BLOOMSBURY PUBLISHING PLC Annual Report & Accounts 2019
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Bloomsbury Publishing Plc ANNUAL REPORT REPORT ANNUAL & ACCOUNTS 2019 February y/e 28 Bloomsbury Publishing Plc 50 Bedford Square, London, WC1B 3DP BLOOMSBURY PUBLISHING PLC Telephone +44 (0) 20 7631 5600 Annual Report & Accounts 2019 www.bloomsbury.com www.bloomsbury-ir.co.uk STOCK CODE: BMY Bloomsbury AR2019_Front.indd 3 12/06/2019 16:02:31 26563 12 June 2019 3:36 pm Proof 11 Bloomsbury Publishing Plc Bloomsbury Publishing is an entrepreneurial, independent, worldwide publisher listed on the London Stock Exchange with offices in London, Oxford, New York, Sydney and New Delhi. Over its 33 year history, Bloomsbury’s mission has been to publish works of excellence and originality. Bloomsbury has built up an extremely valuable portfolio of content and rights-based intellectual property assets. Contents OVERVIEW FINANCIAL STATEMENTS COMPANY INFORMATION Performance Review 1 Independent Auditor’s Report 76 Five Year Financial Summary 144 Highlights 2 Consolidated Income Statement 86 Company Information 145 Chairman’s Statement 3 Consolidated Statement of Comprehensive Legal Notice 145 Income 87 Notice of the Annual General Meeting 146 STRATEGIC REPORT Consolidated Statement of Financial Position 88 Consolidated Statement of Changes in Chief Executive’s Review 6 Equity 89 Financial Review 12 Consolidated Statement of Cash Flows 90 Notes to the Financial Statements 91 Group Overview Company Statement of Financial Position 130 – Group Strategic Summary 18 Company Statement of Changes in Equity 131 – Non-Consumer 19 Company Statement of Cash Flows 132 – Consumer 21 Notes to the Company Financial Statements 133 – Group Functions 24 Risk Factors 25 Corporate Responsibility 30 Visit us online at: GOVERNANCE www.bloomsbury.com/uk Board of Directors 40 www.bloomsbury-ir.co.uk Directors’ Report 42 Corporate Governance 47 Cautionary statement Directors’ Remuneration Report 54 This document should be read in conjunction with the legal notice on page 145 Bloomsbury AR2019_Front.indd 4 12/06/2019 16:02:31 26563 12 June 2019 3:36 pm Proof 11 notes-heading-level-one Performance Review notes-heading-level-two notes-heading-level-three notes-heading-level-four notes-strapline Revenue Dividend Adjusted profit1 notes-text-body £m pence per share £m ✷ list-bullet ✷ notes-list-bespoke £162.7m 7.96p £14.4m − notes-list-dash a. notes-list-alpha +1% +6% +9% 4. notes-list-number i. notes-list-roman 2019 162.7 2019 7.96 2019 14.4 2018 161.5 2018 7.51 2018 13.2 2017 142.6 2017 6.70 2017 12.0 2016 123.7 2016 6.40 2016 13.0 OVERVIEW 2015 111.1 2015 6.10 2015 12.1 Profit before tax Adjusted diluted EPS2 Diluted EPS £m pence per share pence per share £12.0m 14.97p 12.25p +3% +8% +2% 2019 12.0 2019 14.97 2019 12.25 2018 11.6 2018 13.92 2018 12.06 2017 9.4 2017 12.63 2017 9.81 2016 10.4 2016 15.24 2016 12.93 2015 9.6 2015 14.73 2015 11.90 Notes: 1. Adjusted profit is profit before taxation, amortisation of acquired intangible assets and other highlighted items. 2. Adjusted diluted EPS is calculated from adjusted profit with taxation on adjusted profit deducted. Stock Code: BMY www.bloomsbury.com 1 Bloomsbury AR2019_Front.indd 1 12/06/2019 16:02:32 26563 12 June 2019 3:36 pm Proof 11 Highlights Financial Highlights ✷ Profit before taxation and highlighted items* grew by 9% to £14.4 million, up from £13.2 million in 2017/18, ahead of market expectations ✷ Total revenues rose to £162.7 million (2017/18: £161.5 million) ✷ Profit before taxation grew by 3% to £12.0 million (2017/18: £11.6 million) ✷ Diluted earnings per share, excluding highlighted items*, grew by 8% to 14.97p (2017/18: 13.92p) ✷ Diluted earnings per share grew by 16% to 12.25p (2017/18: 12.06p) ✷ Cash conversion of 128% (2017/18: 161%), excluding the acquisition, with net cash of £27.6 million at 28 February 2019 (2018: £25.4 million) ✷ Proposed final dividend up 6% to 6.75p per share, making a total dividend of 7.96p per share for the year (2017/18: 7.51p per share) ✷ 24th consecutive year of dividend growth Operational Highlights Non-Consumer division Consumer division ✷ Excellent Academic & Professional performance, with profit before ✷ Resilient full year results, with profit before highlighted items of highlighted items of £3.1 million (2017/18: loss of £0.4 million) and £10.7 million (2017/18: £11.4 million) revenue up 13% ✷ Exceptional Adult Trade performance, with operating profit before ✷ Non-Consumer revenues grow 7% to £63.4 million (2017/18: highlighted items of £0.9 million (2017/18: loss of £0.2 million) and £59.3 million) revenue up 1% ✷ Bloomsbury Digital Resources 2020 (“BDR 2020”) Academic & ✷ Children’s Trade delivered profit before highlighted items of Professional revenues up 42% on a like-for-like basis, excluding the £9.8 million (2017/18: £11.6 million), with enduring sales of the impact of IFRS 15 Harry Potter series against last year’s very strong comparative ✷ Five new digital resources launched during the year, as planned with the twentieth anniversary. Sarah J. Maas titles continued their bestselling performance, including the new bestseller Kingdom ✷ Acquisition of I.B. Tauris Co. Ltd (“IBT”) in May 2018 completed for of Ash, and revenue and profit growth delivered in the rest of £5.6 million, strengthening our digital resources with its quality the Children’s division academic IP ✷ IBT delivered £2.5 million of revenue and £0.4 million of profit Bigger Bloomsbury before highlighted items for the first ten months of ownership Bigger Bloomsbury represents our seven key growth initiatives, announced in May 2018. During the year, we delivered all seven of ✷ Substantial new B2B five-year digital subscription contract with the these initiatives, with notable highlights including delivering excellent Institute of Chartered Accountants of England and Wales (“ICAEW”), growth in Adult and Academic & Professional profitability, announced in October 2018 international growth and continued working capital improvement. Notes * Highlighted items comprise amortisation of acquired intangible assets and restructuring costs and legal and other professional fees relating to the acquisition of IBT. Harry Potter and the Philosopher’s Stone was Stuart Turton’s The Seven Deaths of Evelyn In the Closet of the Vatican by Frédéric Sarah J. Maas sales continue to grow with the fourth bestselling Children's book on UK Hardcastle, was the winner of the Costa First Martel was a New York Times bestseller the global number one bestseller, Kingdom Nielsen Bookscan, twenty-one years after it Novel Award published by the Special Interest Division of Ash was first published 2 Bloomsbury Publishing Plc Annual Report and Accounts 2019 Bloomsbury AR2019_Front.indd 2 12/06/2019 16:02:34 26563 12 June 2019 3:36 pm Proof 11 Chairman’s Statement Sir Richard Lambert Ondaatje named winner of the 2018 Golden Man Booker Prize for Fiction for The English Patient and Stuart Turton won the Costa First Novel Award 2018 for Fiction for The Seven Deaths of Evelyn Hardcastle. Bloomsbury’s authors continue to enrich the lives of millions of people across the world. And on behalf of the Board, I would also like to thank the staff for their hard work and dedication to publishing the Bloomsbury way. After ten years on the Board, Richard Charkin stood down from his executive responsibilities at the end of last May. Jill Jones will leave the Board as a Non-Executive Director and Chair of the OVERVIEW Remuneration Committee at the Annual General Meeting. Jill joined the Board in 2013 and has provided practical insights of great value. The Company has benefitted immensely from her “ The digital age presence on the Board and her guidance, drawn from her extensive publishing experience. I would continues to provide like to thank both Richard and Jill most warmly for exciting new their support during their time on the Board. The Nomination Committee led a rigorous search opportunities for process for Jill’s successor and I am delighted to welcome Leslie-Ann Reed to the Board, who will be Bloomsbury.” joining Bloomsbury as Non-Executive Director on 17 July. Leslie-Ann brings a wealth of experience, Sir Richard Lambert having previously held senior finance leadership Non-Executive Chairman and non-executive roles with various media and professional services companies. I am happy to say that Steven Hall will succeed Jill as Chair of the loomsbury delivered a strong performance Remuneration Committee when she leaves. over the year to February, reflected in the The digital age continues to provide exciting robust financial results. Group revenues rose opportunities for Bloomsbury. The Company has Bby 1% to £162.7 million and profits before taxation delivered well on the Bloomsbury Digital Resources and highlighted items increased by 9% to £14.4 2020 digital growth strategy through the launch of million, ahead of market expectations. Profits before five new digital resources during the year and new taxation were up by 3% to £12.0 million. content partnerships. The acquisition of I.B. Tauris & The Board is recommending a final dividend of 6.75 Co. Limited, the London-based academic publisher, pence per share, which if approved by Shareholders not only consolidates our significant presence in would bring a total dividend of 7.96 pence per humanities and social science academic publishing, share for the year. This represents an increase in full but also represents another important step on the year dividend of 6% and continues Bloomsbury’s way to increasing Bloomsbury’s digital resource record of dividend growth for the 24th consecutive offering. These are just a few of our achievements in year.