Final Results
Bloomsbury Publishing PLC
23 March 2004
BLOOMSBURY PUBLISHING PLC
Preliminary Results for the Year Ended 31 December 2003
EARLIER INVESTMENT PRODUCES CLEAR BENEFITS
• Turnover increased 22.2% to £83.11m (2002, £68.02m).
• Operating profit before goodwill amortisation increased 44.1% to £14.61m
(2002, £10.14m)
• Pre-tax profit before goodwill amortisation increased 38.3% to £15.38m
(2002, £11.12m).
• Basic earnings per share before goodwill amortisation up 42.5% to 16.45p
(2002, 11.54p).
• Strong operating cash flows of £14.65m (2002, £12.01m) underpin 52.4%
increase in net cash to £28.32m (2002, £18.58m).
• Final dividend increased 21.5% to 1.677p (2002, 1.380p). Full year
dividend increased by 20% to 2.151p (2002, 1.793p).
• Investment in future titles at the year end up 41.5% at £16.61m (2002,
£11.74m).
• Bloomsbury USA secured successes both with American originated books and
titles originated by Bloomsbury in London, while Berlin Verlag launched new
children's imprint in Germany.
• Three acquisitions made in 2003 expanding markets and strengthening
backlist.
• Board remains confident in outcome for 2004 and future prospects,
reflecting successful development of publishing portfolio.
Commenting on the results and prospects for Bloomsbury, Nigel Newton, Chairman,
said:
'These strong results reflect the benefits of earlier investment. Our
operations in the UK, US and Germany are working well together to build an
increasingly international portfolio for the Group, with more rights retained
in-house. The communication between all three operations has been a key factor
in the Group's success. Sharing information and experiences on the performance
of titles, and above all the vision of our editors to acquire new books that
would be equally successful when published by their colleagues in other parts of
the Group, has ensured that we maximise the chances of identifying the global
bestselling books of the future.
The Group is currently performing to the Board's expectations, and 2004 is
expected to show further progress, supported by continued strong cash
generation. We will continue to invest heavily in our portfolio to ensure
further growth and we look forward to the future with confidence.'
For further information, please contact:
Tim Spratt, Financial Dynamics 020 7831 3113
Charles Palmer, Financial Dynamics
Sandy Karon, PA to the Chairman, Bloomsbury Publishing Plc 020 7494 6015
Chairman's statement
Overview
The results and achievements of the last year were firmly based on the
investment we had previously made in future titles which materialised into major
bestselling books. The strong performance of titles across all three publishing
divisions, Children's, Adult and Reference, was reflected in our results with
pre-tax profit before goodwill amortisation increasing by 38.3% to £15.38m
(2002, £11.12m) on turnover up 22.2% to £83.11m (2002, £68.02m).
During the year, the Group continued to implement its well-defined growth
strategy based on its three core areas. For 2003, the breakdown of turnover for
these areas was as follows: Adult 22% (2002, 25%), Reference 15% (2002, 19%) and
Children's 63% (2002, 56%). Sales of Adult titles increased 6.7% to £18.37m
(2002, £17.21m), while as projected, sales from Reference titles decreased
slightly by 1.7% to £12.45m (2002, £12.66m). Children's sales increased by
37.1% to £52.29m (2002, £38.15m). Adult sales were buoyed by strong titles such
as Donna Tartt's The Little Friend, Schott's Original Miscellany, Schott's Food
and Drink Miscellany, Jeffrey Eugenides's Middlesex, and also the first-time
contribution from Berlin Verlag which was acquired last March. As predicted,
Reference sales declined slightly by comparison to 2002 due to the launch in the
previous year of Business - The Ultimate Resource. The Children's division
performed well on the back of a full year's contribution from Bloomsbury USA,
the success of the fiction list in the UK and the launch of Harry Potter and the
Order of the Phoenix.
At 31 December 2003, the Group had under contract 888 titles (2002, 621) for
future publication, with a gross investment of £16.61m (2002, £11.74m). After
payment of the initial tranches of advances to authors, our liability for future
cash payments on these contracted titles at that date was £8.66m (2002, £6.83m).
During 2003 we made three strategic acquisitions: Andrew Brodie, Berlin Verlag
and Reeds Almanac. The total consideration for these was £2.07m (2002, £2.06m).
Financial Performance
Turnover increased by 22.2% to £83.11m (2002, £68.02m) of which £2.40m (2002,
£0.98m) was generated from acquisitions made during the year. The remaining
growth came from a strong frontlist publishing programme and in particular the
hardback launch of Harry Potter and the Order of the Phoenix.
Profit before tax and goodwill amortisation for the Group increased 38.3% to
£15.38m (2002, £11.12m), after charging a loss before tax and goodwill
amortisation of £1.30m (2002, profit £0.24m) on our acquisitions made during the
year. Basic earnings per share before goodwill amortisation increased by 42.5%
to 16.45 pence (2002, 11.54 pence). Fully diluted earnings per share, before
goodwill amortisation, increased by 46.1% to 15.82 pence (2002, 10.83 pence).
Net cash inflow from operating activities was £14.65m (2002, £12.01m),
reflecting the strength of our publishing programme. At the end of the year the
Group had increased net cash balances by 52.4% to £28.32m (2002, £18.58m). As
can be seen from our investment in titles for future publication and our
acquisition track record, the cash is being used to fund future organic growth
through acquiring new authors and titles and through strategic acquisitions,
which complement our three core activities of Adult, Reference and Children's
publishing.
Children's
2003 was a successful year for the Children's division. We generated excellent
results across the list, proving yet again the importance of Children's
publishing as a primary area of income for Bloomsbury. Internationally we
continued to build the Bloomsbury Children's list in the USA and undertook the
successful launch of Bloomsbury Kinderbucher in Germany. Pirates! by Celia Rees
was our first children's launch across all three markets, and met with
considerable success.
In the US, the Children's division, in its first full year of trading, has shown
good growth. We have quickly become established as a quality publisher of young
adult fantasy fiction, such as Herbie Brennan's Faerie Wars, and achieved
several awards for our books in 2003. We expect to see growing value in our
future backlist revenues in America.
The launch of Harry Potter and the Order of the Phoenix was our most challenging
to date. Detailed international logistics and a major marketing campaign
achieved record-breaking sales in the first weeks of publication, which will
provide a strong platform for the future books in the series.
In 2004, we will be publishing 15 new editions of existing titles in the Harry
Potter series. In addition to the launch of the paperback of Harry Potter and
the Order of the Phoenix in July, we will be publishing, for the first time,
adult hardbacks of the first four books. The newly designed covers will be used
on the re-launch of the adult paperbacks as well. The adult crossover market is
largely untapped in the UK and the export markets. We will also be publishing
new boxed sets aimed at the gift market. The film of Harry Potter and the
Prisoner of Azkaban will be released on 4 June and we will be releasing a
celebratory edition of the book prior to that. The new editions will be backed
up by a strong marketing campaign, such investment ensuring the sustainability
of the series for many years to come.
Adult
During 2003, the division has focused on building critical mass and is achieving
this by:
• buying an increasing number of new books with world rights in order to
publish with Bloomsbury USA and Berlin Verlag as well as generate income
from other foreign rights sales;
• broadening and strengthening its paperback list;
• increasing the hit rate of bestsellers;
• developing books with film and television tie-ins and maximising our
existing relationship with Creative Artists Agency in Hollywood.
2003 was the biggest year yet for the paperback list. Our biggest bestseller was
Donna Tartt's The Little Friend, which went straight to number two in the
bestseller list. Also successful were Jeffrey Eugenides's Middlesex and a
prize-winning first novel, If Nobody Speaks of Remarkable Things by Jon
McGregor. Our paperback list has been further strengthened by the reversion
during the year from a third-party publisher of the paperback rights to the
backlist of one of our major authors, Michael Ondaatje, including his
bestselling Booker-winning Prize novel The English Patient.
Schott's Original Miscellany was in the UK top ten since publication in 2002,
and Schott's Food and Drink Miscellany went straight into the top ten on
publication in November. The series is now an established recognised brand and
paves the way for future titles such as Schott's Sporting, Gaming, & Idling
Miscellany to be published in the current Olympic year.
One of the main achievements for 2003 was our success in acquiring books to
which film rights have been subsequently sold. Anthony Minghella and Miramax
have bought Liz Jensen's new novel, The Ninth Life of Louis Drax, which is due
to be published in June 2004. Scheduled to go into production this year, The
Kite Runner by Khaled Hosseini is to be directed by Sam Mendes, and Oliver Stone
has bought the rights to Anchee Min's Empress Orchid. In the US the
feature-length films of Heart is Deceitful Above All Things and PS have already
been produced and are due for release in 2004. We have also bought books to
tie-in with two television series from the comedians Dom Joly and Rob Brydon.
Another major series, Spy, will have a tie-in book by our author Harry Ferguson
to coincide with its ten-part BBC screening this year. We believe that this is
a good formula to ensure that the adult list continues to grow at a healthy rate
year-on-year. Ultimately, the success of these books will add to our future
backlist revenues.
The publishing programme for 2004 is also strong. Acquisitions during 2003
included the purchase of world rights in a first novel, Jonathan Strange and Mr
Norrell by Susanna Clarke, which is due for publication by Bloomsbury in the UK,
US and Germany simultaneously in the Autumn of 2004. The book has now been sold
by us in translation in 15 territories and is set to be a major international
publishing event. Another first novel, The Icarus Girl by Helen Oyeyemi, has
been sold in ten countries so far and could be the sensation of 2005. Both
titles have strong film potential. Finally, we bought world rights in Sheila
Hancock's memoir of her marriage to John Thaw. There will be a major marketing
campaign for this book this Autumn and we have high hopes for it.
Reference and Electronic Media
In 2003, the Reference Division continued to build on the success of our
business database, Business - The Ultimate Resource, with the publication of a
series of companion volumes. The German edition of the book which we licensed
to Campus Verlag, Germany's leading business book publisher, was published to
great acclaim in the Autumn.
In the Autumn we re-launched the Peter Collin dictionaries list, acquired in
2002, under the Bloomsbury imprint. The texts have been databased, considerably
updated and given a new jacket treatment. We have continued to license titles
in this list in electronic and print form, including several deals with China.
China was also an important licence territory for the Encarta range of
dictionaries with a major deal concluded for the whole series. Agreement was
also reached for a Chinese edition of the Macmillan English Dictionary. This
range continues to grow with the delivery and successful publication of the
Macmillan Essential Dictionary in the Spring. This series is proving extremely
successful in the competitive English Language Teaching dictionary market.
During the year we reached an agreement with the leading sporting brand, John
Wisden, to sell the cricketers' bible, Wisden Cricketers' Almanack, from 2004.
This deal also included agreement that Bloomsbury will publish from 2004 a range
of new Wisden brand titles.
The strategy for the Division remains to grow the copyrights to which Bloomsbury
controls the rights and to exploit these internationally in all formats. Since
the acquisition of Peter Collin and with the continuing evolution of the
Encarta, Macmillan and Business databases, the number of words in our databases
has increased to over 40,000,000.
In 2003, A&C Black continued to build its core publishing areas, strengthened
its substantial backlist and added new annual publications to a list which
already includes Whitaker's Almanack and Who's Who.
In December, we acquired a major new annual publication, Reeds Nautical Almanac.
This unique compendium of navigational data is required by yachtsmen who sail
the coastal waters of Northern Europe. Updated each year, the Almanac and its
related titles will provide steady income streams in future periods. The
addition of the Almanac to our list confirms A&C Black as the pre-eminent
nautical publisher in Europe, and has enabled us to negotiate better terms with
wholesalers across our nautical list. The business also brings with it a
valuable marketing database of customers with an interest in nautical books. We
will publish the 2005 edition in September 2004.
In 2004, we will continue to build our list of annual publications by adding new
titles to the Whitaker's Almanack series, by publishing two new yearbooks,
Whitaker's Almanack Little Book of Everything and Whitaker's Almanack Quiz Book.
2004 will also see a change in A&C Black's distribution arrangements. Due to
the increase in volume of business, the distribution centre at Eaton Socon has
had to deal with warehousing requirements beyond its current capacity. After
looking at a number of options, it was decided to outsource the operation to
Bloomsbury's existing distributor, Macmillan Distribution Limited. Macmillan
Distribution Limited will acquire the freehold warehouse for £1.355m cash and
will take on the warehouse staff only. The new distribution arrangements will
take effect from 1 May 2004 and will allow A&C Black to take advantage of the
sophisticated technology and fast, flexible customer service provided by a
larger distributor such as MDL. I would like to take this opportunity to thank
enormously the staff at the A&C Black distribution centre at Eaton Socon for
their hard work and commitment over many years.
International Activities
Berlin Verlag
2003 was a difficult year for German book publishing which made it an
opportunistic moment for a well-priced acquisition in one of the largest book
markets in the world. We have restructured Berlin Verlag by reducing its
operating overheads, implementing new management information systems and
injecting funds to invest in an expanded publishing programme.
We have re-established Berlin Verlag as an independent publisher, rather than a
small part of a large German conglomerate, and the company is now perceived
again as one of the most respected German publishing houses.
In the Autumn of 2003, Berlin Verlag started a new Children's list, Bloomsbury
Kinderbucher, which is off to a very good start, harnessing Bloomsbury's
worldwide reputation in this area. The list sold very well and has prepared the
ground for increasing the number of titles to be published in 2004.
In September 2004 Berlin Verlag will launch a new commercial imprint to be
called Bloomsbury Berlin, with a number of strong titles. Susanna Clarke's
Jonathan Strange & Mr Norrell and Schott's Original Miscellany are of Bloomsbury
UK provenance, and there is also a promising German title on the list, Mirjam
Pressler's psychological thriller Rosengift.
The economic situation in Germany is gradually improving which may provide a
positive stimulus in book sales in general. Berlin Verlag and its imprints are
well positioned to benefit from the momentum of an improving German economy.
Book sales are recovering and the sales of recognised authors and good backlist
of Berlin Verlag should increase too.
Bloomsbury USA
Bloomsbury USA made progress on a number of fronts as we increased our staff to
meet our expansion plans. The Children's list is now firmly established in
America and had a number of successes ranging from Herbie Brennan's Faerie Wars
to the Latin edition of Harry Potter and the Philosopher's Stone.
The Adult list had many high-selling titles from Sloane Tanen's Bitter with
Baggage to Schott's Original Miscellany which appeared in the New York Times
bestseller list for a number of weeks following its publication in August.
Board and Management Changes
The Company announces that John Dare will retire from the Board at the end of
his current term in June 2004. I would like to thank John for the immense
contribution he has made to the growth of Bloomsbury in the 10 years he has been
on the Board. Paul Scherer has been appointed Senior Non-Executive Director.
Dividend
The directors recommend a final dividend of 1.677 pence per share (2002, 1.380
pence per share) making a total of 2.151 pence per share (2002, 1.793 pence per
share) for the year. This represents a 20% increase in the full year 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, the development of new databases and acquisitions, to
ensure continued growth in earnings in the years ahead. The final dividend will
be payable on 7 July 2004 to Ordinary Shareholders on the register at the close
of business on 28 May 2004.
Prospects
These strong results reflect the benefits of earlier investment. Our operations
in the UK, US and Germany are working well together to build an increasingly
international portfolio for the Group, with more rights retained in-house. The
communication between all three operations has been a key factor in the Group's
success. Sharing information and experiences on the performance of titles, and
above all the vision of our editors to acquire new books that would be equally
successful when published by their colleagues in other parts of the Group, has
ensured that we maximise the chances of identifying the global bestselling books
of the future.
The Group is currently performing to the Board's expectations, and 2004 is
expected to show further progress, supported by continued strong cash
generation. We will continue to invest heavily in our portfolio to ensure
further growth and we look forward to the future with confidence.
Nigel Newton
Chairman
23 March 2004
Financial Review
A key element of Bloomsbury's growth strategy is to retain and exploit in-house
an increasing number of the rights it acquires. This has contributed
significantly to organic growth over the years. With the acquisition of Berlin
Verlag last year, the Group has now started publishing, for the first time,
books in a foreign language. Rather than sub-license foreign-language rights to
third-party German publishing houses who then publish under their own imprint
and pay us a six-monthly royalty, we now channel the German rights we acquire
via Bloomsbury UK and Bloomsbury USA through Berlin Verlag and receive a full
trading margin on all copies sold. This gives a greatly increased income stream
in comparison to the smaller royalty income stream received under previous
sub-licensing arrangements. In addition to Berlin Verlag, we acquired two other
operations, namely Andrew Brodie Publications in January 2003 and Reeds Almanac
in December. All three acquisitions are complementary to the Group's core
business areas.
Turnover for the year for the Group increased 22.2% to £83.11m (2002, £68.02m),
of which £2.40m was generated from the three acquisitions made during the year
(2002, £0.98m). The Group's operations are split into three main operating
areas: Adult, Reference and Children's publishing. For 2003, the breakdown of
turnover for the three areas was as follows: Adult 22% (2002, 25%), Reference
15% (2002, 19%) and Children's 63% (2002, 56%). Turnover by sales channel in
2003 was as follows: Home £53.20m (2002, £47.24m), International £22.62m (2002,
£13.48m), USA £4.64m (2002, £3.81m) and Rights £2.65m (2002, £3.49m). Home and
International sales increased significantly with strongly performing titles such
as Harry Potter and the Order of the Phoenix and The Little Friend by Donna
Tartt. Schott's Original Miscellany and Schott's Food and Drink Miscellany sold
particularly well in the UK. USA sales increased with a full year's
contribution from the Children's list, strong backlist sales and major new
titles such as Schott's Original Miscellany and Pirates! by Celia Rees. Rights
sales were 24% down on 2002 for two reasons. Firstly, we are now retaining
German publishing rights acquired by Bloomsbury UK and Bloomsbury USA in order
to publish them through Berlin Verlag and, secondly, we generated a number of
one-off electronic rights deals on the launch of Business - The Ultimate
Resource in 2002 which were not repeated in 2003.
Gross profit increased 53.9% to £43.48m (2002, £28.25m). Gross profit margin
increased to 52.3% (2002, 41.5%). The change in the gross profit margin was due
to a combination of the economies of scale achieved on the printing of Harry
Potter and the Order of the Phoenix and the accelerated amortisation of the
Encarta World English Dictionary development costs in 2002 as work commenced on
a fully revised second edition due for publication in 2004.
Marketing and distribution costs increased 69.2% to £13.15m (2002, £7.77m). The
increase was primarily as a result of the increase in turnover, costs associated
with the launch of Harry Potter and the Order of the Phoenix and incremental
marketing and distribution costs from the acquisitions made during the year.
Amortisation of goodwill increased 28.7% to £1.75m (2002, £1.36m).
Administrative expenses excluding amortisation of goodwill increased 52.1% to
£15.73m (2002, £10.34m) due to increased staff costs and the incremental
overheads from the acquisitions made during the year. Operating profit before
the deduction of goodwill amortisation increased 44.1% to £14.61m (2002,
£10.14m).
Net interest receivable was 20.4% down on 2002 at £0.78m (2002, £0.98m) due to a
combination of lower average cash balances during the year and prevailing lower
interest rates.
The effective corporation tax rate for the year of 28.7% (2002, 31.4%) takes
account of disallowable costs such as goodwill amortisation of £1.32m (2002,
£0.61m), relating to A&C Black, Berlin Verlag, Peter Collin Publishing and Reeds
Almanac, and losses in Berlin Verlag not utilised during the year, but offset by
tax relief on share options exercised during the year. Profit after tax and
goodwill amortisation increased by 45.1% to £9.72m (2002, £6.70m).
Basic earnings per share before goodwill amortisation increased by 42.5% to
16.45 pence (2002, 11.54 pence). Fully diluted earnings per share before
goodwill amortisation increased by 46.1% to 15.82 pence (2002, 10.83 pence).
Balance sheet
Stocks increased 10.3% to £12.48m (2002, £11.31m). Work in progress was down
13.4% to £5.15m (2002, £5.95m) due to timing of titles at the work in progress
stage and the ongoing amortisation of the electronic databases. Stocks of
finished goods increased 38.3% to £7.19m (2002, £5.20m) due to the stock holding
of an increased number of titles published by Bloomsbury and A&C Black during
the year.
Group debtors falling due within one year and after one year increased 22.2% to
£30.41m (2002, £24.88m). Trade debtors increased 4.7% to £13.90m (2002,
£13.27m). Prepayments and accrued income increased 7.6% to £12.32m (2002,
£11.45m) reflecting the increase in investment in future titles.
Group creditors falling due within one year and after one year increased 36.3%
to £26.06m (2002, 19.12m). £0.68m of guaranteed loan notes were issued during
the year as part of the consideration for the acquisition of Reeds Almanac.
£0.12m of the guaranteed loan notes 2005, relating to the A&C Black acquisition
in 2000, were redeemed during the year. The net effect has increased the loan
notes outstanding to £1.15m (2002, £0.59m). Trade creditors decreased by 21.3%
to £4.94m (2002, £6.28m), reflecting the lower amounts payable to printers at
the end of the year. Accruals and deferred income increased by 83.3% to £14.96m
(2001, £8.16m). Accruals and deferred income includes royalty payments to
authors. These vary from year to year depending on turnover and the authors'
royalty terms.
Cash Flow
£14.65m cash was generated from operating activities during the year (2002,
£12.01m). The timing of the publication of Harry Potter and the Order of the
Phoenix meant that the bulk of cash from sales in the UK was collected before
the end of the year. The bulk of cash relating to export sales will be
collected in the first half of 2004. Corporation tax paid during the year was
£4.28m (2002, £5.08m) and £2.07m was spent on acquisitions (2002, £2.06m).
Shareholders' Funds
At 31 December 2003, Shareholders' funds stood at £58.82m (2002, £48.28m). The
increase was due to retained earnings of £8.20m (2002, £5.49m) and share options
exercised during the year.
Future Investment and Strategy
The Group continues to generate strong positive cash flow. We will continue to
invest in the publishing programme of Berlin Verlag to build critical mass
within the German market. Using Berlin as a channel for German rights acquired
in titles in the UK and the US gives us more control over the way in which these
rights are exploited, improved trading margin and better earnings visibility.
This investment in Berlin Verlag will ensure that as the German economy grows we
will be in a strong position to take advantage of the upswing. Bloomsbury now
has a publishing operation in the three major publishing markets in the world.
This, combined with our extensive export agency network, enables us to
co-ordinate an effective global marketing campaign for our major titles and
gives us more leverage to acquire world rights in future titles.
Organic growth and strategic acquisitions will enhance our position in these
three territories and pave the way for further expansion in other
foreign-language markets.
Colin Adams ACA
Group Finance Director
23 March 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2003
Notes
2003
Continuing 2003 2003 2002
operations Acquisitions Total Total
£'000 £'000 £'000 £'000
Turnover 2 80,714 2,400 83,114 68,016
Cost of sales (38,623) (1,009) (39,632) (39,764)
______ ______ ______ ______
Gross profit 42,091 1,391 43,482 28,252
Marketing and distribution costs (12,174) (973) (13,147) (7,771)
Administrative expenses:
- goodwill (1,313) (438) (1,751) (1,362)
- other (14,014) (1,715) (15,729) (10,339)
______ ______ ______ ______
Operating profit 14,590 (1,735) 12,855 8,780
______ ______
Net interest receivable 775 982
______ ______
Profit on ordinary activities 13,630 9,762
before taxation
Taxation on profit on 3 (3,915) (3,061)
ordinary activities ______ ______
Profit on ordinary activities 9,715 6,701
after taxation
Dividends 4 (1,516) (1,211)
______ ______
Profit for the financial year
transferred to reserves 8,199 5,490
_____ _____
Basic earnings per share 5 14.10p 9.87p
______ ______
Diluted earnings per share 5 13.56p 9.26p
______ ______
Basic earnings per share 5 16.45p 11.54p
before goodwill amortisation ______ ______
Diluted earnings per share 5 15.82p 10.83p
before goodwill amortisation ______ ______
Note
All turnover and results arose from continuing operations.
There were no recognised gains or losses in either year other than the profit
for the year and on this basis a statement of total recognised gains and losses
has not been prepared.
CONSOLIDATED BALANCE SHEET
at 31 December 2003
2003 2002
£'000 £'000
Fixed assets:
Intangible assets 11,359 11,162
Tangible assets 1,218 1,176
______ ______
12,577 12,338
Current assets:
Stocks 12,484 11,311
Debtors due within one year 26,706 20,822
Debtors due after more than one year 3,707 4,058
Cash at bank and in hand 29,472 19,174
______ ______
72,369 55,365
Creditors: amounts falling due within 25,173 18,683
one year ______ ______
Net current assets 47,196 36,682
______ _____
Total assets less current liabilities 59,773 49,020
Creditors: amounts falling due after 883 438
more than one year
Provisions for liabilities and charges 69 302
______ ______
58,821 48,280
______ _____
Equity capital and reserves:
Called up share capital 876 845
Share premium account 33,967 31,656
Capital redemption reserve 20 20
Profit and loss account 23,958 15,759
______ ______
Total shareholders' funds 58,821 48,280
______ _____
The financial statements were approved by the Board of Directors on 23 March
2004.
J N Newton Director
C R Adams Director
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2003
2003 2002
£'000 £'000
Net cash inflow from operating activities 6 (a) 14,650 12,011
Returns on investments and servicing of finance
Interest paid (64) (53)
Interest received 839 1,035
______ ______
Net cash inflow from returns on investments and 775 982
servicing of finance
Taxation
Tax paid (4,283) (5,083)
Capital expenditure
Purchase of tangible fixed assets (389) (372)
Sale of tangible fixed assets 18 22
______ ______
(371) (350)
Acquisitions
Purchase of subsidiary undertakings (1,534) (703)
Purchase of publishing assets (537) (1,359)
______ ______
(2,071) (2,062)
Equity dividends paid (1,274) (1,092)
Financing
Repayment of loans (122) (1,185)
New loan notes in connection with acquisition 675 -
Purchase of own shares - (1,230)
Share options exercised (net of expenses) 2,319 391
______ ______
Net cash outflow from financing 2,872 (2,024)
______ ______
Increase in cash 6 (b) 10,298 2,382
_____ _____
RECONCILIATION OF MOVEMENTS IN CONSOLIDATED SHAREHOLDERS' FUNDS
for the year ended 31 December 2003
2003 2002
£'000 £'000
Profit on ordinary activities after taxation 9,715 6,701
Dividends (1,516) (1,211)
Purchase of own shares - (1,230)
Share options exercised 2,342 391
______ ______
Net addition to shareholders' funds 10,541 4,651
Opening shareholders' funds 48,280 43,629
______ ______
Closing shareholders' funds 58,821 48,280
______ ______
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 2003 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 2003 are the same as those applied in 2002.
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:
2003 2002
£'000 £'000
United Kingdom 54,581 49,300
North America * 9,060 8,962
Continental Europe 11,316 3,402
Australasia 4,222 3,521
Others 3,935 2,831
_______ _______
83,114 68,016
_______ _______
* 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. Taxation
(a) Tax charge for the year
2003 2002
£'000 £'000
Based on the profit for the year:
Corporation tax at 30% 4,243 3,933
Less double tax relief (31) (30)
_______ _______
4,212 3,903
Over provision in respect of prior year (95) (8)
Overseas taxation - current year 31 30
_______ _______
4,148 3,925
Deferred tax (233) (864)
_______ _______
3,915 3,061
_______ _______
(b) Factors affecting tax charge for the year
The tax assessed for the year is different from the standard rate of corporation
tax in the UK (30%). The differences are explained below:
2003 2002
£'000 £'000
Profit on ordinary activities before tax 13,630 9,762
______ ______
Profit on ordinary activities multiplied by the standard 4,089 2,929
rate of corporation tax in the UK of 30%
Effects of:
Expenses not deductible for tax purposes (primarily 504 223
goodwill amortisation)
Difference between depreciation and capital allowances 13 1
Utilisation of tax losses (57) (74)
Losses for the year in subsidiary company not utilised 409 -
Corporation tax relief on share options exercised (919) -
Reversal of authors' advances deducted against - 134
corporation tax in prior years
Reversal of database development costs deducted against 216 727
corporation tax in prior years
Marginal small companies' rate relief in subsidiary (12) (7)
companies
Adjustment to tax charge in respect of previous periods (95) (8)
______ ______
Corporation tax charge for the year 4,148 3,925
______ ______
4. Dividends
2003 2002
£'000 £'000
Interim, paid 0.474p per share (2002: 0.413p) 341 278
Final proposed 1.677p per share (2002: 1.380p) 1,175 933
______ ______
1,516 1,211
______ ______
5. Earnings per share
Basic earnings per share has been calculated by reference to earnings of
£9,715,000 (2002, £6,701,000) and a weighted average number of Ordinary Shares
in issue of 68,901,851 (2002, 67,899,576). The diluted earnings per share has
been calculated by reference to a weighted average number of Ordinary Shares in
issue of 71,654,541 (2002, 72,363,788) which takes account of share options.
Basic and diluted earnings per share excluding goodwill amortisation and the tax
effect thereof have been calculated by reference to earnings of £11,337,000
(2002, £7,837,000).
The reconciliation between the weighted average number of shares for the basic
earnings per share and the diluted earnings per share is as follows:
2003 2002
Number Number
Weighted average number of shares for basic
earnings per share 68,901,851 67,899,576
Dilutive effect of share options 2,752,690 4,464,212
______ ______
Weighted average number of shares for diluted
earnings per share 71,654,541 72,363,788
______ ______
The reconciliation between earnings before and after goodwill amortisation is as
follows:
2003 2002
£'000 £'000
Earnings after goodwill amortisation 9,715 6,701
Goodwill amortisation 1,751 1,503
Adjustment to goodwill arising in previous years - (141)
Tax relief on goodwill amortisation (129) (226)
______ ______
Earnings before goodwill amortisation 11,337 7,837
______ ______
6. Cash flow statement
(a) Reconciliation of operating profit to net cash flow from operating
activities
2003 2002
£'000 £'000
Operating profit 12,855 8,780
Depreciation of tangible fixed assets 344 316
Goodwill amortisation 1,751 1,362
Profit on disposal of tangible fixed assets (5) (3)
(Increase) / decrease in stocks (836) 1,683
(Increase) / decrease in debtors (5,382) 5,514
Increase / (decrease) in creditors 5,923 (5,641)
______ ______
Net cash inflow from operating activities 14,650 12,011
______ ______
(b) Reconciliation to net funds
2003 2002
£'000 £'000
Increase in cash in the year 10,298 2,382
(Increase) / decrease in debt (553) 1,185
______ ______
Movement in net funds in the year 9,745 3,567
Net funds at 1 January 18,580 15,013
______ ______
Net funds at 31 December 28,325 18,580
______ ______
7. Annual General Meeting
The Annual General Meeting will be held at 12 noon on Thursday 24 June 2004
at 38 Soho Square, London W1D 3HB.
8. 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
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