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01.04.08 | Alison Flood
Bloomsbury's sales soared by over 100% in 2007 to £150.21m, while profit before tax increased 243.5% to £17.86m. The publisher, which also announced this morning the acquisition of Featherstone Education, and Liz Calder's stepping down from the board, put the uplift down to strong performances from key authors including J K Rowling, Khaled Hosseini, Hugh Fearnley-Whittingstall and William Boyd.
Gross profit for Bloomsbury increased 63.6% to £59.17m in 2007, while gross profit margin decreased to 39.4% from 48.4% in 2006. Bloomsbury said the decrease was due to a combination of increased royalty costs, the high level of book returns experienced and expected in future periods in the UK, US and Germany, and increased stock and advance provisions in adult across all territories on books published in previous financial years.
Revenue in Bloomsbury's children's division increased 261.4% to £98.92m in 2007, thanks largely to the publication of the final Harry Potter novel in July. Gross profit for the children's division in 2007 increased 198.9% to £39.6m.
"This is a good set of results, substantially ahead of last year. We saw strong growth from our adult and children's publishing and also from A&C Black and Berlin Verlag," said c.e.o. Nigel Newton. "We are now well positioned for the post Harry Potter era. We have reduced overhead costs, are successfully developing new business areas in specialist publishing, and have a strong pipeline of titles. We will continue to do what Bloomsbury does best - discovering new talent and developing it both in the UK and overseas."
Bloomsbury also revealed this morning that as the result of an internal strategic review, which examined "how best to position the business and maximise returns", it has decided to divide the group into two divisions: trade and specialist.
Going forwards, it will look to expand both organically and through acquisition its educational, academic and reference publishing; this has already begun with the acquisition yesterday of educational publisher Featherstone Education, which focuses on publishing to support teachers and of education of children up to seven years old. Newton said: "Education is core to A&C Black and this acquisition extends our reach to the 0-7 ages, and to a wider range of customers."
Newton will have responsibility for the specialist division and Richard Charkin for the trade division, reporting to Newton.
Bloomsbury also intends to drive reductions in its cost base going forwards, both directly and through its supply chain. It said it has made annualised cost savings to date of £1.75m, the principal benefit of which will be felt in 2008, with a further £0.78m of annualised cost savings expected this year.
And Bloomsbury has just signed an agreement with Microsoft to digitise its entire backlist, to enable e-book sales and print on demand orders.
Non-executive chairman Jeremy Wilson, making his first chairman's statement for Bloomsbury since the group split the role of chairman and c.e.o. in September 2007, announced that Liz Calder would step down from the board today after 21 years. "She will very much remain with Bloomsbury, looking after her list of authors. She has made a huge contribution to the board, and we are tremendously grateful to her," said Wilson.
Wilson also praised Newton's performance: "As far as the board is concerned, Nigel Newton, the founder and chief executive of Bloomsbury, has achieved what few founders of a successful company achieve - transformation of a team where he played a dominant role in making it what it is today into a business where his leadership allows the interaction of the non-executive directors and the executive team for constructive, balanced debate and decision taking."