Final Results

RNS Number : 4010H

Bloomsbury Publishing PLC

27 May 2011

 



Bloomsbury Publishing Plc

27 May 2011

BLOOMSBURY PUBLISHING Plc

("Bloomsbury" or "the Group")

Unaudited Preliminary Results for the fourteen months ended 28 February 2011

Bloomsbury Publishing Plc has changed its year end to 28 February 2011, as previously reported. The Group today announces fourteen month results for the period ended 28 February 2011. Interim results for the twelve months ended 31 December 2010 were announced on 28 February 2011.

Financial highlights

The highlights for the fourteen months ended 28 February 2011 include:

·          Revenue of £103.4 million for the 14 months ended 28 February 2011 (12 months ended 31 December 2009: £87.2 million)

·          Pre-tax profit of £4.2 million (2009: £7.1 million)

·          Pre-tax profit adjusted for  highlighted items* £7.7 million (2009: £7.7 million)

·          Basic earnings per share of 3.02 pence (2009: 6.77 pence)

·          Earnings per share adjusted for  highlighted items* 7.70 pence (2009: 7.56 pence)

·          Net cash of £36.9 million (2009: £35.0 million)

·          Board  recommended final dividend of 0.28p per share for the two month period from 1 January 2011 to 28 February 2011 - subject to shareholder approval at the AGM

*Highlighted items comprise goodwill impairment, amortisation of intangible assets, acquisition costs, aborted acquisition costs, restructuring and relocation costs

Operating highlights

·          Bloomsbury's e-book sales increased to £1.5 million in 2010 (2009: £0.08 million). Sales in January to March 2011 were £1.1 million

·          Launch of Bloomsbury Australia in January 2011, immediately earnings enhancing

·          Acquisition of Bristol Classical Press and Duckworth Academic in November 2010

·          Appointment of two new Non Executive Directors in 2010 and a new Group Finance Director in 2011

·          Appointment of a Group Sales and Marketing Managing Director, a Managing Director of the new Children's and Educational division and a new Managing Director of Berlin Verlag

·          Bestsellers across the Group included:

-     Eat, Pray, Love - Elizabeth Gilbert

-     The Finkler Question - Howard Jacobson - winner of the 2010 Man Booker Prize

-     Operation Mincemeat - Ben Macintyre

-     Suspicions of Mr Whicher - Kate Summerscale

·          Major online initiatives included:

-     Berg Fashion Library Online

-     Public Library Online in new territories

-     Winston Churchill Archives digitisation

·          Implemented on 1 March 2011 One Global Bloomsbury - four worldwide publishing divisions: Adult; Children's & Educational; Academic & Professional; and Information, now form the basis of the Group's structure

Commenting on the results and prospects for Bloomsbury, Nigel Newton, Chief Executive, said:

"This is an exciting time for Bloomsbury: demand for digital delivery, including e-books, is increasing significantly; it will change the publishing business model creating one worldwide market. The recent organisation change is already bringing benefits to the Group, enabling us to better exploit that worldwide market as a global publisher in print and digital. We have a strong balance sheet and an excellent management team, so are well placed to exploit future opportunities as we enter our 25^th anniversary year."

For further information, please contact:

Daniel de Belder/Rosanne Perry, Pelham Bell Pottinger	[phone]
Nigel Newton, Chief Executive, Bloomsbury Publishing Plc	[phone]

CHAIRMAN'S STATEMENT

The world, particularly in the West, is inching its way back to recovery, weighed down by public debt and fiscal imbalances in the aftermath of a financial crisis which has done lasting damage to business confidence.  In the aftermath of the economic earthquake, a new world is emerging.

At the same time, the publishing world is handling its own revolution.  Digital competence is undermining old business models, spawning new ones and allowing major new forces to transform - or render irrelevant - traditional relationships.

Charles Darwin observed that "It is not the strongest of the species, nor the most intelligent that survives.  It is the one that is the most adaptable to change".  Bloomsbury is undergoing one of the most significant periods of adaptation in its 25 year history. 

The Chief Executive's Report covers the re-organisation of the Group to exploit the global horizons opened in the publishing industry by digital technology;  the continued pace of acquisitions;  the move into new premises later this year; the overhaul of key internal systems;  and Bloomsbury's adaptation to meet the needs of the growing population of e-readers who are provoking one of the most profound re-assessments of the conventional publishing industry since the development of the printing press.

The Board of Bloomsbury Publishing Plc has also been re-positioned. 

Ian Cormack and Sarah Jane Thomson have joined the Board as non-Executive Directors following the retirement of Charles Black and Mike Mayer, and Wendy Pallot has joined the Board as Group Finance Director replacing Colin Adams. 

Ian Cormack has had a successful City career in leading international and UK roles at AIG, Citigroup and Citibank, where he spent over thirty years. A former member of the Chancellor's City Advisory Panel, he has served on committees for the London Stock Exchange, CHAPS, APACS, the European Securities Forum, Cedel and the Bank of England.  Ian Cormack is Senior Independent Director of Bloomsbury and Chair of the Audit Committee.  He brings to Bloomsbury the experience and discipline of a career with some of the finest corporate institutions in the world. 

Sarah Jane Thomson founded Thomson Intermedia Plc in 1997 (now Ebiquity Plc), a media information business using internet and technology to capture and deliver real-time advertising creatives and expenditure data for businesses. The company was floated on AIM in 2000 and she remains on the Board. In 2006, she founded First News, the weekly newspaper for children which has become the most widely read children's publication in the UK and she continues to be actively involved in driving the business forward. Her other roles include: founder of Priority One, an IT outsourcing business, serving medium size businesses in Central London and joint CEO of Addictive Interactive a newly launching Social Network for brands.  Sarah Jane Thomson is Chair of the Remuneration Committee.  She brings to Bloomsbury the experience, forward-looking vision, and sure intuition of a successful entrepreneur in the digital world. 

Wendy Pallot has joined the Board as Group Finance Director.  Wendy Pallot is a graduate Chartered Accountant who qualified with Coopers & Lybrand with whom she spent 8 years.  She was Group Finance Director for GCap Media plc, the UK's leading commercial radio operator and formerly listed on the UK Main Market, from 2005 until its takeover by Global Radio in 2008.  She was Group Finance Director of GWR Group plc, a leading UK radio operator formerly listed on the UK Main Market, from 2001 until its merger with Capital Radio plc in 2005 to form GCap Media plc.  She brings to Bloomsbury a fresh perspective and a capacity for change.

This mix of new talent and experience on the Board - three new members on a Board of six - should not be under-estimated.  It will be invaluable. 

The departure of Colin Adams as Group Finance Director deserves special comment.  His firm, steady and comprehensive grasp of the financial reins, and his understanding of the business, saw the Group through a momentous period of 17 years in its history.  The Board and the entire complement of Bloomsbury wish him well in his new job.

Charles Black and Mike Mayer stepped down from the Board during 2010 after a long service, during which they both contributed immensely to the success of the Group.

With the injection of new blood to our senior and middle management through acquisitions and recruitment, and the depth of the Group in a well-established and long-serving work-force, Bloomsbury and its stakeholders are well equipped for the continued transformation in the next stage of the revolution in this industry and the geo-political upheaval in the world in which it operates.

The people who work for Bloomsbury are amongst the best in the business.  The success of the Group in meeting the formidable challenges of the past, and in ensuring a profitable future, is down to them. The whole team are focused on the   challenge and opportunities the group now faces. They have the thanks and gratitude of the Board, its shareholders and all its stakeholders for their untiring and enthusiastic commitment.

Jeremy Wilson

Chairman

CHIEF EXECUTIVE'S STATEMENT

Overview

Bloomsbury has changed its year end to 28 February 2011 as previously reported, so these results are in respect of the fourteen months ended on that date. We reported interim results for the twelve months ended 31 December 2010 on 28 February 2011. Figures given below in relation to the twelve months ended 31 December 2010 are unaudited.

Bloomsbury's results for the fourteen month period ended 28 February 2011 demonstrate not only the strength of our revenue streams but also the adaptability of Bloomsbury which allows the Group to continue to grow in a difficult, but dynamic and opportunistic, external environment. This ability is largely centred on our small but strong, proactive and entrepreneurial management team, who not only continue to excel in traditional publishing but are also establishing a highly successful digital strategy.

A good performance during the fourteen month period was particularly strengthened by an excellent final quarter of 2010. The two months ended 28 February 2011 were, as forecast, seasonally quiet months delivering a small trading loss in line with expectations and our experience in previous years.

In 2010 and into 2011 we have, in particular, seen significant growth in e-book sales. The US market continues to lead this trend, although since the last quarter of 2010, the UK has also begun to experience a surge in demand. Bloomsbury's e-book sales rose from £79,000 in 2009 to £1.5 million in 2010 and sales in January to March 2011 were £1.1 million. UK and US e-book sales are both growing apace, and with the Kindle now firmly established in the UK market and recently launched in Germany, there is now a focused effort to sell e-books throughout the world.

Financial Performance

On 1 March 2011, Bloomsbury reorganised its structure into four worldwide publishing divisions: Adult; Children's & Educational; Academic & Professional; and Information. We have also created two global service divisions for Sales & Marketing and Production. These changes were made in order to align the Group's structure with the increasing globalisation of the publishing business and the growing demand for digital content. For the fourteen months to 28 February 2011, the Group was managed on the previous geographic lines, so this report reflects that configuration, reviewing performance within Trade and Specialist divisions across the UK, North America and Continental Europe.

Revenue for the Group for the fourteen month period to 28 February 2011 was £103.4 million (12 months ended 31 December 2009: £87.2 million). Revenue for the year to 31 December 2010 was up 4% to £90.7 million (2009: £87.2 million). Revenues from the UK for the fourteen month period were £70.6 million (2009: £58.9 million). Revenues from the US were £21.7 million (2009: £18.8 million). Revenues from Continental Europe generated by Berlin Verlag were £10.1 million (2009: £9.6 million). Revenues from Bloomsbury Australia, which was launched on 1 January 2011, were £1.0m.

Profit before tax for the Group was £4.2 million (2009: £7.1 million). Profit before tax and highlighted items was £7.7 million (2009: £7.7 million). Highlighted items include the amortisation of intangible assets of £1.1 million (2009: £0.6 million), impairment of goodwill for Berlin Verlag of £1.5 million (2009: £nil), costs of £0.3 million (2009: £nil) relating to an aborted class one acquisition, restructuring costs of £0.2 million (2009: £nil) and costs of £0.2 million (2009: £nil) in relation to the relocation of the London offices as part of the Group's reorganisation. We are due to move to a new London headquarters building in August 2011. This will enable the majority of Bloomsbury staff in the UK to operate from one building and bring the benefits of better integration of the publishing teams. The impairment of the goodwill in Berlin was made following a review of economic factors affecting the business. A new management team and structure is in place there now and a subsequent rationalisation of the publishing programme and reduction of the cost base has put the business on a firmer footing for the future.

Basic earnings per share were 3.02 pence (2009: 6.77 pence). Basic earnings per share before highlighted items were 7.70 pence (2009: 7.56 pence). Diluted earnings per share were 3.02 pence (2009: 6.74 pence). Diluted earnings per share before highlighted items were 7.70 pence (2009: 7.53 pence).

At the period end the Group had net cash balances of £36.9 million (2009: £35.0 million). We continue to invest in future growth through acquiring new authors and titles as well as specialist publishing companies. Our strong balance sheet puts us in an excellent position to take advantage of these opportunities as they arise. As at 28 February 2011, the Group had 1,329 titles (31 December 2009: 1,073) under contract for future publication, with a gross investment of £23.2 million (2009: £23.7 million).  After payment of the initial tranches of advances to authors, our commitment for future cash payments on these contracted titles was £13.2 million (2009: £13.4 million).

UK Specialist

In July 2010, Bloomsbury Academic won the contract to digitise and publish online on a subscription model the archive of Sir Winston Churchill. This nearly one million-page archive will be launched in the second half of 2012.  In April 2011 we purchased the National Archive Book publishing programme from the National Archive, that includes an academic as well as a trade history list. 

The acquisition of Bristol Classical Press and Duckworth Academic in November 2010 has made Bloomsbury Academic a major player in the field of classical scholarship by publishing important new research in Archaeology, Classics, Ancient History and Ancient Philosophy.

Bloomsbury Professional published a number of major reference works in the period.  Foremost of these were The Law and Practice Relating to Charities 4^th ed., by Hubert Picarda QC which is the first major book to cover the sweeping new reforms in charities law, and Personal Injury Schedules - Calculating Damages 3^rd ed.  Our loose-leaf, Norfolk and Montagu on the Taxation of Interest and Debt Finance, was re-launched to great acclaim and this has led to a 24% increase in these loose-leaf subscribers and a more than 100% increase in revenue owing to the delivery of higher value content.  Important to our success in 2011/12 is the launch of our new online service, and loose-leaf titles such as Norfolk and Montagu, with their established subscriber base, regular income stream and fast-changing content, which are ideally placed to capitalise on online delivery.

Our Core Tax Annual series continued to grow in 2010, with revenue up by 20% on the previous year.  It will form the backbone of our new tax online service, which will be launched later in the year.  The change of government in 2010, combined with an extra Finance Act, created significant tax publishing opportunities.   As complex tax reforms are set to continue over the next few years, we can expect a continuing uplift for our tax publishing programme.

In 2011/12, we launch a new online professional service in the Republic of Ireland.  The first modules will provide a comprehensive reference service for professionals specialising in tax and company law, with further modules in other core subject areas to follow.

Under Bloomsbury's ownership, Berg Publishersproduced the best performance in its trading history in the period. Sales were strongly boosted by the US co-publication of the Berg Encyclopedia of World Dress and Fashion with Oxford University Press. Along with the on-line Berg Fashion Library, it won three major awards.  The first was the 2011 Dartmouth Medal, awarded by the American Library Association who deemed it a "landmark of scholarship." The second was the 2011 Frankfurt Book Fair Digital Award from the Independent Publishers Guild and the third the 2011 Bookseller FutureBook Award for Best Website.

In September 2011 Berg will relocate from Oxford to the new London head office, with clear advantages from reduced overheads and synergies from the closer integration of the Berg business with Bloomsbury's visual arts list.

Methuen Drama and Faber & Faber Limited have just announced a new partnership to develop a drama digital content platform for libraries, teachers, students and researchers. Launching in late 2012, Drama Online is the ultimate online resource for plays, critical analysis and performance. Drawing on the pre-eminent titles from Methuen Drama, Arden Shakespeare and Faber, Drama Online will offer a complete digital library of the most studied, performed and critically acclaimed plays from the last two and a half thousand years. In addition, it will provide expert student guidance in the form of scholarly notes, annotated texts, critical analysis and contextual information. Performance and practitioner texts from theory to backstage and acting guides, coupled with video and audio material, will make this an essential study tool meeting the full range of drama teaching needs.

Bloomsbury Information had an excellent financial period which saw the delivery of our key management services contracts with the Qatar Foundation through the successful launch of two new divisions of the Foundation: Bloomsbury Qatar Foundation Publishing (BQFP) and Bloomsbury Qatar Foundation Journals (BQFJ). BQFP publishes books in English and Arabic and was launched in April 2010 at a reception at Windsor Castle hosted by Her Majesty Queen Elizabeth II and attended by Her Highness Sheikha Mozah bint Nasser Al Missned, Consort of the Emir of Qatar and Chairperson of the Qatar Foundation. Since its launch, BQFP has published over 40 titles including the Arabic translation of the worldwide bestseller The Gruffalo. It has acquired English language and translation rights to a number of novels from Arab writers including the two most recent winners of the International Prize for Arab Fiction, known as the 'Arab Booker' prize.

In December the astronaut Buzz Aldrin's inspiring talk to scientists meeting in Qatar marked the lift-off of BQFJ, the open-access, online, peer-reviewed, research journals publishing portal (www.qscience.com). The launch journals include Sir Magdi Yacoub's Aswan Heart Centre: Science and Practice, and journals about healthcare, librarianship, education and Islamic Studies.

The online financial best practice and information resource (www.qfinance.com) also saw sustained growth through the period achieving over 186,000 unique visitors per month by the end of February 2011.

Prospects for 2011/12 are positive as the new businesses develop. From 1 July, BQFP will take over the sales of Bloomsbury Group titles in the Arab World from Penguin Group. Other international business development opportunities are under active pursuit with additional internal resource being devoted to this aspect of the Division's activities since the Group restructure in March 2011.

UK Trade

The Trade division continues to perform well. The strategy for the division has been to focus strongly on the titles with maximum commercial potential whilst keeping tight controls on the level of advance investment, continuing to identify new talented writers and promoting the "long tail" by acquiring established authors' backlists in print and e-book format and moving titles to print on demand.

In Adult, the growth of our food list has been considerable with books published by high profile authors such as Hugh Fearnley-Whittingstall and Heston Blumenthal but also innovative new authors such as Niki Segnit with The Flavour Thesaurus. We continue to look for markets that are showing good growth and we have embarked on building a crime list of high quality writers who will deliver a book a year.  Our ten-year strategy of building a serious non-fiction list has matured. Concentration on the growth of our paperback list has paid off with a wide variety of bestselling books from the novels of Khaled Hosseini to The Guernsey Literary and Potato Peel Pie Society to Eat, Pray, Love and the books of Ben McIntyre.

The retail landscape is changing with more titles being sold online or through supermarkets, in e-book or print format. The impact of digitisation is becoming considerable and acquiring world English rights is of premier importance in the digital future. In the month of October 2010, e-books made up 42% of the US sales of our Man Booker Prize winner, The Finkler Question.

During the period we have had seven hardback bestsellers in the UK including Alex's Adventures in Numberland by Alex Bellos, The Flavour Thesaurus by Niki Segnit, which was the winner of a design award, MI6: The History of the Secret Intelligence Service 1909-1949 by Keith Jeffery, Operation Mincemeat by Ben McIntyre, Just Kids by Patti Smith, River Cottage Everyday by Hugh Fearnley-Whittingstall and The Finkler Question by Howard Jacobson.  We also had three paperback bestsellers, Eat, Pray, Love and Committed by Elizabeth Gilbert, and Operation Mincemeat, in the Sunday Times list. Operation Mincemeat was number one in both hardback and paperback and Eat, Pray, Love was the number one bestselling non-fiction book in the year of 2010, occupying first place for 23 consecutive weeks.

Howard Jacobson won the Man Booker Prize, and Patti Smith won the National Book Award. We continue to identify and acquire books that are adopted for the Richard & Judy and TV Bookclub promotions.  No and Me, Operation Mincemeat, and Major Pettigrew's Last Stand were adopted as Richard & Judy picks and The Bed I Made and Even the Dogs as TV Bookclub choices.

The 2011/12 year started well with the paperback edition of Alex's Adventures in Numberland and The Good Book: A Secular Bible by AC Grayling.  Highlights of the year ahead include the paperback of The Finkler Question, a new book in the summer from Ben Schott, Schott's Quintessential Miscellany, and Rip Tide, a thriller by the ex chief of MI5, Stella Rimington.  Non-fiction highlights for the autumn include the new title in the River Cottage series, River Cottage Everyday Veg by Hugh Fearnley-Whittingstall, Heston Blumenthal's Heston at Home and How to Bake by Paul Hollywood.

In Children's & Educational The Graveyard Book by Neil Gaiman won the Carnegie Medal in June 2010 and was the first book to win both the Newbury and the Carnegie Medals. Chains by Laurie Halse Anderson was also shortlisted for the Carnegie medal - giving Bloomsbury Children's two out of the eight shortlisted titles. Grass by Cathy McPhail won the 12-16 year category for the Royal Mail Scottish Book Award in February 2011. Mortlock by Jon Mayhew and A Beautiful Lie by Irfan Master were shortlisted for The Waterstone's Children's Book Prize in January 2011. Terry Deary's Put Out the Light, published in September 2010, has been shortlisted for the Sheffield Children's Book Award 2011. The Wombles made a successful return to print, 40 years after the first book by Elizabeth Beresford was published in November 2010.  

A children's publishing agreement was signed with London Zoo to create a bespoke book programme for them; the first books will be published in September 2011.

J.K. Rowling won the Hans Christian Andersen Literature Prize in October. The Harry Potter series was reissued in paperback with a stunning new livery for a new generation of readers. It was published alongside the release of the film of Harry Potter and the Deathly Hallows Part 1 in November 2010. Sales of the boxed set continued to be particularly strong. Part 2 of this film will be released in July 2011.

We have just announced the establishment of Bloomsbury Reader, a new digital global publisher, in partnership with the Rights House, one of Britain's leading literary agencies. The aim of this business is to make available books that are in copyright but currently unavailable in print, as e-books and print-on-demand throughout the world.  The first list to be published in September 2011 has 500 titles by authors including Alan Clark, Ivy Compton-Burnett, Monica Dickens, Angela Huth, Roy Jenkins, Edith Sitwell and Alec Waugh, most of whom have not been published by Bloomsbury before. 

Bloomsbury's Public Library Online project continues to help libraries offer to their communities cost effective online access to books from a wide range of publishers thereby helping them retain their valued place at the core of a literate society.  The service has maintained a 100% renewal rate and is currently available through 18 UK library authorities reaching 7.3 million of the UK population.  Based on the success of the service in the UK and its scalability, Public Library Online has now been launched in the US, Canada, Australia, New Zealand, Germany and Scandinavia.

US

The US turned in a record performance for the period and all divisions had marked success. With the addition of new e-book agreements, most notably with Barnes & Noble, e-book sales increased significantly throughout the year, and Bloomsbury had its first two e-book bestsellers on the newly established New York Times e-book bestseller list.

In Adult, My Horizontal Life, by Chelsea Handler, remained in the top 20 on the New York Times trade paperback non-fiction bestseller list every week during 2010, while the e-book of My Horizontal Life was in the top 10 of the New York Times non-fiction e-book bestseller list that was established in the last quarter of 2010.  The U.S. adult division published The Finkler Question, and it became an immediate print and e-book bestseller when published in October, appearing each week thereafter in 2010 on the New York Times trade paperback fiction bestseller list, and several weeks on the e-book bestseller list. 

Professional and Academic sales grew solidly throughout the year in the US, and the Methuen and Arden Shakespeare lists are now well-established there as leading publishers of drama.  A&C Black's book on Alexander McQueen, the first book published following his death, was a big success.

The Children's list had numerous successes including Captivate, Carrie Jones's sequel to her paranormal blockbuster Need.  It reached number seven on the New York Times bestseller list.  Rules of Attraction, the follow up to Simone Elkeles's 2009 bestseller Perfect Chemistry, also appeared on the Times list - reaching the number three spot - and placed on the USA Today and Publishers Weekly bestseller lists as well. Hearts at Stake, by Alyxandra Harvey, the first in a paranormal romance series published in January, has shipped more than 50,000 copies, and with the subsequent 2010 releases of Blood Feud in July and Out for Blood in December, the series now has over 100,000 copies in print. 

Germany

The overall German retail book market showed no growth in 2010, and Berlin Verlag's sales reflected that.  A film tie-in paperback edition of Elizabeth Gilbert's Eat, Pray, Love hit the top of the bestseller list, as did a biography of Berthold Beitz, one of Germany's most important industrialists during the post-war era. Strong sales of Khaled Hosseini's The Kite Runner and A Thousand Splendid Suns ensured that backlist sales remained significant.

Profitability improved considerably as a result of having moved the print contract for the paperback list to the UK, where costs are lower.

Berlin Verlag e-books were launched in the autumn, and following Amazon's entry into the market in Germany in the spring of 2011 we expect significant growth in this area.

Berlin Academic was launched in the spring of 2010 with the aim of providing a digital platform for academic publishers, and has made good progress in negotiations with potential clients.

At the end of February 2011, Berlin Verlag was renamed as Bloomsbury Verlag as part of the corporate restructuring.

Management

On 28 May 2010, Sarah Jane Thomson was appointed as an Independent non-executive Director and Chair of the Remuneration Committee. Sarah replaced Charles Black who stepped down from the Board on 28 May 2010. Ian Cormack was appointed as Independent non-executive Director on 1 January 2011 and also became the Senior Independent Director and Chair of the Audit Committee on that date. Ian Cormack replaces Mike Mayer who stepped down from the Board on 31 December 2010. I would like to thank Charles and Mike for their long and distinguished service to the Board of Bloomsbury and their immeasurable contribution to the Company over many years. Wendy Pallot joined the Group as Group Finance Director on 8 April 2011. We thank Colin Adams for his support and contribution over 17 years as Group Finance Director.

Current trading, developments and prospects

Since the period end, trading within the UK has remained strong, although overseas markets are currently weaker, in part reflecting the weakness in their respective retail book markets. The strength in the UK list at the moment is evidenced by titles such as Anthony Grayling's The Good Book, the paperback editions of Howard Jacobson's The Finkler Question and Kate Summerscale's The Suspicions of Mr Whicher, Raymond Blanc's Kitchen Secrets, The River Cottage Baby and Toddler Cookbook, and the Orange Prize shortlisted The Memory of Love by Aminatta Forna.

This is an exciting time for Bloomsbury: e-book demand is increasing significantly; it will change the publishing business model creating one worldwide market. The recent organisational change is already bringing benefits to the Group, enabling us to better exploit that worldwide market as a global publisher in print and digital. During 2011/12 these benefits will be enhanced by the move into our new headquarters building in Bedford Square, London. We have a strong balance sheet and an excellent management team, so are well placed to exploit future opportunities as we enter our 25th anniversary year.

Nigel Newton

Founder and Chief Executive

FINANCIAL REVIEW

Results for the fourteen months ended 28 February 2011

The figures given below are for the fourteen month period ended 28 February 2011 unless otherwise indicated. Figures given below in relation to the twelve months ended 31 December 2010 are unaudited.

Profit before tax for the fourteen month period was £4.2 million (2009: £7.1 million).  Profit before tax and highlighted items was £7.7 million (2009: £7.7 million). For the twelve month period to 31 December 2010 profit before tax and highlighted items was £8.4 million (2009: £7.7 million).  Due to the cyclicality of the business the operation typically makes a loss in January and February.

Revenue for the Group for the fourteen month period was £103.4 million (2009: £87.2 million). Revenue for the twelve month period ended 31 December 2010 was £90.7 million (2009: £87.2 million).

The consolidated income statement for the year ended 28 February 2011 is also provided for information purposes. It does not form part of the preliminary results. In addition the related segmental analysis is provided, both under the old divisional structure and under the new structure, assuming that the business reorganisation had taken place on 1 March 2010.

Segmental analysis

Until March 2011 the Group was managed on a geographic basis and the segmental analysis presented in these financial statements reflects that structure. Revenue in the UK was £70.6 million (2009: £58.9 million). The revenue increase was primarily due to the success of the Adult list and the full period's trading of Bloomsbury Professional which was acquired in July 2009. During the fourteen month period we enjoyed seven hardback bestsellers in the UK. Unadjusted profit before investment income, finance costs, tax and central cost recharge income in the UK was £4.9 million (2009: £6.3 million).  Profit before highlighted items, investment income, finance costs, tax and central cost recharge income in the UK was £6.7 million (2009: £6.9 million).  US revenue was £21.7 million (2009: £18.8 million). E-book sales continued to gather momentum into the new year along with re-orders of core backlist titles.  Profit in the US before investment income, finance costs, tax and central costs recharged from the UK was £1.2 million (2009: £0.5 million). For Continental Europe, revenue, which was generated by Berlin Verlag, was £10.1 million (2009: £9.6 million). Berlin was operating in a difficult market during 2010 but generated a profit before highlighted items, investment income, finance costs, tax and central costs recharged from the UK in the six months to 31 December 2010. The loss in Berlin for the fourteen month period before highlighted items, investment income, finance costs, tax and central costs recharged from the UK was £0.5 million (2009: loss £0.6 million).

Within the geographical locations, the Group's divisional structure is split into three main operating areas: Children's, Adult and Reference publishing. Under this structure Children's and Adult form the Trade publishing division, and Reference the Specialist publishing division. All three divisions operated in the UK, US and Germany. For the fourteen month period the breakdown of revenue between the three areas was: Children's 22% (2009: 26%), Adult 46% (2009: 44%) and Reference 32% (2009: 30%).

Revenue in Children's was £22.8 million (2009: £23.0 million). Although there were fewer bestselling titles during the period, the backlist performed well on the back of the film Harry Potter and the Deathly Hallows part 1 and the release of the Harry Potter series with a new jacket design. The demand for the paperback box set over the Christmas period also continued into the New Year. Contribution before administrative expenses was £7.9 million (2009: £8.4 million).

Adult revenue was £47.8 million (2009: £37.9 million). As previously mentioned, the Adult division performed well during the period from a broad selection of new titles and existing backlist. The division was also the main beneficiary of e-book revenues during the period.  The increase in gross profit margin was mainly due to lower provisions against unearned advances, decreased stock provisions and lower return levels. Contribution before administrative expenses was £17.3 million (2009: £11.0 million). This increase was mainly due to higher revenues and margin.

Reference revenue increased to £32.8 million (2009: £26.4 million). The revenue growth was primarily due to the full fourteen month impact of the 2009 acquisitions of Tottel Publishing, renamed Bloomsbury Professional, and Hodder Education's Higher Education Humanities list. Bristol Classical Press and Duckworth Academic, which were acquired in November 2010, have now been integrated into the Academic operation. Contribution before administrative expenses was £10.4 million (2009: £8.6 million).

Rights revenue, which includes subsidiary rights, electronic database income, management contracts and income derived from third-party agencies, was £8.1 million (2009: £9.2 million). The contribution attributable to this revenue was £6.5 million (2009: £6.6 million). The decrease in contribution on a like for like basis was due to higher revenue recognised in 2009 on the delivery of content under the QFCA contract which was not repeated in 2010. £5.0 million (2009: £4.9 million) of the profit was generated in the Specialist Publishing Division and £1.5 million (2009: £1.7 million) was generated in the Trade Publishing Division.

Gross profit

Gross profit for the Group for the period was £53.1 million (2009: £43.4 million). Gross profit margin increased to 51.3% (2009: 49.7%). The increase in the gross profit margin was due to a number of factors including the fourteen months' trading of the higher margin Bloomsbury Professional, acquired in July 2009, lower book returns rates in the UK and moving the paperback printing of Berlin's business to the UK where the costs are lower.

Royalty rates vary according to the type of books published in the year. Provisions against unearned advances charged to the Income Statement were £3.7 million (2009: £3.4 million) and represented 3.6% of revenues (2009: 3.9% of revenues). Books returned by customers are credited to the returns provision. There was no overall change in the returns provision during the period. There was a write-back to the Income Statement in 2009 of £0.58 million. The stock provision charged to the Income Statement in respect of obsolescence (excluding write downs for items such as wastage) increased to £2.6 million (2009: £2.2 million) and represented 2.5% of revenues (2009: 2.5% of revenues).

Costs

Marketing and distribution costs for the period were £17.5 million. For the twelve month period to 31 December 2010 they were £15.2 million (2009: £15.4 million). Administrative expenses before highlighted items for the period were £28.2 million.  For the twelve month period to 31 December 2010 they were £24.7 million (2009: £21.2 million). On a like for like basis with 2009, £1.2 million of increased overhead costs before central cost recharges relate to the additional six months' overhead of Bloomsbury Professional, which was acquired in July 2009. In addition, share option charges for the twelve month period to 31 December 2010 increased to £0.8 million (2009: £0.1 million) and there were higher premises costs and professional fees as a result of credits in the year ended 31 December 2009. 

Highlighted items

Highlighted items for the fourteen month period include the amortisation of intangible assets of £1.1 million (2009: £0.6 million), impairment of goodwill of Berlin Verlag of £1.5 million (2009: £nil), costs of £0.3 million (2009: £nil) relating to an aborted class one acquisition, restructuring costs of £0.2 million (2009: £nil) and costs of £0.2 million (2009: £nil) in relation to the relocation of the London offices as part of the Group's reorganisation.  The move to the new offices in London is due to take place in August 2011. The increase in the amortisation is due to the full fourteen months' charge on the prior year's acquisitions and acquisitions and other additions in the period.  The impairment of the goodwill in Berlin was made following a review of economic factors affecting Germany, in particular the weakness of the retail book market there.  With a new management team and structure, there has been a rationalisation of the publishing programme and reduction of Berlin's cost base as part of the plan to increase profitability in the business.

Investment Income

Investment income for the fourteen month period was £0.4 million (2009: £1.1 million) as a result of lower interest rates and, to a lesser extent, lower average cash balances held during the fourteen month period. 2009 benefitted from the overhang of longer-term deposits made in prior years at significantly higher interest rates.

Taxation

The Group's effective tax rate for the fourteen months ending 28th February 2011 was 47.2% (2009: 30.1%). The increase in the rate is primarily due to certain significant one-off items which reduce the group's pre-tax profits but which are not considered allowable expenses for corporation tax purposes. These one-off highlighted items principally relate to an impairment of goodwill in respect of the Group's Berlin operations of £1.5 million (2009: £nil), fees incurred on an aborted class 1 transaction of £0.3 million (2009: £nil) and costs associated with relocating the Group's London head office of £0.2 million (2009: £nil).

The corporation tax charge for the period also includes the impact of the Group recognising a deferred tax asset of £0.4 million, relating to previously unrecognised losses arising from the Group's US operation, which partially offsets the de-recognition of the deferred tax asset (of £0.7 million) on the Group's Berlin operation's tax losses in prior periods. The adjusted underlying corporation tax rate for 2011 excluding the impact of these one-off items is 31.3%.

Earnings per share

Basic earnings per share were 3.02 pence (2009: 6.77 pence).  Diluted earnings per share were 3.02 pence (2009: 6.74 pence). Basic earnings per share before highlighted items were 7.70 pence (2009: 7.56 pence). Diluted earnings per share before highlighted items were 7.70 pence (2009: 7.53 pence).

Dividend

The Directors are recommending a final dividend of 0.28 pence per share, which, subject to shareholder approval at our Annual General Meeting, will be paid on 27 September 2011 to shareholders on the register at the close of business on 26 August 2011. This dividend is a 5% increase, pro rata for two months, on the dividend paid for the six months ending 30 June 2010. Together with the interim and second interim dividend, this makes a total dividend for the 14 month period ended 28 February 2011 of 5.00 pence per share, a 13.0% increase on the total dividend for the year ended 31 December 2009 of 4.43 pence per share.

Balance sheet

Intangible assets

Intangible assets were £37.2 million (2009: £37.6 million). The change was primarily due to the acquisition of Bristol Classical Press and Duckworth Academic in November 2010 and other additions (mainly software and publishing rights) less amortisation and the impairment of the goodwill relating to Berlin Verlag.

The businesses and net assets of Bristol Classical Press and Duckworth Academic were acquired for a cash consideration of £1,100,000. The acquisition has been accounted for using the acquisition method of accounting. The goodwill of £28,000 and intangibles of £930,000 arising on the acquisition have been capitalised in the Group balance sheet.

Current assets

Inventories increased 12.1% to £18.3 million (2009: £16.4 million). The increase mainly reflects the higher revenues particularly in the second half of the year, business seasonality and stock at the new Australian subsidiary. The underlying stock holding has remained relatively stable over the last twelve months. On a like for like basis with 2009 there was no significant exchange movement on overseas stocks (2009: positive exchange movement of £0.6 million).

Trade and other receivables increased 2.5% to £48.7 million (2009: £47.5 million). Trade receivables were £21.4 million (2009: £21.6 million). 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 period-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 £6.5 million for future returns relating to 2010/11 and prior year sales (2009: £6.5 million relating to 2009 and prior year sales) has been carried forward in trade receivables at the balance sheet date. This provision at margin represents 6.3% (2009: 7.5%) of revenues. Within trade and other receivables, prepayments and accrued income increased 7.1% to £27.2 million (2009: £25.4 million) mainly as a result of higher paid advances. Net provisions of £3.7 million (2009: £3.4 million) against advances to authors on titles published were made during the period.

Equity and liabilities

As at 28 February 2011 total equity stood at £111.9 million (2009: £112.7 million). The reduction was due to retained earnings reduction of £1.3 million (2009: £1.9 million increase) as a result of the profit for the period of £5.6 million before highlighted items (2009: £5.6 million), the highlighted items of £3.4 million (2009: £0.6 million), dividends of £3.3 million (2009: £3.1 million) and share buy-back of £0.2 million (2009: £nil), a decrease in the translation reserve due to the translation loss on consolidation of the assets and liabilities of overseas subsidiaries in other comprehensive income of £0.4 million (2009: £3.0 million loss), and an increase in the share-based payment reserve due to the share-based payment charge for the fourteen months of £0.8 million (2009: £0.1 million).

Current liabilities increased 20.6% to £29.1 million (2009: £24.2 million). Trade payables increased to £9.2 million (2009: £5.9 million) due to increased payables for work in progress and trade payable for the stock acquired by the new Australian subsidiary. Accruals and deferred income, which is included in trade and other payables, increased 20.8% to £18.6 million (2009: £15.4 million).  Accruals and deferred income includes increased deferred income on database contracts, higher deferred subscription revenues and increased 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 sales increase.

Cash flow

The Group had a net cash inflow from operating activities before tax of £11.0 million for the fourteen months (2009: £2.6 million cash outflow). This was mainly attributable to increased payables more than offsetting increased receivables. Corporation tax paid during the fourteen months was £2.8 million (2009: £1.7 million). During the fourteen months £0.4 million (2009: £1.4 million) of interest was received from deposits, and £3.3 million (2009: £3.1 million) of dividends were paid.  £1.1 million, net of cash acquired, was spent on the business acquired during the period (2009: £10.3 million). The Group's cash on the balance sheet as at 28 February 2011 was £36.9 million (2009: £35.0 million).

Wendy Pallot ACA

Group Finance Director

UNAUDITED CONSOLIDATED INCOME STATEMENT

for the fourteen month period ended 28 February 2011

Continuing operations	Notes			14 months ended 28 February 2011 £'000	Year ended 31 December 2009 £'000
Revenue	2			103,398	87,217
Cost of sales				(50,316) ______	(43,839) ______
Gross profit				53,082	43,378
Marketing and distribution costs				(17,539)	(15,441)
Administrative expenses - highlighted items	7			(3,449)	(584)
Administrative expenses - other				(28,228) ______	(21,186) ______
Administrative expenses - total				(31,677)	(21,770)
Profit before investment income, finance costs, tax and highlighted items				7,315	6,751
Highlighted items	7			(3,449)	(584)
Profit before investment income, finance costs and tax				3,866	6,167
Investment income				403	1,105
Finance costs				(49)	(145)
Profit before taxation and highlighted items				7,669	7,711
Highlighted items	7			(3,449)	(584)
Profit before taxation	2			4,220	7,127
Income tax expense				(1,991) ______	(2,146) ______
Profit for the period, attributable to owners of the parent				2,229 ______	4,981 ______
Basic earnings per share	5			3.02p ______	6.77p ______
Diluted earnings per share	5			3.02p ______	6.74p ______

 

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the fourteen month period ended 28 February 2011

				14 months ended 28 February 2011 £'000	Year ended 31 December 2009 £'000
Profit for the period				2,229 ______	4,981 ______
Other comprehensive income:
Exchange differences on translating foreign operations				(368)	(2,950)
Deferred tax on share based payments				(26)	21
				______	______
Other comprehensive income for the period net of tax				(394) ______	(2,929) ______
Total comprehensive income for the period attributable to owners of the parent company				1,835 ______	2,052 ______

 

UNAUDITED CONSOLIDATED BALANCE SHEET

                                                            at 28 February 2011                                                           

	Notes		28 February 2011 £'000	31 December 2009 £'000
ASSETS
Non-current assets
Property, plant and equipment			965	1,061
Intangible assets			37,241	37,598
Deferred tax assets			1,583	1,965
Total non-current assets			______ 39,789 ______	______ 40,624 ______
Current assets
Inventories      Trade and other receivables     Cash and cash equivalents Total current assets	8		18,334 48,719 36,876 ______ 103,929 ______	16,350 47,509 35,036 ______ 98,895 ______
TOTAL ASSETS			143,718 ______	139,519 ______
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			924 39,388 22 3,197 4,236 64,077 ______ 111,844 ______	922 39,388 20 2,393 4,604 65,357 ______ 112,684 ______
Liabilities
Non-current liabilities      Deferred tax liabilities      Retirement benefit obligations      Other payables Total non-current liabilities			2,176 95 467 ______ 2,738 ______	2,234 91 353 ______ 2,678 ______
Current liabilities      Trade and other payables      Current tax liabilities Total current liabilities			29,120 16 ______ 29,136 ______	23,069 1,088 ______ 24,157 ______
Total liabilities			31,874 ______	26,835 ______
TOTAL EQUITY AND LIABILITIES			143,718 ______	139,519 ______

UNAUDITED 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 2009	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:
Dividends	-	-	-	-	-	(3,128)	(3,128)
	______	______	______	______	______	______	______
Total transactions with owners for the year ended 31 December 2009	-	-	-	-	-	(3,128)	(3,128)
Share-based payments	-	-	-	88	-	-	88
	______	______	______	______	______	______	______
Balances at 31 December 2009	922	39,388	20	2,393	4,604	65,357	112,684
Profit for the period ended 28 February 2011	-	-	-	-	-	2,229	2,229
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	(368)	-	(368)
Deferred tax on share-based payments	-	-	-	-	-	(26)	(26)
	______	______	______	______	______	______	______
Total comprehensive income for the period ended 28 February 2011	- ______	- ______	- ______	- ______	(368) ______	2,203 ______	1,835 ______
Transactions with owners:
Dividends	-	-	-	-	-	(3,296)	(3,296)
Share options exercised	4	-	-	-	-	-	4
Share buy back and cancellation	(2)	-	2	-	-	(187)	(187)
	______	______	______	______	______	______	______
Total transactions with owners for the period ended 28 February 2011	2	-	2	-	-	(3,483)	(3,479)
Share-based payments	-	-	-	804	-	-	804
	______	______	______	______	______	______	______
Balances at 28 February 2011	924 ______	39,388 ______	22 ______	3,197 ______	4,236 ______	64,077 ______	111,844 ______

UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
for the fourteen month period ended 28 February 2011

		14 months ended 28 February 2011 £'000	Year ended 31 December 2009 £'000
Cash flows from operating activities
Profit before tax		4,220	7,127
Adjustments for:
Depreciation of property, plant and equipment		655	669
Amortisation of intangible assets		1,136	584
Impairment of goodwill		1,532	-
Profit on sale of property, plant and equipment		-	(9)
Share-based payment charges		804	88
Investment income		(403)	(1,105)
Finance costs		49	145
		______	______
		7,993	7,499
Increase in inventories		(1,942)	(76)
Increase in trade and other receivables		(1,379)	(98)
Increase / (decrease) in trade and other payables		6,326 ______	(9,888) ______
Cash generated from / (used in) operations		10,998	(2,563)
Income taxes paid		(2,792) ______	(1,734) ______
Net cash generated from / (used in) operating activities		8,206 ______	(4,297) ______
Cash flows from investing activities
Purchase of property, plant and equipment		(563)	(304)
Proceeds from sale of property, plant and equipment		-	23
Purchase of businesses, net of cash acquired		(1,100)	(10,307)
Purchases of intangible assets		(1,437)	-
Interest received		385	1,409
		______	______
Net cash used in investing activities		(2,715) ______	(9,179) ______
Cash flows from financing activities
Share options exercised		4	-
Share buy back		(187)	-
Equity dividends paid		(3,296)	(3,128)
Interest paid		(33)	(34)
		______	______
Net cash used in financing activities		(3,512) ______	(3,162) ______
Net increase / (decrease)  in cash and cash equivalents		1,979	(16,638)
Cash and cash equivalents at beginning of period		35,036	51,908
Exchange loss on cash and cash equivalents		(139)	(234)
		______	______
Cash and cash equivalents at end of period		36,876 ______	35,036 ______

NOTES

1.    The above unaudited financial information does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The above figures for the period ended 28 February 2011 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 and authorised for issue on 27 May 2011.

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 the period ended 28 February 2011 are consistent with those applied in the Financial Statements for 2009 other than the changes resulting from the implementation IFRS 3 (revised), which was implemented during the financial year. The impact on the Group's accounting policies is explained in the condensed consolidated interim financial statements for the six months ended 31 December 2010.

The statutory accounts for the year ended 31 December 2009 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 498(2) or section 498(3) of the Companies Act 2006.

NOTES

2.   Segmental analysis

In the period ended 28 February 2011, the main thrust of the Group's growth was to develop its international publishing strategy. The internal reporting to the chief operating decision maker was therefore 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.

Fourteen months ended 28 February 2011	United Kingdom £'000	North America £'000	Continental Europe £'000	Australia £'000	Eliminations and unallocated costs £'000	Total £'000
Revenue
External sales	70,647	21,734	10,052	965	-	103,398
Inter-segment sales *	1,813 _______	- _______	202 _______	- _______	(2,015) _______	- ______
Total revenue	72,460 _______	21,734 _______	10,254 _______	965 _______	(2,015) _______	103,398 ______
Result
Segment result before central costs and highlighted items	6,666	1,191	(451)	(91)	-	7,315
Highlighted items	(1,791)	-	(1,658)	-	-	(3,449)
Central cost recharges	329 _______	(183) _______	(146) _______	- _______	- _______	- ______
Segment result	5,204	1,008	(2,255)	(91)	-	3,866
Investment income	398	5	-	-	-	403
Finance costs	(49) _______	- _______	- _______	- _______	- _______	(49) ______
Profit / (loss) before taxation	5,553	1,013	(2,255)	(91)	-	4,220
Income tax expense	- _______	- _______	- _______	- _______	(1,991) _______	(1,991) _______
Profit / (loss) for the period	5,553 _______	1,013 _______	(2,255) _______	(91) _______	(1,991) _______	2,229 ______
Other Information
Amortisation of intangible assets	1,095	41	-	-	-	1,136
Depreciation	586	29	40	-	-	655
Actuarial losses	16	-	-	-	-	16
Share-based payment charges	727 _______	38 _______	39 _______	- _______	- _______	804 ______

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

NOTES

2.   Segmental analysis (continued)

Year ended 31 December 2009	United Kingdom  £'000	North America  £'000	Continental Europe  £'000	Australia  £'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 and highlighted items	6,868	450	(567)	-	-	6,751
Highlighted items	(584)	-	-	-	-	(584)
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
Depreciation	620	17	32	-	-	669
Actuarial losses	111	-	-	-	-	111
Share-based payment charges	88 _______	- _______	- _______	- _______	- _______	88 ______

* 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	Australia £'000	Total £'000
Destination Fourteen months ended 28 February 2011
United Kingdom (country of domicile)		49,114 _______	- _______	- _______	- _______	49,114 _______
North America		1,179	21,734	-	-	22,913
Continental Europe		7,724	-	10,052	-	17,776
Australasia		4,332	-	-	965	5,297
Far and Middle East		5,066	-	-	-	5,066
Rest of the world		3,232 _______	- _______	- _______	- _______	3,232 _______
Overseas countries		21,533	21,734	10,052	965	54,284
		_______	_______	_______	_______	_______
Total external sales		70,647 _______	21,734 _______	10,052 _______	965 _______	103,398 _______
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 _______
Overseas countries		20,371	18,777	9,552	-	48,700
		_______	_______	_______	_______	_______
Total external sales		58,888 _______	18,777 _______	9,552 _______	- _______	87,217 _______

Non-current assets

		28 February 2011 £'000	31 December 2009 £'000
United Kingdom (country of domicile)		34,528 _______	33,283 _______
North America		3,575	3,679
Continental Europe		101	1,697
Australia		2 _______	- _______
Overseas countries		3,678	5,376
		_______	_______
Total non-current assets (excluding deferred tax assets)		38,206 _______	38,659 _______

NOTES

2.   Segmental analysis (continued)

Business Divisions

In the period ended 28 February 2011, the Group's business was 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.

Fourteen months ended 28 February 2011	Trade (Adult)	Trade (Children's)	Total Trade	Specialist	Unallocated	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	47,823	22,812	70,635	32,763	-	103,398
Cost of sales	(22,893) _______	(11,546) _______	(34,439) _______	(15,877) _______	- _______	(50,316) _______
Gross profit	24,930	11,266	36,196	16,886	-	53,082
Marketing and distribution costs	(7,672) _______	(3,379) _______	(11,051) _______	(6,488) _______	- _______	(17,539) _______
Contribution before administrative expenses	17,258 _______	7,887 _______	25,145	10,398	-	35,543
Administrative expenses			(20,678)	(7,937)	(3,062)	(31,677)
			_______	_______	_______	_______
Divisional result			4,467	2,461	(3,062)	3,866
Investment income			-	-	403	403
Finance costs			-	-	(49)	(49)
			_______	_______	_______	_______
Profit before taxation			4,467	2,461	(2,708)	4,220
Income tax expense			-	-	(1,991)	(1,991)
			_______	_______	_______	_______
Profit for the period			4,467	2,461	(4,699)	2,229
			_______	_______	_______	_______

NOTES

2.   Segmental analysis (continued)

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 administrative 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

3.   Taxation

(a) Tax charge for the period

	14 months ended 28 February 2011 £'000	Year ended 31 December 2009 £'000
UK corporation tax	1,720	2,159
Overprovision in respect of prior year	(55)	(246)
Overseas taxation - current period	70	61
	_______	_______
	1,735	1,974
Deferred tax - UK	4	172
- Overseas	252	-
	_______	_______
	1,991 _______	2,146 _______

NOTES

3.   Taxation (continued)

(b) Factors affecting tax charge for the period

The tax assessed for the period is different from the standard rate of corporation tax in the UK (28%).  The differences are explained below:

	14 months ended  28 February  2011 £'000	%	Year ended  31 December  2009 £'000	%
Profit before taxation	4,220 ______	100.00 ______	7,127 ______	100.00 ______
Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 28% (2009, 28%)	1,182	28.00	1,996	28.00
Effects of:
Non-deductible revenue expenditure	111	2.63	73	1.06
Non-qualifying depreciation	34	0.81	52	0.73
Share-based payments	150	3.55	-	-
Different rates of tax on overseas results	(48)	(1.14)	6	0.09
Tax losses (utilised) / not utilised	50	1.18	116	1.65
Movement in deferred tax rate	(95)	(2.25)	-	-
Adjustment to tax charge in respect of previous periods - current tax - deferred tax	(55) (5) ______	(1.32) (0.12) ______	(246) 149 ______	(3.50) 2.12 ______
Tax charge for the period before highlighted and other non-recurring items	1,324	31.34	2,146	30.15
Highlighted and other non-recurring items:
Disallowable costs incurred on the abortive acquisition / moving head office	143	3.39	-	-
Impairment of goodwill	271	6.42	-	-
Write off deferred tax asset on German tax losses previously recognised	680	16.11	-	-
Recognition of deferred tax asset on US tax losses not previously recognised	(427) ______	(10.12) ______	- ______	- ______
Tax charge for the period	1,991 ______	47.15 ______	2,146 ______	30.15 ______

NOTES

4.   Dividends

For the prior year

A final dividend for 2009 of 3.65 pence per share (£2,698,000) was paid to the equity shareholders on 1 July 2010, being the amount proposed by the Directors, and subsequently approved by the shareholders at the 2010 Annual General Meeting (2009: final dividend for 2008 paid in 2009 of 3.47 pence per share, £2,554,000).

For the current period

On 16 November 2010 an interim dividend of 0.81 pence per share (£597,423) was paid to the equity shareholders (2009: 0.78 pence per share, £574,000).

The Directors have declared a second interim dividend of 3.91 pence per share, which will be paid on 1 June 2011 to shareholders on the register at close of business on 3 May 2011.  Based on the number of shares currently in issue, excluding shares held by the Employee Benefit Trust, the second interim dividend will be £2,825,000.

The Directors are recommending a final dividend of 0.28 pence per share, which, subject to shareholder approval at our Annual General Meeting, will be paid on 27 September 2011 to shareholders on the register at close of business on 26 August 2011. Together with the interim and second interim dividend, this makes a total dividend for the 14 month period ended 28 February 2011 of 5.00 pence per share, a 13.0% increase on the total dividend for the year ended 31 December 2009 of 4.43 pence per share. Based on the number of shares currently in issue, excluding shares held by the Employee Benefit Trust, the final dividend will be £202,000. This dividend is subject to approval by the shareholders at the Annual General Meeting and has therefore 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 £2,229,000 (2009, £4,981,000) and a weighted average number of Ordinary Shares in issue after deducting 88,760 (2009, 88,760) shares held by the Employee Benefit Trust of 73,735,046 (2009, 73,594,863). The diluted earnings per share has been calculated by reference to earnings of £2,229,000 (2009, £4,981,000) and a weighted average number of Ordinary Shares of 73,735,046 (2009, 73,920,795) 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:

	28 February 2011 Number	31 December 2009 Number
Weighted average number of shares for basic earnings per share	73,735,046	73,594,863
Dilutive effect of share options and awards	-	325,932
	_________	_________
Weighted average number of shares for diluted earnings per share	73,735,046 _________	73,920,795 _________

The earnings per share are shown below:

	14 months ended 28 February 2011	Year ended 31 December 2009
Basic earnings per share	3.02p ______	6.77p ______
Diluted earnings per share	3.02p ______	6.74p ______

The adjusted earnings per share before amortisation of intangible assets of £1,136,000 (2009, £584,000), impairment of goodwill of £1,532,000 (2009, £nil) and other highlighted items of £781,000 (2009 £nil) are shown below:

	14 months ended 28 February 2011	Year ended 31 December 2009
Adjusted basic earnings per share	7.70p ______	7.56p ______
Adjusted diluted earnings per share	7.70p ______	7.53p ______

NOTES

6.  Acquisitions

On 1 November 2010 A&C Black acquired the business and net assets of Duckworth Academic for a cash consideration of £1,100,000.  It was renamed Bristol Classical Press and is being managed under the Bloomsbury Academic imprint. Bloomsbury has identified academic and professional publishing as a growth area for the Group. Bringing Bristol Classical Press into Bloomsbury Academic is an important stepping stone in the development of our publishing in this area. The acquisition has been accounted for by the acquisition method of accounting. The goodwill of £28,000 and intangibles of £930,000 arising on the acquisition have been capitalised in the Group balance sheet.

The Directors consider the assets acquired and the impact on results is not material.

7.  Highlighted items

	14 months ended  28 February 2011 £'000	Year  ended 31 December 2009 £'000
Amortisation of intangible assets	1,136	584
Impairment of goodwill	1,532	-
Professional fees on acquisitions	25	-
Relocation of headquarters	196	-
Aborted acquisition costs	313	-
Restructuring costs	247 ______	- ______
	3,449 ______	584 ______

Highlighted items charged to profit before tax comprise significant non-cash charges and/or non-recurring items which are highlighted in the income statement because, in the opinion of the Directors, separate disclosure is helpful in understanding the underlying performance of the business.

The goodwill impairment charge relates to goodwill attributable to Berlin Verlag.  This was a result of an impairment review assessing the carrying value of the investments, which took account of economic factors in Germany, in particular the weakness of the retail market there, and forecasts not supporting the carrying value.  With the new management team and structure, there will be a rationalisation of the publishing programme and continuing reduction of Berlin's cost base as part of the plan to increase profitability in the business.

Legal costs of £25,000 were incurred in relation to the acquisition of Duckworth Academic.

The Group has incurred costs of £196,000 relating to its planned relocation of its Head Office to Bedford Square in July 2011, including professional fees and additional rental expense while the new premises are refurbished.

Aborted acquisition costs of £313,000 related to professional fees in connection with an acquisition of a business which did not go ahead following the due diligence process.

Restructuring costs of £247,000 were incurred as a result of the strategic global reorganisation of the Bloomsbury Group.

8.  Trade and other receivables

Included within trade and other receivables are the following provisions:

As books are returnable by customers, the Group makes a provision against books sold in the accounting period which is then carried forward in trade receivables in the balance sheet in anticipation of book returns received subsequent to the period end.  A provision for the Group of £6.51m (2009: £6.51m), at margin, for future returns relating to the current period and prior year sales has been included in trade receivables in the balance sheet at 28 February 2011.  This included a provision for the Company of £2.21m (2009: £2.14m). A 1% change in the closing returns provision rates would have an impact of £0.31m for the Group (2009: £0.26m). In addition to books returned by customers during 2009, there was a write-back in the returns provision relating to changes in assumptions made in respect of the provision brought forward from the prior year which, as a result of the level of returns actually received during the period, is no longer required.  The value of the write-back to the income statement is £nil (year to 31 December 2009: £0.58m).

The reconciliation of the Group's returns provision balance is shown below:

	28 February 2011 £'000	31 December 2009 £'000
At 1 January 2010	6,505	7,783
Exchange difference	(19)	(431)
Change in basis of calculation	-	(581)
Subsidiaries acquired	-	186
Provision made in the period	11,079	8,340
Provision utilised in the period	(11,053)	(8,792)
	______	______
At 28 February 2011	6,512 ______	6,505 ______

The change in the basis of the calculation takes account of the reassessment of likely returns rates based on the level of actual returns in the period.

The Group makes a provision against published titles advances which may not be covered by anticipated future sales, paperback editions or contracts for subsidiary rights receivable.  At the end of each financial year a review is carried out on all published titles advances.  If it is unlikely that royalties from future sales, paperback sales or subsidiary rights will fully earn down the advance, a provision is charged to the income statement for the difference between the carrying value and the anticipated recoverable amount from future earnings ("advance provision").  The advance provision charged to the income statement for the Group was £3.67m for the fourteen months to 28 February 2011 (year to 31 December 2009, £3.44m).  The provision for the Company has been increased by £0.88m (year to 31 December 2009, £1.03m).  The net advance is included within prepayments and accrued income.

The movement on the advances provision for the Group during the period is shown below:

	14 months ended 28 February 2011 £'000	Year ended 31 December 2009 £'000
Reversal of provision no longer required	-	(1,624)
Provisions made in the period	3,668	5,062
	______	______
Total charge to income statement	3,668	3,438
Provisions used to write off advances	(1,682)	(1,960)
Exchange difference	(273)	(474)
	______	______
Net movement in provision	1,713 ______	1,004 ______

9. Annual General Meeting

The Annual General Meeting will be held at 12 noon on Thursday 11 August 2011 at 36 Soho Square, London W1D 3QY.

10. Report and Accounts

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

This information is provided for information purposes only, does not form part of our preliminary results and is unaudited

CONSOLIDATED PROFORMA INCOME STATEMENT

for the year ended 28 February 2011

			Year ended 28 February 2011 £'000
Revenue			92,555
Cost of sales			(44,651) ______
Gross profit			47,904
Marketing and distribution costs			(15,622)
Administrative expenses - highlighted items			(3,299)
Administrative expenses - other			(25,068) ______
Administrative expenses - total			(28,367)
Profit before investment income, finance costs, tax and highlighted items			7,214
Highlighted items			(3,299)
Profit before investment income, finance costs and tax			3,915
Investment income			349
Finance costs			(44)
Profit before taxation and highlighted items			7,519
Highlighted items			(3,299)
Profit before taxation			4,220
Income tax expense			(1,843) ______
Profit for the year, attributable to owners of the parent			2,377 ______

Segmental analysis

Business Divisions - new structure

Year ended 28 February 2011	Adult	Children's & Educational	Academic & Professional	Bloomsbury Information	Unallocated	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	54,790	24,439	10,722	2,604	-	92,555
Cost of sales	(26,940) _______	(12,447) _______	(4,874) _______	(390) _______	- _______	(44,651) _______
Gross profit	27,850	11,992	5,848	2,214	-	47,904
Marketing and distribution costs	(9,649) _______	(3,870) _______	(2,015) _______	(88) _______	- _______	(15,622) _______
Contribution before administrative expenses	18,201	8,122	3,833	2,126	-	32,282
Administrative expenses	(14,163)	(7,258)	(3,023)	(959)	(2,964)	(28,367)
	_______	_______	_______	_______	_______	_______
Divisional result	4,038	864	810	1,167	(2,964)	3,915
Investment income	-	-	-	-	349	349
Finance costs	-	-	-	-	(44)	(44)
	_______	_______	_______	_______	_______	_______
Profit before taxation	4,038	864	810	1,167	(2,659)	4,220
Income tax expense	-	-	-	-	(1,843)	(1,843)
	_______	_______	_______	_______	_______	_______
Profit for the year	4,038	864	810	1,167	(4,502)	2,377
	_______	_______	_______	_______	_______	_______

Segmental analysis

Business Divisions - old structure

Year ended 28 February 2011	Trade (Adult)	Trade (Children's)	Total Trade	Specialist	Unallocated	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Revenue	42,941	20,551	63,492	29,063	-	92,555
Cost of sales	(20,461) _______	(10,401) _______	(30,862) _______	(13,789) _______	- _______	(44,651) _______
Gross profit	22,480	10,150	32,630	15,274	-	47,904
Marketing and distribution costs	(6,956) _______	(3,081) _______	(10,037) _______	(5,585) _______	- _______	(15,622) _______
Contribution before administrative expenses	15,524 _______	7,069 _______	22,593	9,689	-	32,282
Administrative expenses			(18,243)	(7,160)	(2,964)	(28,367)
			_______	_______	_______	_______
Divisional result			4,350	2,529	(2,964)	3,915
Investment income			-	-	349	349
Finance costs			-	-	(44)	(44)
			_______	_______	_______	_______
Profit before taxation			4,350	2,529	(2,659)	4,220
Income tax expense			-	-	(1,843)	(1,843)
			_______	_______	_______	_______
Profit for the year			4,350	2,529	(4,502)	2,377
			_______	_______	_______	_______

 

END

 

 

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