Tomorrow morning my favourite FTSE-250 publishing group will declare its Interim Results for the six months to the end of August this year.
They may well show a fall-back in sales and profitability, so could now be a good time for Master Investor readers to take some profits, looking to come back in lower down?
The Business
Established in 1986, Bloomsbury Publishing is a leading independent publishing house, with authors who have won the Nobel, Pulitzer and Booker Prizes.
It is the publisher of fiction, non-fiction, children's, specialist, academic and professional titles and is one of the few publishers with a portfolio that includes both general and academic publishing.
It is also the originating publisher and custodian of the Harry Potter series.
Bloomsbury has offices in London, New York, New Delhi, Oxford and Sydney.
Within Bloomsbury’s Academic division, it publishes under Bloomsbury, as well as under a number of prestigious and historic imprint names.
AGM Trading Update
Tuesday 16th July, saw the group reporting that its trading had been in line with recently upgraded expectations, following a strong performance in the first four months of its financial year.
Its consumer bestsellers were Sarah J Maas, JK Rowling, Cixin Liu, together with Stuart Turton, Samantha Shannon, Hugh Fearnley-Whittingstall, Jon Fosse, Tom Kerridge and Johann Hari amongst its host of authors.
During the summer new releases by Sally Smith, Josephine Quinn and Chibundu Onuzo were also expected to show well.
At that time, the leading publisher clearly guided the market that it was considering that consensus market expectation for the year ending 28 February 2025 was for revenue of £319.3m and profit before taxation and highlighted items of £37.6m.
Research View
Ian Daly at h2Radnor currently has estimates out for the year to end February 2025 for revenues of £319.1m (£342.7m), with adjusted pre-tax profits of £37.3m (£48.7m), earnings of 34.1p (46.6p), but with an increased dividend of 15.4p (14.7p) per share.
He foresees a part-recovery in the 2026 year with sales of £339.8m, £44.3m profits, earnings of 40.6p and another increased dividend to 16.2p per share.
Daly also added the fact that he sees the acquisitive group’s net cash position falling by end-February to just £10.5m (£65.8m).
The researcher noted that the current valuation remains relatively undemanding for such a quality track record and that he considers that there is much that is still not captured within the then 710p current price, nor expectations.
Elsewhere three other analysts follow the company, all rating the group’s shares as a Buy, with the highest Price Aim of 800p, the lowest at 753p.
My View
We have had a wonderful run upwards with the shares of Bloomsbury since my first Profile on the company, which I have been following for more than two decades.
Now at 676p, I believe that some downward views of this week’s Interims could well spook the shares for a short while.
(Profile 28.02.19 @ 231p set a Target Price of 257p*)
(Profile 27.03.19 @ 238p set a Target Price of 300p*)
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