Bloomsbury bets reading revival will survive cost of living crisis

Bloomsbury Publishing reported record sales and profit, as the publisher behind the Harry Potter series predicted books would not be hit by the cost of living crisis in the way subscriptions have.

The London-listed company said on Wednesday that sales jumped 24 per cent to £230.1mn in the year ending February, while pre-tax profits were up 28 per cent to £22.2mn.

“The question on all of our minds was: would the pandemic surge in reading continue? We now know the answer: reading has become a reacquired habit and continues to thrive,” chief executive Nigel Newton said.

He told the Financial Times that books were an “affordable luxury” that readers were still likely to buy, even as inflation hit disposable income.

“We saw a little moment in April — the month that Netflix warned on subscribers — when our own sales were light and thought: ‘oh boy, here we go, the cost of living crisis’,” Newton said. “But it turned out to be a mirage, and sales surged ahead in May.”

Newton also pointed to a higher share of digital sales in the company’s academic division.

He said more than half of the company’s sales were backlist titles that were cheaper to republish than newly commissioned work. Sales of books belonging to the Harry Potter franchise grew 5 per cent in the past year, 24 years after the first one was published.

Shares in Bloomsbury rose 5 per cent on Wednesday morning. Analysts at Investec said the company’s “excellent” results had been achieved during a year of supply chain issues in paper and print cost inflation.

Some of Bloomsbury’s bestselling titles this year included Piranesi by Susanna Clarke as well as Nicole Perlroth’s This Is How They Tell Me The World Ends, and hobby-driven books on topics such as cooking continued to do well.

Newton said the price of books could rise in the next few months, as inflation continued to hit manufacturing and transport costs, adding that “we review our pricing monthly”.

Bloomsbury last year bought the California-based online academic publisher ABC-CLIO, as well as Red Globe Press, which previously belonged to Springer Nature.

It also acquired the London-based fiction publisher Head of Zeus, which the company said contributed to £9mn of sales in the nine months since the deal.

Newton said the company would continue to buy smaller rivals, adding that “we have several acquisitions under consideration, and they are primarily academic”.

Bloomsbury said it would raise its final dividend 24 per cent to 9.40p a share.