in these fields. Both lists have been taken on with no increase in staff and will benefit from our specialist editorial and marketing expertise. A&C Black's other publishing also produced some notable successes in 2002. In ornithology, The RSPB Handbook of British Birds was a bestseller. This was the first book produced as part of a long-term publishing agreement with the RSPB. In the children's and music division, Music Express, our new music scheme for schools, outperformed all expectations and is set to make a significant contribution to the backlist for many years to come. Our Developing Maths series also exceeded budget in a year when many educational publishers experienced a significant downturn in Primary Maths. Other highlights included the 40th edition of Black's Medical Dictionary, the success of our new sailing bible, The Complete Day Skipper, by Tom Cunliffe, and the growth in sales of our sports books, including the publication of a new book, Kids' Food for Fitness, by our bestselling author Anita Bean. The sports list is showing good underlying organic growth and is being developed to become one of our significant revenue generating streams for the future. Children's The children's list continued to perform strongly even without the publication of a new Harry Potter. Children's publishing accounted for 56% of the Group's turnover (2001, 68%). Children's sales decreased in the year by 7.3% to £38.15m (2001, £41.22m) against the strong performance in 2001, which included the publication of Harry Potter and the Goblet of Fire in paperback. Fiction continues to dominate the children's market and Bloomsbury is seen as a market leader in terms of both content and sales. Strong selling titles in 2002 were Sorceress and Witch Child by Celia Rees and Dogs Don't Tell Jokes by Louis Sachar. We have now sold seventeen foreign language editions of Witch Child. Stravaganza by Mary Hoffman was a strong seller in hardback and will be a lead paperback title in 2003. Our bestsellers include the four Harry Potter titles, which have stayed at the top of the children's charts throughout the year. Harry Potter and the Order of the Phoenix, the fifth in the Harry Potter series, will be published on 21 June. This can accurately be described as the most anticipated book of the year and will be launched with a dramatic campaign. Neil Gaiman's first novel for children Coraline became a bestseller when it was published in August. We also have perennially bestselling backlist titles in Holes by Louis Sachar and The Selfish Crocodile by Faustin Charles and Mike Terry, now in its sixth year of publication. The children's operation in the US, which was launched in May 2002, is establishing itself as an identifiable brand in US children's publishing. We have already received several awards including a short listing for the Michael J Printz Award for Sabrina Fludde and the Christopher Award for Mole and The Baby Bird. Our major acquisitions in 2002 for publication in 2003 and 2004 have been the next children's novel by Neil Gaiman, the commercial series Gossip Girl, and a first novel by Anna Dale called Whispering To Witches for which we have already secured five foreign language deals. In 2002, we also agreed with Celia Rees a contract for another historical drama entitled Pirates, which we will publish in October 2003. We continue to acquire world rights in the majority of our children's titles and exploit those rights to the full, either in-house or to licencees. We have sold film rights to The Disney Corporation through the Creative Artists Agency (CAA) in Hollywood for the novel Frog Princess by E. D. Baker. Acquisitions The four acquisitions made in 2002, Whitaker's Almanack, T&D Poyser, Peter Collin, Thomas Reed and also Andrew Brodie, acquired in January 2003, have strengthened our market positions in the reference, nautical, ornithology and educational markets. These acquisitions fit in well with the Group's existing operations and require little increase to overheads. The acquisitions provide branded content for immediate exploitation, are already benefiting from being part of a larger publishing group, and have been integrated as planned. Whitaker's Almanack was acquired in May. It is a well-established brand, first published in 1868. The Almanack is an annual publication, which will generate revenues indefinitely. The first edition under the A&C Black imprint was published in October 2002 and exceeded the previous year's sales by 58%, demonstrating the sales synergies achievable under the Group's ownership. We have also concluded a five-year deal with an electronic distributor to libraries. In July, we acquired T&D Poyser, an established ornithology list, which has added over 200 titles to A&C Black's backlist and frontlist publishing programmes. Poyser has been publishing high-quality bird books since 1973 and fits well with our market leading ornithology list. In September, we acquired Peter Collin Publishing. The company is a reference publisher of specialist subject dictionaries, dictionaries for learners of English, and bilingual dictionaries, such as the French Business Dictionary. The acquisition provided us with ready made content in an area of reference publishing we had been looking to move into for some time. The databases that came with the acquisition are ideal for electronic exploitation as well. In the same month we purchased Thomas Reed Publications, which has been publishing nautical books since 1782. The list is aimed at merchant mariners and the practical leisure boating market and fits in well with our market leading Adlard Coles nautical list. In January of this year, we acquired Andrew Brodie Publications, an educational publisher of photocopiable books for the UK schools market. A&C Black already has a highly successful educational list in which we experienced good growth in 2002, and the additional material that comes with Andrew Brodie, acquired in January 2003, will give us greater penetration into the schools educational market. Board and Management Changes During the year we made three appointments. In January, Sarah Odedina, Publishing Director of Children's books was appointed as executive director, and Michael Mayer, a San Francisco based venture capitalist, joined as a non-executive director. Expansion in the USA and children's publishing are key areas of development for the Company and their input to the board will be invaluable in achieving our strategic goals. In June, David Ward, Sales Director of Bloomsbury, was appointed as executive director to the Board. He has been with the Company since 1987. In November, Alan Wherry retired from the Company and the Board. He was one of the founding directors of Bloomsbury and was responsible for setting up Bloomsbury USA and running it until his retirement. He will continue his involvement with Bloomsbury USA as a consultant. I would like to thank Alan for his enormous contribution both to the founding of Bloomsbury itself in 1986 and of Bloomsbury USA in 1998. Alan's role as head of Bloomsbury USA was taken over by Karen Rinaldi, Publisher of Bloomsbury in New York, with effect from 2nd December. Karen Rinaldi has a wealth of publishing experience and joined Bloomsbury in 1999 as its first US based editor. She has already commissioned several bestsellers for the company, including Anthony Bourdain's Kitchen Confidential. She was also a Senior International Tax Consultant for Price Waterhouse for four years earlier in her career. Dividend The directors recommend a final dividend of 5.52 pence per share (2001, 4.8 pence per share) making a total of 7.17 pence per share (2001, 6.30 pence per share) for the year. This represents a 13.8% increase in the dividend in line with our progressive dividend policy, underpinned by the company's increasing profitability. However, the dividend policy will continue to reflect the need to invest in new and established authors, the acquisition of international rights, and the development of new databases, to ensure continued growth in earnings in the years ahead. The final dividend will be payable on 4 July 2003 to Ordinary Shareholders on the register at the close of business on 23 May 2003. Prospects Bloomsbury is well positioned in its three key markets of adult, children's and reference publishing with strong forthcoming lists in each. Paperback editions of hardback titles from 2002 by Donna Tartt, Ethan Hawke and Jeffery Eugenides will be released in 2003. Margaret Atwood's Oryx and Crake will be published in May, and the most anticipated book of the year, Harry Potter and the Order of the Phoenix, in June. Ben Schott's next book, Schott's Food and Drink Miscellany will be published in October. During 2003, the Group's strong balance sheet and cash flow will support increased investment in the Group's portfolio, to drive both organic and acquisition-led growth. The Group is currently performing to the Board's expectations and 2003 is expected to show further growth, supported by continued strong cash generation. We look forward to the future with confidence. Nigel Newton Chairman 19 March 2003 Financial Review The focus for Bloomsbury in 2002 was to continue maximising returns on investment in titles both on its frontlist and backlist publishing programmes to ensure continued organic growth. In addition to this we made four strategic acquisitions, namely Whitaker's Almanack, T&D Poyser, Peter Collin Publishing and Thomas Reed Publications. All four acquisitions complemented the Group's core business areas, which meant that we were able to integrate them with minimal incremental recurring overheads. Turnover for the year for the Group increased by 11.3% to £68.02m (2001, £61.14m) of which £0.98m was generated from the four acquisitions made during the year (2001, £nil). Backlist revenues increased 16.7% to £43.46m (2001, £37.25m). The Group's operations are split into three main operating areas, adult, children's and reference publishing. For 2002, the breakdown of turnover for the three areas was as follows: adult 25% (2001, 17%), children's 56% (2001, 68%), and reference 19% (2001, 15%). Turnover by sales channel in 2002 were as follows: Home £47.24m (2001, £37.53m), Export £13.48m (2001, £18.20m), USA Trade £3.81m (2001, £3.21m), and Rights £3.49m (2001, £2.20m). Home sales were strong with three particularly UK oriented bestsellers, Whitaker's Almanack, Schott's Original Miscellany and Joanna Trollope's Girl From The South. UK sales showed strong growth through non-book trade outlets including sales to institutions of Whitaker's Almanack and Who's Who, sales direct to UK schools, sales of nautical and ornithology titles to chandleries and specialist outlets, and sales by direct mail of A&C Black and Bloomsbury titles. Gross profit increased 4.4% to £28.25m (2001, £27.05m). Gross profit margin was lower at 41.5% of turnover (2001, 44.3%). The reduction was primarily due to a number of low margin print deals which were concluded in the second half of the year and the amortisation of the Encarta World English Dictionary. We are now fully revising the Encarta World English Dictionary Database for the second edition of the dictionary which is due to be published in 2004. We have therefore accelerated the amortisation of the development costs of the first edition, which had been amortised on a straight-line basis since 1999. Marketing and distribution costs decreased by 8.4% to £7.77m (2001, £8.48m) because there were no costs associated with a release of a new edition of Harry Potter. Goodwill amortisation increased 127% to £1.36m (2001, £0.60m). Of this £0.60m was goodwill arising from the annual amortisation of the goodwill arising from the acquisition of A&C Black in 2000. The increase was due to net goodwill arising on the acquisition of Peter Collin Publishing Limited, and business assets purchased during the year. The business assets acquired have been fully integrated into the operations of A&C Black which makes it difficult to identify the ongoing value of the associated goodwill. We have therefore taken the view that it is appropriate to eliminate the goodwill in the year of acquisition of those assets. Administrative expenses increased 2.4% to £10.34m (2001, £10.10m). Operating profit before the deduction of goodwill amortisation increased 19.6% to £10.14m (2001, £8.48m). Bloomsbury's cash is handled by the treasury division of The Royal Bank of Scotland. Their remit is to obtain a better rate of return than the UK deposit rates from banks around the world with a minimum A1 Standard & Poors rating. Net cash balances increased 23.8% to £18.58m at 31st December 2002 (31st December 2001, £15.01m). The net cash balances exclude £0.59m (2001, £1.78m) set aside for loan note holders from the A&C Black acquisition in 2000. The Group generated net interest income of £0.98m (2001, £0.88m). Profit before tax and goodwill for the Group increased 18.9% to £11.12m (2001 £9.35m). The effective corporation tax rate for the year of 31.4% (2001, 32.6%) takes account of disallowable costs such as goodwill amortisation of £0.61m, relating to the acquisition of A&C Black Limited and Peter Collin Publishing Limited. Profit after tax and goodwill amortisation increased by 13.6% to £6.70m (2001, £5.90m). Basic earnings per share before goodwill amortisation increased by 20.2% to 46.17 pence (2001, 38.41 pence). Fully diluted earnings per share before goodwill amortisation increased by 21.0% to 43.32 pence (2001, 35.80 pence). Balance Sheet Stocks decreased by 9.4% to £11.31m (2001, £12.49m). Work in progress decreased by 12.4% to £5.95m (2001, £6.79m) as a result of the accelerated amortisation of the first edition development costs of the Encarta World English Dictionary. Finished goods for resale decreased by 5.8% to £5.20m (2001, £5.52m) due to improved stock control. Group debtors falling due with one year and after one year decreased by 17.1% to £24.88m (2001, £30.02m). Trade debtors decreased 34.3% to £13.27m (2001, £20.20m) due to sales being generated more smoothly over the last six months of the year. Prepayments and accrued income increased 20.7% to £11.45m (2001, £9.49m) reflecting the increase in investment in future titles. Group creditors falling due within one year and after one year decreased 28.4% to £19.12m (2001, 26.72m). £1.19m of guaranteed loan notes 2005 were redeemed during the year, reducing the loan notes outstanding to £0.59m (2001, £1.78m). Trade creditors decreased by 21.5% to £6.28m (2001, £8.00m) reflecting the lower amounts payable to printers at the end of the year. Accruals and deferred income decreased by 27.4% to £8.16m (2001, £11.24m). Accruals and deferred income includes royalty payments to authors. These vary from year to year depending on the authors' royalty terms. Cash Flow £12.01m cash was generated from operating activities during the year (2001, £12.51m). 2002 was the first year where the transition phase for paying corporation tax no longer applied for the Group and the full amount of estimated corporation tax was payable in advance in quarterly instalments. Corporation tax paid during the year was £5.08m (2001, £2.72m). £2.06m was spent on four acquisitions during 2002. During the year, loan note holders redeemed £1.19m (2001, £0.21m) of loan notes leaving £0.59m outstanding at the year end (2001, £1.78m). In September 2002, we took advantage of a drop in the Company's share price and bought back 220,000 of our own shares for £1.23m. These shares were subsequently cancelled. After all expenditure, there was a net increase in cash of £2.38m (2001, £9.32m). Shareholders' Funds At 31 December 2002, Shareholders' funds stood at £48.28m (2001, £43.63m). The increase was due to retained earnings of £5.49m (2001, £4.83m), share options exercised during the year, less the share buy back. Future Investment and Strategy The Group continues to generate funds from its operations. The cash is being invested in book titles to enable the Group to continue its rate of organic growth, as well as selective acquisitions within the Group's core publishing areas. The strategy for book acquisitions is to acquire as many of the rights associated with them as possible. These can either be exploited in-house, or sub-licensed to a third party where we can participate in the royalty income stream. Over the course of time more of these rights will be retained in-house and published under the Group's various imprints thus enabling the Group to benefit from the full margin of the sale of the product rather than a lower margin licence royalty. We are looking for further acquisitions with a strong track record to complement our current operations. Whitaker's Almanack fits in well with our existing stable of properties, such as Who's Who and Black's Medical Dictionary, and will continue to generate profits and cash for many years to come, enhancing the long-term visibility of the earning potential of the Group's intellectual property. Colin Adams ACA Group Finance Director 19 March 2003 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 December 2002 Notes 2002 Continuing 2002 2002 2001 operations Acquisitions Total Total £'000 £'000 £'000 £'000 Turnover 2 67,036 980 68,016 61,140 Cost of sales (39,378) (386) (39,764) (34,086) Gross profit 27,658 594 28,252 27,054 Marketing and distribution costs (7,636) (135) (7,771) (8,482) Administrative expenses: - - goodwill (459) (903) (1,362) (600) - other (10,121) (218) (10,339) (10,096) Operating profit 9,442 (662) 8,780 7,876 Net interest receivable 982 877 Profit on ordinary activities before 9,762 8,753 taxation Taxation on profit on ordinary (3,061) (2,852) activities Profit on ordinary activities after 6,701 5,901 taxation Dividends 3 (1,211) (1,068) Profit for the financial year transferred to reserves 5,490 4,833 Basic earnings per share 4 39.48p 34.86p Diluted earnings per share 4 37.04p 32.50p Basic earnings per share before 4 46.17p 38.41p goodwill amortization Diluted earnings per share before 4 43.32p 35.80p goodwill amortization Note All turnover and results arose from continuing operations. There were no recognised gains and losses in either year other than the profit for the year and on this basis a statement of recognized gains and losses has not been prepared. CONSOLIDATED BALANCE SHEET at 31 December 2002 2002 2001 £'000 £'000 Fixed assets: Intangible assets 11,162 11,067 Tangible assets 1,176 1,139 12,338 12,206 Current assets: Stocks 11,311 12,493 Debtors due within one year 20,822 26,165 Debtors due after more than one year 4,058 3,859 Cash at bank and in hand 19,174 16,792 55,365 59,309 Creditors: amounts falling due within one year 18,683 26,441 Net current assets 36,682 32,868 Total assets less current liabilities 49,020 45,074 Creditors: amounts falling due after more than one year 438 279 Provisions for liabilities and charges 302 1,166 48,280 43,629 Equity capital and reserves: Called up share capital 845 848 Share premium account 31,656 31,273 Capital redemption reserve 20 9 Profit and loss account 15,759 11,499 Total shareholders' funds 48,280 43,629 The financial statements were approved by the Board of Directors on 19 March 2003. J N Newton Director C R Adams Director CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2002 2002 2001 £'000 £'000 Net cash inflow from operating activities 5(a) 12,011 12,506 Returns on investments and servicing of finance Interest paid (53) (68) Interest received 1,035 945 Net cash inflow from returns on investments and servicing of finance 982 877 Taxation Tax paid (5,083) (2,716) Capital expenditure Purchase of tangible fixed assets (372) (320) Sale of tangible fixed assets 22 16 (350) (304) Acquisitions Purchase of subsidiary undertaking (703) - Purchase of publishing assets (1,359) - (2,062) - Equity dividends paid (1,092) (930) Financing Repayment of loans (1,185) (210) Purchase of own shares (1,230) - Share options exercised (net of expenses) 391 97 Net cash outflow from financing (2,024) (113) Increase in cash 5(b) 2,382 9,320 RECONCILIATION OF MOVEMENTS IN CONSOLIDATED SHAREHOLDERS' FUNDS for the year ended 31 December 2002 2002 2001 £'000 £'000 Profit on ordinary activities after taxation 6,701 5,901 Dividends (1,211) (1,068) Purchase of own shares (1,230) - Share options exercised 391 49 Net addition to shareholders' funds 4,651 4,882 Opening shareholders' funds 43,629 38,747 Closing shareholders' funds 48,280 43,629 NOTES 1. The above financial information does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The above figures for the year ended 31 December 2002 are an abridged version of the Company's audited accounts which will be reported on by the Company's auditors before despatch to the shareholders and filing with the Registrar of Companies. The accounting policies applied in 2002 are the same as those applied in 2001. 2. Geographical analysis of turnover The directors regard the Group's business as a single segment. Its profit and turnover arise principally in the United Kingdom where its assets are mainly located. The table below analyses turnover by destination: 2002 2001 £'000 £'000 United Kingdom 49,300 38,579 North America * 8,962 7,736 Continental Europe 3,402 5,953 Australasia 3,521 5,118 Others 2,831 3,754 68,016 61,140 * Sales in North America include the turnover from Bloomsbury USA, co-edition sales and the sale of rights and licences to third parties. In the directors' opinion, disclosure of the analysis of the profit before tax by geographical segment would be seriously prejudicial to the Group. 3. Dividends 2002 2001 £'000 £'000 Interim, paid 22 November 2002 278 254 Final proposed 5.52p per share 933 814 1,211 1,068 4. Earnings per share Basic earnings per share has been calculated by reference to earnings of £6,701,000 (2001, £5,901,000) and a weighted average number of Ordinary Shares in issue of 16,974,894 (2001, 16,926,075). The diluted earnings per share has been calculated by reference to a weighted average number of Ordinary Shares in issue of 18,090,947 (2001, 18,158,383). Basic and diluted earnings per share excluding goodwill and the tax effect thereof have been calculated by reference to earnings of £7,837,000 (2001, £6,501,000). The reconciliation between the weighted average number of shares for the basic earnings per share and the diluted earnings per share is as follows: 2002 2001 Number Number Weighted average number of shares for basic earnings per share 16,974,894 16,926,075 Dilutive effect of share options 1,116,053 1,232,308 Weighted average number of shares for diluted earnings per share 18,090,947 18,158,383 The reconciliation between earnings before and after goodwill amortisation is as follows: 2002 2001 £'000 £'000 Earnings after goodwill amortisation 6,701 5,901 Goodwill amortisation 1,362 600 Tax relief on goodwill amortisation (226) - 7,837 6,501 5. Cash flow statement (a) Reconciliation of operating profit to net cash flow from operating activities 2002 2001 £'000 £'000 Operating profit 8,780 7,876 Depreciation of tangible fixed assets 316 268 Goodwill amortisation 1,362 600 Profit on disposal of tangible fixed assets (3) (6) Decrease / (increase) in stocks 1,683 (994) Decrease in debtors 5,514 3,704 (Decrease) / increase in creditors (5,641) 1,058 Net cash inflow from operating activities 12,011 12,506 (b) Reconciliation to net funds 2002 2001 £'000 £'000 Increase in net cash in the year 2,382 9,320 Decrease in debt 1,185 210 Movements in net funds in the year 3,567 9,530 Net funds at 1 January 15,013 5,483 Net funds at 31 December 18,580 15,013 6. Annual General Meeting The Annual General Meeting will be held at 12 noon on Thursday 26th June 2003 at 38 Soho Square, London W1D 3HB. 7. Report and Accounts Copies of the Report and Accounts will be circulated to shareholders shortly and may be obtained after the posting date from the Company Secretary, Bloomsbury Publishing Plc, 38 Soho Square, London W1D 3HB. This information is provided by RNS The company news service from the London Stock Exchange

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