The Bookseller.com

1st December 2008

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Bloomsbury looks for specialist buys

02.04.08 Alison Flood

Bloomsbury is looking to buy academic, reference and educational publishers after doubling its group turnover to £150.2m in 2007. The initiative is to be led by chief executive Nigel Newton who is to oversee a new "specialist" publishing division, comprising its educational, academic and reference units.

Bloomsbury also announced that it had joined Microsoft's Live Search programme, and was in the process of digitising its backlist. "It will take a couple of months and will be achieved very economically," Newton said.

Newton, who has previously been critical of rival search engine Google's approach to book digitisation, said that the titles would benefit from controlled search on the internet leading to increased sales. Newton also plans to increase Bloomsbury's e-book and print-on-demand offering. "Some books where appropriate will be e-books, but the market largely hasn't taken off," he said.

He added that A&C Black already offered 500 titles via print on demand, and saw turnover from this area of £126,000 in 2007. "It's small but growing," he said.

The acquisitions strategy has already begun with the purchase this week of Featherstone Education, which publishes educational books for children up to age seven, and has a turnover of around £800,000. "I would now like to look for companies with £5m-plus turnover," said Bloomsbury group finance director Colin Adams.

Newton said Bloomsbury was well equipped to survive post-Harry Potter. "Bloomsbury can survive post-Harry just as we did pre-Harry. We had 11 successful years before we were lucky enough to have Harry come into our lives."

Bloomsbury's 100% rise in turnover was accompanied by a pretax 243.5% boost in profit to £17.9m. Newton singled out for praise J K Rowling, Khaled Hosseini, Hugh Fearnley-Whittingstall and William Boyd, along with A & C Black's bestselling Don'ts for Husbands and . . . Wives.

Sales in Bloomsbury's children's division increased 261.4% to £98.9m, with gross profit up 198.9% to £39.6m. Adult revenue increased 9.7% to £35.9m but gross profit was down 17.3% to £13.3m.

"Adult profit was down because of increased provisions against advances," said c.e.o. Nigel Newton. "We had high royalty costs on some of the books we published in 2007, Harry Potter for example."

Reference sales were up 4.8% to £15.45m, with gross profit down 8.3% to £6.31m. Overall gross profit margin decreased to 39.4% from 48.4%. Bloomsbury said it has made annualised cost savings to date of £1.8m, with a further £0.8m of annualised cost savings expected this year. "We reduced our cost base in a mixture of ways including staff savings," said Newton. "We have also tightened up the supply chain."

Bloomsbury Nigel Newton Alison Flood Microsoft Book Search