Bloomsbury lifts profit forecast as it moves beyond Harry Potter books

Bloomsbury Publishing has raised its guidance for full-year revenue and profit, pushing its shares up almost a tenth as the group expands beyond the Harry Potter books that have driven business for more than a decade.

The publisher of JK Rowling’s bestselling series said on Wednesday that it expected profit to “materially” exceed market expectations in the year to February, as it also cashes in from a pandemic-induced reading boom. It anticipated that revenue would “comfortably” surpass a company-compiled market consensus of £197.1m.

Following the trading update, analysts are now expecting Bloomsbury to report record annual profits before tax, surpassing the £20.1m recorded when it published the penultimate Harry Potter book in 2005.

“They have built [on the success of Harry Potter],” said Malcolm Morgan, analyst at Peel Hunt, which raised its profit estimate for Bloomsbury by 12 per cent to £22m. “Harry Potter is a great asset” that was giving the company the cash it needed to develop its business, he added.

Following the publication of the final Harry Potter book in 2007, Bloomsbury’s business declined dramatically, with profits before tax falling as low as £5.3m in 2010-11.

But the group has since sought to diversify its business, launching a suite of digital libraries for academic texts since 2016. Bloomsbury said it had now hit its target to generate £5m in annual profit from these services, after university teaching moved online during the pandemic.

Nigel Newton, founder and chief executive, told the Financial Times that he expected Bloomsbury’s academic and consumer businesses would eventually be on an “equal footing”. Last year, consumer titles were still responsible for 64 per cent of revenue.

“The transition to digital resources in universities was already well on the way,” he added. “[The pandemic] has simply accelerated [the change]”.

Line chart of Publisher's share price in London since March 2020 showing Bloomsbury becomes pandemic 'winner' as reading takes off

Newton pointed out that the Harry Potter series had remained popular, with a highly publicised television event marking the 20th anniversary of the first film this month.

After Bloomsbury initially warned that lockdowns would hit sales, many of its titles have benefited from a reading boom as both adults and children turned to books during the pandemic.

“A lot of people when stuck at home were reminded of the joys of reading,” said Newton, who added that the renewed interest would outlast the Covid-19 crisis. “[Reading] is being factored back in to people’s lives.” 

Since the start of the pandemic, shares in the company have risen more than 50 per cent. They were up more than 9 per cent to 368.85p in early afternoon trading in London.


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