Bloomsbury: Harry Potter publisher delivers more magic

‘Exceeds Expectations’ is one of three pass marks teachers at Hogwarts School of Witchcraft and Wizardry can award. Bloomsbury, the Harry Potter series publisher, achieved the same grade in annual results on Wednesday. Revenues of £185m and pre-tax profits of £19.2m in the year to February both beat predictions. Lockdowns boosted demand for everything from the fantasy escapism of Sarah J. Maas to insights on racism by Reni Eddo-Lodge. 

A renaissance in reading means that sales of physical books have risen by a tenth in the past year worldwide. That has stoked demand for shares in the UK-based publisher. These are back to levels last seen in 2006, before Amazon’s Kindle was released and e-books became popular.

Children’s books remain a Bloomsbury staple. Sales rose by 26 per cent last year to make up two-fifths of total revenues. Even sales of Harry Potter books rose 7 per cent — over two decades after the first edition was published. Sales of titles for adults rose 17 per cent. Profit growth from the consumer division was even more impressive, increasing 61 per cent to £14.2m.

A solid performance from books directed at consumers more than offset weakness in academic publishing. Bloomsbury, like other academic publishers, is still adapting to the reality of students buying fewer books. Revenues increased just 3 per cent in that subdivision last year. Taking up some of that slack is Bloomsbury Digital Resources, which sells digital access to academic institutions. Sales here rose 49 per cent as the pandemic accelerated the shift to online learning.

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Surveys taken during lockdown suggest new reading habits will persist even as restrictions ease. Children have become more engaged with reading. A quarter of young people said the activity had become more enjoyable, according to the National Literacy Trust.

Some of this enthusiasm may evaporate as hanging out with friends becomes easier. Bloomsbury shares are trading at a multiple of 19 times forward earnings, richer than any time in more than a decade. Unless new habits are as permanent as Harry’s lightning bolt scar, this is a high sticker price.

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