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Bloomsbury Publishing is so closely associated with Harry Potter, it’s hard sometimes to look beyond the boy wizard.
A recent bullish trading update though showed that some of the seeds planted using the cash from the Potter phenomenon are starting to bear fruit.
Moves into higher-margin professional and academic publishing, where the focus is business-to-business digital publishing, and a partnership with Spotify have been recent highlights.
Turning point: That first Harry Potter book and the subsequent six instalments went on to sell the best part of half a billion copies
Spotify is to make Bloomsbury’s series of music business-focused books – 331/3 -available on the music streaming service.
Focusing on a single album per book, 331/3 is a series of short books about popular contemporary music with more than 130 titles published.
The music-streaming giant will offer titles from the series in a variety of formats exclusively.
In April, Bloomsbury snapped up academic book publisher IB Tauris, which has a back catalogue of 4,000 titles spanning areas such as Middle East Studies and International Relations.
Around 90 per cent of IBT’s sales are in print and Bloomsbury expects to be able to build digital sales through its own platform. While not in the league of Harry Potter, they underline the momentum.
Last month, the publisher said it expects profits expectations for the year ended February to be well ahead of expectations.
Excellent sales, particularly in January and February, lower than anticipated returns and a new clutch of best sellers including one potentially in the same league as Harry Potter were all cited.
Tom Kerridge’s Lose Weight For Good, for example, sold more than 70,000 copies, which is more than any book has ever sold in the UK in a week in January – including the Harry Potter titles.
Partnership: Bloomsbury has signed a deal with Spotify and will publish a series of short books about popular contemporary music
Bloomsbury did not break down its full-year numbers by division – that will come when the full-year figures are released, but we know that in the first half the consumer division’s revenues rose 20 per cent from the year before to £44.7million while the non-consumer division’s sales rose 8 per cent year-on-year to £27.4million.
Another author, Sarah J Maas, might even eventually give Potter author JK Rowling a run for her money for the accolade of Queen of Fantasy with the Throne of Glass series.
Numis Securities called the trading update ‘positive’ and raised its target price for Bloomsbury shares to 248p from 238p, adding it was ‘one of our key picks in SmallCap Media.’
The broker also raised its full-year 2018 pre-tax profit/earnings per share forecasts by eight per cent to £13million/13.9p respectively highlighting the strong momentum across both the Consumer and Academic & Professional businesses.
And underpinning all of this is the Harry Potter bedrock, which is now so entrenched in global culture it is almost an annuity for the company.
Last year marked the 20th anniversary of the publication of the very first Harry Potter book, Harry Potter and the Philosopher’s Stone.
It also marked a quarter-of-a-century since the London-listed publisher took a chance on an author who had been rejected by several other publishers.
Bloomsbury was the one that eventually decided to take a punt on a story that combined post-Tolkien fantasy with the sort of boarding school yarns peddled by Frank Richards, of Billy Bunter fame. It proved to be a master stroke and a company-maker.
The decision transformed Bloomsbury from a small, independent company into one of the most successful children’s publishers.
That first book and the subsequent six instalments went on to sell the best part of half a billion (yes, 500,000,000) copies around the world and were printed in 79 different languages.
It didn’t end there though. All of the books were made into films which grossed more than £6billion worldwide, a theme park followed not long after as did several spin-offs.
Even in his wildest dreams, Bloomsbury founder and chief executive Nigel Newton couldn’t have imagined Harry Potter enjoying the kind of enduring success that it has. Nor would he have thought 20 years ago that that decision would change Bloomsbury and the wider children’s books landscape forever.
But with the franchise being extended now into the US with Fantastic Beasts and no sign that JK Rowling is running out of stories, it is hard to see what will slow it down.
Shares in Bloomsbury are currently trading at around 180p for an earnings multiple of 14. The interim dividend went up by 5 per cent and a similar increase in the final payment would give a forward yield of 3.9 per cent at 180p, which looks good value for all that solidity.