14 June 2023
Annual Financial
Report
Bloomsbury Publishing Plc (the
"Company")
The Company released its Preliminary
Announcement of annual results for the year ended 29 February 2024
on 23 May 2024. Further to the Preliminary Announcement, the
Company can confirm that the Annual Report and Accounts for the
year ended 29 February 2024 ("2024 Annual Report") and the Notice of
Annual General Meeting ("Notice of AGM") have been posted, or
otherwise made available, to Shareholders.
The 2024 Annual Report and the Notice of AGM
may also be viewed on the Company's website at
www.bloomsbury-ir.co.uk.
AGM
The Company's Annual General Meeting
("AGM") will be
held on Tuesday 16 July 2024 at 12.00 noon at the
Charlotte Street Hotel, 15-17 Charlotte Street, London W1T
1RJ.
National
Storage Mechanism
Pursuant to Listing Rule 9.6.1R, electronic
copies of the 2024 Annual Report and the Notice of AGM have been
submitted to the National Storage Mechanism and will shortly be
available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Additional
Information
In accordance with Disclosure Guidance and
Transparency Rule 6.3.5R, additional information is set out in the
appendices to this announcement. The Directors'
Responsibility Statement, a description of the Principal Risks and
Uncertainties and details of Related Party Transactions are set out
below in full unedited text extracted from the 2024 Annual
Report. The text below should be read in conjunction with the
Company's final results for the period ended 29 February 2024 which
were announced on 23 May 2024. This information is not a substitute
for reading the 2024 Annual Report.
For further
information, please contact:
Bloomsbury Publishing Plc
|
|
Maya Abu-Deeb, Group General Counsel &
Company Secretary
|
maya.abu-deeb@bloomsbury.com
|
Hudson Sandler
|
+44 (0) 20 7796 4133
|
Dan de Belder / Hattie Dreyfus /
Emily Brooker
|
bloomsbury@hudsonsandler.com
|
APPENDIX 1:
Directors' Responsibilities Statement
The following directors' responsibility
statement is extracted from the 2024 Annual Report (page
105):
Statement of
Directors' responsibilities
The Directors are responsible for
preparing the Annual Report and the Group and Parent Company
financial statements in accordance with applicable law and
regulations.
Company law requires the Directors
to prepare Group and Parent Company financial statements for each
financial year. Under that law, they are required to prepare the
Group financial statements in accordance with UK-adopted
international accounting standards and applicable law and have
elected to prepare the Parent Company financial statements on the
same basis.
Under Company Law, the Directors
must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the
Group and Parent Company and of the Group's profit or loss for that
period. In preparing each of the Group and Parent Company financial
statements, the Directors are required to:
• select
suitable accounting policies and then apply them
consistently;
• make
judgements and estimates that are reasonable, relevant, reliable
and prudent;
• state
whether they have been prepared in accordance with international
accounting standards in conformity with the requirements of the
Companies Act 2006;
• assess the
Group and Parent Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern;
and
• use the
going concern basis of accounting unless they either intend to
liquidate the Group or the parent Company or to cease operations,
or have no realistic alternative but to do so.
The Directors are responsible for
keeping adequate accounting records that are sufficient to show and
explain the Company's transactions and disclose with reasonable
accuracy at any time the financial position of the Company and
enable them to ensure that its financial statements comply with the
Companies Act 2006. They are responsible for such internal control
as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other
irregularities.
Under applicable law and
regulations, the Directors are also responsible for preparing a
Strategic Report, Directors' Report, Directors' Remuneration Report
and Corporate Governance Statement that complies with that law and
those regulations.
The Directors are responsible for
the maintenance and integrity of the corporate and financial
information included on the Company's website. Legislation in the
UK governing the preparation and dissemination of financial
statements may differ from legislation in other
jurisdictions.
In accordance with Disclosure
Guidance and Transparency Rule 4.1.15R, the financial statements
will form part of the annual financial report prepared using the
single electronic reporting format under the TD ESEF Regulation.
The Auditor's report on these financial statements provides no
assurance over the ESEF format.
Safe
harbour
Under the Companies Act 2006, a safe
harbour limits the liability of Directors in respect of statements
in and omissions from the Strategic Report and the Directors'
Report. Pages 01 to 213 of the Annual Report, and the front and
back covers to the Annual Report, are included within the
Directors' Report by reference and so are included within the safe
harbour.
Responsibility
statement of the Directors in respect of the annual financial
report
Each of the Directors, whose names
and functions are set out on pages 96 and 97 of this Annual Report,
confirms that to the best of their knowledge:
• the
financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidation taken as
a whole; and
• the
Strategic Report/Directors' Report includes a fair review of the
development and performance of the business and the position of the
issuer and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and
Accounts, taken as a whole, is fair, balanced and understandable
and provides the information necessary for Shareholders to assess
the Group's position and performance, business model and
strategy.
Legislation in the UK governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The Strategic Report and Directors'
Report were approved by the Board on 22 May 2024.
APPENDIX 2:
Principal Risks and Uncertainties
The following description of the principal
risks and uncertainties that the Company faces is extracted from
the 2024 Annual Report (pages 84 to 91):
Key:
↑Increase, ↔No
change, ↓ Reduced
Principal
Risks
Key
area
|
Description
|
Mitigation
|
Market
Changes during
the year
↑
|
Market volatility: impact of economic
instability
Economic instability, inflationary
pressures and, in the case of academic institutions,
funding/budgetary pressures may lead to changes in demand for
products, impacting revenues and margins.
|
• Bloomsbury combines academic and
general publishing in different formats and distributes its
products through different channels. In addition, we operate in
multiple countries and sell our products worldwide. This
diversified portfolio and customer base, together with our
international presence creates a level of resilience in respect of
market or country-specific downturns
• Close monitoring of revenue
streams, lists and channels; range and diversity of our content;
resilience of demand for strong content
• Close monitoring of developments
in the academic market including library spending and demand for
HSS course material, adjusting publishing and marketing programmes
accordingly
• Continue focus on promoting
Academic BDR products, developing BDR product pipeline and adopting
flexible buying solutions to enable customers to purchase according
to their individual content requirements and budgetary
constraints
• Focus on expanding international
sales in territories where student numbers and investment in Higher
Education are increasing
• Increase marketing and sales
activities focused on retaining reader engagement
• Continue focused promotion
of reading for pleasure including at key travel
points
|
Increased dependence on internet retailing
Growth of online retailers may
impact on the discoverability of Bloomsbury titles and lead to a
reduction in sales channels available to the Group.
|
• Grow expert
marketing teams skilled in internet sales.
• Engage with
multiple internet retailers and support independent
retailers.
• Focus on
promoting sales from the Company's own website and on direct sales
to customers
• Increase focus
on developing other marketing opportunities and other revenue
streams, e.g. academic and professional digital products, rights
and services
|
Open
access
Policy changes in the UK, Europe and
US are accelerating the requirement for publicly funded scholarly
content to be published on an Open Access basis. From 1 January
2024, UK Research and Innovation (UKRI) UKRI will require
monographs, book chapters and edited collections that acknowledge
UKRI funding to be made Open Access within 12 months of
publication. If there is not sufficient public funding in place,
then income from UK-originated monographs that are submitted to the
REF - the UK's system for assessing the quality of research in UK
higher education institutions - may be impacted.
In March 2024, the UK's Research
Excellence Framework (REF) launched a consultation on requiring all
scholarly books and chapters submitted to it to be made Open Access
within two years of publication. If implemented, this will
effectively be a mandate for all UK-authored scholarly books to be
made Open Access. This is at the consultation stage and the final
policy is expected to be announced in late 2024.
In the US, federal agencies,
including the National Endowment for the Humanities (NEH) and
National Endowment for the Arts (NEA) are consulting on introducing
Open Access requirements by 2026, while, in Europe, the PALOMERA
project aims to align European research funders over the next two
years to accelerate Open Access for books and chapters.
|
• Develop digital services that deliver mixed Open Access and
proprietary content in the form that customers demand and will
continue to pay for.
• Director
of Research and Open Access manages responses to developments in
Open Access publishing and related mandates to ensure the
successful transition to sustainable Open Access business models.
Business workflow and systems are in the process of being adapted
to ensure capacity to operate at scale
• Open
Access publishing initiatives are underway to ensure Bloomsbury is
well placed to continue to serve its UK academic authors, and in
preparation for the adoption of UKRI's proposed policy in respect
of monographs from 2024.
• Continue to engage with industry representative bodies to
influence Open Access policy developments, including in respect of
the response to the UK's Research Excellence Framework (REF)
consultation
|
Sales of used
books
Sales of used books for academic purposes erode
backlist sales.
|
• Digital
subscriptions and multiple ebook purchasing models are offered
direct to institutions and students
|
Rental of
textbooks
US readers may license books from retailers for
a limited period at a lower cost to buying books, with no revenues
or royalty paid to the publisher.
|
• Develop digital
resources and ebook platforms to deliver, direct to institutions
and students, the content and flexible pricing models to suit
readers' requirements
|
Importance
of
digital
publishing
Changes during
the year
↑
|
BDR revenues
and profit
Revenue and profit from BDR products and
services may not grow in line with our stretching
targets.
See also Market Risk
|
• Develop a
portfolio of high-quality online content services in markets we
understand well
• Use third party
content and content partnerships to scale up projects more quickly
and create economies of scale.
• Continue to
invest in internal resource and infrastructure to support product
pipeline
|
Acquisitions
Changes during
the year
↔
|
M&A
activity
Acquisitions could deliver lower than expected
return on investment. Poor acquisitions may result in potential
impairment charges.
|
• Potential
acquisition targets are assessed by the members of the Executive
Committee according to strategic and cultural fit. Thorough
pre-acquisition due diligence is conducted by relevant functions,
including finance, legal, publishing and sales. Capital allocation
for acquisitions is determined at Group level and approved by the
Board. Integration plans are developed at Divisional level and are
implemented by a cross-functional team of experts, with Divisional
oversight
• Regular reports
are presented to the Board throughout the year on post-acquisition
performance, including an assessment of any variation to the
expected return on investment
|
Title
acquisition
(Consumer
publishing)
Changes during
the year
↔
|
Commercial
viability
Titles may be acquired that are not
commercially or critically successful.
|
• Advances over a
certain limit are required to be authorised by the Chief Executive
and Group Finance Director
• Financial
forecasts are prepared prior to acquisition to predict commercial
success
• Focus on
acquiring world rights where possible in order to increase sales
opportunities and mitigate the risk posed by competing editions in
open markets
• Editorial
guidelines and policies in place to guide acquisition
decisions
|
Information
and
technology
systems
Changes during
the year
↑
|
Cybersecurity/malware
attack
Unauthorised access to the Company's systems
may result in fraud, a data privacy breach, theft of intellectual
property, inability to access, or damage to, vital systems and
assets, thus causing financial and reputational damage to the
Group.
|
• Audit Committee monitoring of
scope,
development and performance of
cyber
security controls
• Follow industry best practice for
information and cyber security, with active management of
information and cyber security risks.
• Controls include Advanced
Endpoint
protection, including Next
Generation
Antivirus, with events fed to a
Centralised
Endpoint Protection Platform. This
is supported by a 24x7 Managed Detection and Response service,
which performs proactive threat hunting of our environment every 24
hours. Automation is in place to disable processes and/or isolate
endpoints for high and critical threats
• Manage access to Company assets
and
services on a least-privilege basis,
with Multi-Factor Authentication required for remote access and
when accessing business-critical cloud services
• Perform frequent vulnerability
scans of the Company's internal and external network to identify
and remediate emerging threats
• Encrypted backups taken daily with
copies stored off site and segmented from the Company's
network
• Information security policies are
in place and staff training includes data protection, cyber
security and regular phishing simulations
|
Inadequate
internal access controls or security measures
Inadequate controls over certain processes
could lead to sensitive data being inadvertently revealed
internally or externally.
|
• Sensitive
personal data is stored securely and protected with password
controls or encryption. User access controls are embedded in the
Company's finance systems
|
Systems Changes
Ineffective change management may
create operational challenges, affecting the Group's ability to
deliver strategic, commercial and operational objectives
|
• Establish specific governance
structures to manage significant projects
• Ensure adequate resources are in
place to address the requirements of systems changes alongside
day-to-day business
• Ensure clear and detailed planning
of each and any system changes, including the impact of other
projects
|
Financial
Valuations
Changes during
the year
↔
|
Judgemental
valuation of assets and provisions
Significant assets and provisions in the
balance sheet depend on judgemental assumptions, e.g. goodwill,
advances, intangible rights, inventory and returns
provisions.
|
• Consistent and
evidence-based approach to assumptions
• Board approval
of key assumptions
|
Intellectual
Property
Changes during
the year
↑
|
Erosion of
copyright
Erosion of traditional copyrights.
|
• Continue policy
of support for copyright and intellectual property rights as a
fundamental facet of publishing
|
Erosion of
territorial copyrights as a result of global internet
retailing.
|
• Continue to
police infringements of the Group's territorial copyrights and take
appropriate action to enforce such rights
|
Infringement
of Group IP by third parties
Failure to adequately manage and protect the
Group's intellectual property rights (including trademarks and
copyright) may damage the value of our core assets and impact on
profits.
|
• Adopt robust
anti-piracy procedures.
• Undertake
targeted enforcement action against third party
infringers
• Ensure
appropriate digital rights management protection of ebooks and
digital formats
|
Reliance on
key
Counterparties; supply chain
resilience
Changes during
the year
↑
|
Failure of key
counterparties or breakdown in key counterparty
relationships
The failure of key counterparties could result
in a significant disruption to the Group's business activities,
resulting in lower levels of trading and revenues.
The Group's ability to meet customer
demand for print products depends on timely supply from our
printing partners. This may be impacted by the availability of raw
materials (e.g. paper pulp) and ongoing global supply chain
disruption.
A breakdown in key commercial relationships
could impact on future publishing opportunities.
|
• Relationships
with key counterparties are closely monitored and actively managed
by senior managers. This includes frequent and regular engagement
with key counterparties in order to ensure open communication and
cooperation and to identify potential issues that may impact on the
Company's business at the earliest opportunity. Other mitigations
include having appropriate contracts and service level agreements
in place, and interrogating the business continuity plans of key
counterparties
• Regular review of global supply chain resilience by the
cross-function Supply Chain Working Group to ensure proactive steps
are implemented to mitigate supply chain risks and prioritise
supply of print titles
• Ongoing diversification of supplier base
• Increased local printing to mitigate shipping delays and
disruptions
• Apply additional due diligence in respect of key partners to
assess their financial stability, cyber and information security
practices and business continuity plans
• Continually assess key partner capabilities and performance to
ensure they are well- positioned to support the Group's long-term
strategic objectives
• Ensure effective leadership and change management governance
structures and resources are in place to oversee the transition of
services provision from one supplier to another
|
Talent
Management and
retention
Changes during
the year
↓
|
Failure to
attract and retain key talent and create an inclusive and
supportive environment in which the Group's employees can
thrive
Inability to recruit individuals with the
necessary skills and experience could impact on Bloomsbury's
ability to innovate and grow.
Loss of key talent could lead to loss of skill
and knowledge from the business, result in decreased efficiency,
impact on staff motivation and undermine external
relationships.
|
• Ongoing
focus at Board and senior leadership level on creating an engaging,
inclusive and rewarding working environment
• Ongoing
employee engagement measures to monitor and improve employee
experience and organisational culture; more information on these
measures is set out on pages 48 to 52 of this Annual
Report
• Continue
focus on employee development through training and mentoring
programmes for early and mid-career employees
• Extensive
learning and development initiatives exist, ranging from individual
skills training through to Leadership Development of our senior
managers
• Ongoing
Employee Voice Programme, allowing every employee to have their
voice heard directly by senior management and the Board. HR
initiatives are implemented in response to matters raised during
Employee Voice Meetings
• Formal
appraisal system provides the opportunity to identify learning and
development opportunities to support career progression and
succession planning
• Continued
focus on Diversity and Inclusion initiatives
• Implement
pay and reward structures that incentivise and ensure that
colleagues share in the Group's success. Introduction of Bloomsbury
Career Framework has involved rigorous evaluation of all roles,
with external benchmarking of salaries in order to create a
transparent and clear framework of job families and career
levels
|
Legal
and
Compliance
Changes during
the year
↔
|
Breach of key
contracts by the Company
Breach of a key contract by the Company could
result in a claim for damages and/or termination of the contract by
the relevant counterparty, resulting in financial loss to the
Group.
|
• Relevant
individuals within the business who are engaged in activities which
relate to or are governed by key contracts are made aware of the
terms of such contracts. Legal advice is sought from the Group's
legal function where appropriate to ensure performance by the
Company in accordance with contractual terms
|
Failure to
comply with applicable regulations
Failure to comply with regulations relating to
the reporting of annual financial reports may lead to a range of
sanctions including fines, imprisonment, reputational damage, and
delisting.
|
• Annual Report
and Accounts is reviewed internally by the Head of Group Finance
and the Group Finance Director, and externally by the Group's
appointed Auditor. Material balances are tested in accordance with
relevant standards. The Head of Investor Relations and the Group
Company Secretary advise on content requirements under relevant
regulation/legislation.
|
Failure to
comply with privacy regulations may result in significant fines and
reputational damage
|
• Mitigation in
respect of the risk of a data breach is noted above in connection
with Information Technology and Systems
• Since the
introduction of the General Data Protection Regulation ("GDPR"),
which came into force in May 2018, the Company has implemented a
range of measures to ensure compliance with the requirements of
GDPR. These include the implementation of policies and guidance in
key areas, the provision of training to employees, reviewing and
updating the Company's data collection methods and marketing
communications, updating supplier terms and conditions, and
updating privacy policies on the Company's websites. The Company
has appointed a Data Protection Officer to oversee GDPR
compliance
|
Failure to
comply with regulations relating to product safety certification,
accessibility and sustainability may affect access to our
market
|
• Relevant
business units are advised by the Group's in-house legal
department, with specialist external advice taken where required,
on forthcoming legislative and regulatory changes and appropriate
measures taken to respond to such changes, including adapting
operational processes and workflows where necessary.
|
Reputation
Changes during
the year
↔
|
Investor
confidence
City confidence undermined by events outside of
the Company's control, e.g. collapse of a retailer.
|
• Diversify the
portfolio of products and services to reduce dependencies on
individual customers, sales channels and markets
|
Cost
inflation
Changes during
the year
↓
|
Print Supply
Costs
Increased print supply costs resulting from
increases to energy prices and raw materials could impact on margin
and achievement of the Group's financial targets.
Increased staff costs as a result of
inflation.
|
• Long-term
contracts with key suppliers to manage and mitigate cost increases;
active price management of Bloomsbury products to recover
incremental costs; diversification of supplier base
• Staff costs are
managed as part of the Group's budgeting process and annual salary
reviews
|
APPENDIX 3:
Related Party Transactions
The following details of 'Related
party transactions' are shown in note 27 to the Company Financial
Statements on page 192 of the 2024 Annual Report.
27.
Related party transactions
There are no related party
transactions other than key management remuneration as disclosed in
note 5.
The following detail on staff costs
is extracted from note 5 (page 169):
5.
Staff costs
The Group considers key management personnel as
defined under IAS 24 "Related Party Disclosures" to be the
Directors of the Company; this includes Non-Executive Directors,
and the heads of the global divisions, major geographic regions and
departments who are actively involved in strategic decision-making
that make up the Executive Committee (for membership see pages 98
to 99 for further details).
Total emoluments for Executive Directors and
other key management personnel were:
|
Year ended
29 February
2024
£'000
|
Year
ended
28
February
2023
£'000
|
Short-term employee benefits
|
6,311
|
4,387
|
Post-employment benefits
|
177
|
170
|
Share-based payment charge
|
1,342
|
1,020
|
Total
|
7,830
|
5,577
|
The following detail on related parties is
extracted from note 48 (page 209):
48. Related parties
Trading transactions
During the year the Company entered
into the following transactions and had the following balances with
its subsidiaries:
|
29 February
2024
£'000
|
28
February
2023
£'000
|
Sale of goods to
subsidiaries
|
11,824
|
13,864
|
Management recharges
|
16,029
|
12,913
|
Commission receivable from
subsidiaries
|
6
|
2
|
Commission payable to
subsidiaries
|
325
|
273
|
Finance income from
subsidiaries
|
95
|
84
|
Finance costs to
subsidiaries
|
640
|
427
|
Amounts owed by subsidiaries at year
end
|
10,707
|
13,445
|
Amounts owed to subsidiaries at year
end
|
81,689
|
73,131
|
All amounts outstanding are
unsecured and will be settled in cash. £0.5 million provision has
been made for doubtful debts in respect of
the amounts owed by subsidiaries (2023:
£0.5 million).
Key
management remuneration is disclosed in note
5.