Bloomsbury Publishing Plc

Good morning and a very warm welcome to the Bloomsbury interim results. We're particularly pleased to see so many analysts and on the live stream to see shareholders and potential shareholders. So a very warm welcome to you all. I'm Nigel Newton, Chief Executive of Bloomsbury, and on my right is Penny Scott-Bayfield, Chief Financial Officer. Bloomsbury and Tamsin Geraghty, Head of Investor Relations. We're delighted to present to you now our results for the period, the rather interesting Bloomsbury months of March through to the end of August. You can see on slide two, our strategy of diversification has created a portfolio of portfolios. That is our mantra at Bloomsbury, much as our shareholders, the fund managers do in their own portfolios. in an effort to balance the vicissitudes of one area against another. And we believe we've created a resilient business model for long-term success. We're pleased to report revenue of £160 million in the six months, profit of £24 million with a strong and improved margin of 15%. We've signed our first non-exclusive AI licensing agreement with potential for more. On the one hand and on the other, we have major bestsellers from our consumer division, including Gillian Anderson, who dominates the charts in the second half and has been number one in paperback for nine weeks now. It is of enormous economic significance that our best-selling author, Catherine Rundell, has secured a long-term film deal with Walt Disney Studios for her brilliant Impossible Creatures series. We demonstrate our confidence in the future by increasing the dividend by 5% and stating that we expect to deliver full-year results ahead of expectations. Now on the next slide, Bloomsbury's investment case. Let's consider that for a minute. We built a portfolio which has the benefit of being diversified across academic and consumer publishing, digitally and internationally for resilient success. That is rare in our industry. Now on the next slide, dividend, look at that marvelous upward swing. We have a strong dividend record, which any PLC would be proud of. This continues with a 5% interim dividend increase and expectation of the same for the full year, which reflects both the achievements of this financial year and our confidence that the company is well positioned for further development. And now, may I hand the mic over to Penny for the financial highlights. Penny.

Thank you. So good morning, everyone. Starting with our key financial highlights. First of all, the revenue of 160 million, which you can see against the last two years. Our pre-tax profit was, as Nigel mentioned, a 15% margin. So that's delivering pre-tax profit of 24 million. Our diluted EPS of 22.98%. benefiting from that lower effective tax rate, net cash of 2.4 million, which we'll come on to expand in a minute, and as Nigel has mentioned, the dividend per share of 4.08p at the interim, a 5% increase continuing our track record there. So moving on to our strong balance sheet. So net cash, 2.4 million. That's net of our current $20 million loan. Some of you will remember we took out a $37.5 million loan to help fund our acquisition of Roman Littlefield in May 24. We've used our good cash position and generation to pay a further $10 million of that early, and that's on top of the $7.5 million that we paid down at the end of the previous financial year. then we are working capital you can see the increase there and that's mainly around timing of our debtors but you will see that impact coming through in the cash flow as well overall as you can see remain our strong balance sheet which really underpins our opportunities for the future so moving on to our cash flow Three points I'd like to highlight here. First of all, you can see that trading strength delivering the 24 million of profit in this first half. You can see the 9.4 million going out to dividends, rewarding our shareholders who remain front and center of everything we do. And then you can see the impact of the increased working capital coming through in that first half. We also highlight the advances paid in the period, if you think of that as our pipeline of future consumer titles. So you can see that remains strong. And royalty payments, that's the one payment I'm always extremely happy to make. That's benefiting our authors and you can see how they're really sharing in our success. So coming on now, a deeper dive into our academic and professional division, which as you know, we're presenting it on its own for the first time. So you can see here, first of all, the revenue up 20% in the first half. And as Nigel has mentioned, and we'll talk more about, that's benefited from our first non-exclusive AI licensing agreement. And you can see that has benefited both the revenue and the profit in this first half. We're very pleased to say the integration of Roman and Littlefield, as many of you know, we fully integrate all of our acquisitions, and that's substantially complete. And I know we sort of referencing it almost as a, you know, taken as read that we've done so well on that. But integrating an acquisition that's four times, by a factor of four, the largest acquisition we've done, I think is a real testament to our operational effectiveness and And of course, that allows us to really start benefiting from and leveraging their great content. So we'll come on to more about that shortly. And then as we've highlighted over the last two years, we're seeing continued budgetary pressure on the UK and US institutions in the academic market. But to finish on a more positive note, the expansion in Asia, so we've talked a bit about the opportunities for growth we see here, as we see geopolitical pressure in the UK and the US markets, there's huge opportunities in those Asian markets and we've referenced that before, but just highlighting again, we're continuing with our plans to open that office by the end of the year and really tap into those opportunities in that region. So moving on to the academic divisions P&L. So you can see here we split out the three key types of income here. You can see the digital sales included BDR and the AI licensing within here. You can see that great growth both on last year and the year before. You can see actually surprising resilience of print sales in a market that's really strategically shifting to digital, and you can see that's some resilience in there, but also the impact of that R&L acquisition. We've brought on this incredible quality content. And then looking at the margin strength, which Nigel mentioned, you can see 24% for this period versus the mid-teens, 16% that we've seen in the two previous halves. So we're generally guided to a mid-teens margin, but you can see the potential for upside there.

So on to AI licensing. I'm incredibly excited about the potential. which AI holds for Bloomsbury, both on the sales side in licensing, but also on the streamlining of work processes. So we've signed our first agreement in the period. As we've stressed, we can do as many of these as we like, and we are in contact with all of the major LLMs that you're aware of so watch this place and it's very important for those LLMs to be trained on the highest quality content which is what we I think the many tens of thousands of titles in the academic area that we've built up represent as an opportunity to these tech companies. We've also engaged with our authors, inviting them to opt in. If they don't opt in, then their work won't be trained upon as a result of our deal. Anyway, it could be due to piracy, but we wish to follow the wishes of our authors, and that's very important, and not all our competitors have chosen to do that. Now, most importantly... When you have a contract with an AI company, you have the guardrails that you want in place. And that's very important. And I think the large amounts of litigation, such as the settlement for, I think it was 1.5 billion, which is eye-watering with Anthropic, is encouraging other people to enter into agreements. with publishers rather than inhabit the wild west that they were before. So that is the way the landscape looks at the moment and further potential opportunities are in discussion at the moment.