Final Results

RNS Number : 3833J

Bloomsbury Publishing PLC

30 March 2010

 



Bloomsbury Publishing Plc

30 March 2010

BLOOMSBURY PUBLISHING Plc

("Bloomsbury" or "the Group")

Preliminary Results for the Year Ended 31 December 2009

2009 saw a strong performance by the Group despite difficult trading conditions.

Financial highlights

The highlights for 2009 include:

·          Revenue of £87.22m (2008: £99.95m - publication of HP7 Paperback and The Tales of Beedle the Bard)

·          Adjusted pre-tax profit of £7.71m (2008, £11.85m - publication of HP7 Paperback)*

·          Basic  earnings per share of 6.77p (2008, 10.67p - publication of HP7 Paperback), adjusted basic earnings per share of 7.56p (2008, 10.96p)*

·          Profit from Bloomsbury USA of £0.45m before central cost recharges (2008: £0.38m)

·          Net cash of £35.04m (2008: £51.91m)

·          Final dividend per share increased 5% to 3.65p (2008: 3.47p).  Full year dividend per share increased by 5% to 4.43p (2008: 4.22p)

* adjusted  figures are stated before the amortisation of intangibles and impairment of goodwill.

Operating highlights

·          Profits ahead of consensus market forecasts achieved in difficult trading conditions and against high comparatives  including paperback release of HP7 in 2008

·          Strong sales driven by an excellent publishing programme including River Cottage Everyday by Hugh Fearnley Whittingstall, The Suspicions of Mr Whicher by Kate Summerscale, The Guernsey Literary and Potato Peel Pie Society by Mary Ann Shaffer and Annie Barrows, Ordinary Thunderstorms by William Boyd and The Fat Duck Cookbook by Heston Blumenthal

·          Strong pipeline of releases for 2010 including launch of newly designed edition of Harry Potter on 1^st November

·          Strengthened academic publishing division with acquisitions of Tottel Publishing and Hodder Education Humanities list

Nigel Newton, Chief Executive, said:

"This is a strong set of results, ahead of consensus market forecasts achieved under difficult trading conditions, and demonstrates the strength of our portfolio. We have further strengthened our academic division with the two new acquisitions. Trading has been excellent in the first quarter of 2010 with a range of new bestsellers (including the Number 1 bestseller Operation Mincemeat) and a major six-figure rights deal concluded in January.

The two Qatar management services partnerships will have an important year in 2010.  Three major movies, Nanny McPhee; Eat, Pray, Love; and Harry Potter and the Deathly Hallows Part One, will drive further sales of these proven bestsellers in 2010. The success of Bloomsbury's Public Library Online initiative and other Bloomsbury innovations will see us at the forefront of the digital opportunity. The marketplace will remain rocky in 2010 and will continue to throw the unexpected at all businesses but I am confident that Bloomsbury is as well positioned as it could be to prosper in this environment with our high hit rate in trade publishing, our expansion in academic and professional publishing, our strong balance sheet and our entrepreneurial mission. "

For further information, please contact:

Nigel Newton, Chief Executive, Bloomsbury Publishing Plc                        [phone]

Daniel de Belder / Rosanne Perry, Bell Pottinger                                             [phone]

Bloomsbury Publishing PLC

Chairman's Statement

2009

The last year has been one of the most turbulent since the Depression.  Across the world it has challenged the economic survival of country, corporation and consumer alike.  It has accelerated a shift of the world's economic axis.  And it is engendering a fundamental reassessment of political ideology across the planet as governments have sought to play their part in keeping the ship afloat.  The world has been brought together by the crisis, and yet new divisions are emerging as a result.

I can think of no other conditions like them in living memory - in the corporate world they have tested to the limit the fundamental ethos and strategies of business organisations.  Some have been found wanting and their businesses have collapsed.  Others have prospered, their businesses reinforced and their competitive positions enhanced.

 Bloomsbury entered the crisis with a clear strategy, a strong financial position, an experienced and established management team, a strengthened governance structure, and the enduring determination of its Founder and Chief Executive, Nigel Newton, and the Executive Directors on the Board, Richard Charkin and Colin Adams, to preserve the entrepreneurialism and cultural backbone which have driven this Company and the Group for almost a quarter of a century.

That strategy involves the stabilisation of the Group's revenue streams through the steady development of its Professional and Academic arm, the further growth of its successful ventures in the Gulf, constant and rigorous attention to its core trade publishing activities and digitisation of its activities across the entire Group. 

Behind this strategy lies a deep and almost instinctive understanding of the transformational forces at work in the publishing industry and an ability to respond to them.  Thus, for example, the key acquisitions in building the Group have been in the Specialist arm of the Group - they have been targeted and measured, are integrating well and have all been manageable and within the financial resources of the Group.  The new Qatar ventures have been beneficial to Bloomsbury, but they have also widened the cultural bandwidth of the Group with a country with the highest potential, resources and influence in the Middle East.  The unremitting housekeeping of the Trade arm of the Group has seen its US business revived and a steady, sustaining flow of revenues from the core activity which forms the basis of a good publishing company.  In all these activities, digitisation of the platforms, delivery systems and infrastructure has been an underlying driver.  The growing force and opportunities of new delivery systems for the published product is a constant reference point for the Board and the Group's management.

These and other initiatives fit within a strategy which has served the Group well when others have been found wanting.  Bloomsbury is in good shape to capitalise on the potential of the year ahead.

Charles Black will retire at this year's Annual General Meeting.  His wisdom, balance and deep understanding of the publishing industry will be sorely missed.  He brought into Bloomsbury A&C Black, a five generation business founded by his family in 1807.  A&C Black is core to Bloomsbury's Academic and Professional business.  Charles is the Senior Independent Director of the Group and Chairman of its Audit and Remuneration Committees.  There is no replacing such a mix of talent, intuition and integrity and Charles leaves behind an enduring legacy which will benefit all the Group's stakeholders for decades to come.

Michael Mayer, according to The Combined Code on Corporate Governance, loses his independence and will retire at the end of his ninth year.  A good company is constantly balancing the costs of conformance governance (not necessarily consistent with good governance) with the economics of a vibrant and successful business, and Michael, through his incisive grasp of the economics of business, invaluable knowledge of the process of acquisition economics and corporate financial husbandry, a deep and abiding loyalty to the Group and his instinctive understanding of the role of the Non-Executive Director, has made an immense contribution to Bloomsbury and challenged this balance to the limit.  His departure at the end of this year is a sad one for the Group and he, too, will be sorely missed.

On behalf of the Group and all its stakeholders, I thank them both for their invaluable contribution - a contribution impossible to recognise fully in a few words on a sheet of paper.

However, change brings opportunity, and the Nominations Committee is well advanced, using the services of an independent search firm, in the selection of two new Directors from an impressive list of candidates to replace Charles and Michael when they retire.

Finally, the contribution of each and every one of the people who work in this Group cannot be over-stated.  Led by an Executive team strengthened the year before last by Richard Charkin's arrival - now a key management asset of the Group - it is they who have ensured that its strategy is executed and its ethos and culture developed and enhanced.  The acquisitions have brought with them talent and skills which have enriched Bloomsbury and the conditions of the last two years have toughened and seasoned the entire team.  On behalf of the Board and all the stakeholders of this Group, they have our sincere thanks. 

In summary, driven by a team of dedicated professionals working throughout this Group, it is the Board's intention that Bloomsbury will continue to change and adapt to the rapidly developing dynamics of the publishing industry.  It is far from certain that the turbulence of the past two years is over, but the Group is well placed to exploit the opportunities of the future.

Jeremy Wilson

Chairman

30 March 2010

Chief Executive's statement

Overview

This excellent set of results, ahead of consensus market forecasts and in a difficult environment against a strong comparative year, demonstrates the strength of the portfolio of revenue streams in the Group. The growth in the Specialist Division was augmented by the acquisitions of the legal and tax publisher Tottel, now renamed Bloomsbury Professional, and the Hodder Education Humanities list. Both have performed well and made good contributions to the Group.

In the second half of 2009, the Trade Division launched one of its strongest lists to date. Major titles included River Cottage Everyday by Hugh Fearnley-Whittingstall, The Fat Duck Cookbook by Heston Blumenthal and Ordinary Thunderstorms by William Boyd. Major backlist sellers included A Thousand Splendid Suns and The Kite Runner by Khaled Hosseini, Eat, Pray, Love by Elizabeth Gilbert, the seven Harry Potters, The Suspicions of Mr Whicher by Kate Summerscale and The Guernsey Literary and Potato Peel Pie Society by Mary Ann Shaffer and Annie Barrows.

In November 2009 Borders, the UK retail bookshop chain, closed. While the amount owed to us by Borders was covered by existing bad debt provisions, the long-term impact is a reduced number of high-street booksellers. At the same time we are seeing an increase in online book sales, partially offsetting the high-street retail decline.

E-book revenues are small but growing and there has been a considerable uplift in activity in the last twelve months including the Amazon Kindle released internationally.  We are looking for opportunities to create new revenue streams from our digital files by content aggregation and innovative marketing.

Financial Performance

Revenue for the Group was £87.22m (2008, £99.95m including Harry Potter and the Deathly Hallows in paperback and The Tales of Beedle the Bard). Revenues from the UK were £58.89m (2008, £71.06m). Revenues from the US were £18.78m (2008, £17.32m). Revenues from Continental Europe generated by Berlin Verlag, were £9.55m (2008, £11.57m).

The Board manages the financial performance of the Group based on the geographic location of its operating units and subsidiaries. Accordingly the paragraphs which follow discuss financial performance separately for operations based in the UK, North America and Continental Europe. The Group has also entered into various arrangements to provide management services to entities in Qatar. These entities are not controlled by the Group and accordingly are not consolidated. The Group earns management and consultancy income from these contracts and financial performance under these contracts is discussed according to the geographic location of the Bloomsbury operating unit providing these services.

Profit before tax for the Group was £7.13m (2008, £11.63m). Profit before tax before intangibles amortisation and goodwill impairment was £7.71m (2008, £11.85m).  Basic earnings per share was 6.77 pence (2008, 10.67 pence).  Diluted earnings per share was 6.74 pence (2008, 10.67 pence). Basic earnings per share before intangibles amortisation and goodwill impairment was 7.56 pence (2008, 10.96 pence). Diluted earnings per share before intangibles amortisation and goodwill impairment was 7.53 pence (2008, 10.96 pence).

At the year end the Group had net cash balances of £35.04m (2008, £51.91m) after the net cash consideration of £10.31m (2008, £7.43m) paid for the two (2008, four) acquisitions made during the reporting period. We continue to invest in future growth through acquiring new authors and titles and specialist publishing companies. Our strong balance sheet puts us in an excellent position to take advantage of these opportunities as they arise. As at 31 December 2009 the Group had under contract 1,073 titles (2008, 1,139) for future publication, with a gross investment of £23.7m (2008, £26.4m).  After payment of the initial tranches of advances to authors, our liability for future cash payments on these contracted titles at that date was £13.4m (2008, £15.6m). The reduction in the number of titles in our forward publishing program is part of our strategy to give greater focus on each title published and increase the potential to create bestsellers.

UK

The UK performance was very good even compared to the previous year which saw the release of Harry Potter and the Deathly Hallows in paperback.

Specialist Division

Bloomsbury increased its presence in academic and professional publishing with the acquisition of Tottel Publishing, now renamed Bloomsbury Professional, and Hodder Education's higher education Humanities list in July.  Both have comfortably matched our expectations for 2009. The Bloomsbury Professional list has proved highly resilient in the face of the difficult economic climate.  Many of the titles remain essential publications and are part of routine expenditure by law and accounting firms.

Notable successes in 2009 included Documentary Credits (4th ed) and Joint Ventures and Shareholders' Agreements (3rd ed), both aimed at the top end of the commercial law market. Subscription and loose-leaf publishing remained strong throughout the year.  The Irish Legal System (5th ed), the standard first year undergraduate text book, was a major success.  The Scottish law market held up extremely well, and 2nd edition of Drafting Wills in Scotland was well received. The key to driving revenue growth for Bloomsbury Professional is the migration of our content to an online platform. We are also continuing to search for law and tax acquisitions to build critical mass.

At Berg, our Oxford based academic publisher, sales in 2009 exceeded expectations, with impressive growth in journals sales.  Berg has launched seven journals in the past four years and acquired three, and the investment in these new titles is now resulting in double digit growth in revenue both in 2009 and projected for 2010. Subscription publications are more recession-resistant than other print products, are less price sensitive, are sold direct to the customer at low discount and subscription income is received upfront.  Berg's journals are essential for academics in their respective subject areas and are less susceptible to library cuts. Berg's sales to the higher education sector, as with other lists in the Specialist division, have benefited from the 6% increase in student numbers in the UK since September 2009.  These counter-cyclical qualities are another reason for Bloomsbury's increased investment in professional and academic publishing.

Bloomsbury Academic's digital platform will be launched in May 2010 and the digital subscription-based Berg Fashion Library in May 2010, a substantial academic resource aimed at academicsand students of fashion, costume and the applied arts, which will be sold and distributed by Oxford University Press ("OUP").  The fit between the Berg Fashion Library and OUP's Grove Dictionary of Art is excellent.  Berg has recently agreed an image bank partnership with the Victoria and Albert Museum to display its costume images within the Library.  Later in 2010 we are publishing the ten-volume Berg Encyclopedia of World Dress and Fashion.  This monumental work, the work of hundreds of scholars and experts worldwide, will be Bloomsbury's most substantial new reference work in 2010.

Several long-term projects are underway in the Gulf. In September 2008 a publishing company was established in Doha by the Qatar Foundation which will publish children's books, novels, non-fiction for adults and children, academic monographs and reference works both in Arabic and in English. The mission of Bloomsbury Qatar Foundation Publishing (BQFP) is also to promote reading and writing development and to transfer publishing skills into Qatar. Excellent progress was made on all fronts during 2009 under our management service contract with Qatar Foundation. BQFP brought out a dual-language Arabic / English edition of The Selfish Crocodile in April 2009 to mark Qatar's first World Book Day which BQFP spearheaded in association with the UK's World Book Day organisation and Qatar University. BQFP also hosted book groups, writing and reading courses and other reading development initiatives. The first publishing list will be launched in April with the Arabic language edition of the The Gruffalo as the lead children's title and on the adult side Nothing To Lose But Your Life (in Arabic and English) by Suad Amiry, the Palestinian writer whose first novel Sharon and My Mother-in-Law was an international success. The cultural collaboration of Britain and Qatar will be celebrated by a reception hosted by Her Majesty the Queen and the Duke of Edinburgh at Windsor Castle in April to mark the launch of Bloomsbury Qatar Foundation Publishing.

In September we published QFINANCE - The Ultimate Resource. The website (www.qfinance.com) and the book were launched with major events in Doha, London and New York. QFINANCE, the result of Bloomsbury's partnership with the Qatar Financial Centre Authority, is a comprehensive information resource focussed on best practice for finance professionals.

In 2009 Bloomsbury Academic implemented its organic growth strategy and also acquired the 300 title upper level Humanities textbook backlist from Hodder Education. Textbook sales exceeded expectations as student numbers expanded during the year. Earlier in the year iFactory was appointed to develop the Bloomsbury Digital Platform. Bloomsbury Academic will be the first imprint of the Group launching its new website on the platform in the spring of 2010. Academic library purchasing, which is core to the monograph programme, is moving to e-books quite rapidly now, especially in the US. The transition to e-book sales holds exciting opportunities as multimedia content is added by authors to enhance scholarly communications.

Arden Shakespeare, acquired in December 2008, was incorporated into our core drama list alongside Methuen Drama.  The list has already benefited from Methuen Drama's specialist sales and marketing in the UK. In the USA Arden was launched as part of the new US publishing division, Bloomsbury Academic and Professional.  Arden released released Double Falsehood in March 2010, the controversial play which Shakespeare was said to have contributed to.

John Wisden and Co is now fully integrated into A&C Black. Sales of the Almanack were increased in 2009, partly as a result of a marketing partnership with the county cricket boards and the Middlesex County Cricket Club. Wisden Cricketers' Almanack was published in e-book format for the first time in 2009, along with an e-book Wisden Collection for libraries.

In response to the growing number of e-book retailers and increased demand for digital content, more than one thousand of A&C Black books will be offered for sale as e-books in 2010.  Two significant new ornithology e-book collections in 2010 will be The Poyser Library and The Helm Family Guides, which will be available as e-books and as print on demand editions. Many of these titles have long been out of print and are sought after by collectors and ornithologists.

We will also be publishing with a range of partners who link us to our markets, including The Federation of Small Businesses (Good Small Business Guide), The Royal Shakespeare Company (The RSC Toolkit for Teachers), The RSPB (including Gardening for Wildlife) and The Wildlife Trust (Birds in Your Garden). We have also entered into an important new CD-publishing agreement for theatre titles with The Royal Academy of Dramatic Art (RADA).  

Trade Division

2009 was a year where we benefited from enduring bestsellers across the adult list, many of them from our backlist. One of the strongest sellers in the year was Kate Summerscale's The Suspicions of Mr Whicher, winner of the Samuel Johnson Prize, Richard & Judy Bookclub Best Read and the Galaxy Book of the Year, reaching No 1 on The Sunday Times non-fiction paperback bestseller list.  The two Khaled Hosseini novels, The Kite Runner and A Thousand Splendid Suns, sold strongly all year.  Our word-of-mouth bestseller, Eat, Pray, Love, continues to sell robustly with a film starring Julia Roberts in the pipeline.  We had a Richard & Judy bookclub title in Sue Miller's new novel, The Senator's Wife, an Orange Prize shortlist in Kamila Shamsie's Burnt Shadows and a new word-of-mouth bestseller in The Guernsey Literary and Potato Peel Pie Society by Mary Ann Shaffer and Annie Barrows.  New novels were published by three of Bloomsbury's biggest authors Margaret Atwood, John Irving and William Boyd - and by a new author to our list, Colum McCann, with his novel Let the Great World Spin, which won the National Book Award and went to No 1 in the Irish bestseller list. 

Non-fiction bestsellers included Last Fighting Tommy, The Life of Harry Patch; Richard van Emden's Sapper Martin; Family Britain,  David Kynaston's follow up to Austerity Britain; and the follow up to Al Gore's bestseller Inconvenient Truth, Our Choice.  2009 also saw the addition to the list of Monty Don with his Ivington Diaries and the extraordinary success of two food titles: River Cottage Every Day by Hugh Fearnley Whittingstall and The Fat Duck Cookbook by Heston Blumenthal. 

2010 got off to a great start with the new Elizabeth Gilbert, Committed; Operation Mincemeat, the new book by Ben McIntyre (author of bestseller Agent Zigzag), was number 1 for four weeks; and the paperback of Liz Jensen's Rapture, which was chosen for the new TV Book Club.  Highlights of the year ahead also include the film tie-in edition of Eat, Pray, Love, the paperback of William Boyd's Ordinary Thunderstorms, and new novels by Barbara Trapido, Sue Miller and Jon McGregor, whose Even the Dogs has been tipped for the Man Booker Prize.  Highlights for the autumn in non-fiction include the Authorised History of the Secret Intelligence Service and a companion to the hit TV series Cranford.  We continue to build our highly successful food list, to concentrate on building and promoting our backlist and we will also be publishing more up-market crime fiction.  Five crime novels will be published in 2010 and the ex chief of MI5, Stella Rimmington, has joined Bloomsbury with a two-book deal.  We continue to find and nurture new talent.  We will publish eight first novels in 2010, one of which has been chosen for a major bookshop promotion, and another of which has been longlisted for the Impac Prize. 

On the Children's list The Graveyard Book by international best-selling author Neil Gaiman was published simultaneously in an adult as well as a children's edition. It won the Teenage Children's Book Award and has been long listed for the Carnegie Medal.   Troubadour by Mary Hoffman was short-listed for the Costa Award for Children's Literature. 

Harry Potter performed extremely well during the year and sales increased on the back of the success of the sixth film, Harry Potter and the Half-Blood Prince. Sales of the boxed sets were particularly good. We have an extensive programme of re-jacketing Harry Potter which will be launched in July.  The film of HP7 is released in November.

In June 2010 we have a new book by bestselling author of Holes Louis Sachar entitled The Cardturner.

We launched Bloomsbury's Public Library Online in May 2009, a concurrent-user online-access subscription service to deliver themed digital bookshelves into UK public libraries.  Themes include Reading Groups, Children's History, Teen Fiction, Wisden and Arden Shakespeare.  Online access sold on a subscription model is a proven digital delivery model for reference books which we have extended to trade fiction and non-fiction.   This has already sold into many library authorities nationwide providing online access to 3.5m potential users.  In March 2010 we rebranded as Bloomsbury's Public Library Online.  Faber have joined it with a Poetry shelf and Quercus with a Crime shelf, including the international bestselling author Stieg Larsson.  We are in discussion with other UK publishers with a view to expanding this initiative to provide a wide range of bestsellers digitally to UK public libraries enabling them to remain relevant to their local communities.  Berlin Verlag has also launched a German language version and there is potential for further overseas development.

US

The US turned in a good performance for the year. The Academic list was also launched. In 2010 the A&C Black list, which has previously been sold by a third party agency, will become part of the new  Bloomsbury Academic and Professional Division in the US.  The Methuen and Arden lists are already being sold through the Division and are becoming a significant force in the US drama market.  The benefits of this strategy are bearing fruit as it is enabling greater focus on growing the lists by means of a dedicated US marketing team, a presence at the major academic conferences and countrywide sales representation. Berg's US list will join them in 2011.

Bloomsbury's new relationship in Qatar agreed in December 2009 is to develop a global academic and research journals publishing business for Qatar Foundation in Doha using the Open Access publishing model via a digital online publishing portal. This venture is owned by Qatar Foundation and will be managed by Bloomsbury Information Ltd. These long-term database and management contracts with leading organisations are part of our strategy to grow the specialist business.

My Horizontal Life was in the top 15 on The New York Times paperback non-fiction list every week during 2009. Logicomix was on The New York Times paperback graphic novel bestseller list for 18 weeks and Methland two weeks on the extended The New York Times hardcover non-fiction bestseller list. The Children's list had a number of strong performing titles including Perfect Chemistry by Simone Elkeles, Freckleface Strawberry and The Dodgeball Bully by Julianne Moore which was on The New York Times bestseller list for six weeks. Disney released The Princess and the Frog which is based on ED Baker's The Frog Princess published by Bloomsbury USA and this has provided the opportunity to re-promote her backlist.

Germany

The German market proved to be a difficult one for Berlin Verlag with its first operating loss since 2004. Some key titles did not meet expectations including the paperback of Jonathan Littell's Die Wohlgesinnten the hardcover of which had been a major bestseller in the previous year. The backlist continued to hold up well with ongoing sales from Khaled Hosseini's The Kite Runner as well as Elizabeth Gilbert's Eat, Pray, Love. The paperback publication of Khaled Hosseini's A Thousand Splendid Suns quickly made its way to the top of the bestseller list and became one of the top selling titles of the year for Berlin.

Working closely with customers we have made reductions in the initial print runs for books which has reduced the risk of overstocks. The print contract for the paperback list was moved to the UK at the beginning of 2010 as UK prices are considerably lower.

Berlin Verlag sells and distributes Bloomsbury UK's English language books and the underlying revenues have seen a consistent year-on-year increase. Building on the success of this we have moved A&C Black and Arden from their third-party sales agency arrangements to Berlin's sales force in January 2010. This will give increased focus on the list and will also retain within the Group the commission paid on those sales. This revenue stream is also growing as Berlin now provides sales and distribution to other publishers. . Two publishers, Parthas and Blumenbar, are due to join in 2010.

Berlin is a trade publishing house and its performance is driven by the number of bestsellers it publishes each year. To provide greater earnings potential we will be starting an English and German language academic business in 2010 specialising in the Humanities and Social Sciences. The first titles will be published in 2011.

Dividend

The Directors are recommending a final dividend of 3.65 pence per share (2008, 3.47 pence) making a total of 4.43 pence per share (2008, 4.22 pence) for the year. This represents a 5% increase in the full-year dividend.  The final dividend will be payable on 1 July 2010 to Ordinary Shareholders on the register at the close of business on 21 May 2010.

Management and staff

I would like to thank all my colleagues for their tremendous contribution in a very busy year where we have seen major strategic as well as operational achievements. I would also like to thank Charles Black and Mike Mayer who will retire as  Non-Executive Directors during the year for their profound contribution to the Board. They will be greatly missed.

Current trading, developments and prospects

We have a strong balance sheet with in excess of £35 million on deposit, and, though investment income will be less than in 2009 due to the reduction in interest rates and lower average cash balances, we are in a good position to expand our Specialist operation in the UK, US and Germany as we make new acquisitions, and to pursue organic growth for our existing Divisions.

For the 2010 financial period we will be moving the year-end to the end of February. The 2010 interim will be to 30 June and we will have an additional interim report as at 31 December with a full period-end reporting on 28 February 2011. With the sixty day reporting deadline for the interim accounts we are finding it increasingly difficult to see shareholders and get the maximum level of press coverage as many other companies announce their results at the same time.  This change will enable us to identify returns of unsold copies we will receive from the book trade after the Christmas selling season.

This is a strong set of results, achieved under difficult trading conditions, and demonstrates the strength of our increasingly diverse revenue streams. We have further strengthened our academic division with the two new acquisitions. Trading has been excellent in the first quarter of 2010 with a range of new bestsellers (including the Number 1 bestseller Operation Mincemeat) and a major six figure rights deal in January.

The two Qatar management services partnerships will have an important year in 2010.  Three major movies, Nanny McPhee; Eat, Pray, Love; and Harry Potter and the Deathly Hallows Part One, will drive further sales of these proven bestsellers in 2010. The success of Bloomsbury's Public Library Online initiative and other Bloomsbury innovations will see us at the forefront of the digital opportunity. The marketplace will remain rocky in 2010 and will continue to throw the unexpected at all businesses but I am confident that Bloomsbury is as well positioned as it could be to prosper in this environment with our high hit rate in trade publishing, our expansion in academic and professional publishing, our strong balance sheet and our entrepreneurial mission.

Nigel Newton

Founder and Chief Executive

30 March 2010

Financial Review

Results

Revenue for the Group for 2009 was £87.22m (2008, £99.95m). The Group was working against a strong comparative year with the publication of Harry Potter and the Deathly Hallows in paperback and The Tales of Beedle the Bard in 2008. Bloomsbury had a very good second half weighted publishing programme in 2009 with strong performances in both the UK and the US.

Bloomsbury's segmental analysis is by geographic breakdown, which follows the Group's international publishing strategy. Revenue in the UK was £58.89m (2008, £71.06m). Harry Potter and the Deathly Hallows paperback and The Tales of Beedle the Bard were published in 2008. There were strong sales performances in 2009 from River Cottage Everyday by Hugh Fearnley-Whittingstall, The Fat Duck Cookbook by Heston Blumenthal, The Suspicions of Mr Whicher by Kate Summerscale and The Guernsey Literary and Potato Peel Pie Society by Mary Ann Shaffer and Annie Barrows. A number of backlist titles performed well with continued sales from A Thousand Splendid Suns and The Kite Runner; Eat, Pray, Love and Harry Potter. Profit before investment income, finance costs and tax in the UK was £6.57m (2008, £8.15m). US revenue was £18.78m (2008, £17.32m) which was primarily due to the success of titles including My Horizontal Life by Chelsea Handler, The Nasty Bits by Anthony Bourdain and The Fat Duck Cookbook. Profit in the US before investment income finance costs tax and central costs recharged from the UK was £0.45m (2008, £0.38m). For Continental Europe, revenue, which was generated by Berlin Verlag, was £9.55m (2008, £11.57m). Berlin was operating in a difficult market which resulted in some key titles that did not meet expectations including the paperback of Jonathan Littell's Die Wohlgesinnten which was a bestseller last year in hardback. The lower revenue contributed to a loss before investment income finance costs, tax and central costs recharged from the UK of £0.57m (2008, profit, £0.19m). A recovery is expected in 2010 and further reductions in the cost base are being made.

The Group's divisional structure is split into three main operating areas: Children's, Adult and Reference publishing. Under the current Group structure Children's and Adult form the Trade Publishing Division, and Reference the Specialist Publishing Division. All three Divisions operate in the UK, US and Germany. For 2009 the breakdown of revenue between the three areas was: Children's 26% (2008, 38%), Adult 44% (2008, 42%) and Reference 30% (2008, 20%). 

Revenue in Children's was £22.98m (2008, £38.33m). Harry Potter and the Deathly Hallows paperback and Beedle the Bard were published in 2008. Harry Potter continued to perform well as did The Graveyard Book by Neil Gaiman. Gross profit for Children's for 2009 was £11.55m (2008, £17.10m). The reduction in gross profit was due to a strong 2008 comparative along with a write-back in the returns provision in 2008 of £5.1m which related to the provision brought forward in 2007.  Contribution before administrative expenses was £8.35m (2008, £13.65m).

Adult revenue was £37.89m (2008, £42.03m). 2008 benefited from the UK paperback publication of A Thousand Splendid Suns. Although revenue decreased, a number of titles  continued to sell well including The Kite Runner (UK and Germany), A Thousand Splendid Suns (UK and Germany), Eat, Pray, Love (UK and Germany), The Fat Duck Cookbook (UK and USA), The Guernsey Literary and Potato Peel Pie Society (UK), The Suspicions of Mr Whicher (UK) and River Cottage Everyday (UK). Gross profit for Adult for 2009 increased 16.4% to £17.84m (2008, £15.32m), with the contribution before administrative expenses up 38.3% to £11.02m (2008, £7.97m). The main reason for the increase in gross profit was lower provisions against unearned advances being charged in the year. In 2008 there was an additional advance provision made of £5.4m.

Reference revenue increased 34.5% to £26.35m (2008, £19.59m). The revenue growth was primarily due to the full year impact of the 2008 acquisitions of Featherstone, Berg, Wisden and Arden Shakespeare and revenues from the acquisitions of Tottel Publishing, renamed Bloomsbury Professional, and Hodder Education's Higher Education Humanities list in July. The gross profit for 2009 was up 29.2% to £13.99m (2008, £10.83m), with the contribution before administrative expenses up 24.2% to £8.57m (2008, £6.90m).

Rights revenue, which includes subsidiary rights, electronic database income, management contracts and income derived from third-party agencies, was £9.23m (2008, £9.30m). The contribution attributable to this revenue was £6.64m (2008, £5.84m). The increase in contribution was due to a combination of reasonable margin deals concluded along with profit being recognised on deliverables under existing contracts. £4.94m (2008, £4.50m) of the profit was generated in the Specialist Publishing Division and £1.70m (2008, £1.34m) was generated in the Trade Publishing Division.

Gross profit for the Group for the year was £43.38m (2008, £43.25m). Gross profit margin increased to 49.7% (2008, 43.3%). The increase in the gross profit margin was primarily due to lower royalty costs charged to the Income Statement than in 2008, lower provisions against unearned advances and the increased contribution from higher margin rights revenues. Royalty costs decreased to £10.03m (2008, £13.96m) and represented 11.5% of revenues (2008, 14.0% of revenues). Royalty rates vary according to the type of books published in the year. Provisions against unearned advances charged to the Income Statement were £3.44m (2008, £9.13m) and represented 3.9% of revenues (2008, 9.1% of revenues). Books returned by customers are credited to the returns provision. Within the overall returns provision charge for the year, there was a write-back in the returns provision relating to changes in assumptions made in respect of the provision brought forward from 2008 which, as a result of the level of returns actually received during 2009, is no longer required.  The value of the write-back to the Income Statement is £0.58m (2008, £5.16m). Stock provisions charged to the Income Statement decreased to £2.21m (2008, £2.83m) and represented 2.5% of revenues (2008, 2.8% of revenues).

Marketing and distribution costs increased by 4.7% to £15.44m (2008, £14.74m). £0.8m of the increase was due to adverse exchange rate movements on the Euro and US dollar. In addition, in 2008 there was a number of high value revenue generating titles which incurred a lower distribution charge as a proportion of revenue.  Administrative expenses before amortisation of intangible assets increased 5.9% to £21.19m (2008, £20.01m), £0.99m of the increase was due to adverse exchange rate movements on the Euro and the US dollar and £0.60m related to overheads on the acquisition of Tottel Publishing. The IFRS2 options charge for the year was £0.09m (2008, £0.19m).

Profit before investment income, finance costs and taxation was £6.17m (2008, £8.40m). Profit before investment income and amortisation of intangible assets was £6.75m (2008, £8.50m). Profit before investment income and amortisation of intangible assets and goodwill impairment was £6.85m (2008, £8.61m).

Investment income decreased to £1.11m (2008, £3.29m)  as a result of lower average cash balances during the year and lower rates of interest earned on those balances.  

The effective corporation tax rate for the year was 30.1% (2008, 32.6%).  The decrease in the rate from 2008 mainly reflects the write-back in an overprovision from prior years. The Group continues to recognise deferred tax assets in respect of brought forward tax losses of Bloomsbury USA and Berlin Verlag which we expect will be utilised in the foreseeable future.

Basic earnings per share was 6.77 pence (2008, 10.67 pence). Diluted earnings per share was 6.74 pence (2008, 10.67 pence).  Basic earnings per share before amortisation of intangible assets and goodwill impairment was 7.56 pence (2008, 10.96 pence). Diluted earnings per share before amortisation of intangible assets and goodwill impairment was 7.53 pence (2008, 10.96 pence).

Balance sheet

Non-current assets

Intangible assets increased to £37.60m (2008, £27.54m) primarily due to the acquisition of two companies during the year, namely legal and tax publisher Tottel, now renamed Bloomsbury Professional, and the Hodder Education Humanities list.

Current assets

Inventories decreased 1.4% to £16.35m (2008, £16.59m). Underlying stock holding has remained relatively stable over the last twelve months. On a like for like basis with 2008 overseas stocks benefitted with a positive exchange movement of £0.56m which was partially offset with new inventories on the acquisition of Tottel and the Hodder Education Humanities list.

Trade and other receivables decreased 3.0% to £47.51m (2008, £48.98m). Trade receivables decreased 5.8% to £21.60m (2008, £22.94m). The level of receivables at the end of the year reflects the lower revenues during the year and the stronger second half weighting of the publishing programme. Since books sold are generally returnable by customers, the Group makes a provision against books sold in the accounting period. The unused provision at the year-end is then carried forward as an offset to trade receivables in the balance sheet, in anticipation of further book returns subsequent to the year end.  A provision for the Group of £6.51m (2008, £7.78m) for future returns relating to 2009 and prior year sales has been carried forward in trade receivables at the balance sheet date. This provision at margin represents 7.5% (2008, 7.8%) of revenues. Within trade and other receivables, prepayments and accrued income decreased 1.1% to £25.42m (2008, £25.71m). Net provisions of £3.44m (2008, £9.13m) against advances to authors on titles published ('advance provisions') were made during the year. Within prepayments and accrued income there were provisions brought forward on titles of £1.61m (2008, £ nil) that were no longer required. This amount has been used to provide against other titles where those amounts are considered not to be recoverable. There was also a reduction in the amount invested in future unpublished titles which is part of our strategy to give greater focus for each title published and increase the potential to create bestsellers.

Equity and liabilities

As at 31 December 2009 total equity stood at £112.68m (2008, £113.67m). The decrease was due to retained earnings of £1.87m (2008, £4.76m) offset by the translation loss on consolidation of the assets and liabilities of overseas subsidiaries in other comprehensive income of £2.95m (2008, gain £8.45m), partially offset by the increase in the share-based payment reserve due to the share-based payment charge for the year of £0.09m (2008, £0.19m), which is also included in retained earnings.

Current liabilities decreased 26.6% to £24.16m (2008, £32.92m). Accruals and deferred income, which is included in trade and other payables, decreased to £15.39m (2008, £24.01m).  Accruals and deferred income includes royalty payments to authors, which vary from year to year depending on revenue and the authors' royalty rates which typically escalate on triggered thresholds as volume sales increase.

 Cash flow

The Group had a net cash outflow from operating activities before tax of £2.56m for the year (2008, £16.34m cash inflow). This was mainly attributable to royalty payments on books sold in the second half of 2008 with the royalty due to authors at the end of March 2009. Corporation tax paid during the year was £1.73m (2008, £6.18m). During the year £1.41m (2008, £3.03m) of interest was received from deposits, and £3.13m (2008, £2.98m) of dividends were paid. £10.31m, net of cash acquired, was spent on the two businesses acquired during the year (2008, £7.43m). The Group's cash on the balance sheet as at 31 December 2009 was £35.04m (2008, £51.91m).

Colin Adams ACA

Group Finance Director

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2009

	Notes			2009 £'000	2008 £'000
Revenue	2			87,217	99,948
Cost of sales				(43,839) ______	(56,698) ______
Gross profit				43,378	43,250
Marketing and distribution costs				(15,441)	(14,742)
Administrative expenses - amortisation of intangible assets				(584)	(102)
Administrative expenses - impairment of goodwill				-	(111)
Administrative expenses - other				(21,186) ______	(19,896) ______
Profit before investment income, finance costs and tax				6,167	8,399
Investment income				1,105	3,285
Finance costs				(145) ______	(51) ______
Profit before taxation				7,127	11,633
Income tax expense	3			(2,146) ______	(3,793) ______
Profit for the year, attributable to owners of the parent company				4,981 ______	7,840 ______
Basic earnings per share	5			6.77p ______	10.67p ______
Diluted earnings per share	5			6.74p ______	10.67p ______

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2009

				2009 £'000	2008 £'000
Profit for the year				4,981 ______	7,840 ______
Other comprehensive income:
Exchange differences on translating foreign operations				(2,950)	8,453
Deferred tax on share based payments				21	34
				______	______
Other comprehensive income for the year net of tax				(2,929) ______	8,487 ______
Total comprehensive income for the year net of tax attributable to owners of the parent company				2,052 ______	16,327 ______

 CONSOLIDATED BALANCE SHEET

at 31 December 2009

			2009 £'000	2008 £'000
ASSETS
Non-current assets
Property, plant and equipment			1,061	1,443
Intangible assets			37,598	27,543
Deferred tax assets			1,965	2,152
Total non-current assets			______ 40,624 ______	______ 31,138 ______
Current assets
Inventories      Trade and other receivables     Cash and cash equivalents Total current assets			16,350 47,509 35,036 ______ 98,895 ______	16,589 48,982 51,908 ______ 117,479 ______
TOTAL ASSETS			139,519 ______	148,617 ______
EQUITY AND LIABILITIES
Equity attributable to owners of the parent      Ordinary shares      Share premium      Capital redemption reserve      Share-based payment reserve      Translation reserve      Retained earnings Total equity			922 39,388 20 2,393 4,604 65,357 ______ 112,684 ______	922 39,388 20 2,305 7,554 63,483 ______ 113,672 ______

Liabilities
Non-current liabilities      Deferred tax      Retirement benefit obligations      Other payables Total non-current liabilities			2,234 91 353 ______ 2,678 ______	1,451 18 558 ______ 2,027 ______
Current liabilities      Trade and other payables      Current tax liabilities Total current liabilities			23,069 1,088 ______ 24,157 ______	32,603 315 ______ 32,918 ______
Total liabilities			26,835 ______	34,945 ______
TOTAL EQUITY AND LIABILITIES			139,519 ______	148,617 ______

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT

	Ordinary shares £'000	Share premium £'000	Capital redemption reserve £'000	Share-based payment reserve £'000	Translation reserve  £'000	Retained earnings £'000	Total £'000
Attributable to owners of the parent
Balances at 1 January 2008	920	39,191	20	2,114	(899)	58,723	100,069
Profit for the year	-	-	-	-	-	7,840	7,840
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	8,453	-	8,453
Deferred tax on share-based payments	-	-	-	-	-	34	34
	______	______	______	______	______	______	______
Total comprehensive income for the year ended 31 December 2008	-	-	-	-	8,453	7,874	16,327
Transactions with owners in their capacity as owners:
Share-based payments	-	-	-	191	-	-	191
Dividends	-	-	-	-	-	(2,980)	(2,980)
Purchase of shares by the Employee Benefit Trust	-	-	-	-	-	(134)	(134)
Share issues	2	197	-	-	-	-	199
	______	______	______	______	______	______	______
Total transactions with owners for the year ended 31 December 2008	2	197	-	191	-	(3,114)	(2,724)
	______	______	______	______	______	______	______
Balances at 31 December 2008	922	39,388	20	2,305	7,554	63,483	113,672
Profit for the year	-	-	-	-	-	4,981	4,981
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	(2,950)	-	(2,950)
Deferred tax on share-based payments	-	-	-	-	-	21	21
	______	______	______	______	______	______	______
Total comprehensive income for the year ended 31 December 2009	-	-	-	-	(2,950)	5,002	2,052
Transactions with owners in their capacity as owners:
Share-based payments	-	-	-	88	-	-	88
Dividends	-	-	-	-	-	(3,128)	(3,128)
	______	______	______	______	______	______	______
Total transactions with owners for the year ended 31 December 2009	-	-	-	88	-	(3,128)	(3,040)
	______	______	______	______	______	______	______
Balances at 31 December 2009	922 ______	39,388 ______	20 ______	2,393 ______	4,604 ______	65,357 ______	112,684 ______

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2009

		2009 £'000	2008 £'000
Cash flows from operating activities
Profit before tax		7,127	11,633
Adjustments for:
Depreciation of property, plant and equipment		669	844
Amortisation of intangible assets		584	102
Goodwill impairment		-	111
Profit on sale of property, plant and equipment		(9)	(12)
Share-based payment charges		88	191
Investment income		(1,105)	(3,285)
Finance costs		145	51
		______	______
		7,499	9,635
(Increase) / decrease in inventories		(76)	38
(Increase) / decrease in trade and other receivables		(98)	33,350
Decrease in trade and other payables		(9,888) ______	(26,686) ______
Cash (used in) / generated from operations		(2,563)	16,337
Income taxes paid		(1,734) ______	(6,183) ______
Net cash (used in) / generated from operating activities		(4,297) ______	10,154 ______
Cash flows from investing activities
Purchase of property, plant and equipment		(304)	(354)
Proceeds from sale of property, plant and equipment		23	30
Purchase of businesses, net of cash acquired		(10,307)	(7,433)
Interest received		1,409	3,026
		______	______
Net cash used in investing activities		(9,179) ______	(4,731) ______
Cash flows from financing activities
Purchase of shares by the Employee Benefit Trust		-	(134)
Equity dividends paid		(3,128)	(2,980)
Interest paid		(34)	(51)
		______	______
Net cash used in financing activities		(3,162) ______	(3,165) ______
Net (decrease) / increase in cash and cash equivalents		(16,638)	2,258
Cash and cash equivalents at beginning of year		51,908	47,558
Exchange (loss) / gain on cash and cash equivalents		(234)	2,092
		______	______
Cash and cash equivalents at end of year		35,036 ______	51,908 ______

NOTES

1.    The above financial information does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The above figures for the year ended 31 December 2009 are an abridged version of the Company's accounts which will be reported on by the Company's auditors before dispatch to the shareholders and filing with the Registrar of Companies. The preliminary announcement was approved by the Board on 29 March 2010.

The consolidated financial information has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU). The accounting policies applied in 2009 are consistent with those applied in the Financial Statements for 2008 other than the changes resulting from the implementation of the following accounting standards which were implemented during the financial year: IFRS 8 'Operating Segments', IAS 1 'Presentation of Financial Statements' and IFRS 7 'Financial Instruments: Disclosures - Amendment; Improving Disclosures About Financial Instruments'.

The statutory accounts for the year ended 31 December 2008 have been lodged with the Registrar of Companies.  These accounts received an audit report which was unqualified and did not include any reference to matters to which the auditors drew attention by way of emphasis without qualifying their report or a statement under section 237(2) or section 237(3) of the Companies Act 1985.

NOTES

2          Segmental analysis

As the main thrust of the Group's growth is to develop its international publishing strategy, the internal reporting to the chief operating decision maker is by geographical segments. Management has determined the operating segments based on these reports. All segments derive their revenue from book publishing, sale of publishing and distribution rights, sponsorship and database contracts.  The analysis by geographical segment is shown below.

Year ended 31 December 2009	United Kingdom £'000	North America £'000	Continental Europe £'000	Eliminations and unallocated costs £'000	Total £'000
Revenue
External sales	58,888	18,777	9,552	-	87,217
Inter-segment sales *	480 _______	- _______	134 _______	(614) _______	- _______
Total revenue	59,368 _______	18,777 _______	9,686 _______	(614) _______	87,217 _______
Result
Segment result before central costs	6,284	450	(567)	-	6,167
Central cost recharges	284 _______	(152) _______	(132) _______	- _______	- _______
Segment result	6,568	298	(699)	-	6,167
Investment income	1,101	4	-	-	1,105
Finance costs	(145) _______	- _______	- _______	- _______	(145) _______
Profit / (loss) before taxation	7,524	302	(699)	-	7,127
Income tax expense	- _______	- _______	- _______	(2,146) _______	(2,146) _______
Profit / (loss) for the year	7,524 _______	302 _______	(699) _______	(2,146) _______	4,981 _______
Other Information
Amortisation of intangible assets	548	36	-	-	584
Actuarial losses	111	-	-	-	111
Share-based payment charges	88 _______	- _______	- _______	- _______	88 _______

* Inter-segment sales are charged at prevailing market rates.

NOTES

2.   Segmental analysis (continued)

Year ended 31 December 2008	United Kingdom £'000	North America £'000	Continental Europe £'000	Eliminations and unallocated costs £'000	Total £'000
Revenue
External revenue	71,062	17,317	11,569	-	99,948
Inter-segment revenue *	- _______	- _______	213 _______	(213) _______	- _______
Total revenue	71,062 _______	17,317 _______	11,782 _______	(213) _______	99,948 _______
Result
Segment result before central costs	7,836	378	185	-	8,399
Central cost recharges	316 _______	(130) _______	(186) _______	- _______	- _______
Segment result	8,152	248	(1)	-	8,399
Investment income	3,253	11	21	-	3,285
Finance costs	(51) _______	- _______	- _______	- _______	(51) _______
Profit before taxation	11,354	259	20	-	11,633
Income tax expense	- _______	- _______	- _______	(3,793) _______	(3,793) _______
Profit for the year	11,354 _______	259 _______	20 _______	(3,793) _______	7,840 _______
Other Information
Amortisation of intangible assets	67	35	-	-	102
Impairment of goodwill	111	-	-	-	111
Actuarial gains	44	-	-	-	44
Share-based payment charges	191 _______	- _______	- _______	- _______	191 _______

* Inter-segment sales are charged at prevailing market rates.

NOTES

2.   Segmental analysis (continued)

External sales by destination

		Source United Kingdom £'000	North America £'000	Continental Europe £'000	Total £'000
Destination Year ended 31 December 2009
United Kingdom (country of domicile)		38,517 _______	- _______	- _______	38,517 _______
North America		3,568	18,404	-	21,972
Continental Europe		5,550	-	9,552	15,102
Australasia		3,809	-	-	3,809
Far and Middle East		5,427	373	-	5,800
Rest of the world		2,017 _______	- _______	- _______	2,017 _______
Foreign Countries		20,371	18,777	9,552	48,700
		_______	_______	_______	_______
Total external sales		58,888 _______	18,777 _______	9,552 _______	87,217 _______
Year ended 31 December 2008
United Kingdom (country of domicile)		48,585 _______	- _______	- _______	48,585 _______
North America		2,038	16,729	-	18,767
Continental Europe		7,748	-	11,569	19,317
Australasia		5,947	-	-	5,947
Far and Middle East		4,986	588	-	5,574
Rest of the world		1,758 _______	- _______	- _______	1,758 _______
Foreign Countries		22,477	17,317	11,569	51,363
		_______	_______	_______	_______
Total external sales		71,062 _______	17,317 _______	11,569 _______	99,948 _______

NOTES

2.   Segmental analysis (continued)

Business Divisions

The Group's business is organised in three operating areas: Trade (Adult), Trade (Children's) and Specialist.  The following table provides the breakdown of revenue and divisional result for these areas.

Year ended 31 December 2009	Trade (Adult)	Trade (Children's)	Total Trade	Specialist	Unallocated	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	37,892	22,977	60,869	26,348	-	87,217
Cost of sales	(20,056) _______	(11,427) _______	(31,483) _______	(12,356) _______	- _______	(43,839) _______
Gross profit	17,836	11,550	29,386	13,992	-	43,378
Marketing and distribution costs	(6,814) _______	(3,203) _______	(10,017) _______	(5,424) _______	- _______	(15,441) _______
Contribution before administration expenses	11,022 _______	8,347 _______	19,369	8,568	-	27,937
Administrative expenses			(16,470)	(5,013)	(287)	(21,770)
			_______	_______	_______	_______
Divisional result			2,899	3,555	(287)	6,167
Investment income			-	-	1,105	1,105
Finance costs			-	-	(145)	(145)
			_______	_______	_______	_______
Profit before taxation			2,899	3,555	673	7,127
Income tax expense			-	-	(2,146)	(2,146)
			_______	_______	_______	_______
Profit for the year			2,899	3,555	(1,473)	4,981
			_______	_______	_______	_______

NOTES

2.   Segmental analysis (continued)

Year ended 31 December 2008	Trade (Adult) £'000	Trade (Children's) £'000	Total Trade £'000	Specialist £'000	Unallocated £'000	Total £'000
Revenue	42,031	38,330	80,361	19,587	-	99,948
Cost of sales	(26,713) _______	(21,229) _______	(47,942) _______	(8,756) _______	- _______	(56,698) _______
Gross profit	15,318	17,101	32,419	10,831	-	43,250
Marketing and distribution costs	(7,353) _______	(3,454) _______	(10,807) _______	(3,935) _______	- _______	(14,742) _______
Contribution before administration expenses	7,965 _______	13,647 _______	21,612	6,896	-	28,508
Administrative expenses			(17,248)	(2,826)	(35)	(20,109)
			_______	_______	_______	_______
Divisional result			4,364	4,070	(35)	8,399
Investment income			-	-	3,285	3,285
Finance costs			-	-	(51)	(51)
			_______	_______	_______	_______
Profit before taxation			4,364	4,070	3,199	11,633
Income tax expense			-	-	(3,793)	(3,793)
			_______	_______	_______	_______
Profit for the year			4,364	4,070	(594)	7,840
			_______	_______	_______	_______

Due to the seasonality of the business, the Group's revenues and gross profit are weighted towards the second half of the year.

NOTES

3.   Taxation

(a) Tax charge for the year

	2009 £'000	2008 £'000
Based on the profit for the year:
UK corporation tax	2,159	3,195
(Over) / under provision in respect of prior year	(246)	-
Overseas taxation - current year	61	197
	_______	_______
	1,974	3,392
Deferred tax - UK	172	109
- Overseas	-	292
	_______	_______
	2,146 _______	3,793 _______

(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 (28%).  The differences are explained below:

	2009 £'000	2008 £'000
Profit before taxation	7,127 ______	11,633 ______
Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 28% (2008, 28.5%)	1,996	3,315
Effects of:
Non-deductible revenue expenditure	73	19
Income not taxable	-	(12)
Non-qualifying depreciation	52	64
Share-based payments	-	95
Indexation allowance	-	(28)
Different rates of tax on overseas results	6	79
Tax losses not utilised	116	266
Adjustment to tax charge in respect of previous periods - current tax - deferred tax	(246) 149 ______	(3) (2) ______
Tax charge for the year	2,146 ______	3,793 ______

4.   Dividends

For the prior year

A final dividend for 2008 of 3.47 pence per share (£2,554,000) was paid to the equity shareholders on 1 July 2009, being the amount proposed by the Directors, and subsequently approved by the shareholders at the 2009 Annual General Meeting (2008, final dividend for 2007 paid in 2008 of 3.30 pence per share, £2,428,000).

For the current year

On 20 November 2009 an interim dividend of 0.78 pence per share (£574,000) was paid to the equity shareholders (2008, 0.75 pence per share, £552,000).

The Directors propose that a final dividend of 3.65 pence per share will be paid to the equity shareholders on 1 July 2010.  Based on the number of shares currently in issue, the final dividend will be £2,689,000. This dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

5.   Earnings per share

The basic earnings per share has been calculated by reference to earnings of £4,981,000 (2008, £7,840,000) and a weighted average number of Ordinary Shares in issue after deducting 88,760 (2008, 88,760) shares held by the Employee Benefit Trust of 73,594,863 (2008, 73,503,495). The diluted earnings per share has been calculated by reference to earnings of £4,981,000 (2008, £7,840,000) and a weighted average number of Ordinary Shares of 73,920,795 (2008, 73,506,869) which takes account of share options and awards.

The reconciliation between the weighted average number of shares for the basic earnings per share and the diluted earnings per share is as follows:

	2009 Number	2008 Number
Weighted average number of shares for basic earnings per share	73,594,863	73,503,495
Dilutive effect of share options and awards	325,932	3,374
	______	______
Weighted average number of shares for diluted earnings per share	73,920,795 ______	73,506,869 ______

The earnings per share are shown below:

	2009	2008
Basic earnings per share	6.77p ______	10.67p ______
Diluted earnings per share	6.74p ______	10.67p ______

The adjusted earnings per share before amortisation of intangible assets of £584,000 (2008, £102,000) and impairment of goodwill of £nil (2008, £111,000) are shown below:

	2009	2008
Adjusted basic earnings per share	7.56p ______	10.96p ______
Adjusted diluted earnings per share	7.53p ______	10.96p ______

6.  Acquisitions

On 1 July 2009 Bloomsbury Publishing Plc acquired the whole of the issued share capital of Tottel Publishing Limited for a cash consideration of £9,962,000. Tottel Publishing Limited is an independent professional and academic publisher in the UK and Ireland. The acquisition has been accounted for by the purchase method of accounting.  The goodwill of £5,579,000 arising on this acquisition has been capitalised on the Group balance sheet. Identifiable intangible assets of £5,611,000 were recognised on the acquisition and a deferred tax liability of £1,200,000 was provided against these assets. A deferred tax asset of £86,000 has also been recognised for pre acquisition losses of Tottel Publishing Limited.  The goodwill on acquisition arises from the expected profitability of the acquired business and the significant cost synergies expected to arise after the acquisition. It also comprises benefits that cannot be separately recognised such as its existing workforce, customer base and relationships with writers.

On 9 July 2009 A&C Black acquired the business and net assets of Hodder Humanities for a cash consideration of £462,000.  It will be managed under the Bloomsbury Academic imprint. The acquisition has been accounted for by the purchase method of accounting.  The goodwill of £146,000 arising on the acquisition has been capitalised in the group balance sheet. Identifiable intangible assets of £273,000 were recognised on the acquisition and no provision was required for deferred tax liability against these assets. The goodwill is attributable to the expected profitability of the acquired business and the synergies expected to arise after the acquisition.

7.  Annual General Meeting

The Annual General Meeting will be held at 12 noon on Friday 28 May 2010 at 36 Soho Square, London W1D 3QY.

8. Report and Accounts

Copies of the Report and Accounts will be circulated to shareholders in May and can be viewed after the posting date on the Bloomsbury website.

Colin Adams ACA

Group Finance Director

 

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