Bloomsbury’s magic touch as Covid turns us into book addicts
WHEN the nights are long, the weather unpredictable and social interaction hugely restricted, there are not many ways to have fun at the end of the working day.
Many households have already painted the kitchen, binge-watched one too many television series and grown tired of online yoga.
They are looking for other ways to chill out – and reading seems high on the list.
Reading is a form of escape, a source of comfort and a way of trying to make sense of the world. People are hankering after all three in these trying times and Harry Potter publisher Bloomsbury has benefited handsomely from the trend.
The shares are £2.79 and should gain ground next year and beyond.
Back in March, when Britain first went into lockdown, Bloomsbury chief executive Nigel Newton thought sales would fall off a cliff.
Over the summer, however, it became increasingly clear that he was wrong and in October the group unveiled profits of £4 million for the six months to September 30, a 60 per cent increase over last year and substantially ahead of forecasts.
Enthusiasm has continued and even intensified since then. Sales have soared in recent weeks and Christmas looks promising, as shoppers snap up books of every hue.
Novels have been a winner since Covid- 19 erupted but Newton reports that consumers have also rushed to pick up philosophical and political titles, such as Joe Biden: American Dreamer and Behind The Enigma, the authorised history of GCHQ, the Government intelligence agency.
Bloomsbury specialises in cookery books too and these have been in huge demand this year, including blogger Skye McAlpine’s A Table For Friends and The Hand And Flowers Cookbook from celebrity chef Tom Kerridge.
Harry Potter remains an enduring favourite, more than 23 years after The Philosopher’s Stone introduced a generation of children to the joys of reading.
The seven-book series has now sold more than 500 million copies worldwide and sales have continued to rise in recent months, with young and old drawn into the magical world of Hogwarts School of Witchcraft and Wizardry.
Most publishers specialise in consumer books or academic titles. Ten years ago, Newton decided to focus on both. The decision was well- timed and five years ago Bloomsbury expanded into online academic publishing, a move that has stood the group in particularly good stead this year.
Bloomsbury Digital Resources – which includes online books, videos and journals on topics from Winston Churchill to fashion – saw turnover surge by 47 per cent in the first half of the group’s financial year, as schools and universities around the world were forced to teach students virtually.
The rate of growth may slow as the pandemic recedes but the division still has plenty of potential, as educational establishments realise that the digital world can bring learning to life for school children and students alike.
Bloomsbury’s consumer arm should prove robust too. Over the years, sceptics have been continually wrong-footed by our love for a good read, be it online or an oldfashioned paperback. And in the kitchen, interest in home-cooked meals is likely to emerge as one of the few lasting benefits of Covid-19, prompting continued support for new cookery titles.
Bloomsbury has a worldwide presence too, deriving two-thirds of its sales from outside the UK.
The company’s dividend performance underlines its resilience. Until a year ago, there was an unbroken, 25-year record of dividend growth but, faced with extreme uncertainty when he published full-year results in May this year, Newton withdrew the cash dividend and offered investors bonus shares instead. In October, the cash dividend was reinstated, with an interim payment of 1.28p.
A total dividend of 8.2p is forecast for the year to the end of February 2021, rising to 8.5p the following year.
Some brokers believe profits will fall in the current year but analysts have often under estimated Bloomsbury in the past and, if current momentum continues, their predictions may prove overly pessimistic again. Either way, growth is expected to resume from 2022.
Ticker: BMY Traded on: Main market Contact: bloomsbury.com or 020 7631 5600