26563 12 June 2019 3:36 pm Proof 11Bloomsbury Publishing Plc ANNUAL REPORT & ACCOUNTS y/e 28 February 2019BLOOMSBURY PUBLISHING PLCAnnual Report & Accounts 2019Bloomsbury Publishing Plc50 Bedford Square, London, WC1B 3DP Telephone +44 (0) 20 7631 5600www.bloomsbury.com www.bloomsbury-ir.co.ukSTOCK CODE: BMYBloomsbury AR2019_Front.indd 312/06/2019 16:02:31 Bloomsbury Publishing Plc
Bloomsbury Publishing is an
entrepreneurial, independent, worldwide
publisher listed on the London Stock
Exchange with offices in London, Oxford,
New York, Sydney and New Delhi. Over its
33 year history, Bloomsbury’s mission has
been to publish works of excellence and
originality. Bloomsbury has built up an
extremely valuable portfolio of content and
rights-based intellectual property assets.
Contents
OVERVIEW
Performance Review
Highlights
Chairman’s Statement
STRATEGIC REPORT
Chief Executive’s Review
Financial Review
Group Overview
– Group Strategic Summary
– Non-Consumer
– Consumer
– Group Functions
Risk Factors
Corporate Responsibility
GOVERNANCE
Board of Directors
Directors’ Report
Corporate Governance
Directors’ Remuneration Report
1
2
3
6
12
18
19
21
24
25
30
40
42
47
54
FINANCIAL STATEMENTS
COMPANY INFORMATION
Five Year Financial Summary
Company Information
Legal Notice
Notice of the Annual General Meeting
144
145
145
146
Independent Auditor’s Report
Consolidated Income Statement
Consolidated Statement of Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in
Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Company Statement of Cash Flows
Notes to the Company Financial Statements
76
86
87
88
89
90
91
130
131
132
133
Visit us online at:
www.bloomsbury.com/uk
www.bloomsbury-ir.co.uk
Cautionary statement
This document should be read in conjunction with the legal notice on page 145
Bloomsbury AR2019_Front.indd 4
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:31
notes-heading-level-one
Performance Review
notes-heading-level-two
notes-heading-level-three
notes-heading-level-four
notes-strapline
notes-text-body
✷ list-bullet
✷
notes-list-bespoke
− notes-list-dash
a. notes-list-alpha
4. notes-list-number
i.
notes-list-roman
Revenue
£m
£162.7m
+1%
Dividend
pence per share
7.96p
+6%
Adjusted profit1
£m
£14.4m
+9%
2019
2018
2017
2016
2015
162.7
161.5
142.6
123.7
111.1
2019
2018
2017
2016
2015
7.96
7.51
6.70
6.40
6.10
2019
2018
2017
2016
2015
14.4
13.2
12.0
13.0
12.1
I
W
E
V
R
E
V
O
Diluted EPS
pence per share
12.25p
+2%
2019
2018
2017
2016
2015
9.81
12.25
12.06
12.93
11.90
Profit before tax
£m
£12.0m
+3%
Adjusted diluted EPS2
pence per share
14.97p
+8%
12.0
11.6
9.4
9.6
10.4
2019
2018
2017
2016
2015
14.97
13.92
12.63
15.24
14.73
2019
2018
2017
2016
2015
Notes:
1. Adjusted profit is profit before taxation, amortisation of acquired intangible assets and other highlighted items.
2. Adjusted diluted EPS is calculated from adjusted profit with taxation on adjusted profit deducted.
Stock Code: BMY
www.bloomsbury.com
1
Bloomsbury AR2019_Front.indd 1
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:32
Highlights
Financial Highlights
✷ Profit before taxation and highlighted items* grew by 9% to £14.4 million, up from £13.2 million in 2017/18, ahead of market expectations
✷ Total revenues rose to £162.7 million (2017/18: £161.5 million)
✷ Profit before taxation grew by 3% to £12.0 million (2017/18: £11.6 million)
✷ Diluted earnings per share, excluding highlighted items*, grew by 8% to 14.97p (2017/18: 13.92p)
✷ Diluted earnings per share grew by 16% to 12.25p (2017/18: 12.06p)
✷ Cash conversion of 128% (2017/18: 161%), excluding the acquisition, with net cash of £27.6 million at 28 February 2019 (2018: £25.4 million)
✷ Proposed final dividend up 6% to 6.75p per share, making a total dividend of 7.96p per share for the year (2017/18: 7.51p per share)
✷ 24th consecutive year of dividend growth
Operational Highlights
Non-Consumer division
✷ Excellent Academic & Professional performance, with profit before
highlighted items of £3.1 million (2017/18: loss of £0.4 million) and
revenue up 13%
✷ Non-Consumer revenues grow 7% to £63.4 million (2017/18:
£59.3 million)
✷ Bloomsbury Digital Resources 2020 (“BDR 2020”) Academic &
Professional revenues up 42% on a like-for-like basis, excluding the
impact of IFRS 15
✷ Five new digital resources launched during the year, as planned
✷ Acquisition of I.B. Tauris Co. Ltd (“IBT”) in May 2018 completed for
£5.6 million, strengthening our digital resources with its quality
academic IP
✷ IBT delivered £2.5 million of revenue and £0.4 million of profit
before highlighted items for the first ten months of ownership
✷ Substantial new B2B five-year digital subscription contract with the
Institute of Chartered Accountants of England and Wales (“ICAEW”),
announced in October 2018
Consumer division
✷ Resilient full year results, with profit before highlighted items of
£10.7 million (2017/18: £11.4 million)
✷ Exceptional Adult Trade performance, with operating profit before
highlighted items of £0.9 million (2017/18: loss of £0.2 million) and
revenue up 1%
✷ Children’s Trade delivered profit before highlighted items of
£9.8 million (2017/18: £11.6 million), with enduring sales of the
Harry Potter series against last year’s very strong comparative
with the twentieth anniversary. Sarah J. Maas titles continued their
bestselling performance, including the new bestseller Kingdom
of Ash, and revenue and profit growth delivered in the rest of
the Children’s division
Bigger Bloomsbury
Bigger Bloomsbury represents our seven key growth initiatives,
announced in May 2018. During the year, we delivered all seven of
these initiatives, with notable highlights including delivering excellent
growth in Adult and Academic & Professional profitability,
international growth and continued working capital improvement.
Notes
* Highlighted items comprise amortisation of acquired intangible assets and restructuring costs and legal and other professional fees relating to the acquisition of IBT.
Harry Potter and the Philosopher’s Stone was
the fourth bestselling Children's book on UK
Nielsen Bookscan, twenty-one years after it
was first published
Stuart Turton’s The Seven Deaths of Evelyn
Hardcastle, was the winner of the Costa First
Novel Award
In the Closet of the Vatican by Frédéric
Martel was a New York Times bestseller
published by the Special Interest Division
Sarah J. Maas sales continue to grow with
the global number one bestseller, Kingdom
of Ash
2
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 2
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:34
Chairman’s Statement
Sir Richard Lambert
Ondaatje named winner of the 2018 Golden Man
Booker Prize for Fiction for The English Patient and
Stuart Turton won the Costa First Novel Award 2018
for Fiction for The Seven Deaths of Evelyn Hardcastle.
Bloomsbury’s authors continue to enrich the lives of
millions of people across the world. And on behalf
of the Board, I would also like to thank the staff for
their hard work and dedication to publishing the
Bloomsbury way.
After ten years on the Board, Richard Charkin stood
down from his executive responsibilities at the end
of last May. Jill Jones will leave the Board as a
Non-Executive Director and Chair of the
Remuneration Committee at the Annual General
Meeting. Jill joined the Board in 2013 and has
provided practical insights of great value. The
Company has benefitted immensely from her
presence on the Board and her guidance, drawn
from her extensive publishing experience. I would
like to thank both Richard and Jill most warmly for
their support during their time on the Board. The
Nomination Committee led a rigorous search
process for Jill’s successor and I am delighted to
welcome Leslie-Ann Reed to the Board, who will be
joining Bloomsbury as Non-Executive Director on 17
July. Leslie-Ann brings a wealth of experience,
having previously held senior finance leadership
and non-executive roles with various media and
professional services companies. I am happy to say
that Steven Hall will succeed Jill as Chair of the
Remuneration Committee when she leaves.
The digital age continues to provide exciting
opportunities for Bloomsbury. The Company has
delivered well on the Bloomsbury Digital Resources
2020 digital growth strategy through the launch of
five new digital resources during the year and new
content partnerships. The acquisition of I.B. Tauris &
Co. Limited, the London-based academic publisher,
not only consolidates our significant presence in
humanities and social science academic publishing,
but also represents another important step on the
way to increasing Bloomsbury’s digital resource
offering. These are just a few of our achievements in
the digital sphere for the year. Over the coming
years, the Bloomsbury Digital Resources 2020
strategy will expand the Group’s portfolio of
high-quality digital resources for academic libraries
and for professionals. With its sound balance sheet,
progressive dividend record, great authors and
wonderful staff, I am confident that Bloomsbury is
well placed to face whatever the future might bring.
Sir Richard Lambert
Non-Executive Chairman
“ The digital age
continues to provide
exciting new
opportunities for
Bloomsbury.”
Sir Richard Lambert
Non-Executive Chairman
Bloomsbury delivered a strong performance
over the year to February, reflected in the
robust financial results. Group revenues rose
by 1% to £162.7 million and profits before taxation
and highlighted items increased by 9% to £14.4
million, ahead of market expectations. Profits before
taxation were up by 3% to £12.0 million.
The Board is recommending a final dividend of 6.75
pence per share, which if approved by Shareholders
would bring a total dividend of 7.96 pence per
share for the year. This represents an increase in full
year dividend of 6% and continues Bloomsbury’s
record of dividend growth for the 24th consecutive
year. Subject to approval at the Annual General
Meeting to be held on 17 July, the final dividend will
be payable on 23 August to Shareholders on the
register on the record date of 26 July. The Strategic
Report that follows, which includes the Chief
Executive’s Review, provides more detail on the
Group’s performance for the year.
Bloomsbury’s excellent results are underpinned by
its commitment to publishing works of the highest
standard and quality. The year saw Michael
I
W
E
V
R
E
V
O
Winner of the Women’s Prize for Fiction
Stock Code: BMY
www.bloomsbury.com
3
Bloomsbury AR2019_Front.indd 3
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:34
26563 12 June 2019 3:36 pm Proof 11AUSTRALIA£11.6mUS£45.9mUK£100.9mINDIA£4.3mBloomsburyhad a very strong year.“Our results, with profits before tax and highlighted items up 9% demonstrate the underlying strength, resilience and further potential of our global publishing strategy. Our Academic & Professional division delivered an outstanding performance with 13% revenue growth and profit before tax and highlighted items up £3.5 million. We had an exceptional result in our Adult division, where profit before tax and highlighted items grew by £1.1 million.. . .Our strong financial position and excellent cash generation, with cash of £27.6 million and cash conversion of 128%, give us great opportunities for further acquisitions and investment in organic growth. Our proposed dividend increase of 6% delivers our 24th year of consecutive dividend growth.”Nigel NewtonChief Executive4Bloomsbury Publishing Plc Annual Report and Accounts 2019Bloomsbury AR2019_Front.indd 412/06/2019 16:02:34 T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
Strategic
Report
6
12
Chief Executive’s Review
Financial Review
Group Overview
18
19
21
24
– Group Strategic Summary
– The Non-Consumer Division
– The Consumer Division
– Group Functions
25 Risk Factors
30 Corporate Responsibility
“ Bigger Bloomsbury
represents our seven
key growth initiatives,
announced in May 2018.
During the year, we
delivered all seven of
these initiatives…”
Nigel Newton
Chief Executive
Stock Code: BMY
www.bloomsbury.com
5
Bloomsbury AR2019_Front.indd 5
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:34
Chief Executive’s Review
Nigel Newton
Overview
The year ended 28 February 2019 was a very
strong year for Bloomsbury. Group profit
before tax and highlighted items increased
by 9% to £14.4 million (2017/18: £13.2 million).
Group profit before tax increased by 3% to
£12.0 million (2017/18: £11.6 million).
Our BDR 2020 digital growth strategy is delivering
well, with a 42% increase year-on-year in Academic
& Professional digital resource revenues on a
like-for-like basis. The range of new contracts
announced during the year, including the five year
contract with the ICAEW, demonstrates the potential
of high quality platforms and infrastructure.
In May 2018 we acquired the academic publisher
I.B. Tauris & Co. Ltd (“IBT”) for £5.6 million. Of this,
£4.4 million was consideration to former
Shareholders for equity, and the remainder
payment for pre-existing loans. This acquisition
further consolidates our significant presence in
humanities and social science academic publishing.
IBT’s complementary lists have good growth
potential, especially with their inclusion within the
BDR 2020 growth strategy.
Due to strong trading in the year, the management
bonus was £2.3 million (2017/18: £2.3 million).
The highlighted item of £2.3 million was the
amortisation of acquired intangible assets
(£1.7 million) and one-off restructuring costs and
legal and other professional fees relating to the
acquisition of IBT (£0.6 million). The effective rate
of tax for the year was 23% (2017/18: 22%).
The adjusted effective rate of tax, excluding
highlighted items, was 21.4% (2017/18: 20.8%).
Diluted earnings per share, excluding highlighted
items, grew 8% to 14.97 pence (2017/18: 13.92
pence). Including highlighted items, profit before
tax was £12.0 million (2017/18: £11.6 million) and
diluted earnings per share was 12.25 pence
(2017/18: 12.06 pence).
“ The strategic
growth initiative
BDR 2020 has made
Bloomsbury into a
leading B2B publisher
in the academic
and professional
information market
and significantly
accelerated the growth
of its digital revenues.”
Nigel Newton
Chief Executive
6
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 6
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:35
Winner of the Golden Man Booker Prize
2018
26563 12 June 2019 3:36 pm Proof 111Harry Potter Box Set: The Complete Collection (Children’s Paperback) J. K. Rowling 2Kingdom of Ash Sarah J. Maas3Harry Potter and the Philosopher’s Stone J. K. Rowling4Tom Kerridge’s Fresh Start Tom Kerridge5A Court of Frost and Starlight Sarah J. Maas6Harry Potter and the Chamber of Secrets J. K. Rowling 7Harry Potter and the Philosopher’s Stone (Illustrated Edition) J. K. Rowling illustrated by Jim Kay8Kitchen Confidential Anthony Bourdain9Norse Mythology Neil Gaiman10Harry Potter and the Goblet of Fire J. K. RowlingBestsellers 2019Global (e-book)1Kingdom of Ash Sarah J. Maas2Kitchen Confidential Anthony Bourdain3A Court of Frost and Starlight Sarah J. Maas4Throne of Glass Sarah J. Maas5Lost Connections Johann Hari6Heir of Fire Sarah J. Maas7Crown of Midnight Sarah J. Maas8Tower of Dawn Sarah J. Maas9A Court of Wings and Ruin Sarah J. Maas10A Court of Thorns and Roses Sarah J. MaasGlobal (print and e-book)Note: Rank is based on revenue.www.bloomsbury.com7Stock Code: BMYSTRATEGIC REPORTBloomsbury AR2019_Front.indd 712/06/2019 16:02:44 26563 12 June 2019 3:36 pm Proof 11Key Strategy Objectives✷ Grow Non-Consumer revenues:✷ Diversify into Non-Consumer markets with higher margins, more predictability and more digital and global opportunities. Delivered 111% increase in Non-Consumer profit this year; and✷ Achieve BDR 2020 revenue of £15 million and profit of £5 million for 2021/22. Delivered £6.4 million revenue, up 42% on a like-for-like basis.✷ Expand international revenues:✷ Reduce reliance on UK market. Delivered overseas revenues of 64% of Group revenue, 2% higher than last year.✷ Grow Consumer revenues:✷ Discover, nurture, champion and retain high quality talent in our Consumer division, remaining the home of some of the world’s best loved and most exciting authors; and✷ Focus on finding excellent works and looking at new ways to leverage existing title rights; this will always be a key part of our strategy.Delivering the Bigger Bloomsbury StrategyBloomsbury continues to focus on quality revenues, increasing earnings and building on the strong momentum achieved over the last two years. Our Bigger Bloomsbury initiative, announced in May 2018, focusing on our key growth drivers with targeted strategies across the Group to help grow our revenues and improve our margins over the next four years. We delivered all seven of these initiatives during the year.1. Growing the profits of the Adult division:✷ Delivered £1.1 million growth in Adult operating profit.2. Growing the profits of the Academic & Professional division:✷ Delivered £3.5 million growth in Academic & Professional operating profit.3. Reducing our finished goods stock further by continuing to roll out globally efficiencies already made in the UK business:✷ Delivered a reduction in inventories of £2.0 million (8%) on a like-for-like basis, ahead of our target.4. Increasing the focus on Bloomsbury’s nine biggest assets, starting with Harry Potter, Sarah J. Maas and Tom Kerridge:✷ Delivered 24 bestsellers globally. 5. Maximising the success of Bloomsbury Digital Resources 2020:✷ Delivered 42% growth in Academic & Professional BDR 2020 revenue on a like-for-like basis. 6. Accelerating the growth of Bloomsbury’s sales in the USA, Australia and India: ✷ Delivered 28% growth in India, 3% growth in the US and 1% growth in Australia (in local currency).7. Developing Bloomsbury China: ✷ Delivered significant progress with two deals in negotiation. CashCash generation continued to be robust with cash at the year end of £27.6 million, up £2.2 million, and cash conversion of 128% (2017/18: 161%), excluding the IBT acquisition. Our focus on working capital continues: inventories have reduced by 8% or £2.0 million year on year, on a like-for-like basis (2018: 5% or £1.3 million). This achieves our target to reduce inventory by 5%, using constant currencies in 2018/19, excluding additions from acquisitions. Our strategic priority for cash is organic investment to grow and enhance our existing business. During the year we invested a total of £1.9 million of capital expenditure in the BDR 2020 strategy. Of the £5.6 million paid for the acquisition of IBT, £5.2 million was paid in cash in the year and the balance was paid in April 2019, post year end. Bloomsbury has a strong and successful track record in strategic acquisitions, with 14 acquisitions completed since 2008. We continue to target and assess opportunities and are increasing our dedicated M&A resource to enable us to achieve further strategic acquisitions. DividendThe Group has a progressive dividend policy aiming to keep dividend earnings cover in excess of two times, supported by strong cash cover. The Board has committed to maintain its progressive dividend policy on the basis that earnings cover will improve as the return on our BDR 2020 investment accrues. The Board is recommending a final dividend of 6.75 pence per share. Together with the interim dividend, this makes a total dividend for the year ended 28 February 2019 of 7.96 pence per share, a 6% increase on the 7.51 pence dividend for the year ended 28 February 2018. Subject to Shareholder approval at our AGM on 17 July 2019, the final dividend will be paid on 23 August 2019 to A few of the Adult Division’s bestselling titles8Bloomsbury Publishing Plc Annual Report and Accounts 2019Chief Executive’s ReviewBloomsbury AR2019_Front.indd 812/06/2019 16:02:45 26563 12 June 2019 3:36 pm Proof 11012345678Dividend per share1999–2019Total dividend per shareThe Children’s Division continued to perform well and some of the bestselling titles are shown aboveShareholders on the register on the record date of 26 July 2019. Including the proposed 2018/19 dividend, over the past 14 years the dividend has increased at a compound annual growth rate of 7.0%, and this will be the 24th consecutive year of dividend growth.Non-Consumer DivisionThe Non-Consumer division consists of Academic & Professional, Special Interest and Content Services. Revenues in the division increased by 7% to £63.4 million (2017/18: £59.3 million). Within this, Academic & Professional revenues grew by 13% to £41.2 million (2017/18: £36.5 million), with 7% organic growth and £2.5 million from the acquisition of IBT. Our performance in humanities and social sciences lists was particularly strong. Operating profit before highlighted items for the Non-Consumer division increased by 111% to £3.6 million (2017/18: £1.7 million). The profit growth reflects improved Academic & Professional profitability, the £0.8 million improvement in the BDR 2020 result and the £0.4 million contribution from the acquisition of IBT, partly offset by lower Special Interest profit. The Special Interest division published the New York Times bestseller In the Closet of the Vatican, following the strong comparative with The Strange Death of Europe by Douglas Murray last year.The strategic growth initiative BDR 2020 has made Bloomsbury into a leading B2B publisher in the academic and professional information market and significantly accelerated the growth of its digital revenues. Our BDR 2020 strategy from inception has been to acquire and license content to develop excellent digital products, and future acquisitions will continue this successful strategy. We launched five new digital resources during the year as planned: Bloomsbury Architecture Library, Screen Studies, Bloomsbury Early Years, Bloomsbury Fashion Business Cases and Bloomsbury Applied Visual Arts Library. We have also launched new, more flexible ways for our customers to buy from us in the form of “Title by Title” acquisition and Evidence Based Acquisition models. Bloomsbury Collections contains some 6,500 backlist Bloomsbury Academic titles; we expect to grow this number by over 20% in the current year as we add titles from IBT and the British Film Institute, along with our newly expanded frontlist collections.The deals that Bloomsbury completed since March 2018Bloomsbury launched five new digital resources, including the Bloomsbury Architecture Librarywww.bloomsbury.com9Stock Code: BMYSTRATEGIC REPORTBloomsbury AR2019_Front.indd 912/06/2019 16:02:46 Chief Executive’s Review
Excluding Harry Potter, Children’s sales were 10% higher year on year.
Sarah J. Maas sales continue to grow with the global number one
bestseller Kingdom of Ash, the epic conclusion to Sarah J. Maas’ #1 New
York Times bestselling Throne of Glass series, which reached number
one on the New York Times bestseller list and the UK Nielsen Bookscan
TCM Children's Bestseller list. Other highlights on the Children’s list
included Norse Mythology by Neil Gaiman, A Curse So Dark and Lonely
by Brigid Kemmerer and The Darkdeep by Ally Condie and Brendan
Reichs.
As a testament to our strength in this area, Bloomsbury won Children’s
Publisher of the Year at the British Book Awards in May 2018 and at the
IPG Awards in May 2019.
Employee Engagement Initiatives
We are also pleased with the strides we have taken in the last year in
our strategic HR initiatives to listen to our employees more and to look
after them even better. This includes our new Employee Voice
meetings where each of our 700 employees worldwide is meeting in
small groups with a member of the Board or Executive Committee to
say how they think Bloomsbury could be a better place to work. Many
changes have been introduced as a result of discussions at these Voice
meetings and this is a key focus for 2019/20.
IFRS 15
During the year IFRS 15, Revenue from Contracts with Customers (“IFRS
15”), was introduced. Adoption of this standard has not had a material
impact on the Group’s results, with nil net impact on revenue and a
net credit to profit before tax of £0.1 million.
In the Non-Consumer division, adopting IFRS 15 has impacted the
timing of recognition of certain non subscription Perpetual Access
(“PA”) digital resource sales. Previously, revenue from sales of these
products was recognised when the customer was granted access;
under IFRS 15 a proportion of these revenues are recognised over five
years. The impact of this is to defer revenue and profit from certain PA
sales compared to the previous treatment. For 2018/19, the net impact
on BDR 2020 revenue and profit before tax has been a reduction of
£0.1 million.
Board Changes
We welcome to the Board Leslie-Ann Reed, who will be joining
Bloomsbury as Non-Executive Director on 17 July 2019, succeeding
Jill Jones who retires from the Board on the same date. We would
like to thank Jill enormously for her significant part in the
governance of Bloomsbury.
During the year we completed the following deals, which demonstrate
the opportunities to further leverage content and market other
services on our digital platforms and through the sales infrastructure
we have developed:
✷ In May 2019, new content partnerships with Taylor and Francis
and Human Kinetics, the world’s leading sports science publisher,
further leveraging our BDR 2020 development and infrastructure;
✷ Substantial new five year digital subscription contract with the
ICAEW, announced in October 2018;
✷ Strategic sales partnerships with Rowman & Littlefield and
Manchester University Press, announced in January 2019; and
✷ Content partnership with Yoox Net-A-Porter, announced in
July 2018.
Consumer Division
The Consumer division consists of Adult and Children’s trade
publishing. The Consumer division delivered revenue of £99.3 million
(2017/18: £102.2 million). Operating profit before highlighted items
was £10.7 million (2017/18: £11.4 million), driven by a strong
performance from the Adult division.
Adult Trade
The Adult team achieved an exceptional operating profit of
£0.9 million (2017/18: loss of £0.2 million), and 1% growth in revenues
to £33.5 million, from success in front and backlist titles, and our
successful delivery of strategic changes including our new Raven
crime and thriller imprint.
Bestsellers in the year included Tom Kerridge’s Fresh Start, number one
on UK Nielsen Bookscan, the New York Times bestseller, Women Rowing
North by Mary Pipher, The New Silk Roads by Peter Frankopan, Circe by
Madeline Miller, the paperback edition of Why I’m No Longer Talking to
White People About Race by Reni Eddo-Lodge, Kitchen Confidential by
Anthony Bourdain, Sea Prayer by Khaled Hosseini and from our crime
and thriller imprint, Raven Books, the Sunday Times bestseller The
Seven Deaths of Evelyn Hardcastle by Stuart Turton.
Our authors won the most important literary awards, notably the
Golden Man Booker Prize with The English Patient by Michael Ondaatje,
the Women’s Prize for Fiction with Home Fire by Kamila Shamsie and
the Costa First Novel Award with The Seven Deaths of Evelyn Hardcastle
by Stuart Turton.
Children’s Trade
Children’s sales were £65.8 million (2017/18: £69.2 million). Harry
Potter’s twentieth anniversary, in 2017/18, generated one of the
highest levels of revenue since the initial publications, growing by 31%
compared to the previous year, so we’ve been pleased to continue the
momentum this year, with the Illustrated Tales of Beedle the Bard and
house editions of Harry Potter and the Chamber of Secrets. Sales of the
Harry Potter titles were 15% below last year. The standard edition of
Harry Potter and the Philosopher’s Stone was the fourth bestselling
children’s book of the year on UK Nielsen Bookscan, 21 years after it
was first published – every year these classics reach a new generation
of readers.
10
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 10
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:46
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
Outlook
We expect to launch five further major digital resources in 2019/20 as
well as creating new content modules for existing platforms. The full
year of our ICAEW contract will also add value in the forthcoming year.
Announced in May 2019, new content partnerships with Taylor and
Francis and Human Kinetics, the world’s leading sports science
publisher, further leveraging our BDR 2020 development and
infrastructure.
Our trade book list this year includes the illustrated version of Harry
Potter and the Goblet of Fire by J.K. Rowling, the first in Sarah J. Maas’
new Crescent City adult series, House of Earth and Blood, The Good
Thieves by Katherine Rundell, The Lost Tide Warriors by Catherine Doyle,
Elizabeth Gilbert’s City of Girls and the authorised History of GCHQ,
Behind the Enigma, by Professor John Ferris. In addition, Bloomsbury
is publishing a major new cookery book with Tom Kerridge.
During 2019/20, the Group will introduce IFRS 16, Leases (“IFRS 16”).
Adoption of this standard is expected to reduce the amount of rent
and lease charges, increase depreciation charges and finance costs
and increase the value of assets and liabilities. The net impact on
profit before tax for 2019/20 is expected to be an additional
£0.2 million charge.
Excluding the impact of IFRS 16, performance is line with management
expectations for 2019/20.
Bigger Bloomsbury Strategy for 2019/20
1. Growing the profits of the Adult division;
2. Growing the profits of the Academic & Professional division;
3. Reducing our finished goods inventory further;
4.
Increasing the focus on Bloomsbury’s nine biggest Consumer assets;
5. Maximising the success of Bloomsbury Digital Resources;
6. Accelerating the growth of Bloomsbury’s sales in the USA,
Australia and India;
7. Growing the revenues of acquisitions; and
8.
Increase employee engagement through strategic HR initiatives.
Nigel Newton
Chief Executive
21 May 2019
Stock Code: BMY
www.bloomsbury.com
11
Bloomsbury AR2019_Front.indd 11
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:48
Financial Review
Penny Scott-Bayfield
Penny Scott-Bayfield
Group Finance Director
Revenue
In 2019, Group revenues increased by 1% to £162.7
million (2018: £161.5 million). Revenues grew by 1%
at constant currencies.
The strong 7% growth in Non-Consumer division
revenues has been a significant contributor to the
Group performance. This included 34% growth in
Bloomsbury Digital Resources 2020 (“BDR 2020”)
revenues, strong underlying Academic growth and
the acquisition of I.B. Tauris & Co. Ltd (“IBT”), which
contributed £2.5 million of revenue for the year.
Total sales in the Consumer division were 3% lower
than last year, with Adult growth and a strong
comparator in Children’s. Growth has been
achieved internationally with India up 28%, the US
up 3% and Australia up 1% (growth quoted is in
local currencies).
The Bloomsbury Digital Resource division (“BDR
2020”) revenues grew by 34% to £6.3 million (2018:
£4.7 million). Five new products were launched in
the year. We are on track to achieve our target of
£15 million of revenues from digital resources in the
year 2022.
Revenues by territory
Revenues sold overseas grew by 2% to
£104.2 million and are now 64% of total revenues.
The adjacent chart shows where Group revenues
were generated for the year ended 28 February 2019.
Revenues by type
Book sales grew by 1% in the year, driven by 16%
growth in digital revenues. Digital sales growth
came from an 8% increase in e-book revenue and a
37% increase in other digital revenues, particularly
from growth in Academic & Professional BDR 2020
revenue. Growth in e-book formats came
particularly from the Adult and Children’s divisions.
Rights and services revenues reduced by 2% as a
result of a strong prior year comparative within the
Consumer division.
The adjacent chart shows the proportion of Group
revenue that each product type generates.
UK 62%
USA 29%
Australia 7%
India 2%
Print 82%
Digital 11%
Rights and Services 7%
12
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 12
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:48
Profit
Profit before tax and highlighted items
increased 9% to £14.4 million (2018: £13.2 million).
Profit before tax and highlighted items at constant
currencies increased by 11% or £1.4 million to
£14.6 million. Profit before tax increased to
£12.0 million (2018: £11.6 million). Currency
movements in the year reduced profit by £nil
(2018: £1.0 million).
The key factors impacting profit year-on-year were
the exceptional trading performance of the Group,
most notably within the Academic & Professional
and Adult divisions. The Academic & Professional
profit of £3.1 million, excluding highlighted items,
(2018: loss of £0.4 million) included a £0.8 million
improvement in the BDR 2020 result and £0.4 million
from the acquisition of IBT.
Administrative expenses excluding highlighted
items were up by 4% on an underlying basis
excluding the acquisition of IBT.
The operating profit margin increased year-on-year
to 7.4% from 7.1%. The operating profit margin
before highlighted items increased year-on-year to
8.8% from 8.1%. This was driven by the Academic &
Professional performance.
Highlighted items in the year were the amortisation
of acquired intangible assets of £1.7 million
(2018: £1.6 million) and £0.6 million restructuring
costs relating to the acquisition of the academic
publisher IBT.
Interest
The net finance income was £0.1 million
(2018: £0.1 million). The finance income relates
mostly to bank interest.
Taxation
The tax charge of £2.8 million (2018: £2.6 million)
is a reported effective rate of tax of 23.3%, higher
than the reported rate of 22.1% for the prior year.
Excluding the effect of highlighted items, the
effective tax rate for the Group was 21.4%
(2018: 20.8%).
Earnings per share
Diluted earnings per share before highlighted items
were up by 8% to 14.97 pence (2018: 13.92 pence),
as a result of the growth in profits. Diluted earnings
per share after deducting highlighted items were
up by 2% to 12.25 pence (2018: 12.06 pence).
Information on distributable reserves can be found
on page 140. Information on the dividend can be
found in the Chief Executive’s Review on page 8.
New Standards
IFRS 9, Financial Instruments, and IFRS 15, Revenue
from Contracts with Customers, were adopted
during the year. See note 2x and 2w of the financial
statements for the impact assessment of the
adoption of IFRS 9 and IFRS 15.
The impact of IFRS 9 and IFRS 15 in the year is
not material.
Capital structure
Our balance sheet at 28 February 2019 is summarised in the table below:
Goodwill and acquired intangible assets
Internally generated intangible assets
Investments
Property, plant and equipment
Net deferred tax assets
Working capital
Other non-current assets and liabilities
Total net assets before net cash
Net cash
Total net assets
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
2019
£m
59.5
7.3
0.3
2.1
–
45.9
1.0
116.1
27.6
143.7
2018
£m
55.1
6.9
0.3
2.1
0.1
48.3
1.4
114.2
25.4
139.6
Stock Code: BMY
www.bloomsbury.com
13
Bloomsbury AR2019_Front.indd 13
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:48
Financial Review
Net assets were £143.7 million (2018: £139.6 million)
and net assets per share were 190 pence (2018: 185
pence). The main movements on the balance sheet
are in goodwill, working capital and cash. Goodwill
has increased following the acquisition of IBT;
working capital has reduced due to the focus on
improving stock efficiency, which, with higher profits,
has been the main reason for the increased cash.
Both current trade and other receivables and current
trade and other liabilities have increased, due to the
reclassification of the provision for returns from trade
receivables to trade payables. Excluding this
adjustment, both have reduced. Trade and other
receivables increased by 4% to £81.9 million
(2018: £78.4 million). Excluding the reclassification,
trade and other receivables have reduced by 5%
or £4.4 million. Since books sold are generally
returnable by customers, the Group makes a
provision against books sold in the accounting year.
The unused provision at the year end is then carried
forward and offset against trade receivables in the
balance sheet, in anticipation of further book returns
subsequent to the year end. This provision has been
reclassified from trade receivables to trade payables
in 2019. A provision of £8.5 million (2018: £7.9 million)
has been made for future returns relating to sales up
to 28 February 2019. This provision was 16% of gross
trade receivables (2018: 14%).
Inventories reduced by 2% to £26.1 million
(2018: £26.7 million), which is the result of the
Group’s continued focus on improving stock
efficiency. On a like-for-like basis, excluding the effect
of acquisitions and on a constant currency basis,
this reduction was 8% or £2.0 million (2018: 5% or
£1.3 million). We are focused on delivering further
reductions in stock in the forthcoming year.
Trade and other liabilities increased by 10% to
£60.6 million (2018: £55.2 million). Excluding the
reclassification of the provision for returns, trade
and other payables have reduced by 5% or
£3.0 million. Accruals are in line with last year at
£23.1 million (2018: £23.2 million).
Cash
Cash and cash equivalents were £27.6 million
(2018: £25.4 million). Cash flow conversion in the
year was strong at 128% (2018: 161%). The Group
has delivered further improvements to working
capital management in the year, especially
following the reduction in inventory.
The net cash generated from operating activities,
including the effect of highlighted items, was
£15.0 million (2018: £19.0 million). This movement
is due to a combination of higher profits and lower
reduction in working capital. Cash used in investing
activities was principally the cost of internally
generated intangible assets such as product and
system development. Cash used for acquisitions
comprised £5.2 million for the acquisition of IBT.
Of this, £4.1 million was consideration to former
Shareholders for equity, and the remainder
payment for pre-existing obligations including
loans to Shareholders and current loans. Cash used
in financing mainly comprised dividend payments
of £5.7 million (2018: £5.0 million).
Liquidity
The Group has an unsecured revolving credit
facility with Lloyds Bank plc, with £10 million to
£14 million of committed loan facility (amount
dependent on time during the year to match
Bloomsbury’s cash flow cycle), a £2 million
overdraft facility renewed annually and a £6 million
uncommitted term loan facility. The loan facilities
expire in May 2021. All loan facilities are subject to
two covenants, being a maximum net debt to
EBITDA ratio and a minimum interest cover
covenant. No facilities were drawn down as at 28
February 2019 (2018: £nil). The Group’s net cash
position changes over the course of the year as a
result of the seasonality of the business with the
most significant expenses being the payment of
royalties in March and September and the most
significant sale receipts being in February from
Christmas sales.
14
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 14
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:48
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
Key Performance Indicators
Revenue growth
%
Adjusted PBTA
£m
1%
2017
2018
2019
1
£14.4m
13
15
2017
2018
2019
12.0
13.2
14.4
Digital resources
revenue growth
%
Adjusted operating
profit margin
%
34%
2017
2018
20
2019
34
8.8%
50
2017
2018
2019
8.4
8.1
8.8
Adjusted diluted EPS
pence per share
ROCE
%
14.97p
11.0%
2017
2018
2019
12.63
13.92
2017
2018
14.97
2019
8.2
9.9
11.0
Acquisition of
I.B. Tauris & Co. Limited (“IBT”)
In May 2018, the Company acquired IBT for
£5.6 million. £4.9 million was paid in cash at
completion, £0.3 million was paid during the year
and £0.4 million was paid in April 2019, in final
settlement of working capital and other
adjustments. IBT contributed £2.5 million of
revenue and £0.4 million of profit for Bloomsbury
Group in its financial year ending 28 February 2019.
Alternative performance measures
The Board considers it helpful to provide
performance measures that it uses to assess
the operating performance of the Group.
The Annual Report presents non-GAAP measures
alongside the standard accounting terms
prescribed by IFRS and the Companies Act, as the
Board considers they would be beneficial to users.
Alternative profit measures
The Group uses adjusted profit measures to assist
users in understanding operational performance.
These measures exclude Income Statement items
arising from significant non-cash charges and
major one-off initiatives which are highlighted
in the Income Statement because, in the opinion
of the Directors, separate disclosure is helpful
in understanding the underlying performance
of the business that underpins long-term value
generation. The Income Statement items that
are excluded from adjusted profit measures are
referred to as highlighted items.
Alternative profit measures are used by the Board
and management for planning and reporting
and have remained consistent with prior year.
The Group’s definition of adjusted performance
measures may not be comparable to other similarly
titled measures that are used by other companies.
A reconciliation of the adjusted profit measures to
their corresponding statutory reported figures can
be found on the face of the Income Statement in
conjunction with note 4 and note 9 on Earnings Per
Share.
Both adjusted profit measures and highlighted
items are presented together with statutory
measures on the face of the Income Statement.
Highlighted items are not a defined term under
IFRS, so may not be comparable to similar
terminology used in other financial statements.
Details of the charges and credits presented as
highlighted items are set out in note 4 to the
financial statements. The basis for treating
these items as highlighted is as follows:
Stock Code: BMY
www.bloomsbury.com
15
Bloomsbury AR2019_Front.indd 15
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:48
Financial Review
Cash conversion
Cash conversion shows how well the Company is converting profit into cash. It is taken
from the following GAAP measures:
Cash generated from operating activities
Settlement of pre existing acquisition liabilities
Adjusted cash generated from operating activities
Less: Purchase of property, plant and equipment
Less: Purchase of intangible assets
Less: Purchase of investments
Net cash generated
Operating profit
Cash conversion
2019
£m
17.5
1.2
18.7
(0.5)
(2.9)
–
15.3
12.0
128%
2018
£m
22.0
–
22.0
(0.3)
(2.8)
(0.3)
18.6
11.5
161%
Constant currency measures
Constant currency measures are disclosed in order to eliminate the effect of the
movement in foreign exchange rates. Changes in exchange rates used to record
non-sterling businesses result in a lack of comparability between periods since equivalent
local currency amounts are recorded at different sterling amounts in different periods.
Results using constant currencies are disclosed where they have a material impact on
those numbers, enabling a better understanding of the underlying performance.
We have therefore restated the current year revenue at the prior year exchange rates on
the following page. The currency adjustment is calculated by applying the monthly
foreign exchange rates used in 2018 to convert the overseas revenue into sterling . This
has been applied on a month-by-month basis to the 2019 revenue. This method allows
better comparability given the seasonality of the business.
Amortisation of acquired
intangible assets
Charges for amortisation of acquired intangible
assets arise from the purchase consideration of a
number of separate acquisitions. These acquisitions
are strategic investment decisions that took place at
different times over a number of years, and so the
associated amortisation does not reflect current
operational performance.
Other highlighted items
Other highlighted items are recorded in
accordance with the Group’s policy set out in note 4
of the financial statements. They arise from one-off
major initiatives such that in the opinion of the
Directors, separate disclosure is helpful in
understanding the underlying performance of the
business that underpins long-term value
generation. Examples include major restructuring
initiatives or legal and professional fees arising from
an acquisition. In the opinion of the Directors,
separate disclosure is helpful in understanding
the underlying performance and future
profitability of the business.
Tax related to highlighted items
The elements of the overall Group tax charge
relating to the above highlighted items are also
treated as adjusting. These elements of the tax
charge are calculated with reference to the specific
tax treatment of each individual highlighted item.
Return on capital employed
Return on capital employed is calculated as profit
before tax with other highlighted items and net
finance costs added back, divided by average
capital employed for the last two years. Capital
employed is gross assets excluding cash and cash
equivalents, deferred tax assets and current tax
receivables less trade and other payables.
16
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 16
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:48
Group revenue 2019 – reported
Currency adjustment
2019 – currency adjusted
2018 – reported
Group revenue 2019 – reported
Currency adjustment
2019 – currency adjusted
2018 – reported
Children’s
£’000
65,800
584
66,384
69,150
Adult
£’000
33,454
318
33,772
33,071
Consumer
£’000
99,254
902
100,156
102,221
Academic &
Professional
£’000
41,245
(17)
41,228
36,517
Special
Interest
£’000
21,156
105
21,261
21,308
United Kingdom
£’000
North America
£’000
100,959
–
100,959
101,321
Academic &
Professional
£’000
Children’s
£’000
Adult
£’000
Consumer
£’000
Content
Services
£’000
1,024
(1)
1,023
1,464
Australia
£’000
11,586
582
12,168
12,087
Non-
Consumer
£’000
63,425
87
63,512
59,289
India
£’000
4,288
379
4,667
3,621
Content
Services
£’000
Non-
Consumer
£’000
(225)
3
(222)
(145)
3,619
24
3,643
1,719
Total
£’000
162,679
989
163,668
161,510
Total
£’000
162,679
989
163,668
161,510
Total
£’000
14,294
205
14,499
13,114
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
45,846
28
45,874
44,481
Special
Interest
£’000
713
27
740
2,225
Group operating profit 2019 –
reported
Currency adjustment
2019 – currency adjusted
2018 – reported
9,784
82
9,866
11,623
891
99
990
(228)
10,675
181
10,856
11,395
3,131
(6)
3,125
(361)
Where no reconciliation is provided above for alternative performance measures, sufficient information is included in the narrative to be able to
perform a reconciliation.
Penny Scott-Bayfield
Group Finance Director
Stock Code: BMY
www.bloomsbury.com
17
Bloomsbury AR2019_Front.indd 17
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:49
Group Overview
Group Strategic Summary
Bloomsbury is a global publisher of books and
other media for general readers, children,
students, researchers and professionals.
Bloomsbury offers authors access to these multiple
markets in multiple formats throughout the
world: in print, through e-books, through digital
downloads and apps; in schools; in libraries;
in universities; and in terrestrial and internet
bookshops; with entrepreneurial teams in New York,
London, Oxford, New Delhi and Sydney serving
all territories.
Our overall strategy is unchanged and is to grow a
high-quality global publishing business delivering
high value to its authors and other contributors,
readers and shareholders.
We achieve this by:
✷ publishing authors and works of excellence and
originality;
✷ delivering professional services to those seeking
publication;
✷ combining tradition and technology to achieve
excellence; and
✷ establishing solid profit streams.
Area of focus
Reason for the focus
Growing Non-Consumer* revenues so that
they match or exceed our Consumer revenues
Continuing acquisition of rights
to publish outstanding works by
undiscovered and established authors
Expanding internationally in English
language markets
Creating and exploiting copyright and IP,
including by licensing information
databases to support major institutions
and corporations
Non-Consumer revenues have higher margins, are generally a more predictable
revenue stream, are less reliant on the retail bookshop environment and have more
digital opportunities. They are typically derived from our Academic & Professional
and Content Services divisions and Education and Special Interest books.
Continue to attract, spot and retain high-quality talent in our Consumer division,
and remain the home of some of the world’s best loved and most exciting authors.
While we recognise the importance of growing reliable Non-Consumer revenues,
we will always strive to discover, nurture and champion brilliant Consumer talent.
This reduces the Group’s reliance on the UK market and, in particular, takes advantage
of the biggest academic market worldwide in the US and the significant growth potential
in India.
This reduces the Group’s reliance on Consumer revenues and increases higher value
B2B transactions.
Benefiting from the digital opportunity
This expands the markets we are in and our revenue opportunities.
Delivering excellent service to our authors
Excellent service is core to attracting and keeping our authors.
*Non-Consumer: This includes Academic & Professional, Content Services, Education and Special Interest.
The Group is organised as two worldwide publishing divisions supported by global back office functions. A review of these follows.
18
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 18
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:49
Group Overview
Non-Consumer
The Non-Consumer Division
The Non-Consumer division consolidates a
number of Bloomsbury publishing divisions:
Academic & Professional; Special Interest;
Content Services and Education. A new publishing
division, Bloomsbury Digital Resources, was created
in May 2016 within the Academic business to focus
on institutional digital resources. During the financial
year 2018-2019, the division became the co-publisher
of British Film Institute (“BFI”) books. In May 2018,
Bloomsbury purchased I.B. Tauris & Co. Limited, an
academic publishing company specialising in Middle
East Studies, Politics, Visual Culture and History.
Both have been integrated into the Humanities and
Social Sciences academic business.
The Non-Consumer division produces a large
portfolio of scholarly and B2B digital resources sold
direct to institutions, schools and companies round
the world; a print and e-book programme of over
1,900 titles per year across humanities and social
sciences, law and tax; consultancy services to
corporations and institutions round the world;
communities of shared interest in military history
(Osprey), natural history (Helm and Poyser),
Sport (through Nautical, Reeds, and Wisden),
Popular Science (through Sigma), and reference
(through Who’s Who, Whitaker’s, and
www.writersandartists.co.uk).
The markets we serve
The Non-Consumer division serves the following
end users:
✷ International research community and higher
education students use our books and digital
resources which are accessed by academic
libraries and institutions worldwide;
✷ Online law, accounting and tax services for UK
and Eire professionals;
✷ Corporations and institutions worldwide looking
for consultancy and publishing services;
✷ Niche communities of interest in sports and
sports science, nautical, military history, natural
history, and popular science; and
✷ Teachers and trainee teachers looking for
content to support Continuing Professional
Development and their teaching.
The Bloomsbury
Handbook of
Electronic Literature
edited by Joseph
Tabbi, the winner of
N. Katherine Hayles
Award 2018
Divisional facts
£63.4m
Revenue – Total
£15.2m
Revenue – US
£3.6mAdjusted
operating profit*
£44.8m
Revenue – UK
£3.4mRevenue –
Other territories
6%Adjusted
operating margin
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
Jonathan Glasspool
Executive Director and
Managing Director,
Non-Consumer division
Jonathan Glasspool joined
Bloomsbury in 1999, was
appointed to the Board as
Executive Director in 2015
and now oversees the
development of
Bloomsbury’s Academic
& Professional publishing
business and the other
Non-Consumer publishing
divisions. Previous roles
include being a publisher
at Reed Elsevier in Singapore,
Melbourne and Oxford.
He started his career at
Cambridge University Press.
He has an MBA with
Distinction from Warwick
Business School. Jonathan
is also a Governor of Bath Spa
University; Chair, Industry
Advisory Board, Oxford
Brookes Publishing Centre;
Chair, Federation of British
Artists, and Trustee,
Publishing Training Centre.
* Adjusted operating profit is profit before taxation, amortisation of acquired intangible assets, restructuring costs and legal and other
professional fees relating to the acquisition of IBT.
Stock Code: BMY
www.bloomsbury.com
19
Bloomsbury AR2019_Front.indd 19
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:49
Group Overview
Non-Consumer
Value generating activities
Description
Academic book publishing in print and e-book formats
Digital academic and B2B services
Professional book and online information publishing
Publishing services
Required study material for students of humanities, social sciences and applied
visual arts. Mainly backlist, print and e-books, with a significant US weighting.
Sold direct and through industry intermediaries.
Online services sold direct to institutions worldwide, e.g. Bloomsbury Professional
Online, Drama Online, Bloomsbury Collections and Bloomsbury Fashion Central.
Sold direct through subscription or perpetual access.
Online and print resources for business practitioners, qualified and trainee
solicitors, barristers, accountants and tax practitioners, sold direct through
subscription and perpetual access.
Range of end-to-end publishing and content services, digital and print, provided
direct to corporations and organisations.
Consultancy and management services
Provided to non-publishers to advise on, implement and manage publishing
strategy and projects.
Books, games and special interest digital resources
Specialist content and services for a range of niche communities of interest.
Content is sold direct through websites and through retail intermediaries.
Books and online resources for teachers
Content for teachers and trainee teachers.
Strategy for growth
Growing the division via direct sales to institutions such as law firms, accountancy practices, tax practitioners, and higher education libraries
worldwide rather than via traditional third party retailers
Increasing investment in repeat purchase, digital services for professional, student and educational use rather than print products
Bolt-on acquisitions that strengthen already-strong lists
Expanding divisional sales in international markets
Strategic goals
Growing institutional subscription revenues internationally, especially North America
Growing revenues from digital-only products and services to £15 million revenue and £5 million profit by 2022
Expanding number of revenue streams from non-book sources
Creating rich content and compelling services for niche communities of special interest
Examples of the recent Non-Consumer prizes and awards
Independent Publishers Guild Digital Publishing Award 2018 (joint winner)
Richard A. Meade Award for Research in English Language Arts Education. The Award is administered by the National Council of Teachers of
English in the United States and recognises published research-based work that promotes English Language Arts teacher development at any
educational level and in any scope and setting (winning publication).
British Book Design and Production Awards 2018 (winner of Brand/Series Identity Category). The Awards promote and celebrate the excellence
and craftsmanship of the British book design and production industry and are administered by the British Printing Industries Federation (BPIF),
in partnership with Oxford Brookes University and The Publishers Association.
The N. Katherine Hayles Award for Criticism of Electronic Literature 2018 (winner). The Award is administered by the Electronic Literature
Organisation and honours the best work of criticism of electronic literature of any length.
The 2018 Stationer’s Company Innovation Excellence Award (winner of the Creative Means of Communicating with Target Audiences Category)
Olivier Award – best new comedy: Labour of Love at Noel Coward Theatre by James Graham
2018 Inner Temple Book Prize (Main Prize and New Author’s Prize)
2019 British Book Awards (administered by the Bookseller): Academic, Educational and Professional Publisher of the Year (shortlisted)
20
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 20
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:49
Group Overview
Consumer
The Consumer Division
The Consumer publishing division publishes
books for both adult and child readers.
It publishes around 600 new titles per
year and these books are published in print and
e-formats under the following imprints: Bloomsbury
Absolute, Bloomsbury Activity Books, Bloomsbury
Children’s Books, Bloomsbury Circus, Bloomsbury
Publishing and the newly launched Raven Books.
The division publishes cookery, fiction and
non-fiction titles on our Adult Trade list – and
activity books, fiction, non-fiction, picture books
and preschool titles on our Children’s Trade list.
Our main publishing operations are based in
London and New York and coordinated by
experienced editorial and publishing managers so
that authors and their works are supported
throughout the world.
Known for the quality and the prize-winning calibre
of the list, we publish authors such as George
Saunders, Madeleine Miller, Kamila Shamsie, Peter
Frankopan and Khaled Hosseini on our Adult Trade
list, Stuart Turton on our Raven Books imprint, and
Neil Gaiman, Sarah J. Maas, J.K. Rowling and Brigid
Kemmerer on our Children’s Trade list.
The markets we serve
Our publishing serves the global bookshop and
online retail market, in print, audio and e-books.
The UK market is the largest market based on
divisional sales.
How sales out of UK bookshops have changed
during January to December 2018:
Children’s Trade
Adult Trade – non-fiction
Adult Trade – fiction
Overall
Total bookshop market
Bloomsbury bookshop market
Value
0.03%
4.31%
1.06%
2.35%
Volume
-0.57%
1.81%
-0.71%
0.26%
Value
-9.27%
18.63%
30.71%
7.51%
Volume
-4.11%
22.82%
56.20%
11.76%
Data taken from Neilsen Bookscan UK Total Consumer Market.
Divisional facts
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
Emma Hopkin
Managing Director,
Consumer division
Emma is responsible for
all Consumer publishing.
She joined Bloomsbury in
2011 to run the Children’s
business and was promoted
in 2016 following a Company
restructure. Previously she
was Managing Director of
Macmillan Children’s Books.
She also held sales and
marketing roles at Houghton
Mifflin, Pan Macmillan
and Routledge.
Revenue – Total
£99.3m
£30.7m
£9.0mRevenue –
Revenue – US
e-books only worldwide
Revenue – UK
£56.1m
£12.5m
Revenue –
Other territories
£10.7m
Adjusted
operating profit*
11%Adjusted operating margin
* Adjusted operating profit is profit before taxation, amortisation of acquired intangible assets, restructuring costs and legal and other
professional fees relating to the acquisition of IBT.
Stock Code: BMY
www.bloomsbury.com
21
Bloomsbury AR2019_Front.indd 21
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:50
Group Overview
Consumer
Value generating activities
Description
Children’s Trade publishing
Activity books, fiction, non-fiction, picture books, preschool books in print, audio and
e-formats.
Harry Potter publishing
J.K. Rowling’s children’s novels.
Adult Trade best-selling fiction
High volume publications in print and digital formats.
Adult Trade non-fiction
Biography, food and drink, history, memoir, popular science and popular psychology.
Strategy for growth
Growing the list by focused and global acquisition of titles
Better exploitation of the backlist
Growing and building brands by winning major literary prizes, winning slots in retail promotions and gaining exceptional media coverage
and TV/film tie-ins
Ensuring strategic sales and marketing planning is in place for established and new brands
Attracting talent to the list by providing excellent author care
Strategic goals
Growing Adult Trade market share in UK and US
Continuing to grow Children’s Trade market share in UK and US
Listing on The New York Times bestsellers and Sunday Times charts
Focus on audio publishing
Examples of recent prizes and awards
Adult Trade division
US winners
UK winners
2019 Windham-Campbell Prize in Fiction: Brother by David Chariandry
2018 Women’s Prize for Fiction: Home Fire by Kamila Shamsie
2017-2018 New York City Book Award: Going into Town by Roz Chast
The Golden Man Booker Prize: The English Patient by Michael Ondaatje
2019 AAAS/Subaru SB&F Prize for Excellence in Science Books in the
Young Adult category: Built by Roma Agrawal
Costa First Novel Prize and Books Are My Bag Readers Award for best
debut novel: The Seven Deaths of Evelyn Hardcastle by Stuart Turnton
Richard Wall Memorial Award: Hitler in Los Angeles by Steven J. Ross
2018 Olof Palme Prize: The Doomsday Machine by Daniel Ellsberg
Heyday Lifetime Achievement Award: Daniel Ellsberg for
The Doomsday Machine
22
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 22
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:50
Design awards
Winner of British Design and Production Award for Brand/Series identity: Eat Like A Local title series
Winner of 2018 D&AD Award for Non-Fiction Trade Cover Design
Shortlisted for the British Design and Production Awards in the Fiction and Non-Fiction categories for Sing, Unburied, Sing by Jesmyn Ward and
A Line in the River by Jamal Mahjoub
Shortlisted for the D&AD Award for Shadowless by Hasan Ali Toptas (SciFi/Fantasy) and Alias Grace by Margaret Atwood (for Classics/Reissues)
Shortlistings of note
2019 Women’s Prize for Fiction: Circe by Madeleine Miller
2019 PEN/Galbraith Award for Non-fiction finalist: One Person, No Vote by Carol Anderson
2018 Los Angeles Times Book Prize finalist in the history category: The Browns of California by Miriam Pawel
2019 Inaugural Royal Society of Literature Christopher Bland Prize: The House on Half Moon Street by Alex Reeve
Children’s Trade division
US winners
UK winners
Goodreads Choice Awards Winner – Young Adult Fantasy: Kingdom of
Ash by Sarah J. Maas (fourth consecutive year as winner of this award)
Winner of the 2019 IPG (Independent Publishers Guild) Awards for
Children’s Publisher of the Year and Education Publisher of the Year
ALA YALSA 2019 Award Best Fiction for Young Adult List: When Light
Left Us by Leah Thomas
Winner of the 2018 Costa Children’s Book Award and the 2018 FCBG
(Federation of Children's Book Groups) Children’s Book Award:
The Explorer by Katherine Rundell
ALA YALSA 2019 Award Quick Picks for Reluctant Readers List:
Moonrise by Sarah Crossan
Winner of the 2018 An Post Irish Book Award for Young Adult Book
of the Year: The Weight of a Thousand Feathers by Brian Conaghan
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
2018 Books Are My Bag Readers Award (Winner of Young Readers –
Middle Grade Award): The Storm Keeper’s Island by Catherine Doyle
Overall winner of 2018 Sheffield Children’s Book Award:
We Come Apart by Sarah Crossan and Brian Conaghan
Shortlistings of note
Irish Book Awards: The Wren Hunt by Mary Watson and The Storm Keeper’s Island by Catherine Doyle
Oscar’s Book Prize: Ruby’s Worry by Tom Percival and Baby’s First Bank Heist by Jim Whalley and Stephen Collins
Stock Code: BMY
www.bloomsbury.com
23
Bloomsbury AR2019_Front.indd 23
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:50
Group Overview
Group Functions
Under the One Global Bloomsbury structure, the process driven Group functions are service providers to the global publishing divisions and are
key to the internal control framework of the business. The following provides an outline of the main Group functions and the interplay with the
business model.
Strategy for growth
Description of service to the Group
Contribution to strategic aims
Sales and Marketing
Kathleen Farrar is Group Sales
and Marketing Director and joined
Bloomsbury in 1998. She began
her publishing career in Sydney,
Australia, and has held various
senior sales and marketing roles.
Production
Louise Cameron is Group
Production Director and
joined Bloomsbury through
the acquisition of Continuum
International Publishing in 2011.
She began her career in publishing
in 1988 and has held various
senior production and editorial
roles.
Finance, Technology
and Internal Audit
Penny Scott-Bayfield is Group
Finance Director and is also
responsible for technology
and internal audit (see Board
biographical details).
Provide sales and marketing services to the Group
across print, e-books and digital platforms.
Manage Group sales and marketing campaigns
and deliver global sales and marketing KPIs.
Manage marketing budgets to maximise
marketing spend return on investment across
the Group. Deliver profitable sales across retail
and wholesale channels.
Cost-efficient on-time delivery of high-quality
print and digital product for sale globally.
Production-editorial operations: design,
documentation and management.
Provide professional and excellent author care
across all divisions.
Maximise profits from all sales channels and
regularly review pricing in print and digital to
increase net revenue.
Margin optimisation through Group-based
tender processes for pre-press, manufacturing
and freight, and through efficient operations.
Support of digital publishing strategy through
design and management of XML-first workflows,
with allied future proofing of content and IP
storage.
Provide finance and royalty administration
services to the Group.
Provide information, communication and
technology services to the Group, across back
office and customer-facing systems.
Transaction processing, good quality financial
reporting and business planning to support
decision-making across Bloomsbury.
Improve author care through excellent royalty
services.
Evaluate, implement and test internal controls in
connection with effective risk management.
Deliver digital platforms to grow digital revenues
in line with Bloomsbury 2020 digital resource
growth strategy.
Provide technology services across the Group to
support business strategy.
Kathleen Farrar
Group Sales and Marketing Director
Louise Cameron
Group Production Director
24
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 24
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:50
Risk Factors
Outlined in the table starting on page 27
is a description of risk factors that
management considers are relevant to
the Group’s business. Not all the factors are within
management’s control and other factors besides
those listed below could also affect the Group.
Actions being taken by management to mitigate
risk factors should be considered in conjunction
with the cautionary statement to Shareholders in
the Directors’ Report on page 45 with regards to
forward-looking statements. Details on financial risk
management are given in note 24.
Viability statement
Provision C.2.2 of the UK Corporate Governance
Code requires the Directors to assess the viability of
the Group over a period significantly longer than
12 months from the date the financial statements
are approved. The directors confirm that they have
carried out a robust assessment of the principal risks
facing the entity, including those that would
threaten its business model, future performance,
solvency or liquidity.
The Group prepares five-year plans for each of the
global publishing divisions and for the Group.
As well as the existing backlist titles, the projections
for the first three years of the plan are based on the
future title, online platform and other income
pipelines. There is inherently less certainty in years
four and five.
The Board therefore concludes that three years is
an appropriate period for the viability statement.
The Group’s principal risks (see below) and its
approach to managing them have been taken into
account for the purposes of assessing viability, both
in connection with the period covered by the
viability statement and longer term. The Board
believes the key risks to viability are primarily:
✷ volatility of book sales for the consumer market
including, but not limited to, the risk of a major
high street retailer going out of business;
✷ the increasing importance of internet retailing;
✷ volatility of rights and services deals;
✷ changes that might occur to the digital
book market;
✷ erosion of copyright;
✷ volatility of paper material costs; and
✷ risks associated with Brexit, principally the impact
on the cost of overseas printing of UK-originated
titles and the impact on supply chains.
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
We have developed plausible downside scenarios
for each of these risk areas and quantified the
impact on the Group’s revenue, profit and cash for
each one. We have evaluated all the principal risks
below and focused our sensitivity analysis on the
key risks.
Individual and multiple scenarios were overlaid on
our three-year projections. Through this analysis,
the Board concludes that the Group does not face a
risk to longer term viability except in the event of
remote combinations of material events. The
analysis took account of the Group’s current
funding, forecast requirements and existing
committed borrowing facilities.
Based on this assessment, the Board has a
reasonable expectation that the Group will be able
to continue in operation and meet its liabilities as
they fall due over the period to 28 February 2022.
It is also important to bear in mind the quantum of
Intellectual Property (“IP”) which the Group holds
and how that impacts the viability assessment.
Bloomsbury owns easily transferable IP assets that
can be broken up into any number of combinations
that it could sell, were a catastrophic risk failure
to occur.
Bloomsbury business model
Our strategy
The Group’s mission is to continue to grow a
high-quality global publishing business delivering
value and prosperity to its authors, employees and
Shareholders. The Group Overview section of the
Annual Report includes information on our
strategy, which has evolved to address the risks
faced by the Group. The Corporate Responsibility
section gives information on how we take account
of social and environmental matters when
implementing our strategy.
Overview of Bloomsbury’s
processes
Bloomsbury is an independent publisher and has
been listed on the Main Market of the London Stock
Exchange since 1994. Over a period of 33 years the
business has built up a substantial body of
publishing rights.
Stock Code: BMY
www.bloomsbury.com
25
Bloomsbury AR2019_Front.indd 25
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:50
26563 12 June 2019 3:36 pm Proof 11More LikelyLess LikelyHigh ImpactLow ImpactImpactLikelihoodThe Group is structured as fully integrated worldwide publishing divisions under a global brand supported by centralised sales, marketing, production and head office functions (this structure is named “One Global Bloomsbury”). Each publishing division reports to the Chief Executive. The Group encourages each publishing division to develop and grow diversified income streams. Each division has the capability to publish books in all formats but may also produce other products such as online content accessible through subscription. Each division may also use its expertise to provide publishing-related services to clients. Book publishingBook publishing (printed books, audio and e-books) is the main activity of Bloomsbury. This generates two core income streams: content sales (books and digital platforms) and rights sales. In competition with other publishers, Bloomsbury’s commissioning editors acquire the IP rights to publish the works of authors. Ultimately, the authors and their literary agents control which rights each publisher acquires. Bloomsbury focuses on publishing worldwide in English but it also acquires an assortment of other rights which it may license to other publishers as considered appropriate, thus generating a separate rights sales income stream. When it makes financial sense, Bloomsbury also sells the publishing rights to titles in its extensive backlist, e.g. for a book in a series published by another publisher which is valuable to them to complete the series.Bloomsbury sells its own books typically through online retailers such as Amazon, through bookshops, through supermarkets and direct to customers.Bloomsbury’s global production function produces books in all formats. Bloomsbury has produced e-books and audio books since 2005 and as an early adopter benefited from the worldwide growth in e-book sales. Printed books that are sold through retail outlets are normally sold on a sale-or-return basis. The Group does not print its own books but subcontracts the printing, warehouse storage and distribution of printed books to a number of long-term global partners.Positioning the business Bloomsbury is a cash generative business and has enjoyed the benefit of publishing many bestselling titles over a prolonged period. Bloomsbury has balanced its core consumer book publishing business with academic and professional publishing. This addresses a number of risks: Long-term growth potential, less sales volatility and higher margins: The demand for academic and professional books is more regular which reduces the volatility of book sales compared to consumer book sales; Barriers to entry: Since acquiring Methuen Drama in 2006, Bloomsbury has continuously invested in growing its academic publishing business through organic growth and acquisitions of publishing businesses, lists of academic books and online databases. The time, cost and expertise required to build up an academic publisher acts as a barrier to entry for significant new competitors; Exploiting intellectual property: Bloomsbury is developing innovative academic online products which are sold under annual subscriptions or on a perpetual access basis and which exploit the Group’s content assets and expertise; and Lower risk: Academic publishing acquisitions require lower advances to authors.Growth in emerging markets India has one of the world’s largest English-speaking populations and an increasing number of highly educated readers of English. Bloomsbury has a growing publishing business in India that publishes the works of local talented authors in addition to the works of Bloomsbury authors with works originally published in the UK and the US.Risk Management and Internal Control FrameworkBloomsbury’s risk management and internal control processes are explained in the Audit Committee section of the Corporate Governance Report on page 50.Principal RisksThe table below provides a description of risk factors that management considers relevant to the Group’s business. Other factors besides those listed could also affect the Group. The risks are illustrated schematically in the following chart:1. Market 2. Rights and services3. Financial valuations4. Information and technology systems5. Growth of digital6. Title acquisition7. Reputation8. IP and copyright9. Overseas operations10. Volatility of paper material costs11. Brexit26Bloomsbury Publishing Plc Annual Report and Accounts 2019Risk FactorsBloomsbury AR2019_Front.indd 2612/06/2019 16:02:51 During the financial year ended 28 February 2019, the Principal Risks have not changed substantially, save that the volatility of paper material costs
and Brexit have been added as Principal Risks.
Key area
1. Market
Risk
Description
Mitigation
Volatility of consumer
book sales
Sales of books to the consumer market can
be seasonal and volatile.
Develop special interest, academic and
professional publishing where revenues are
less volatile.
Develop other revenue streams, including
from rights and services, increasing the
scope to enter annually renewing
agreements.
Increased
dependence on
internet retailing
Readers might not discover, and so buy,
Bloomsbury’s print and e-books sold
through internet retailers who may control
discoverability.
Grow expert marketing teams skilled in
internet sales.
Engage with multiple internet retailers.
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
2. Rights
and services
Dependence on
timing of closing
rights and services
deals
Generating new/
non-renewal of
subscription and
services agreements
The timing for completing high margin
rights and services deals can depend on the
performance by multiple parties including
the main customer.
The pipeline of new products and
agreements might be uneven.
A customer or partner might not renew
larger agreements that generate significant
ongoing income.
Increase focus on developing other
marketing opportunities and other revenue
streams, e.g. Academic & Professional digital
products, rights and services.
Increase the number of rights and services
deals to reduce the dependency on
individual deals.
Increase the portfolio of products and
agreements to grow income and reduce
the dependency on individual agreements.
Senior managers are responsible for
ensuring strong performance by
Bloomsbury of its obligations and strong
customer care.
Entrepreneurial risk
A deal may require upfront staff time
and costs but fail to close, resulting in lost
investment.
Similar to ordinary publishing risks: increase
the portfolio of deals to leverage economies
of scale and reduce volatility.
3. Financial
valuations
Judgemental
valuation of assets
and provisions
4. Information
and
technology
systems
Productivity of IT
systems and data
Cybersecurity
Significant assets and provisions in the
balance sheet depend on judgemental
assumptions, e.g. goodwill, advances,
intangible rights, inventory and returns
provisions.
Continuing to improve staff efficiency
depends on the IT systems and data keeping
pace with the needs of the business.
Unauthorised access could be made to
Bloomsbury’s systems to perpetrate a fraud
or cause damage.
Consistent and evidence-based approach
to assumptions.
Board approval of key assumptions.
Rigorous audit of valuations.
Board level representation on steering IT
strategy, implementation and IT operations.
Clear responsibility for systems, increasing
use of the cloud, monitoring security risks,
internal control reviews of the systems and
up-to-date anti-virus software are amongst
the measures in place.
Stock Code: BMY
www.bloomsbury.com
27
Bloomsbury AR2019_Front.indd 27
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:51
Risk Factors
Key area
5. Growth
of digital
Risk
Description
Mitigation
Digital development
Unforeseen hold-ups may delay
development of new online content services
and revenue for the services may not grow in
line with our stretching targets.
Develop high-quality online content services
in markets we understand well.
Standardise the digital delivery platform to
simplify and speed up the development and
implementation of new online content
services.
Development of the
digital book market
Consumer e-book prices may not hold up in
the longer term. Possible emergence of not
yet known reading technology.
Continue to supply books in all formats
through multiple digital delivery systems
aligned with the demands of readers.
6. Title
acquisition
Rise of alternative
book supply
arrangements
High advances
sought by agents
World rights not
acquired
7. Reputation
Product and service
quality
Errors in books and digital content.
Ensure the Group is positioned to take
advantage of e-book and audio book (or any
new format) growth in international markets.
Use social media and other digital marketing
to encourage direct sales to consumers.
Develop Non-Consumer offering where
revenues are less volatile and there is a direct
relationship with the customers.
Develop digital platforms to deliver, on a
subscription basis, the content that readers
demand.
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.
Agents seek high advances for some authors.
Publish more special interest trade books.
Agents prefer to split territorial rights for
English language publishing between US
and UK.
Focus acquisition on titles where world
English rights are available.
Concentrate on academic publishing where
world rights are the norm.
Careful selection and rigorous review of titles
by broad teams of experienced publishers,
and planning of the title pipeline to focus on
publishing strengths.
Rigorous production procedures and
planning of titles and digital resource
content.
Information security
Investor confidence
Being hacked and theft of intellectual
property, e.g. key illustrations before
publication.
Security awareness in teams and additional
security measures to protect high value
assets and data.
City confidence undermined by events
outside of Bloomsbury’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.
28
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 28
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:51
Key area
Risk
Description
Mitigation
8. IP and
copyright
Erosion of copyright
Erosion of traditional copyrights.
Erosion of territorial copyrights as a result
of global internet retailing.
Open access.
Continue policy of support for copyright and
intellectual property rights as a fundamental
facet of publishing.
Continue to police infringements of the
Group’s territorial copyrights and take
appropriate action to enforce such rights.
Develop digital services that deliver mixed
open access and proprietary content in the
form that customers demand and will
continue to pay for.
Piracy
Piracy of titles in print or digital form.
Adopt robust anti-piracy policies.
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
9. Overseas
operations
Overseas offices
Growing offices in the US, India and Australia
may increase the operational risks and
demands on management.
10. Volatility
of paper
material costs
Increased production
costs
11. Brexit
Impact on the cost of
paper materials
A contracting print market and increases to
the costs of paper around the world due to
various factors including increased
regulation may result in higher production
costs for the Group. See also below for the
potential impact of Brexit on the costs of
paper materials.
Falls in the value of sterling may result in
increased production costs due to increases
in the costs of paper sourced by the
Group’s printers.
Impact on supply
chains and ensuring
delays in delivering
product to market
Disruptions to the supply chain may impact
on sales if the delivery of product is delayed.
Logistics costs may increase as a result of
measures taken to counter delays and as a
result of increased complexities surrounding
the movement of goods across the UK/EU
border.
Ensure good digital rights management
protection of e-books and digital formats.
Participate in key industry anti-piracy
initiatives.
One Global Bloomsbury structure of global
publishing divisions supported by Group
functions provides an effective internal
control framework and oversight of the
overseas offices. Keep under review the
management resources deployed within
this structure as the business evolves.
Provision for production variances are
factored into the Group’s budget at the
beginning of each fiscal year.
The Group’s contracts with its printers
typically fix prices for printing work for a
period of time, and include provisions to
control the extent to which increases in the
costs of paper may be passed on to the Group.
The Group’s contracts with its printers
typically fix prices for printing work for a
period of time, and include provisions to
control the extent to which increases in the
costs of paper may be passed on to the Group.
Production costs are paid by the Group in a
mix of local and foreign currencies and falls in
sterling will not impact on all production costs
Measures to mitigate the risk of disruption to
supply chains include building in additional
time to production schedules and placing
orders for additional paper supplies with
Bloomsbury’s printers.
Stock Code: BMY
www.bloomsbury.com
29
Bloomsbury AR2019_Front.indd 29
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:51
Corporate Responsibility
as a good corporate citizen.
The following section provides an outline of Bloomsbury’s work
Our literary heart
Bloomsbury’s core business is the worldwide publication of literature
and information for readers of all ages, which has a high social value.
The Group has a significant beneficial social impact globally through
sales of e-books and print books and access to online resources that
are embraced by adults and children in all walks of life.
Our ethos
We aim for integrity in all our activities, consider our impact on society
and the environment and maintain high ethical standards. This is key
to our commercial success and ability to deliver good returns to our
Shareholders, which depends on attracting and retaining talented
authors who want us to publish them and on books for which there is a
significant demand.
The Board recognises that the achievements of the Group have
depended upon the high standards of social responsibility
demonstrated by the Directors and employees for more than 30 years.
The Board aims to take account of the relevant social, environmental
and ethical issues and associated risks and opportunities to the
Group’s short-term and long-term value.
We aim to engage with and contribute to our key communities,
whether outside Bloomsbury (local communities and partners) or
inside Bloomsbury (our colleagues) in ways that will create a positive
impact upon those communities and will support Bloomsbury’s
ongoing success.
The Group is mindful of the impact of its activities on the environment
and the Board has implemented annual reviews, as separate items on
the agenda, to consider the environmental impact of the Group’s
business.
Engagement outside Bloomsbury
Bloomsbury has a significant direct beneficial impact on the
community through its activities. Our publishing teams share a
common passion for promoting the enjoyment of reading and
high-quality literature that is often cutting edge and provides new
authors with opportunities to establish themselves. We have a
substantial Children’s division focused on promoting literacy for
young readers of all abilities and ages, including specialist ranges for
“Hi-Low” pupils (high age, low attainment) which provide parents and
teachers with the tools needed to engage their children in reading.
In addition to our direct commercial activities and with a focus mainly
on promoting literature, literacy and education, we actively support
numerous organisations worldwide including schools, universities,
libraries and other good causes and charities. We also encourage the
spare time involvement of staff worldwide in supporting good causes
and in the promotion of literature, literacy and education. These
voluntary activities by employees are often directly or indirectly
assisted by the business and by Bloomsbury colleagues. The following
examples illustrate the range of Bloomsbury’s support and support by
its employees for good causes worldwide:
Corporate donating
✷ Bloomsbury has adopted the National Literacy Trust (“NLT”),
a charity dedicated to giving disadvantaged children the literacy
skills they need to succeed and to improving reading, writing,
speaking and listening skills in the UK’s poorest communities,
as its house charity. This year, reflecting the Company’s strong
profit performance, we have made a donation of £10,000 to the NLT
and will work with them to support activities aimed at developing
literacy in Hastings, one of the ten worst cities in the UK for adult and
child working class literacy (more information about Bloomsbury’s
support of the NLT is set out in the Corporate Volunteering section
below).
✷ A further sum of £12,457 has been set aside for donations to
appropriate organisations in the US, Australia and India, the
beneficiaries of which will be chosen over the coming months.
✷ In August 2018 Bloomsbury published Sea Prayer, a powerful
book by Khaled Hosseini in response to the current refugee crisis.
By donating £1 per every copy sold to UNHCR – the UN refugee
agency – Bloomsbury has raised over £100,000 in support of
UNHCR’s activities caring for refugees around the world.
✷ We support good causes that promote literacy and literature,
e.g. we are a sponsor and partner with World Book Day, which was
established by UNESCO to promote reading amongst children and
adults, and our US office has provided sponsorship to a number of
non-profit groups involved in the promotion of literacy, human
rights and the freedom of expression, including PEN America,
The Center for Fiction, the National Coalition Against Censorship,
and Literacy Partners.
✷ Our Australian office supports the Indigenous Literacy Foundation
(the national charity of the Australian Book Industry which aims to
address the literacy gap arising in remote indigenous communities
across Australia and reduce the disadvantage experienced
by children in such communities across Australia) (“ILF”) with
fundraising and time given for administrative support. During the
year Bloomsbury’s Australia office made a modest donation to ILF,
to match funds donated by Bloomsbury employees.
30
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 30
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:51
✷ Our US, UK and Australia offices donate, or provide at a reduced
cost, a substantial quantity of books and games each year, which
includes donations of mainstream titles to schools, libraries and
organisations supporting education, e.g. our US office donated over
300,000 children’s books to the Soho Center that promotes quality
childcare nationally with a special focus on children’s literacy, school
readiness, and school success and our UK office donated 20,000
educational books to Book Aid International. Our Australia office
has donated books to the Children’s Book Council of Australia.
Other donations of books and Osprey games worldwide have been
to good causes not related to literature and education such as
Barnardo’s, Oxfam, the Red Cross, the Salvation Army and smaller
organisations local to our offices worldwide.
✷ The Bloomsbury Institute (Bloomsbury’s own public events series)
has organised events to support the Book Aid International,
Womankind, British Dyslexia Association and Mothers2Mothers
charities. It also regularly hosts collaborative events that involve
donating a portion of profits to both established and emerging
literary organisations and their patrons. For example, in 2018, the
Institute held sold-out events in collaboration with the London
Library and Cambridge University Libraries.
Corporate volunteering and educational development
✷ As stated in the Corporate Donating Section, Bloomsbury has
adopted the NLT as its house charity and will work with the NLT to
support outreach activities aimed at improving literacy in Hastings
in support of the NLT’s Get Hasting Reading initiative. We hope to
send up to one hundred Bloomsbury colleagues to Hastings for
a day to volunteer with local schools and libraries. Bloomsbury
authors Greg James and Chris Smith (authors of Kid Normal) have
recently participated at a book event in Hastings to which children
throughout Hastings were invited, and we plan to arrange many
further author events in the future to support the Get Hastings
Reading initiative.
✷ We have sponsored achievement prizes for students within US
and UK universities, invite students to visit us for presentations on
working in publishing and support careers fairs for students to
promote publishing as a career.
✷ Bloomsbury’s Chief Executive is President of Book Aid International
that gifts approximately 500,000 books a year to libraries in Africa.
✷ Jonathan Glasspool, one of Bloomsbury’s Executive Directors, is
Senior Independent Governor at Bath Spa University, as well as Chair
of Federation of British Arts. Both organisations have a substantial
education remit in the creative arts.
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
Khaled Hosseini and Rosianna Halse Rojas (UNHCR) at a Bloomsbury Institute event
Stock Code: BMY
www.bloomsbury.com
31
Bloomsbury AR2019_Front.indd 31
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:51
Corporate Responsibility
Staff volunteering
✷ A significant number of our employees worldwide, both through
a Bloomsbury coordinator and privately, are involved in formal
volunteer reading schemes and regularly attend schools in the UK
and the US. These provide supervised reading support to young
readers, often from disadvantaged backgrounds where their
opportunities to develop reading skills may be hindered.
✷ Bloomsbury employees attend schools and colleges to give talks
that have included on careers, such as in digital publishing and
IT, and on reading skills required in the workplace. They have also
assisted young people with interview practice, career mentoring
and school magazines. They are unpaid public speakers at
presentations, have published articles and hosted discussions
on publishing topics and are volunteers for literary festivals and
societies for young publishers. Bloomsbury employees also support
primary schools, e.g. giving classroom talks on writing.
✷ Many employees worldwide are involved in their local communities
typically promoting literacy, literature and education, such as by
sitting on committees, as governors of schools, by supporting
special interest groups and as trustees and supporters of publishing
industry and arts voluntary organisations, e.g. a UK employee
is a trustee of a book trade charity; and US employees support
various organisations such as a not-for-profit bookstore helping
the homeless and in the fight against HIV and AIDS. An employee
in our Australia office has for many years been a volunteer at ILF,
mentioned in the Corporate Donating section, donating an hour
each week at ILF’s head office to support IFL outreach initiatives and
fundraising activities.
✷ The main Board Directors commit significant spare time outside
of work to book-related charities, not-for-profit organisations and
higher education.
In our offices worldwide the employees volunteer regularly to assist
good causes unrelated to publishing, e.g. in the UK they are
Samaritans and worldwide they provide spare time support for
homeless, sick and vulnerably housed adults and children.
Staff donating
Bloomsbury employees worldwide often call on their colleagues for
fundraising sponsorship such as with marathons, cake sales and many
other employee-inspired activities. For example, an employee in the UK
office climbed Everest Base Camp for Cancer Research UK with a large
proportion of the funds raised donated by Bloomsbury employees.
Our offices will put up teams to participate in events, e.g. Bloomsbury’s
netball team raises money for good causes and charities; our US office
participates in a food drive for hunger by donating canned goods and
non-perishables to the Food Bank of New York City; and groups of
employees arrange visits to charity centres at Christmas to sing carols.
Engagement within Bloomsbury
Bloomsbury is a people business, and the success of our business is in
large part driven by the expertise, passion and commitment of our
workforce. Our colleagues are a key asset of the business and our
employment policies are directed at creating a workplace that attracts,
motivates, develops and retains high calibre employees.
We promote a supportive and inclusive culture that fosters diversity
and encourages professional development, active participation and
the exchange of ideas.
During the year, the Group instigated a wide range of strategic HR
initiatives directed at further promoting this culture and creating a
rewarding work environment and ongoing professional opportunities
for colleagues. These initiatives are reflected in the Group’s
employment policies and practices set out below but include:
✷ conducting a global Employee Engagement Survey across all offices
to understand and improve the employee experience. Following
the completion of the survey, individual focus groups have been
established to address key issues arising out of the survey;
✷ the implementation of an employee voice forum programme,
allowing every employee to have their voice heard directly by senior
management and the Board;
✷ the formation of a diversity and inclusion focus group;
✷ the introduction of ongoing training in unconscious bias, equality
and diversity to reinforce Bloomsbury’s culture of equal treatment
of all employees;
✷ the expansion of the provision of training, mentoring and employee
development programmes for early and mid-career employees
to provide them with opportunities to grow their leadership and
management capabilities so that they are equipped to progress in
their careers;
✷ the provision of executive coaching for women in senior leadership
positions;
✷ the introduction of Core Hours (9.30 am to 4.00 pm) working in
order to allow employees to choose a working pattern which suits
them;
✷ the introduction of Summer Hours to support more flexible working
by enabling employees to finish work early on Fridays over the
summer months; and
✷ the implementation of a global Employee Assistance Programme
to support employee well-being and mental health. This service is
provided by an independent company and provides all employees
with free, confidential access to counselling and support for work
issues and personal issues.
32
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 32
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:51
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
Penny Scott-Bayfield in attendance at an Employee Voice Meeting
Diversity
We have a diverse workforce and management team led by a gender
diverse Board. The majority of senior managers and employees
worldwide in the Group are women. As at 28 February 2019 the
number of employees by each gender is:
All employees of the Group1
Senior managers of the Group2
Directors of the Group Parent Company
Female
506 (71%)
5
2
Male
209 (29%)
3
5
1. Excludes workers who are freelance consultants and temps.
2.
Includes the heads of publishing divisions, Group functions and country heads who are
not Executive Directors on the parent Company Board.
In the UK, the government introduced regulations designed to help
address the gender pay gap. Bloomsbury has provided information on
its gender pay gap in the UK (see http://www.bloomsbury-ir.co.uk/
archives/governance/Bloomsbury_Gender_Pay_Gap_2018.pdf).
We have benchmarked our Gender Pay Gap against the publishing
industry and will continue to identify best practices that can reduce
the pay gap.
The Board, supported by the Nomination Committee, oversees the
diversity and inclusion initiatives across the Group and is committed to
developing a strong and diverse talent pipeline in connection with
effective succession planning. The Board receives regular updates on
strategic HR initiatives across the Group with a view to ensuring that
the strategies in place are effective in promoting a culture that
upholds Bloomsbury’s principles of inclusion, diversity and equality.
Employment KPIs
The senior management team monitors staff-related KPIs (e.g. joiners
and leavers) but the Group does not disclose all of these for
commercial reasons that are in the interests of the Shareholders.
Employees and human rights
Supported by territory heads of human resources, the managing
directors of the publishing divisions, the heads of each Group function
and managing directors of regional offices have responsibility for the
employment matters (including human rights) of their teams. The
Chief Executive has overall Board-level responsibility for employment
matters. For example, where employment matters have a Group-wide
impact or cannot be resolved at a lower level in the business then they
may be referred to the Chief Executive.
Stock Code: BMY
www.bloomsbury.com
33
Bloomsbury AR2019_Front.indd 33
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:52
Corporate Responsibility
Key features of the Group’s employment policies and practices are:
✷ Openness: Bloomsbury provides a good degree of openness
and transparency on its activities and performance through
information provided to employees. Employees are kept updated
frequently on sales, book releases, project achievements, internal
newsletters, corporate news and feedback from external media and
other sources. The Bloomsbury Institute arranges regular events,
which enable staff to meet authors. Weekly and other regular
team meetings and internal annual conferences bring employees
together from across the Group’s worldwide sites allowing
colleagues to formally and informally share information about the
business and develop strong working relationships.
✷ Engagement: We promote a friendly collegiate culture in which
employees are encouraged to discuss their concerns and issues with
their line managers and senior colleagues. The senior management
team meets frequently to discuss employee matters and is
supported by regular operational meetings attended by managers
covering all of the Group’s worldwide sites. During the year, we
introduced an employee voice forum programme, to ensure that
every employee has the opportunity to share their views with senior
management and the Board.
✷ Ethical behaviour: We expect employees, Directors, subcontractors
and others to exercise the highest ethical standards at all times
in respect of the relationships and dealings that Bloomsbury
has with other third parties. Compliance with ethical behaviour
Group policies such as for anti-bribery and corruption, dealing in
Bloomsbury shares and anti-slavery and human trafficking is an
employment term of Group employment contracts. Bloomsbury’s
Whistleblower policy (at www.bloomsbury-ir.co.uk) enables
employees, other categories of workers and third parties to have
any concerns relating to the Group confidentially addressed.
✷ Employee development: Bloomsbury is acquisitive and has
benefited from an intake of high calibre entrepreneurs who
support the Group’s capacity to innovate. The Group develops its
management structure to serve the changing needs of the business.
This creates opportunities for suitably high calibre individuals to
progress to increasing levels of seniority as they gain capabilities and
expertise. External recruitment is supported by territorial Human
Resources functions, enabling vacancies across sites worldwide
to be filled internally where employees of an appropriately high
calibre seek new opportunities. Bloomsbury continues to expand
the provision of training, mentoring and employee development
programmes to provide employees with opportunities to grow their
leadership and management capabilities.
✷ Performance and merit: Senior employees agree personal
objectives and are rewarded based on performance determined by
business results and appraisals. Senior managers are accountable
for the performance of their teams and determine the most
appropriate approach to performance management for each
team. Promotions and external recruitment are based on merit and
ensure that the most suitable person is selected for each position.
✷ Employee participation in share schemes: The Group offers UK
employees the opportunity to participate in an all-employee HM
Revenue & Customs approved Sharesave scheme to encourage
employee participation in the performance and growth of the
Group. High performing senior managers may also be eligible to
participate in the Company’s Long Term Incentive Plan.
✷ Flexible working: We encourage family-friendly working practices
such as flexible working hours and recognise that experienced
employees returning to work following maternity, paternity or other
career breaks are an asset. We have introduced Core Hours Working
to encourage and support flexible working patterns.
✷ Equality of opportunity: Bloomsbury has a diverse workforce and
follows a policy that no employee or other person receives more
or less favourable treatment on the grounds of gender, sexual
orientation, colour, race and ethnic origin, nationality, religion,
disability or age. This extends to any person known to be HIV
positive. The Human Resources function monitors compliance with
the policy and with applicable legislative requirements to ensure the
equality of opportunity in the recruitment, selection and promotion
of employees. Grievance and disciplinary procedures protect
employees from discriminatory behaviours and attitudes.
✷ Disabled persons: Group policy is to offer equal treatment in
respect of the recruitment, training, career development and
promotion of disabled persons. Should people become disabled
during the course of their employment, the Group will seek to retain
their services and to provide retraining where necessary.
✷ Human rights: Bloomsbury is committed to meeting its
responsibility to respect human rights. The regional Human
Resources managers monitor for human rights issues and ensure
any remedial action that is needed is taken promptly. Bloomsbury
is committed to complying with employment and other legislation
applicable to the locations in which it employs people, ensuring the
human rights of individuals are protected.
Health and safety
Bloomsbury’s Facilities Manager reporting to the Chief Executive in
respect of Health and Safety (“H&S”) heads an H&S team that ensures
Group-wide compliance with H&S policy. At least annually, the main
Board and senior team review H&S including risks assessments,
developments and incident reports. The H&S team works closely with
management and employees to ensure that the H&S policy is
effectively communicated, implemented and maintained across the
business. Managers of the worldwide sites are accountable for
ensuring their areas of the business are in compliance with H&S policy.
The Group maintains H&S risk assessments and accident books for all
its locations worldwide (including where there is no local legal
requirement to do so) and staff are encouraged to report all accidents
or near misses.
During the year there were no serious injuries, fatalities or reportable
incidents. Accidents have typically included infrequent bumps and
scalds from hot drinks associated with the office environment.
34
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 34
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:52
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
Our relationship with the environment
Bloomsbury is mindful of its relationship with the environment and
takes its environmental responsibilities seriously. We aim to reduce the
environmental impact of our business wherever possible.
The Executive Committee (which consists of the Executive Directors
and the managing directors of the publishing divisions and Group
functions) have responsibility for environmental matters of their
teams. These people report to the Chief Executive who has overall
Board level responsibility for environmental matters and issues.
The impact on the environment of our business predominantly arises
from the activities the Group subcontracts to its suppliers including the
printing, production, distribution, recycling and disposal of printed
books. Bloomsbury also has office-based editorial, product
development, sales and administrative activities, which operate
through an employee workforce based at offices in the UK, the US
(New York), India (New Delhi) and Australia (Sydney).
We employ specialist independent external advisers, Trucost, to
monitor our impact on the environment. Key areas where we are
active in reducing the direct and indirect environmental impact
of the business include:
Print on demand: Changes in technology and the print supplier base
are increasingly making it economic to print books at the time and in
the quantity needed for sale rather than bulk printing and holding as
warehouse stock. This reduces the CO2 generated by pulping,
recycling and transporting unsold books.
Online publishing and e-formats: Our strategy embraces digital
publishing and the potential benefits this may bring to the
environment.
Book manufacture: We are committed to reducing the environmental
impact of our products and to controlling the materials used to
produce them. To that end, we work only with Forestry Stewardship
Council (“FSC”) and the Programme for the Endorsement of Forest
Certification (“PEFC”) accredited suppliers, and we use FSC materials for
over 90% of the Group’s output. Where FSC-accredited materials are
not available we specify alternatives from known and reputable
sources. We make regular trips to suppliers’ factories to monitor their
recycling and other locally relevant environmental initiatives. These
visits also provide an opportunity to view employment practices at first
hand, including employee minimum age and working conditions.
Other required accreditations to act as a supplier to the Group are ISO
9001 and ISO 14001. Where the manufacture/handling of novelty items
is involved, e.g. on our Children’s and Games lists, we require The
International Council of Toy Industries (“ICTI”) accreditation.
Building and office facilities: Most of our employees travel to work
by public transport and we support part-time and homeworking. We
provide bicycle storage for staff who ride to work. For most employees
we have implemented separate recycling bins for different waste
materials so that a significant proportion of our office waste is recycled.
Lights are generally fitted with motion detectors and our office policy
is to turn off lights out of hours when not in use.
We have previously taken advice from the Carbon Trust and continue
to apply their recommendations to reduce our carbon footprint.
For example, we use point-of-use instead of bottled water coolers, fit
energy efficient lamps, ensure heating systems are regularly
maintained and programmed efficiently and turn off unnecessary
electrical equipment out of hours, amongst other measures.
Greenhouse gases
Our independent external adviser, Trucost, has calculated the tables
overleaf based on data we have provided. We report on our waste
production and greenhouse gas emissions aligning with the 2006
Government Guidelines; Environmental Key Performance Indicators:
Reporting Guidelines for UK Businesses. In respect of greenhouse
gases, we report consumption of natural gas, vehicle fuel and
electricity in kWh, converted to CO2e following the protocols provided
by the Department for Environment, Food and Rural affairs (“DEFRA”).
Emissions have been categorised against the Greenhouse Gas Protocol
scopes of reporting. This information is unaudited and is shown in the
tables on pages 36 and 37.
Environmental targets
We aim to beat the greenhouse gas and waste production normalised
tonnes per £million revenue averaged for the previous two years.
By setting such a target we are focused on continuously increasing
our efficiency at using natural resources.
During the year the business beat its target for the overall level of
emissions of CO2 and waste production from our offices worldwide,
although there was an increase in total Scope 1 Greenhouse gas
emissions and waste production in comparison with the preceding
year. Analysis of the reasons for this increase indicates that it arose
from the following factors:
✷ This year, fuel oil was included in reporting for Bloomsbury’s US
office for the first time. In addition, colder weather during the
relevant period than in the preceding year resulted in more
heating being used across Bloomsbury’s UK offices;
✷ Data submitted in respect of Company cars for the preceding year
was incomplete (covering only a six month period); the increase in
emissions in the year can be attributed to an increase in the scope
of coverage with data being provided for the full year;
✷ An increase in the number of employees of approximately 11%
on the preceding year; and
✷ Better data becoming available in respect of landfill waste
generated by Bloomsbury’s Australian office and a move within that
office from occupying two floors to one, generating increased waste
in the form of furniture and furniture packaging.
The increase in water consumption in comparison with the preceding
year is lower than the proportional increase in staff referred to above,
thus indicating a reduction in usage intensity.
Our direct operations are predominantly office-based and have been
independently assessed as having a low impact on the environment.
The Group’s consumption of natural resources, although relatively
minor, is significantly impacted by ambient weather conditions
beyond our control and by the buildings we lease.
Stock Code: BMY
www.bloomsbury.com
35
Bloomsbury AR2019_Front.indd 35
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:52
Corporate Responsibility
Previously published 2018 data has been updated to allow for an improved estimation methodology.
Greenhouse Gas Emissions: Scope 1
Greenhouse Gases
Definition
Data Source and Calculation Methods
Scope 1 Direct Impacts
Stationary fuel
use
Emissions
from natural
gas and diesel
consumption in
utility boilers.
Emissions from
refrigerant
leakage.
Emissions from
petrol and diesel
consumption.
Refrigerants
Company cars
Total Scope 1
Annual consumption in kWh collected from fuel bills,
converted according to DEFRA guidelines for the
London head office. Data scaled up by number of
employees to estimate emissions for Haywards Heath,
Dublin and Edinburgh serviced offices. Natural gas
was not used in US, India and Australia offices. This
year India office has diesel consumption in utility
boilers and US office has fuel oil consumption. A new
office at Salem Road, London is added this year for
analysis.
Refrigerant R410A used in US office in 2018/2019
financial year; however, no record kept of losses.
Annual consumption in litres calculated from fuel
bills for the UK and India. Converted according to
DEFRA guidelines. There are no company cars in
Australia and the US offices.
Greenhouse Gas Emissions: Scope 2
Greenhouse Gases
Definition
Data Source and Calculation Methods
Scope 2 Impacts
Electricity use –
location-based
emissions
Greenhouse
gas emissions
resulting from
electricity
purchased.
Electricity use –
market-based
emissions
Market-based
emission for
purchased
electricity.
Total Scope 2
Annual consumption of directly purchased electricity
in kWh collected for the London, Alton, Haywards
Heath, Oxford, US, Australia and India offices. Data
scaled up by the number of employees to estimate
emissions for the operations in the rest of UK offices.
kWh data converted to emissions according to
DEFRA, EPA and IEA guidelines.
Calculated by using purchased electricity data in
kWh and residual mixes for UK and US. For India and
Australia, average grid emission factors are used
from IEA as no residual emissions are yet determined
by governments in these countries.
Quantity
Absolute Tonnes CO2e
2017/2018
2018/2019
Normalised Tonnes CO2e per
£m Revenue
2018/2019
2017/2018
46
33
0.3
0.2
–
–
0.0
0.0
35
16
0.2
0.1
81
49
0.5
0.3
Quantity
Absolute Tonnes CO2e
2017/2018
2018/2019
Normalised Tonnes CO2e per
£m Revenue
2018/2019
2017/2018
314
361
1.9
2.2
382
378
2.4
2.3
314
361
1.9
2.2
36
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 36
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:52
Other Environmental Indicators
Water
Definition
Data Source and Calculation Methods
2018/2019
2017/2018
2018/2019
2017/2018
Quantity
Absolute Cubic Metres
Normalised Cubic Metres
per £m Revenue
Water
consumption
Directly
purchased
water.
Annual volume of water purchased provided for
London, Oxford and India offices. Disclosed UK
data was scaled up using number of employees to
estimate water consumption in the rest of UK, US and
Australia offices.
7,196
6,830
44
42
Quantity
Absolute Tonnes
Normalised Tonnes
per £m Revenue
T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
Waste
Landfill
Definition
Data Source and Calculation Methods
2018/2019
2017/2018
2018/2019
2017/2018
Annual quantity of waste generated in London
offices, Oxford and India are provided. UK disclosed
data scaled up to estimate quantity for operations in
the rest of UK, US and Australia offices.
74.99
67.21
0.46
0.42
General office
waste (which
includes a
mixture of
paper, card,
wood, plastics
and metals) sent
to landfill sites.
Recycled
General office
waste sent
to recycling
facilities
Annual quantity of waste generated in London
offices, Oxford and India are provided. UK disclosed
data scaled up to estimate quantity for operations in
the rest of UK, US and Australia offices.
57.96
61.36
0.36
0.38
Stock Code: BMY
www.bloomsbury.com
37
Bloomsbury AR2019_Front.indd 37
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:52
Our mission
Our purpose and focus is to be an entrepreneurial,
independent publisher of works of excellence and
originality, increasing value to our shareholders.
Our values
Quality publishing - We will ensure Bloomsbury is
entrepreneurial, innovative and independently minded in
its publishing
Ethical dealing - We will act honestly and fairly in
dealings with our colleagues and others and respect the
environment.
Culture - We will foster a collaborative culture that is
respectful and inclusive of our colleagues and encourages
productive contribution from them.
Prosperity - To achieve our mission, we will seek to
enhance prosperity for Bloomsbury staff, authors and
stakeholders.
In other words, let’s be great publishers. Let’s be really
proud of everything we publish as we bring some of the
world’s best writing to readers - informing, entertaining,
teaching – and celebrating our shared humanity.
38
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 38
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:52
E
C
N
A
N
R
E
V
O
G
Governance
40 Board of Directors
42 Directors' Report
47 Corporate Governance
54 Directors' Remuneration Report
“ The Board is working to
ensure that the Company
reviews and updates as
necessary its corporate
governance arrangements
to promote a corporate
culture that is aligned with
the Company’s purpose
and business strategy,
promotes integrity and
values diversity.”
Stock Code: BMY
www.bloomsbury.com
39
Bloomsbury AR2019_Front.indd 39
26563
12 June 2019 3:36 pm
Proof 3
12/06/2019 16:02:52
Board of Directors
Board Officer
Maya Abu-Deeb
General Counsel and Company
Secretary
Maya Abu-Deeb is a qualified solicitor and
joined Bloomsbury in 2008. Maya is responsible
for all legal advice to the Company, and
manages the legal and contracts teams at
Bloomsbury. She is also Company Secretary
and Group Data Protection Officer. Prior to
joining Bloomsbury Maya was in private
practice for ten years, specialising in
commercial, media and intellectual property
law, and advising in respect of both
contentious and non-contentious matters.
Maya read Oriental Studies at St John's College,
Oxford, before completing the Common
Professional Exam and Legal Practice Course at
the College of Law in London.
Chairman
Sir Richard Lambert
Non-Executive Chairman
Sir Richard Lambert joined the Bloomsbury
Board as an Independent Non-Executive
Director in July 2017. He was appointed as
Chairman of the Board, Chair of the
Nomination Committee and a member of the
Remuneration Committee on joining. Sir
Richard is Chairman of the British Museum. He is
also a member of the Board of the Institute for
Government and the Advisory Board of The
Centre for European Reform. Sir Richard joined
the Financial Times after reading history at
Balliol College, Oxford. He was editor of the Lex
column, became New York bureau chief, and
thereafter deputy editor. He was Editor of the
Financial Times from 1991 to 2001. He has
served as a member of the Bank of England
Monetary Policy Committee from 2003 to 2006,
Director General of the CBI from 2006 to 2011,
interim Chairman of The Banking Standards
Review Council from 2013 to 2014, Chancellor
of the University of Warwick from 2008 to 2016
and the senior independent member of the
Foreign and Commonwealth Office’s
Supervisory Board from 2012 to 2017.
Executive Directors
Nigel Newton
Founder and Chief Executive
Jonathan Glasspool
Executive Director
Penny Scott-Bayfield
Finance Director
Nigel Newton was born and raised in San
Francisco. He read English at Cambridge. After
working at Macmillan Publishers, he joined
Sidgwick & Jackson. He left Sidgwick in 1986 to
start Bloomsbury. Bloomsbury floated on The
London Stock Exchange in 1994 and has grown
organically and through acquisitions and
partnerships. Bloomsbury publishes 2,500 books a
year from its offices in the UK, US, India and
Australia.
Nigel Newton serves as President of Book Aid
International, a member of the Man Booker Prize
Advisory Committee and a member of the US-UK
Fulbright Commission. He is Chairman Emeritus of
the Charleston Trust, past Chair of the British
Library Trust, past Chair of World Book Day (2006),
past member of the Publishers Association Council
and Member of the Advisory Committee of
Cambridge University Library.
Jonathan Glasspool was appointed to the
Bloomsbury Board in July 2015. He joined
Bloomsbury in 1999 and is Managing Director
of Bloomsbury’s Academic & Professional
publishing division. He is responsible for
Bloomsbury’s Special Interest publishing and for
Bloomsbury India. Jonathan is Chair of the
Industry Advisory Board at Oxford Brookes
University, a Trustee of Publishing Training
Centre (until July 2019), a member of the
Academic & Professional Board of the Publishers
Association, Chair of Federation of British Artists
and Senior Independent Governor of Bath Spa
University. He has held roles in publishing with
Reed Elsevier in the UK and Asia, the Chartered
Management Institute, and Cambridge
University Press. Jonathan has a first class degree
in English from Trinity College, Oxford, a Master’s
in English from Bristol University and an MBA with
Distinction from Warwick Business School.
Penny Scott-Bayfield was appointed to the
Bloomsbury Board in July 2018, when she joined
Bloomsbury as Group Finance Director. Prior to
this, she was Finance Director of Conde Nast
Britain, and held senior finance roles at Sky Plc
and lastminute.com plc. She started her career
and qualified as Chartered Accountant (FCA)
with Deloitte. Penny Scott-Bayfield has a first class
degree in Maths from University College,
Durham, and has been a judge on the 'Women
of the Future' programme since 2011.
40
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 40
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:52
Non-Executive Directors
John Warren
Senior Independent Director
Chair of the Audit Committee
Jill Jones
Independent Non-Executive Director
Chair of the Remuneration Committee
John Warren joined the Bloomsbury Board in
July 2015 and is the Senior Independent Director,
the Chair of the Audit Committee and the
member with recent and relevant financial
experience. He is a Chartered Accountant (FCA)
and has a wealth of non-executive and audit
committee chairmanship experience with
companies including Rexam Plc, Spectris plc,
Welsh Water, Greencore Group plc, 4imprint
Group plc and Bovis Homes Group PLC. As an
executive director he was Group Finance Director
of WH Smith PLC and before that United Biscuits
(Holdings) Plc.
Jill Jones joined the Bloomsbury Board in July
2013 and is the Chair of the Remuneration
Committee. She was Managing Director of
McGraw-Hill Education, Europe, Middle East and
Africa, until 2016, and from 2008 until 2012 she
was President and CEO (EMEA) of Cengage
Learning EMEA, a leading digital information
and print services global provider for teaching,
learning and research solutions. Before this, she
held positions in Pearson Education, Thomson
Learning, Longman and Prentice Hall. Jill has
worked in Higher Education and Schools
textbook and revision publishing, English
Language Teaching and reference publishing
including the development of large electronic
and primary source material databases. She is a
former Council Member of the Publishers
Association and former Chair of the Academic
Publishers group at the Publishers Association.
Jill holds a BA Hons First Class (Geography) from
University College London, and a Postgraduate
Certificate in e-business from the University of
British Columbia, Canada.
Steven Hall
Independent Non-Executive Director
Steven Hall joined the Bloomsbury Board in
March 2017. He is managing director of IOP
Publishing, a leading publisher of scientific books,
journals and websites, and has worked in
academic publishing for more than 40 years.
He has extensive experience of digital publishing
and has led the development of pioneering
online content databases. He is a member of the
Academic Publishers Council of the UK Publishers
Association and regularly represents the
publishing industry to government and
policymakers in the UK and overseas. He served
for six years on the board of the International
Association of STM Publishers, in his final year as
chair, and was one of three publisher members
of the UK’s “Finch” group.
E
C
N
A
N
R
E
V
O
G
Membership of Board Committees
Date resigned
31 May 2018
16 July 2018
Committee
Board
Audit Committee
Remuneration Committee
Nomination Committee
Members
Sir Richard Lambert
Nigel Newton
Richard Charkin
Wendy Pallot
Penny Scott-Bayfield
Jonathan Glasspool
Jill Jones
John Warren
Steven Hall
John Warren
Jill Jones
Steven Hall
Jill Jones
Sir Richard Lambert
Steven Hall
John Warren
Sir Richard Lambert
Nigel Newton
Jill Jones
John Warren
Steven Hall
Chairman of the Board
Chief Executive
Executive Director
Finance Director
Finance Director
Executive Director
Independent Non-Executive Director
Senior Independent Director
Independent Non-Executive Director
Chair of the Committee
Chair of the Committee
Chair of the Committee
Date appointed
18 July 2017
11 May 1986
1 October 2007
8 April 2011
16 July 2018
23 July 2015
23 July 2013
23 July 2015
1 March 2017
23 July 2015
23 July 2013
1 March 2017
23 July 2013
18 July 2017
18 July 2018
23 July 2015
18 July 2017
20 September 2014
23 July 2013
23 July 2015
1 March 2017
Stock Code: BMY
www.bloomsbury.com
41
Bloomsbury AR2019_Front.indd 41
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Directors’ Report
The Directors present their report and the audited financial
statements for Bloomsbury Publishing Plc and its subsidiary
companies (the “Group”) for the year ended 28 February 2019.
Bloomsbury Publishing Plc is a company incorporated in England and
Wales, company number 01984336, with its principal place of business
and registered office at 50 Bedford Square, London WC1B 3DP.
Bloomsbury Publishing Plc is a premium listed company on the Main
Market of the London Stock Exchange subject to the Listing Rules and
Disclosure and Transparency Rules of the Financial Conduct Authority.
Strategic Report
In accordance with the Companies Act 2006, the Strategic Report on
pages 5 to 37 provides a fair review of the Group’s business and a
description of the principal risks and uncertainties facing the Group.
It contains information on the Group’s performance, business model
and strategy. A summary of the Group’s corporate responsibility
activities is contained in the Corporate Responsibility section.
Overseas activities
The Group has overseas subsidiaries that are based and operate in
North America, Australia and India. These subsidiaries allow locally
employed teams to deliver services locally to authors and customers.
Employees from all Bloomsbury offices can be involved in business
development and travel to various countries worldwide.
Results
The Financial Review on page 12 sets out the Group’s profit before tax
and highlighted items, revenue and profit before tax along with other
Key Performance Indicators. Profit after tax for the Group’s operations
for the year was £9.2 million (2018: £9.1 million).
The Directors recommend a final dividend of 6.75 pence (2018:
6.36 pence) per share payable on 23 August 2019 to Shareholders on
the register on the record date of 26 July 2019. The dividends paid and
proposed by the Company for the year ended 28 February 2019 and
year ended 28 February 2018 are as follows:
Dividend
2019 Final
(proposed)
2019 Interim
Total
2018 Final
2018 Interim
Total
Dividend
per share
Total dividend
Record date
6.75p
1.21p
7.96p
6.36p
1.15p
7.51p
£5.1m 26 July 2019
£0.9m 2 Nov 2018
£6.0m
£4.7m 27 July 2018
£0.9m 3 Nov 2017
£5.6m
Paid/payable
date
23 Aug 2019
29 Nov 2018
24 Aug 2018
30 Nov 2017
Directors
The names of the Directors as at the date of this report, together with
biographical details, are set out in the Board of Directors section on
page 40. The Directors serving on the Board of the Company during
the year were as follows:
Non-Executive Chairman
Sir Richard Lambert
Independent Non-Executive
Directors
Jill Jones
John Warren
Steven Hall
Executive Directors
Nigel Newton
Richard Charkin
Wendy Pallot
Penny Scott-Bayfield
Jonathan Glasspool
Date appointed
in the year
(if applicable)
Date resigned
in the year
(if applicable)
–
–
–
–
–
–
–
–
–
–
–
16 July 2018
–
–
31 May 2018
16 July 2018
–
–
Details of Directors’ service contracts and Directors’ interests in shares,
awards and options are shown in the Directors’ Remuneration Report.
Other than as disclosed in that Report, none of the Directors held any
interest, either during or at the end of the financial year in any material
contract or arrangement with the Company or any subsidiary
undertaking. The terms under which Directors’ contracts may
terminate are described in the Directors’ Remuneration Report on
pages 60 to 61. This includes details of any arrangement by which the
Company would pay compensation to its Directors for loss of office, for
loss of employment or would make payments in respect of a change of
control of the Company. During the year two Executive Directors left
the Company and details of their treatment upon doing so are
included in that Report.
Company policy is to appoint Directors to the Board on the
recommendation of the Nomination Committee. This may be as part of
the progressive refreshing of the Board, to reappoint a Director
retiring by rotation, to fill a vacancy arising as a result of a retiring
Director or as part of measures taken to enhance the skills, experience,
capability and balance of the Board.
In 2016, the Board agreed that all Directors would stand for annual
re-election and this is now required under the 2018 revision of the
Corporate Governance Code. Accordingly, the Chairman on behalf of
the Board, confirms that each Director proposed for re-election at the
2019 Annual General Meeting (“AGM”) continues to contribute
effectively and demonstrate commitment to the role (including
commitment of time for Board and Committee meetings and any
other duties). In addition, the Board believes that each such Director is
important to the long-term success of the Company.
42
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 42
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
At the 2019 AGM, Jill Jones, a Non-Executive Director and current
Chair of the Remuneration Committee, will not stand for re-election.
Leslie-Ann Reed will stand for election as a Non-Executive Director
and her biography is given at page 50 under the report of the
Nomination Committee.
Directors’ indemnities and insurance
In accordance with the Articles, the Company may indemnify the
Directors to the extent permitted by law in respect of liabilities incurred
as a result of their office. The Articles permit the Company to purchase
insurance for its Directors and it has maintained insurance throughout
the year for its Directors and Officer (the Company Secretary) against
the consequences of any actions brought against them in relation to
their duties.
Director conflicts of interest
Procedures are in place to ensure compliance with the Directors’
conflict of interest duties set out in the Companies Act 2006. These
procedures have been complied with during the year and the Board
considers that these procedures operate effectively. Details of any new
potential or actual conflicts must be submitted to the Board for
consideration at the start of each meeting. These may be approved or
the Director may be asked, where appropriate, to withdraw from any
consideration of a matter where a potential or actual conflict exists.
Authorised conflicts or potential conflict matters are reviewed by the
Board on a regular basis.
Charitable and political donations
In addition to the significant sums raised for the benefit of UNHCR
through sales of Sea Prayer by Khaled Hosseini as set out in the
Corporate Responsibility section of the Strategic Report, the Group
made charitable donations of £25,800 in respect of the year (2018:
£24,390). Details of the non-cash support given by the charitable and
voluntary activities of the Company are as set out in the Corporate
Responsibility section.
No political donations were made by the Group during the current or
previous year.
Financial instruments
Details of financial risk management are given in note 24.
Share capital and rights attaching to the
Company’s shares
The share capital of the Company comprises a single class of ordinary
1.25 pence shares (“Ordinary shares”). During the year the Company
made no new allotment of shares, nor were any cancelled. Share
movements during the year are therefore as follows:
As at 1 March 2018
Movement during the year
As at 28 February 2019
Fully paid
Ordinary
shares in issue
75,328,570
–
75,328,570
As at the date of this Directors’ Report, there were 75,328,570 fully paid
up issued shares, all listed on the London Stock Exchange. The Directors
are authorised to issue up to a further 25,107,012 Ordinary shares
until the earlier of the date of next AGM of the Company, currently
17 July 2019, or 17 October 2019 should the date of the 2019 AGM
be delayed for any reason.
Details of the issued share capital can be found in note 21.
No Ordinary shares carry special rights with regard to control of the
Company. At a General Meeting of the Company every member has
one vote on a show of hands and, on a poll, one vote for each share
held. The Notice of General Meeting specifies deadlines for exercising
voting rights either by proxy or by being present in person in relation
to resolutions to be passed at a general meeting.
Under the Articles, any share in the Company may be issued with such
rights or restrictions, whether in regard to dividend, voting, return of
capital or otherwise as the Company may from time to time by ordinary
resolution determine (or, in the absence of any such determination,
as the Directors may determine).
No Shareholder is, unless the Board decides otherwise, entitled to
attend or vote either personally or by proxy at a general meeting or to
exercise any other rights conferred by being a Shareholder if he or she
or any person with an interest in shares has been sent a notice under
section 793 of the Companies Act 2006 (which confers upon public
companies the power to require information with respect to interests
in their voting shares) and he or she or any interested person failed to
supply the Company with the information requested within 14 days
after delivery of that notice. The Board may also decide to apply to the
court for an order under section 794 of the Companies Act 2006 so that
no dividend is payable in respect of those default shares and that no
transfer of any default shares shall be registered. These restrictions end
seven days after receipt by the Company of a notice of an approved
transfer of the shares or all the information required by the relevant
section 793 notice, whichever is earlier.
The Directors may refuse to register any transfer which is not a fully
paid share, although such discretion may not be exercised in a way
which the Financial Conduct Authority (“FCA”) regards as preventing
dealing in the shares of that class from taking place on an open and
proper basis. The Directors may likewise refuse any transfer of a share
in favour of more than four persons jointly.
The Company is not aware of any other restrictions in the transfer of
Ordinary shares in the Company other than certain restrictions that
may, from time to time, be imposed by laws and regulations.
The Company is not aware of any agreements between Shareholders
that may result in restrictions on the transfer of the securities or
voting rights.
E
C
N
A
N
R
E
V
O
G
Stock Code: BMY
www.bloomsbury.com
43
Bloomsbury AR2019_Front.indd 43
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Directors’ Report
Share dilution
In respect of dilution limits, the Company adheres to the “Investment
Association Principles of Remuneration” issued in November 2018. In
particular:
✷ The rules of the Company’s Long Term Investment Plan (“LTIP”)
scheme ensure that:
– commitments to issue new shares or reissue treasury shares
under executive (discretionary) schemes do not exceed 5% of the
issued Ordinary share capital of the Company (adjusted for share
issuance and cancellation) in any rolling ten-year period; and
– commitments to issue new shares or reissue treasury shares,
when aggregated with awards under all of the Company’s other
schemes, do not exceed 10% of the issued Ordinary share capital
(adjusted for share issuance and cancellation) in any rolling
ten-year period.
✷ The Remuneration Committee ensures that appropriate policies
regarding flow-rates exist in order to spread the potential issue of
new shares over the life of relevant schemes so that the limit is not
breached.
The Bloomsbury Employee Benefit Trust may purchase shares in the
market to be used for satisfying vested LTIP awards and other
employee share options. Further details are given below.
Authorities to purchase shares, to allot shares
and pre-emption rights
The Notice of the 2019 Annual General Meeting and explanatory
foreword set out:
✷ an ordinary resolution renewing the authority for the Directors to
allot shares under section 551 of the Companies Act 2006;
✷ special resolutions renewing the authority given to the Directors to
disapply statutory pre-emption rights under section 571 of that Act
to allow shares to be issued for cash or treasury shares to be sold for
cash on a non-pre-emptive basis; and
✷ a special resolution renewing the authority given to the Directors to
purchase the Company’s own shares on the stock market.
Employee Benefit Trust
The Bloomsbury Employee Benefit Trust (“EBT”) may purchase shares
in the market to be used for satisfying LTIP awards and other employee
share options that vest. During the year the EBT held Ordinary shares
of 1.25 pence in the Company as follows:
As at 1 March 2018
Released to satisfy vesting of awards
As at 28 February 2019
Fully paid
Ordinary shares
held by EBT
651,011
150,303
500,708
As at 28 February 2019 and up to the signing of the report, the EBT held
500,708 Ordinary shares of 1.25 pence in the Company being less than
0.7% of the issued Ordinary share capital. The Trustee may vote on
shares held by the EBT at its discretion, but waives its right to a dividend.
Share purchases of own shares
During the year, the Company made no purchases of its own shares.
As at the date of signing of this report, the Company had been notified
of the following interests of 3% or more in the issued share capital of
the Company.
Ordinary shares
number million
% issued
shares1
Institution
JO Hambro Capital Management Ltd
Liontrust Investment Partnership LLP
Majedie Asset Management Ltd
Cannacord Genuity Group Inc
Charles Stanley & Co plc
Standard Life Investment (Holdings) Ltd
1. Based on 75,328,570 issued shares.
7.1
6.9
4.5
4.1
3.8
2.9
9.5
9.2
6.5
5.4
5.2
3.8
44
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 44
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Changes of control
The Group has established close relationships over a long period within
the publishing markets in which it operates. It relies heavily on its
goodwill and reputation and in particular on its reputation as an
autonomous independent publisher with authors, customers and
key employees that could be affected by a change of control.
The Company’s share incentive schemes (see note 22 for further details
of the share incentive schemes) contain provisions relating to a change
of control of the Company following a takeover bid. Under these
provisions, a change of control of the Company would normally be
a vesting event, facilitating the exercise of awards, typically subject
to the discretion of the Remuneration Committee.
Contracts and arrangements essential
to the business
The Group has a diverse base of authors, customers and general
suppliers so that its dependency on any one individual author,
customer or supplier is reduced. Primarily for printed books, the Group
develops longer term relationships with a reduced number of business
partners, printers and distributors to maximise process efficiencies and
economies of scale. Failure of a main supplier could temporarily
disrupt the supply of books to market or result in increased cost
of working whilst alternative arrangements are made.
The Group depends on its reputation which strongly influences
authors and customers in their selection of publisher.
Future developments
The Group intends to continue to develop its range of publishing
businesses and services. Although the primary focus of the Group
is on organic growth, acquisitions in these areas of business will
be considered.
Cautionary statement
Under s417 of the Companies Act 2006, a company’s directors’ report
is required, among other matters, to contain a fair review by the
directors of the group’s business through a balanced and
comprehensive analysis of the development and performance of the
business of the Group and the position of the Group at the period end,
consistent with the size and complexity of the business.
The Directors’ Report together with all sections incorporated into
it by reference has been prepared only for the Shareholders of the
Company. Its sole purpose and use is to assist Shareholders to exercise
their governance rights. In particular, the Directors’ Report has not
been audited or otherwise independently verified. The Company and
its Directors and employees are not responsible for any other purpose
or use or to any other person in relation to the Directors’ Report.
The Directors’ Report contains indications of likely future
developments and other forward-looking statements that are subject
to risk factors associated with, among other things, the economic and
business circumstances occurring from time to time in the sectors,
countries and business divisions in which the Group operates.
These factors include, but are not limited to, those discussed in the Risk
Factors section. These and other factors could adversely affect the
Group’s results, strategy and prospects. Forward-looking statements
involve risks, uncertainties and assumptions. They relate to events and
or depend on circumstances in the future that could cause actual
results and outcomes to differ materially from those currently
anticipated. No obligation is assumed to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Auditor
a) Reappointment of the Auditor
A resolution to reappoint KPMG LLP as Auditor will be proposed at the
forthcoming AGM.
b) Statement as to disclosure of information to the Auditor
The Directors who were in office on the date of approval of these
financial statements have confirmed that, as far as they are aware,
there is no relevant audit information of which the Auditor is unaware.
The Directors have each confirmed that they have taken all the steps
that they ought to have taken as Directors in order to make themselves
aware of any relevant audit information and to establish that it has
been communicated to the Auditor.
E
C
N
A
N
R
E
V
O
G
Stock Code: BMY
www.bloomsbury.com
45
Bloomsbury AR2019_Front.indd 45
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
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 1 to 145 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
We confirm that to the best of our 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 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 21 May 2019.
By order of the Board
Maya Abu-Deeb
General Counsel and Company Secretary
Directors’ Report
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 International Financial Reporting Standards as
adopted by the European Union (“IFRSs as adopted by the EU”) 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 their
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 and
reliable;
✷ state whether they have been prepared in accordance with IFRSs as
adopted by the EU;
✷ 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 parent Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the parent 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, www.bloomsbury-ir.co.uk. Legislation in the United Kingdom
(“UK”) governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
46
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 46
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Corporate Governance
The Board takes its responsibility to achieve sound governance
of the Bloomsbury Group seriously and continuously maintains
high standards of corporate governance that focus on serving
the interests of the Shareholders.
Confirmation of compliance with the Code
The UK Corporate Governance Code edition issued April 2016 (the
“Code”) is published on the Financial Reporting Council’s (“FRC”)
website (www.frc.org.uk). The Company has complied fully throughout
the year with the provisions of the Code in addition to the Listing Rules
of the Financial Conduct Authority.
In July 2018, the FRC published the UK Corporate Governance Code
2018 (the “2018 Code”), which applies to accounting periods
beginning on or after 1 January 2019. For the current financial year
commencing 1 March 2019, the Board is working to ensure that the
Company reviews and updates as necessary its corporate governance
arrangements to promote a corporate culture that is aligned with the
Company purpose and business strategy, promotes integrity and
values diversity in line with the developments in the 2018 Code.
The following sections provide information on how the Company has
applied the Code principles and adhered to Code provisions.
Board and the Directors
Board effectiveness
The Board is responsible to the Shareholders for ensuring that the
Company is appropriately managed and that it achieves its objectives.
The Board determines the strategy for the Group and sets and
monitors targets for the management team to achieve the strategy.
The Board comprises the Non-Executive Chairman, Senior
Independent Director, a further two Independent Non-Executive
Directors, the Chief Executive, the Finance Director and the Managing
Director of the Academic and Professional publishing division. The
biographies of the Directors appear in the “Board of Directors” section
of the Annual Report on pages 40 to 41.
The agendas for all main Board meetings provide standing items for
each Director to provide updates on their areas of responsibility and
items for the chairs of each Board committee to update the Board.
The Board has acted within its Schedule of Matters reserved to it. The
Board has delegated some of its responsibilities to committees. The
three main Board Committees – the Audit Committee, Nomination
Committee and Remuneration Committee – have terms of reference
approved by the Board that can be found on the Company’s website,
www.bloomsbury-ir.co.uk.
Matters considered at Board meetings during the year have included:
✷ review and setting of strategy for the Company’s operations
supported by an in-depth review of the publishing market;
✷ a meeting dedicated to the impact of the 2018 Code combined with
a reassessment of measures around the Company’s values, mission,
consideration of stakeholders and in particular, strategic human
resources matters. The consequences of the 2018 Code continued
to be considered at other meetings;
✷ review of the management accounts, short and long-term forecasts,
key performance indicators and full year forecasts;
✷ approval of the annual and interim results statements;
✷ review and approval of the annual budget;
✷ regular reports by Executive Directors on operational matters
including progress towards the Bloomsbury Digital Resources
2020 targets;
✷ the Bigger Better Bloomsbury initiative announced in May 2018;
✷ the completion of the acquisition of I.B. Tauris & Co. Ltd; and
✷ the management and review of the risks of the Company;
and evaluation of the Board’s own effectiveness.
The Chairman is responsible for the effective leadership of the Board,
with its oversight and strategic role. The Chief Executive is responsible
for the operational success of the Company. A formal statement
describing this division of responsibilities can be found at
www.bloomsbury-ir.co.uk. The role of the Non-Executive Directors
is to constructively challenge and help develop proposals on
strategy and proposed corporate initiatives while providing
oversight of the Executive Directors.
The Directors and Board committees have access to the advice and
services of the Company Secretary, who advises the Board, through
the Chairman, on governance matters and best practices. Directors
also have access to independent professional advice, if required,
at the Company’s expense.
Conflicts of interest procedures
Directors are required to declare any new interests at the start of all
meetings. The Board has reviewed the interests of the Directors and
maintains a register of areas of potential conflict of interest for
Directors. In accordance with the Board’s formal policy, should a
matter arise where there is a risk of a conflict in the Board discussing
matters or making decisions then the Director affected by the conflict
will absent themselves from meeting while the matter is considered.
During the year there were no actual or potential conflicts of interest
arising that required a Director to take this step.
Director independence
The Board considers each of the Non-Executive Directors who served
during the year to be independent in character and judgement and
does not consider that there are any relationships or circumstances
which affect, or could appear to affect, their independent judgement.
E
C
N
A
N
R
E
V
O
G
Stock Code: BMY
www.bloomsbury.com
47
Bloomsbury AR2019_Front.indd 47
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Corporate Governance
Board and committee attendance
The table below shows the attendance of Directors at Board and Committee meetings during the year ended 28 February 2019. Executive
Directors may also have been present at Committee meetings, either in full or part to update members. Nigel Newton attends the Nomination
Committee as a full member.
Date appointed
during the year
Date resigned
during the year
Board
Remuneration
Audit
Nomination
Total number of scheduled meetings
during the year
Executive Directors
Nigel Newton (Chief Executive)
Richard Charkin
Wendy Pallot
Penny Scott-Bayfield1
Jonathan Glasspool
Non-Executive Directors
Sir Richard Lambert (Chairman of the Board)
Jill Jones
Steven Hall2
John Warren
–
–
–
16 July 2018
–
–
31 May 2018
16 July 2018
–
–
–
–
–
–
–
–
–
–
8
8
2
3
5
8
8
8
8
8
6
–
–
–
–
–
–
6
3
6
3
–
–
–
–
–
–
3
3
3
4
4
–
–
–
–
4
4
4
4
1 In addition to the meetings above, Penny Scott-Bayfield attended a Board meeting as an observer prior to joining the Board.
2 Steven Hall became a member of the Remuneration Committee on 18 July 2018.
Board and Committee evaluation
The Board conducts an annual formal evaluation of its performance. In
2019 this was conducted internally. The Board is supportive of the
changes introduced by the 2018 Code, and in line with its
recommendations, next year’s Board evaluation will be undertaken by
an independent outside body.
The 2018/19 evaluation of the Board took place early in the year
starting 1 March 2018. It was led by the Chairman who used
questionnaires to facilitate discussion with each Director to appraise
the performance of the Board and to discuss any improvements
needed to the Board processes. He then reported to the Board where
his findings were considered. These were:
✷ although the standard of Board papers was high, more could be
done to ensure the timeliness of their delivery;
✷ it would be appropriate to further the engagement of members of
senior management in Board meetings;
✷ the Board should engage more on strategy and longer term trends,
with better arrangements for regular in-depth reviews for each
business area;
✷ HR matters continued to require focus, which was not unexpected,
given the continued growth of the business; and
✷ the Board membership continued to strike the right balance of
skills and experience required of Non-Executive Directors against
the need for regular refreshment. If necessary, the Board should
be prepared to be flexible in its intention that an average Non-
Executive Director appointment should last for four years.
During the year, the Board took action to address these findings
and continued to monitor the improvements arising from the
evaluation. In particular, it supported a series of employee
engagement initiatives, which will be sustained in the years ahead.
Towards the end of the year it reviewed its progress, concluding that
the Board continued to work well together, with strong commitment
from the Executive and Non-Executive Directors. Its focus on the Bigger
Bloomsbury initiative, introduced a year ago, had produced positive
results. That initiative would continue to help shape the strategic
direction for the longer term. The engagement of senior management
in Board meetings and more engagement by the Board on strategy
and longer term trends remained areas of focus. A new area was
added, focusing on the Company’s relationship with its authors.
Board committees are evaluated annually against their terms of
reference and against adherence to relevant regulations such as the
Code, as well as how they operate as an effective committee. They
consider the evaluations and make recommendations to the Board on
any changes needed to related Board processes and their terms of
reference. During 2019, the Board committees also considered their
roles in the light of the changes emerging out of the 2018 Code and
how this impacted on their roles, responsibilities and the skills and
experience of committee members. In the year to 29 February 2020,
the Board and its committees will consider whether amendments are
needed to these terms of reference as a result.
48
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 48
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
The Chairman
The present Chairman, Sir Richard Lambert, joined the Board in
July 2017 and was considered independent upon his appointment.
During 2018, the Senior Independent Director evaluated his
performance through confidential discussions with the other
Non-Executive Directors and a one-to-one interview with the
Chairman. The outcome was reported to the Board who agreed
with the assessment that the Chairman continued to lead the Board
in an effective and positive manner.
Directors
The Board considers that each of the Directors proposed for
re-election at the 2019 AGM continues to contribute effectively, and to
demonstrate commitment, to their roles. The Board evaluation process
is designed to identify whether each Director has refreshed their skills
and knowledge sufficiently for their roles and whether there is
anything that the Company can assist them with in the performance
of their duties. The induction process is designed to ensure that on
appointment, Directors are provided with support and information
about Bloomsbury. During 2019, Penny Scott-Bayfield joined the Board
and was supported by an induction programme of introductory
meetings with Executive and Non-Executive Directors, senior
management and advisers, including joining the Board for a
strategic retreat prior to her formal appointment
During the year the External Auditor KPMG and the external
remuneration consultants New Bridge Street provided updates
on developments in corporate governance, remuneration,
auditing and financial reporting standards.
Relations with Shareholders
The Board, led by the Chairman, is responsible for ensuring an open
dialogue with Shareholders based on the mutual understanding of
objectives. The Annual Report, interim reports, AGM, market updates
and post-results announcement presentations are the principal means
through which the Company communicates its strategy and
performance to Shareholders. All Shareholders are welcome at the
AGM, which includes presentations on the business and an
opportunity to ask questions. The Chairmen of the Audit,
Remuneration and Nomination Committees attend and are available
to answer questions.
The Company maintains an active dialogue with its institutional
Shareholders and City analysts through a planned programme of
investor relations. Twice a year there are formal presentations of
results, followed by a series of post-results meetings with Shareholders.
The presentations are made available at www.bloomsbury-ir.co.uk.
The outcome of these meetings is reported to the Board. This includes
feedback from individual Directors and from discussions by the
Company’s corporate broker or public relations representative with
Shareholders and City analysts. This is used to help review and develop
Bloomsbury’s procedures. In addition, the Chairman invites significant
Shareholders to meet with him to discuss any matter of interest or
concern. During the year, the Chairman met with one Shareholder
and reported the outcome to the Board.
Board Committees
The operations of the Nomination and Audit Committees are detailed
below. Those of the Remuneration Committee are set out in the
Directors’ Remuneration Report on page 72.
Nomination Committee
The Committee comprises the Non-Executive Chairman of the Board,
who chairs the Committee, the three Independent Non-Executive
Directors and the Chief Executive. The Committee’s terms of reference
are agreed by the whole Board, and are available on the Company’s
website www.bloomsbury-ir.co.uk. Its role is to review the composition
of the Board, consider succession planning and recommend
candidates to the Board for formal appointment as Directors. The
Board appointment process is as follows:
✷ the annual evaluation of Board effectiveness enables the Committee
to identify any gaps in the skills and experience needed or forecast
in anticipation of Director resignations;
✷ the Committee then carries out a more detailed consideration of the
Board’s structure, balance, and succession planning needs;
✷ an independent external recruitment consultant is appointed who
performs a search to identify candidates meeting criteria agreed
with the Nomination Committee. The external consultant carries
out initial interviews with candidates and carries out background
research on them to formulate a shortlist;
✷ one or more Directors interview each candidate and feed back to
the external consultant on the interview evaluation of the candidate;
✷ references are taken and other background checks are made on
candidates;
✷ the Nomination Committee sitting together selects the final
candidate and makes a recommendation to the Board; and
✷ the Board has the final decision on appointing a candidate.
During 2018, the Nomination Committee completed the process
of selecting the new Group Finance Director, Penny Scott-Bayfield.
The recruitment firm Odgers Berndtson had complied a list of
candidates. The Chief Executive undertook the first round of interviews
with all candidates and Committee members sitting together
conducted the second round. Thereafter, there were meetings with
individual Executive Directors to seek their opinions on candidates who
had made it through the second round. The outcome of these
meetings were fed back to the Committee to inform its decision before
Penny Scott-Bayfield was recommended to the Board as a suitable
candidate for the role.
In addition, the Committee also started the process of recruiting
a Non-Executive Director to replace Jill Jones, who would not be
standing for re-election at the 2019 AGM. The Willis Partnership was
appointed to handle the search for her replacement following an
evaluation of the Board’s needs and the particular skills required.
The selection process outlined above was followed. In May 2019 the
Nomination Committee recommended, and the Board approved,
the appointment of Leslie-Ann Reed to the Board, subject to her
election at the 2019 AGM.
E
C
N
A
N
R
E
V
O
G
Stock Code: BMY
www.bloomsbury.com
49
Bloomsbury AR2019_Front.indd 49
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Corporate Governance
If her election is approved, Leslie-Ann Reed will be a member of the
Remuneration Committee and Audit Committee. She is an
Independent Non-Executive Director and Chair of the Audit
Committee of the AIM-listed company Learning Technologies Group
plc, and a Non-Executive Director of the German-listed company ZEAL
Networks SE where she is Vice Chair of the Supervisory Board and Chair
of the Audit Committee. Until May 2018 she was a Non-Executive
Director and Chair of the Audit Committee of the London-listed
publisher Quarto Group, Inc.
Other matters considered by the Committee during the year included
the gender balance for direct reports to senior management,
succession plans for below board senior management, diversity and
inclusion in the Bloomsbury workforce and whether the Board should
consider the use of an external facilitator for its annual evaluation.
The Committee supports the Board in overseeing the Company's
diversity and inclusion policy and related HR strategies for the
purposes of developing a strong and diverse talent pipeline for the
future through recruitment, retention and development strategies
designed to promote all aspects of diversity.
Board diversity
The Board aims for at least one-third, or the nearest number to a third,
of Directors on the Board to be women. At present it has two women
among its seven Directors. New appointments are selected by the
Nomination Committee using independent search consultants based
on merit as the best candidate for the role. The Board believes it
supports a diverse pipeline of senior management with respect to
gender balance. A majority of the Executive Committee and other
senior managers are women. More details can be found in the
Company’s Gender Pay Gap Report on its website
www.bloomsbury-ir.co.uk.
Re-election of Directors
In 2016, the Board decided to follow best practice by requiring all
Directors to retire at each AGM and stand for re-election. Annual
re-election is now a requirement under the 2018 Corporate
Governance Code for a FT SmallCap company such as Bloomsbury
Publishing Plc. The Articles of the Company would otherwise require all
Directors to be subject to reappointment by the Shareholders at the
first Annual General Meeting after their appointment and thereafter at
intervals of no more than three years.
Recent Non-Executive Director appointments by the Board have been
for periods of up to four years. In 2016, the Board concluded that it
would be best served by a policy of progressive refreshing of the
Non-Executive Directors, anticipating annual appointments of new
Non-Executive Directors and an average duration of such
appointments of four years. During 2018 the Board reviewed this policy
and decided it remained appropriate given that it retained flexibility to
extend an appointment beyond four years where the circumstances
made it appropriate to do so.
The notice periods by the Company of the Directors are set out in the
Directors’ Remuneration Report on pages 60 to 61.
Audit Committee
Operation of the Audit Committee
The Committee comprises three Independent Non-Executive Directors.
The Chair of the Committee is John Warren, a Fellow of the Institute of
Chartered Accountants in England and Wales. The Board is satisfied
that his experience and qualifications are sufficient for him to meet the
experience and qualification requirements for at least one member of
the Audit Committee to hold recent and relevant financial experience
as required by the Code and Listing Rules. In addition, the other
Committee members are experienced in the field of publishing,
enabling it to have competence relevant to the sector in which the
Company operates.
The Committee typically invites the External Auditor, the Head of
Internal Audit, the Chairman of the Board, the Group Finance Director
and the other Executive Directors to attend meetings. There is a
standing item on the agenda for the External and Internal Auditors to
meet the Committee alone without management present, enabling
Committee members to share any concerns that they may have.
The terms of reference of the Committee can be found on the
Company’s website, www.bloomsbury-ir.co.uk, and set out the role
and authority of the Committee. Responsibilities include:
✷ to monitor the integrity of the financial statements of the Company
and any formal announcements relating to the Company’s financial
performance, reviewing significant financial reporting judgements
contained in them;
✷ to review the Company’s internal financial controls and to review
the Company’s internal control and risk management systems;
✷ to monitor and review the effectiveness of the Company’s internal
audit function;
✷ to make recommendations to the Board, for it to put to the
Shareholders for their approval in a general meeting, in relation
to the appointment, reappointment and removal of the
External Auditor and to approve the remuneration and terms of
engagement of the External Auditor;
✷ to review and monitor the External Auditor’s independence
and objectivity and the effectiveness of the audit process, taking
into consideration relevant UK professional and regulatory
requirements;
✷ to develop and implement policy on the engagement of the
External Auditor to supply non-audit services, taking into account
relevant ethical guidance regarding the provision of non-audit
services by the external audit firm;
✷ to report to the Board, identifying any matters in respect of which
it considers that action or improvement is needed and making
recommendations as to the steps to be taken; and
✷ to report to the Board on how it has discharged its responsibilities.
The Committee’s annual evaluation review considered that the
Committee was acting satisfactorily.
50
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 50
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Bloomsbury’s IP to third parties, as stated in note 2g to the financial
statements. The revenue recognised from these licences in any one
period reflects the value of contracted performance obligations
satisfied in that period. The revenue recognition treatment for more
complex deals is reviewed and agreed with the Group Finance team
before the contract is signed; and
✷ that the Group’s annual and interim financial statements, after
review and taken as a whole, are fair, balanced and understandable,
and provide the necessary information to assess the Group’s
position and performance, business model and strategy. In addition,
it considered that they met the necessary legal and regulatory
requirements. It so advised the Board.
External Auditor
The Audit Committee has primary responsibility for making a
recommendation on the appointment, reappointment and removal
of the External Auditor and approving its remuneration and terms of
engagement.
The role of External Auditor was tendered following the 2013 AGM and
the Board appointed KPMG LLP as External Auditor for the Group and
for the Company for audits for the year ended 28 February 2014 and
onwards. The detailed tender process followed is set out in the Annual
Report for that year. The Group will continue to comply with the
relevant tendering and auditor rotation requirements applicable
under UK and EU regulations, which require the next external audit
tender to occur for the year ending 28 February 2024. The External
Auditor is required to rotate the audit partner responsibility for the
Group audit every five years. During the year, the then partner John
Bennett, was joined at Committee meetings by the new audit partner,
Sarah Styant, to ensure a smooth handover of responsibilities for 2019.
In the same period, the Committee also assessed the effectiveness of
the external audit process and were satisfied with the scope, direction
and outcome of work. In forming its view the Committee considered:
✷ the quality of audit work undertaken and resulting findings;
✷ the scope of the Auditor’s work and whether the Auditor deployed
sufficient resources to complete their agreed programme; and
✷ the independence and objectivity of the External Auditor.
The Committee was satisfied that KPMG was an effective External
Auditor and recommended to the Board that the reappointment of
KPMG as External Auditor be put to the Shareholders at the 2018 AGM.
The External Auditor’s terms of engagement and remuneration were
approved. Details of the amounts paid to KPMG are provided in note 4
to the Accounts.
E
C
N
A
N
R
E
V
O
G
Activities of the Committee during the year
During the year, among other matters, the Committee considered:
✷ the impact of adopting accounting standards – these are covered
in more detail under the heading of Significant Financial Reporting
Matters below;
✷ the annual and interim statements and associated announcements,
recommending them to the Board for approval;
✷ the External Auditor’s audit strategy for the year, agreeing the risks
identified therein, noting that the acquisition of I.B. Tauris & Co.
Ltd. represented potential new risks that needed to be investigated
and the impact from the adoption of IFRS 15 and IFRS 9, as further
described below;
✷ its oversight role of monitoring and evaluating the Internal
Audit function supplied from within Bloomsbury, along with
management’s responses to its recommendations. It has since
considered that it would be appropriate to co-source the function
using both internal and external resources, while retaining its
oversight role, and the Committee has approved the engagement
of Grant Thornton for this purpose;
✷ at each meeting, the subject of internal controls and associated risk
management to assess the scope and effectiveness of these matters.
The approach to these matters is further elaborated on below while
the principal risks facing the Company are described in the Risk
Factors section of the Annual Report on page 25, which also explains
how each risk is managed and mitigated. These are reported to the
Board;
✷ the content of the Company’s risk register as part of the processes
around risk mitigation, including updates on the impact of Brexit
and copyright-related risks and the controls in place to mitigate
possible losses;
✷ a report on the latest Corporate Governance changes arising out
of 2018 Code and the measures that would be taken to achieve
compliance; and
✷ Whistleblowing procedures for staff to raise concerns in confidence.
In line with the changes in the 2018 Code, the Board will take on this
responsibility during the current year.
Significant Financial Reporting Matters
The Committee considered:
✷ the impact of adopting IFRS15 and the resulting changes including
disclosure requirements. The key changes related to the timing
of revenue recognition for printed books, and on subscription
income for Perpetual Access digital products and licences and other
income. Further details are supplied in note 2w to the Accounts;
✷ the impact of adopting IFRS9 in place of IAS39, for which the key
change was the valuation of trade receivables, partly offset by a
credit on respect of deferred tax. Details are disclosed in note 2x
to the Accounts;
✷ the treatment of goodwill, in particular arising from the acquisition
of I.B. Tauris & Co. Ltd;
✷ the treatment of rights and services revenues from licences over
Stock Code: BMY
www.bloomsbury.com
51
Bloomsbury AR2019_Front.indd 51
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Corporate Governance
External Auditor non-audit services
The Committee has approved a formal policy on the provision of
non-audit services to safeguard the independence and objectivity
of the External Auditor and reviews the level of non-audit fees
relative to audit fees. The full policy is found on the website
www.bloomsbury-ir.co.uk. A list has been approved by the Committee
of services that the External Auditor is prohibited from undertaking.
During 2019, KPMG did not supply any non-audit services to the Group.
Internal control and risk management
The Code requires the Directors to assess at least annually the
effectiveness of the Group’s systems of internal control, which include
financial, operational and compliance controls, and the system of risk
management. The Audit Committee reviews the systems and controls
while the Board considers the overall state of the risks to the business,
the Group’s appetite for risk and the countermeasures in place. The
Board retains overall responsibility for the Group’s internal controls
and for reviewing their effectiveness and for approving all related
policy. These internal controls are designed to manage rather than
eliminate risk, and can only provide reasonable, and not absolute,
assurance against material loss.
The Board has put in place an ongoing process for identifying,
evaluating and managing the significant risks faced by the Group. This
process has been in place for the year under review and up to the date
of approval of this Annual Report. The process is regularly reviewed by
the Audit Committee on behalf of the Board to ensure that the
procedures implemented continue to be effective and, where
appropriate, recommendations are made to management to improve
the procedures. The Company’s system of internal financial control
aims to safeguard the Group’s assets, ensures that proper accounting
records are maintained, that the financial information used within the
business and for publication is reliable, that business risks are identified
and managed and that compliance with appropriate legislation and
regulation is maintained. The Board confirms it has monitored the
Group’s risk management and internal control systems and carried
out a review of their effectiveness covering all material controls,
including financial, operational and compliance controls.
Internal control and risk management framework
The preparation of the consolidated financial statements of the
Company is the responsibility of the Finance Director and is overseen
by the Audit Committee with overall responsibility resting with the
Board. This includes responsibility for ensuring appropriate internal
controls are in place over financial reporting processes and related IT
systems. The Audit Committee monitors the risks and associated
controls over financial reporting processes, including the
consolidation process.
The Risk Factors section of the Annual Report on page 25 sets out how
the Board has taken account of the Group’s current position and
principal risks and how it has assessed the prospects of the Group over
a period of three years. The Board has a reasonable expectation that
the Group will be able to continue in operation and meet its liabilities
as they fall due over the assessment period.
Relevant features of the Company’s system of internal controls and
risk management in relation to the financial reporting process and
preparation of the Group financial statements include:
✷ Organisational culture: The Company has a highly skilled,
professional and committed workforce. The Board is committed
to developing a culture of openness, integrity, competence
and responsibility. The Board concentrates mainly on strategic
and significant organisational issues, approving objectives
and monitoring, at a high level, the financial and operational
performance against objectives.
✷ Organisational structure: The One Global Bloomsbury structure
comprises the worldwide publishing divisions supported by Group
functions (finance, IT, production, sales and marketing) which
provide an internal control service to the business as internal
control pillars within the Group’s internal control framework.
✷ Viability Statement: The Risk Factors section of the Annual Report
sets out how the Board has taken account of the Group’s current
position and principal risks and undertaken a robust assessment
of the prospects of the Group over a period of three years. The
Board has a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due over the
assessment period.
✷ Risk and control review: The Executive Committee (which
comprises the divisional and Group function heads and Executive
Directors) maintains Group level and Group function level risk
analysis and control assessments for each risk. This ensures that risks
and control issues from around the Group worldwide are reported
openly to the senior management team and addressed. The Board
has regularly reviewed the significant Group and functional risks
to ensure appropriate action is taken to address the risks. The
Audit Committee reviews the risks, in particular the financial risks
and issues that could impact on reporting, when considering the
financial statements.
✷ Financial internal control and risk review: The Finance Director
formally reviews the internal financial controls, taking account of
the risks within the financial information systems, and reports the
findings of this review to the Audit Committee. Analytical review of
operating results and detailed control questionnaires completed
for the publishing divisions and overseas offices supplement
management’s knowledge of the business for the evaluation of the
risks and assessment of the internal financial controls. The Audit
Committee also receives reports on the internal controls and risks
provided by the Internal Auditor. The Audit Committee receives
other reports from management relevant to the internal financial
controls such as reports on the progress of key projects.
52
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 52
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Significant failings or weaknesses
in the internal controls
Following its review, the Committee concluded that the systems of risk
management and internal controls are adequate for Bloomsbury,
including all the Group companies. There were no significant internal
control weaknesses identified that challenged the Group in achieving
its objectives. However, the Committee agreed that the control
assessment should be changed to include a “no-deal” Brexit scenario
and an increase in risks regarding “IP and copyright” and “Open
Access” on the Group risk matrix.
Maya Abu-Deeb
General Counsel and Company Secretary
E
C
N
A
N
R
E
V
O
G
✷ Authority levels: The Board maintains a detailed register of
delegated authorities and sets the level of authority required, before
Board approval is needed, to commit the Company or to undertake
transactions. It also approves budgets and other performance
targets. The publishing divisions and Group functions operate
within these authority levels and budgets. The Executive Directors
determine the authority to be delegated to individual managers.
✷ Financial management reporting: The Board approves the
annual Group budget. Sales are reported daily, weekly and monthly.
Financial results of the business operations are reported monthly
and compared to budget and forecasts. Detailed forecasts for the
Company are updated regularly and reviewed by the Board.
✷ Book title acquisition procedures: Established procedures, such
as the review and approval by an Executive Director of acquisition
proposals of rights to new books, are operated within set authority
limits and used for transactions in the ordinary course of business.
Acquisitions exceeding delegated authority limits require approval
by the Board. Significant acquisitions of companies and businesses
are approved by the Board. The Board has set authorised limits
for the total author advances held on the Statement of Financial
Position as a percentage of net assets and for the total value of
committed but unpaid advances.
✷ Accountability: The Company has clearly defined lines of
responsibility headed by the Chief Executive and Executive
Committee to control the publishing divisions and business
functions. Detailed operational and financial performance data are
monitored by supervisory management to ensure the performance
of operations is in line with targets. The reasons for variances
and underperformance are established by supervisory line
management and followed up with managers and staff.
✷ Overseas offices: Each overseas office has a local manager or
managing director who is responsible for operational effectiveness
and local internal controls. Accounting for the Group is centralised
and overseas subsidiaries hold limited cash balances. Senior
managers and Executive Directors regularly visit the overseas
offices and the finance function conducts operational review visits
to review the procedures. The Board has implemented a Group
Whistleblower Policy and an Anti-bribery and Corruption Policy.
✷ Internal audit: For the year 2018/19, internal control questionnaires
(“ICQ”) were used to assess the internal controls across the Group
worldwide at least twice annually. Outcomes of assessments were
reported regularly to senior management and at each Audit
Committee meeting. The Audit Committee considers reports from
External and Internal Audit to ensure that adequate measures are
being taken by management to address risk and control issues.
Stock Code: BMY
www.bloomsbury.com
53
Bloomsbury AR2019_Front.indd 53
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Directors’ Remuneration Report
Annual Statement
Dear Shareholder
I am delighted to present the Directors’ Remuneration Report (the
“Report”) for Bloomsbury Publishing Plc for the year ended 28
February 2019. The Report has been prepared on behalf of the
Bloomsbury Board by the Remuneration Committee (the
“Committee”) and has been approved by the Board.
Outline of the Remuneration Report
The Report is split into the following two sections:
✷ Part A, the Remuneration Policy Report, which sets out the
Remuneration Policy for the Executive and Non-Executive Directors;
and
✷ Part B, the Annual Report on Remuneration, which discloses how
the Remuneration Policy was implemented for the year ended
28 February 2019 and will be implemented for the year ending
29 February 2020.
The Directors’ Remuneration Policy (the “Remuneration Policy”)
was approved by Shareholders at the 2017 Annual General Meeting,
with strong support from our shareholders with 99.5% of votes cast in
favour with the expectation that the Policy would remain in place until
the next triennial binding vote. The Committee keeps the Policy under
regular review and considers it continues to incentivise the sustainable
delivery of the Board’s strategy, strong financial performance and the
creation of long-term Shareholder value. No policy changes were
proposed for 2019 and therefore it will next be subject to a binding
vote at the 2020 AGM.
The Annual Report on Remuneration will be subject to an advisory
Shareholder vote at the forthcoming AGM on 17 July 2019. It provides
details of the remuneration earned by Directors in the year ended
28 February 2019.
Developments in 2019
The Committee is considering the implications of the recent changes
to the UK Corporate Governance Code and subsequent updates
from the institutional investor bodies for our Remuneration Policy.
We intend to reflect any changes required under the Code and to
ensure our Remuneration Policy takes into account the best practice
expectation of institutional investors when the Remuneration Policy
is next subject to a shareholder vote at the 2020 AGM.
Performance and reward for 2019
The Group delivered a strong performance over the year to February
2019 which was reflected in the financial results. Group revenues rose
by 1% to £162.7 million and profits before taxation and highlighted
items increased by 9% to £14.4 million, ahead of market expectations.
Profits before taxation were up by 3% to £12.0 million. The final
dividend of 6.75p per share, if approved by Shareholders at the AGM,
will mean that Bloomsbury will continue a record of dividend growth
over 24 consecutive years.
Annual bonus
Annual bonus payments to the Executive Directors are based on a
combination of financial and strategic measures. The majority (70%) of
the bonus is based on financial measures, (the “Profit Target bonus”),
the remainder (30%) is based on strategic measures (the “Strategic
Objectives bonus”).
Bonuses for the Executive Directors for the year to 2019 (the “2019
Bonuses”) paid out at an average rate of 91.5% of the maximum bonus
opportunity. The Profit Target element of the bonus was achieved in
full, reflecting the strong financial performance of the business and
achievement against the strategic objectives, and resulted in an
average outturn of 72% of the maximum opportunity for this element
of the bonus. Full disclosure of the targets set for the bonus and the
achievement against each target is disclosed in the Annual Report on
Remuneration.
The basis of the 2019 Bonus plan remains unchanged from the
previous year: the Strategic Objectives bonus is assessed against five
strategic targets set by the Committee with different weightings
applied to each of these targets based on the relative importance to
each respective Director; and the Profit Target bonus is assessed
against stretching financial threshold targets. For 2019, the Committee
set a stretching threshold target for profit before taxation and
highlighted items (“Adjusted profit”) of £14.4 million, taking account
of the City analysts’ forecasts and other factors. Profit above the
threshold accrues into a bonus pool (until the pool becomes fully
funded). The level of outperformance was sufficient to fund the
profit-related bonus at the maximum level.
Long Term Incentive Plan (“LTIP”) grants and vesting
In July 2018, LTIP awards were granted to Executive Directors based on
100% of their annual salary. These were granted on the basis of 50%
on an earnings per share (“EPS”) performance condition and 50% on
a return on capital employed (“ROCE”) performance condition. These
conditions were the same as for those awards granted in July 2017.
The LTIP awards granted on 7 June 2016 (“2016 Award”) and due to
vest in June 2019 were subject to EPS and to total shareholder return
(TSR) performance conditions. Up to half of the award could vest
under each of these two performance conditions. Annualised EPS was
required to exceed the retail price index (RPI) over the three-year
period by 3 percent before a minimum vesting under the EPS
performance condition. The TSR performance condition required the
Company to rank in at least the median quartile before any vesting
was possible, but subject to annualised EPS in excess of RPI being equal
or greater than 0% (the “Underpin”). The Company ranked in the
upper quartile under the TSR condition but failed the Underpin test.
Accordingly, no shares will vest in June 2019 under the 2016 Award.
The outcome of the 2016 Award is also shown in tabular form under
Part B of the Remuneration Report at pages 65 and 66.
54
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 54
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Remuneration arrangements for 2020
For the year ending 29 February 2020, the Committee has decided
that:
✷ In line with the Group’s general workforce, an annual increase in
basic salaries of 2.5% has been applied to the Executive Directors
and Chairman.
✷ There will be no changes to other elements of fixed pay (i.e. benefit
and pension provision).
✷ The structure and quantum of the annual bonus arrangement
continues to work well as an incentive. Therefore, the maximum
bonus potential will remain at 100% of salary and the structure of
the 2020 annual bonus will be broadly similar to that operated for
2019; with 70% based on profit before tax and 30% on strategic
objectives. Within the strategic objectives part of the bonus
arrangements, the Committee decided that it was appropriate to
add an objective of employee engagement. The Committee will
have the discretion to reduce any payment under the bonus if they
feel payment is not merited based on the overall performance of
the Group or if the bonus is not considered affordable by the Board.
A clawback provision will operate in respect of the annual bonus for
the Executive Directors.
✷ The current LTIP provides strong alignment between the Executive
team and Shareholders. No changes are proposed in respect of
either the operation of the plan or the quantum of awards made.
The performance measures attached to awards made in 2020 will
continue as for 2019; 50% of the awards will continue to be based
on earnings per share (“EPS”) growth relative to RPI while the
other 50% will be based on stretching targets for Return on Capital
Employed (“ROCE”). To ensure a continued focus on shareholder
return, the ROCE award will be subject to an EPS underpin at the
discretion of the Committee. Where performance under any of
these measures is considered unacceptable, the Committee may
reduce an award, including to zero. In line with best practice, LTIP
awards will be granted subject to a two-year post-vesting holding
period. The holding period will continue to apply should an
Executive Director leave Bloomsbury.
✷ It will review the Remuneration Policy approved at the 2017 AGM.
As part of this review, the Committee will consider the implications
for the Remuneration Policy of changes made recently to the UK
Corporate Governance Code and the subsequent guidelines issued
by the main institutional investor bodies. We intend to reflect any
changes required at the next binding policy vote at the 2020 AGM.
Executive Director changes
During the year, Richard Charkin and Wendy Pallot resigned and we
welcomed Penny Scott-Bayfield as our new Group Finance Director. In
line with the Remuneration Policy, neither retiring Director had any
payment made to him or her in lieu of notice or on any ex gratia basis.
All Performance Share Plan (“PSP”) awards and Sharesave options
lapsed. All sundry benefits such as life insurance and family health care
also lapsed. The Remuneration Committee decided to exercise its
discretion in respect of annual bonuses in each case and details are
given in the Remuneration Report on page 63.
Richard Charkin continues to be available to work for the Group in his
capacity as a consultant on specific projects due to his exceptional
experience in international publishing. There has been no
undertaking made either before or following his departure agreeing
any minimum commitment to his services to the Group. However,
prior to his departure it was agreed that any consultancy arrangement
would not exceed a maximum of 44 days over the 12 months following
his departure, or over any subsequent 12-month period.
There are no further disclosures that the Remuneration Committee
believe should to be brought to the attention of Shareholders under
the Remuneration Policy in respect of the departure of either Richard
Charkin or Wendy Pallot.
On appointment to the role of Group Finance Director, Penny
Scott-Bayfield was recruited on a salary below that of her predecessor,
and below market, on the basis that once her expertise and
performance were proven and she was fully operating in the role of
Group Finance Director, her salary would be increased, in line with the
Group’s recruitment approach. Penny’s salary increase for the
upcoming financial year will be in line with the wider population, with
the intention that a review of Penny’s salary will be undertaken and
any increase would be effective from July 2020.
Exercise of Committee’s discretion
The variable pay outcomes are consistent with the assessment of
outturns against the performance pay measures. The Committee has
not exercised discretion to amend the payout or vesting outcomes for
any of the Executive Directors. It exercised its discretion in respect of
departing directors as disclosed under Executive Director changes,
above.
In the pages that follow are details of:
✷ The annual report on remuneration for 2019;
✷ Our approach to the application of the Remuneration Policy in 2020;
and
✷ The existing Remuneration Policy, approved at the 2017 AGM.
We hope you will find this 2019 Remuneration Report clear and helpful,
and of course welcome Shareholder feedback.
Jill Jones
Chair of the Remuneration Committee
21 May 2019
E
C
N
A
N
R
E
V
O
G
Stock Code: BMY
www.bloomsbury.com
55
Bloomsbury AR2019_Front.indd 55
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Directors’ Remuneration Report
PART A – REMUNERATION POLICY REPORT
Introduction
The Committee has adopted the principles of good governance
relating to Directors’ remuneration as set out in the UK Corporate
Governance Code issued in April 2016 (the “Code”). This Report,
together with the Annual Report on Remuneration, complies with the
Companies Act 2006 (the “Act”), the UKLA Listing Rules of the Financial
Conduct Authority and Directors’ Remuneration: the Large and
Medium-sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013. The Company has complied with the
provisions of the Code relating to Directors’ remuneration throughout
the year. In July 2018 the Code was revised (the “2018 Code”). While the
revised Code applies to the Company’s Report and Accounts in the
year ending 29 February 2020 and onwards, the Committee has
nevertheless sought to incorporate its requirements where
appropriate.
In determining the Remuneration Policy the Committee applies the
key principles that remuneration should:
✷ attract and retain suitably high calibre Executive Directors and
ensure that they are motivated to achieve the highest levels
of performance including delivering strategic initiatives and
objectives;
✷ align the interests of the Executive Directors with those of the
Shareholders and wider stakeholders; and
✷ not pay more than is necessary.
Consideration of Shareholder views
The Committee considers Shareholder feedback received in relation to
the AGM each year. This feedback, plus any additional feedback
received during any meetings from time to time, is then considered as
part of the Group’s annual review of the Remuneration Policy. In
addition, the Remuneration Committee will seek to engage directly
with major Shareholders and their representative bodies should any
material changes be proposed to the Remuneration Policy. Major
Shareholders and representative bodies were consulted in early 2017
about the current policy, which runs for three years until 2020. During
2019, the Committee anticipates engaging with Shareholders
regarding the Remuneration Policy to be proposed at the 2020 AGM.
Consideration of employment conditions
elsewhere in the Group
The Committee considers the general basic salary increase for the
broader employee population when determining the annual salary
increases for the Executive Directors. The relative increase in CEO pay
for the year under review, as compared with that of the general
workforce, is set out in the Annual Report on Remuneration. The
Committee also considers environmental, social and governance
issues and risk when reviewing executive pay quantum and structure.
New reporting regulations introduced the requirement to disclose our
CEO pay ratio for financial years beginning after 1 January 2019. The
Committee will be reviewing the relevant data and considering the
most practical method for us to produce this during 2019 in readiness
to report the ratio as part of the Report for 2019, published in May 2020.
56
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 56
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Remuneration Policy for Executive Directors – Summary policy table
The following table summarises each element of the remuneration policy for the executive directors, explaining how each element operates and
links to the corporate strategy.
Element
Salary
Annual
bonus
Purpose and link to strategy
Operation
Maximum
Performance targets
✷ Reflects the value of the
individual and their role
normally effective 1 March
✷ Reviewed annually and
✷ No maximum base salary
✷ N/A
✷ Reflects skills and
✷ Takes periodic
experience over time
✷ Provides an appropriate
level of basic fixed income
avoiding excessive
risk-taking arising from
over-reliance on variable
income
comparisons against
companies with similar
characteristics and sector
comparators
or maximum salary
increase operated
✷ Annual increases are
typically linked to those of
the wider workforce
✷ Where salaries are below
market levels (e.g. upon
promotion or a change
of role) higher increases
may be awarded where
appropriate
✷ Incentivises annual
✷ Paid in cash
✷ 100% of salary
✷ Group profit (majority)
✷ Not pensionable
delivery of financial and
strategic goals
✷ Maximum bonus only
payable for achieving
demanding targets
✷ Strategic objectives,
including personal
objectives (minority).
Clawback provisions
operate for Executive
Directors
E
C
N
A
N
R
E
V
O
G
Pension
✷ Provides modest
✷ Defined contribution/
✷ Up to 15% of salary
✷ N/A
retirement benefits
✷ Opportunity for Executive
Directors to contribute to
their own retirement plan
salary supplement or cash
payment in lieu of pension
contribution
Other
benefits
✷ To aid retention and
recruitment
Long-term
incentives
✷ Aligned to main strategic
objectives of delivering
sustainable profit growth
and Shareholder return
✷ Company car or car
allowance and the
provision of private
medical/permanent
health insurance and life
assurance
✷ Annual grant of nil cost
options or conditional
awards which normally
vest after three years
subject to continued
service and performance
targets
✷ Any vested shares must be
held by the Executive for a
further two years
✷ N/A
✷ N/A
✷ Normal annual grant
policy is 100% of basic
salary
✷ Enhanced award levels
may be granted up to
150% of salary (e.g. upon
an Executive Director’s
appointment)
✷ Dividend equivalents
may be payable to the
extent that shares under
award vest
✷ Vesting of PSP awards will
be based on achieving
financial and/or TSR or
ROCE targets
✷ 25% of awards will vest at
threshold performance
increasing pro rata to
full vesting at maximum
performance levels
✷ Clawback provisions
operate for Executive
Directors
Stock Code: BMY
www.bloomsbury.com
57
Bloomsbury AR2019_Front.indd 57
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:53
Directors’ Remuneration Report
Element
Purpose and link to strategy
Operation
Maximum
Performance targets
Sharesave
✷ To encourage employee
share ownership
by employees and
therefore alignment with
Shareholders
Share
ownership
guidelines
✷ To provide alignment
between Executive
Directors and
Shareholders
✷ HMRC approved savings
plan to fund the exercise
of share options
✷ The exercise price may be
discounted by up to 20%
✷ Provides tax advantages
to UK employees
✷ Executive Directors are
required to build and
maintain a shareholding
equivalent to one year’s
base salary through the
retention of vested share
awards or through open
market purchases
✷ Prevailing HMRC limits
✷ N/A
apply
✷ 100% of salary holding for
✷ N/A
Executive Directors
Non-
Executive
Director fees
✷ Reflects time
✷ Cash fee paid monthly
✷ No maximum fee or
✷ N/A
commitments of each role
✷ Reflects fees paid by
similarly sized companies
maximum fee increase
operated
✷ Annual increases are
typically linked to those
of the wider workforce,
time commitment and
responsibility levels
Notes to the summary policy table:
1.
2.
3.
4.
A description of how the Company intends to implement this in
2019/20 is set out in the Annual Report on Remuneration.
Remuneration arrangements below Board tend to be skewed more
towards fixed pay with less of a focus on share-based long-term
incentive pay. These differences have arisen from the development
of remuneration arrangements that are market competitive for
the various categories of individuals.
The choice of the performance metrics applicable to the annual
bonus or long-term incentive scheme will reflect the Company
strategy at the time of grant.
The all-employee Sharesave scheme does not have
performance conditions.
Discretion of the Committee
The Committee will operate the annual bonus and PSP schemes
according to the respective scheme rules (or relevant documents)
and in accordance with the applicable regulations. Executive Director
incentive schemes and remuneration plans are designed to align the
interests of management with those of the Shareholders and are kept
as simple as possible. Where the outcome of incentives is not as the
Committee intended, it may use its discretion to intervene and modify
the outcomes to align the interests of management with those of
the Shareholders.
The Committee has adopted terms of reference based on best
practice and may apply its independent discretion in a number
of ways through its conditional approval including for:
58
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 58
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:54
Share-based incentives
✷ granting of all discretionary share awards/options and determining
the participants (including for Executive Directors and below the
Board), timing of grants, size of awards, performance conditions and
how vested awards should be satisfied;
✷ running Sharesave to ensure that the scheme is run within
applicable dilution limits;
✷ vesting of all discretionary share awards/options including the
timing and level of vesting;
✷ non-routine vesting of all-employee share options to ensure the
effective operation of the schemes under the applicable regulations
and rules;
Annual bonuses
✷ making annual bonus awards to the Executive Directors and
determining the level of awards, targets and conditions and
calibration of bonuses;
✷ the Group bonus pool and the level of bonus payouts for the
Executive Directors and managers below Board who participate in
the Group bonus scheme;
✷ bonus payments to the Executive Directors so to determine the level
of payments following the assessment of performance measures
and achievement against bonus objectives;
Routine payments
✷ all routine changes to Executive Director basic salaries, pensions and
eligibility to benefits; and
Non-routine payments
✷ all non-routine payments to the Executive Directors including but
not limited to leavers, to new appointees and in respect of a change
of control.
Reward scenarios
The remuneration package comprises both fixed elements (base
salary, pension and benefits) and performance-based variable
elements (cash bonus and LTIP). The structure of the remuneration
packages for on-target and stretch performance for each of the
Executive Directors for 2019/20, in line with the Remuneration Policy,
is illustrated in the bar charts below.
Nigel Newton
Penny Scott-Bayfield
Minimum
100%
£552
Minimum 100% £276
Target
54%
23%
23%
£1,007
Target
54%
23%
23%
£512
E
C
N
A
N
R
E
V
O
G
Maximum
38%
31%
31%
£1,462
Maximum
36%
32%
32%
£748
Max +50%
growth
£000
0
38%
27%
40%
£1,690
500
1,000
1,500
2,000
Max +50%
growth
£000
0
32%
27%
40%
£866
500
1,000
1,500
2,000
Fixed pay
Annual Bonus
Long -term incentives
Fixed pay
Annual Bonus
Long -term incentives
Jonathan Glasspool
Minimum 100% £293
Target
54%
23%
23%
£535
Maximum
38%
31%
31%
£777
Notes:
1.
The minimum performance scenario comprises the fixed elements of remuneration
only, based on salary, pension and car allowance as per policy for 2019/20.
The target level of bonus is taken to be 50% of the maximum bonus opportunity (100%
of salary), and the target level of PSP vesting is assumed to be 50% of the face value
assuming a normal grant level (100% of salary). These values are included in addition to
the components/values of minimum remuneration.
Maximum assumes full bonus payout (100% of salary) and the full face value of the PSP
(100% of salary), in addition to fixed components of remuneration.
2.
3.
Max +50%
growth
£000
0
33%
27%
40%
£898
4. Basic salaries from 1 March 2019 are used.
500
1,000
1,500
2,000
Fixed pay
Annual Bonus
Long -term incentives
5.
6.
For simplicity, no share price growth has been factored into the calculations. The value
of any Sharesave awards and notional dividends accruing on vested LTIP shares has
been excluded.
In addition, a further performance scenario, to reflect 50% share price growth, has been
included.
Stock Code: BMY
www.bloomsbury.com
59
Bloomsbury AR2019_Front.indd 59
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:54
Directors’ Remuneration Report
Executive Director share ownership guidelines
Under the guidelines, the Executive Directors are expected to build
and maintain a shareholding valued at 100% of basic salary with no
upper limit on the number of shares they may hold. A time limit is not
set to accumulate the shareholding; however, Executive Directors are
required to retain all shares arising from vested PSP awards (net of tax)
or purchase shares until the shareholding guideline is met. The
number of shares needed to satisfy the shareholding is recalculated
annually at the close of the next business day following the
announcement of the full year results taking account of changes to
basic salary.
Remuneration earned by the Executive Directors
from outside appointments
Significant external appointments of the Directors are given in the
bibliographic details in the Board of Directors section of the Annual
Report. The Committee considers that the external appointments of
the Executive Directors have no detrimental impact on the
performance of their duties. The Committee has approved that each
Executive Director may retain his or her remuneration earned from
external appointments up to £15,000 per year.
Approach to recruitment and promotions
The remuneration package for any new Executive Director would be
set in accordance with the terms of the Company’s approved
Remuneration Policy at the time of appointment and take into account
the skills and experience of the individual, the market rate for a
candidate of that experience and the importance of securing the
relevant individual.
Salary would be provided at such a level as required to attract the most
appropriate candidate and may be set initially at a below mid-market
level on the basis that it may progress towards the mid-market level
once expertise and performance has been proven and sustained. The
annual bonus potential would be limited to 100% of salary, pro-rated
for new joiners, and grants under the PSP would be limited to 100% of
salary (150% of salary in exceptional circumstances). In addition, the
Committee may offer additional cash and/or share-based elements to
replace deferred or incentive pay forfeited by an Executive leaving a
previous employer. It would seek to ensure, where possible, that these
awards would be consistent with awards forfeited in terms of vesting
periods, expected value and performance conditions.
For an internal Executive Director appointment, any variable pay
element awarded in respect of the prior role may be allowed to pay
out according to its terms. In addition, any other ongoing
remuneration obligations existing prior to appointment may continue.
For external and internal appointments, the Committee may agree
that the Company will meet certain relocation and/or incidental
expenses as appropriate.
If appropriate the Committee may agree, on the recruitment of a new
Executive Director, a notice period in excess of 12 months but to
reduce this to 12 months over a specified period.
Service contracts for Executive Directors
Details of the service contracts of the Executive Directors, which are not
of a fixed term and are terminable by either the Company or the
Director, are set out below:
Executive Directors
Date of agreement Date of expiry Notice period
Nigel Newton
Penny Scott-Bayfield*
Jonathan Glasspool
* Appointed 16 July 2018.
24 June 2003
18 April 2018
23 July 2015
–
–
–
12 months
12 months
12 months
At the Board’s discretion, early termination of an Executive Director’s
service contract may be undertaken by way of payment of salary and
benefits in lieu of the required notice period (or shorter period where
permitted by the contract of service or where agreed with the
Executive Director) and the Committee would take such steps as
necessary to mitigate the loss to the Company and to ensure that the
Executive Director observed his or her duty to mitigate loss.
Annual bonus may be payable, at the discretion of the Committee,
with respect to the period of the financial year served although it will
be prorated for time and paid at the normal payout date. Any
share-based entitlements granted to an Executive Director under the
Company’s share plans will be determined based on the relevant plan
rules. However, in certain prescribed circumstances, such as death, ill
health, injury, disability, redundancy, retirement, sale of employing
business or other circumstances at the discretion of the Committee,
“good leaver” status may be applied. For good leavers, awards will
normally vest at the normal vesting date, subject to the satisfaction of
the relevant performance conditions at that time and reduced pro
rata to reflect the proportion of the performance period actually
served. However, the Remuneration Committee has the discretion to
determine that awards vest at cessation of employment and/or not to
prorate awards.
The service contracts for Executive Directors are available for
inspection at the Company’s registered office.
60
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 60
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:54
Non-Executive Directors
Each of the Non-Executive Directors (“NEDs”) has similar general terms for their agreement, which can be found on Bloomsbury’s investor
relations website at www.bloomsbury-ir.co.uk. The agreements provide for three months’ notice by the Director or by the Company with the
option for the Company to terminate an appointment at any time on payment of three months’ fees in lieu of notice. All directors’ appointments
are subject to annual reappointment at each AGM. Termination of the agreements is without compensation.
Details of the NED agreements are as follows:
Non-Executive Director
Date of appointment
Jill Jones
John Warren
Steven Hall
Sir Richard Lambert
23 July 2013
23 July 2015
1 March 2017
18 July 2017
Date of agreement
18 July 2018
18 July 2018
19 January 2017
15 June 2017
Date of expiry
2019 AGM
2020 AGM
2021 AGM
2021 AGM
Notice period
3 months
3 months
3 months
3 months
The annual fees of NEDs, excluding the Chairman, are determined by the Chairman and the Executive Directors. The annual fee of the Chairman is
determined by the Committee (excluding the Chairman) and the Executive Directors. NEDs receive a basic annual fee of £39,399 (2018: £38,438)
plus an extra annual amount of £2,574 (2018: £2,511) if acting as chairman of a Board committees. There is no extra fee paid for the role of Senior
Independent Director, or to Chairman in respect of his role as Chairman of the Nomination Committee. The fees of the NEDs and Chairman are
considered appropriate for a listed company of the size of Bloomsbury Publishing Plc. Where NEDs and the Chairman receive an increase in
annual fee this is normally the percentage increase in salaries for Bloomsbury employees generally. The NEDs and Chairman do not participate in
the Company’s annual bonus or share incentive schemes, including Sharesave.
E
C
N
A
N
R
E
V
O
G
Stock Code: BMY
www.bloomsbury.com
61
Bloomsbury AR2019_Front.indd 61
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:54
Directors’ Remuneration Report
PART B – ANNUAL REPORT ON REMUNERATION
The following discloses the remuneration paid to, or earned, by the directors in respect of the financial year ended 28 February 2019.
PART B-1 (AUDITED INFORMATION) Single total figure table of remuneration for 2019
Directors’ remuneration for 2019
Details of the remuneration of each of the Directors are as follows:
Year ended
28 February
Basic salary
or fees
£’000
Other
Benefits
£’000
Pension
Contributions
£’000
Performance-
related bonus5
£’000
Gain on share
awards
£’000
Executive Directors
Nigel Newton
Richard Charkin1
Wendy Pallot2
Jonathan Glasspool
Penny Scott-Bayfield3
Non-Executive Directors
Sir Richard Lambert4
Steven Hall
John Warren
Jill Jones
Total
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
444
433
60
233
106
270
236
230
142
–
108
66
39
38
41
40
41
40
1,217
1,390
29
27
2
12
7
15
15
15
2
–
–
–
–
–
–
–
–
–
55
69
67
65
–
–
16
41
36
35
14
–
–
–
–
–
–
–
–
–
133
141
411
384
56
206
96
243
218
204
128
–
–
–
–
–
–
–
–
–
909
1,037
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Total
£’000
951
909
118
451
225
569
505
484
286
–
108
66
39
38
41
40
41
40
2,314
2,637
1.
Richard Charkin resigned as a Director of the Company on 31 May 2018. He had been in receipt of fees in total of less than £15,000 per annum in respect of his external appointments as a
Non-Executive Director of the Institute of Physics Publishing and of Liverpool University Press. The Committee had approved his retention of such fees and they are not included in the
table above. No other Executive Director is or was in receipt of remuneration from external appointments as Non-Executive Director during the year.
2. Wendy Pallot resigned as a Director of the Company on 16 July 2018.
3. Penny Scott-Bayfield was appointed a Director of the Company on 16 July 2018.
4. Sir Richard Lambert was appointed to the Board on 18 July 2017. His 2018 fees are from the date of his appointment.
5.
Figures shown for bonus payments relating to 2018 are those received during the year based on performance and basic salary received during the previous year. The bonus for 2019
was paid in May 2019 and the basis is explained below.
More details on the content of the headings in the above table, including description of the other benefits received by the Directors, their pension
contributions and the basis of their bonus awards for 2019, are set out below under the relevant headings below. There were no gains on PSP
award share incentives in 2018 or in 2019, as none vested.
62
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 62
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:54
Basic salary
Executive Directors’ salaries were reviewed with effect from 1 March 2018 in accordance with normal policy and were increased, taking into
account the average salary increases for employees across the Group, by 2.5%.
The basic salaries for the Executive Directors from 1 March 2018 are as follows:
Executive Director
Nigel Newton
Richard Charkin1
Wendy Pallot2
Jonathan Glasspool
Penny Scott-Bayfield3
From
1 March
2018
£’000
444
239
277
236
230
From
1 March
2017
£’000
433
142
270
230
–
1.
2.
3.
Richard Charkin resigned as a Director on 31 May 2018. He had reduced his time commitment to around two days per week from 1 March 2017, and at that point his salary was reduced
accordingly. However, during 2017/18 he was required to work an average of more than two days per week to support strategic projects. Under his employment contract he was
entitled to be paid on a per diem basis, which is reflected in the amount shown in the table above based on his actual amounts earned for the year to 28 February 2018. His actual
earnings for the period from 1 March 2018 to 31 May 2018 are shown in the Directors’ Remuneration table, immediately above this table under basic salary.
Wendy Pallot resigned as a Director on 16 July 2018. Her actual earnings for the period from 1 March 2018 to the date of her departure are shown in the Directors’ Remuneration table,
above.
Penny Scott-Bayfield joined the Board on 16 July 2018, on a salary in line with the Company’s existing Remuneration Policy. Her actual earnings for the period from her appointment to
28 February 2019 are shown in the Directors’ Remuneration table, above.
Pensions
In accordance with the policy, pension contributions in 2018 were 15%
of basic salary for Nigel Newton, Wendy Pallot, Jonathan Glasspool and
Penny Scott-Bayfield. Directors may elect to receive a cash alternative
in lieu of payments by the Company into their private pension
arrangements. There were no pension contributions made in respect
of Richard Charkin.
Any payment under either element can only be made out of the
bonus pool that accrues above the stretching target that the
Committee sets. This results in value to Shareholders being accrued
faster up to the profit target, and thereafter a higher proportion of
profit funding the bonus scheme. This minimises the risk that our profit
targets are not met and incentivises management to achieve profits
over and above expectations.
E
C
N
A
N
R
E
V
O
G
Other benefits
Benefits comprised a car or car allowance (excluding Richard Charkin
and Penny Scott-Bayfield), medical cover, permanent health cover, life
assurance and Company schemes offered to staff generally, such as
buying books for private use at the staff discount rate.
Bonus for 2019
The purpose of the Bloomsbury Annual Management Bonus Scheme
(“the Scheme”) is to incentivise annual delivery of financial and
strategic goals. There are 40 staff in the scheme globally, including the
Executive Directors. Seventy per cent of the bonus relates to Group
profits and 30% relates to other strategic objectives, such as digital
resource revenues and the successful implementation of Bloomsbury
2020 against plan.
The Remuneration Committee sets stretching annual targets for the
profit element of the management bonus scheme, taking into account
a wide set of reference points including, for example: Bloomsbury’s
historical performance to date; internal future projections in line with
our business and growth plans; City analysts’ consensus forecast; the
full year budget; and external performance of any key relevant
industry peers (both historic and analyst forecast).
Bloomsbury has operated the same bonus scheme for many years and
the Committee believes that it remains fit-for-purpose. An indicator of
this is that the Company has always made consensus results in the
period of this scheme and secondly the scheme has paid bonus levels
to management proportionate to the profit delivered.
Profit target bonus for 2019
The Group profit bonus objective accounts for 70% of the total bonus
opportunity for Executive Directors. As set out in the Strategic Report,
Bloomsbury delivered excellent performance for the year ended
28 February 2019, achieving profit before taxation and highlighted
items (“Adjusted profit”) of £14.4 million (£16.7 million before the
profit bonus). At the start of the year, the Committee set a stretching
threshold target for this Adjusted profit of £14.0 million, after assessing
the Group’s budget, analyst consensus forecasts and other factors.
This resulted in a Senior Management bonus pool shared by 40 staff,
including the Executive Directors, of £2.3 million sufficient to pay the
full bonus element.
Stock Code: BMY
www.bloomsbury.com
63
Bloomsbury AR2019_Front.indd 63
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:54
Directors’ Remuneration Report
Strategic objectives bonus for 2019
Definition of the targets
At the start of the year, the Committee reviewed the 2018 objectives and decided to amend these by the removal of one concentrating on targets
relating to the US business and the addition of a new objective focused on worldwide sales of the Group’s most important revenue sources.
Within these five objectives, threshold and stretching targets were set for each.
Objective
Aim
Definition of the metric for measuring achievement
1) Earlier profit
realisation
2) Cost saving
Reduce the
dependency
on the final
two months
of the year
Improve the
efficiency of
the Group
Metric:
Measured Profit
Definition:
Adjusted profit as defined in the Annual Report
Measurement:
Measure the level of achievement as at
31 December 2018
Metric:
Measured Cost (note 2)
Definition:
Total of (marketing + distribution
+administrative including commission) before
BDR 2020 costs, bonus and forex movement
Measurement:
Flex the variable cost component in the target
in proportion to Group revenue
Target for
threshold vesting
(pays 50%)
Target for
full vesting
(pays 100%)
Measured Profit
of £9.6m
Measured Profit
of £10.6m
(Threshold plus
10%)
Actual
Achieved
£12m
100%
Measured Cost
to be £68.4m or
less
Measured Cost
to be £67.9m or
less
£68.4m 50%
(Threshold less
£0.5m)
3) Sales
development
of six major
properties
Improve
revenue and
earnings
Metric:
Net revenue
Definition:
Net revenue as defined in the Annual Report
Revenue of
£48.7m
Sales of £51.1m
(Threshold plus
5%)
£52.3m 100%
4) Inventory
reduction
5) Digital
revenue
Measurement:
Net sales
Metric:
Net finished goods stock value
Definition:
Net finished goods stock, excluding acquisitions
and on a constant exchange rate basis
Measurement:
Audited figures disclosed in the Group Financial
Statements
Metric:
BDR 2020 Revenue
Definition:
Revenue accruing in the year from subscription
and perpetual access sales of digital platforms
Reduce
working
capital and
improve
ROCE
Achieve the
milestones
within the
Bloomsbury
2020 strategy
Net finished
goods stock of
£21.4m or less
Net finished
goods stock to
be £20.8m or
less
£20.8m 100%
Revenue of
£6.3m
Revenue of
£6.9m
(Threshold plus
10%)
£6.3m
50%
1.
2.
The level of vesting for achievement between threshold and full vesting targets is calculated on a straight-line basis from 50% to 100%.
No vesting for achievement below threshold. 100% vesting for achievement above the full vesting target.
The Measured Cost excludes BDR 2020 strategy and any bonus accrual and is adjusted to exclude foreign exchange movements. An analysis of the Measured Cost used by the
Committee is on the next page:
64
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 64
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:54
Marketing
Distribution
Administrative
£m
7.1
14.1
47.2
68.4
The Committee sets the following allocations of opportunity for each strategic objective based on the relative importance to each Director as
determined by the Committee:
Strategic Objective
1) Earlier profit realisation
2) Cost savings
3) Sales development of six major properties
4) Inventory reduction
5) Digital revenue
Total opportunity for the strategic objectives bonus as a
percentage of basic salary
Actual achievement of strategic element
(within the overall total of 100%)
Total bonus (including profit target bonus)
paid at a rate of salary
Nigel
Newton
Richard
Charkin 1
Wendy
Pallot 1
Jonathan
Glasspool
Penny Scott-
Bayfield 2
5%
5%
5%
5%
10%
30%
5%
5%
5%
5%
10%
30%
22.5%
22.5%
92.5%
92.5%
5%
10%
–
5%
10%
30%
20%
90%
5%
5%
5%
5%
10%
30%
22.5%
92.5%
5%
10%
–
5%
10%
30%
20%
90%
1.
Richard Charkin resigned as a Director on 31 May 2018 and Wendy Pallot resigned on 16 July 2018. The Committee decided to exercise its discretion to permit them to participate in the
2019 bonus scheme in light of their contribution to the success of the Group during the year. Their bonus was prorated to their salaries paid during the year.
2. Penny Scott-Bayfield was appointed as a Director of the Company on 16 July 2018. Her bonus is prorated in line with her basic salary as earned during the year.
Vesting of PSP awards
The PSP awards granted on 8 June 2016 (“2016 PSP”) are set to vest in 2019 based on performance over the three years ended 28 February 2019.
The performance conditions for this award are mentioned in the letter from the Chair of the Committee at the start of this Report and disclosed in
previous annual reports. The level of vesting for the 2016 PSP awards is as follows:
E
C
N
A
N
R
E
V
O
G
Metric
Performance condition
Relative Earnings per Share growth
(50% of awards)
Total Shareholder Return
(50% of awards)
25% vesting for compound annual
growth in normalised EPS over the
performance period in excess of
annualised RPI (“Relative EPS growth”) 3%
increasing pro rata to 100% vesting for
Relative EPS growth of 8%
TSR against the constituents of the FTSE
SmallCap (excluding investment trusts).
Median (25% vesting of this part of an
award) to top quartile (100% vesting) over
three years from the start of the financial
year in which the awards are granted
The awards have a concurrent
performance condition that no vesting
occurs for Relative EPS growth below 0%
Total estimated vesting of 2016 PSP awards
Threshold target
3%
Stretch
target
8%
Actual
-4%
Median
Upper
quartile
N/A
Concurrent
target of
Relative EPS
growth >0%
has not been
met
0%
% Vesting
0%
(out of a
maximum
of 50%)
0%
(out of a
maximum
of 50%)
Stock Code: BMY
www.bloomsbury.com
65
Bloomsbury AR2019_Front.indd 65
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:54
Directors’ Remuneration Report
Based on the above, values for the 2016 PSP awards are as follows:
Executive
Type of award
Nigel Newton
Richard Charkin 2
Wendy Pallot 3
Jonathan Glasspool
Conditional award
with EPS and TSR
performance
conditions
Number
of shares at
grant with EPS
261,544
213,642
157,530
138,888
Number
of shares
to lapse
261,544
213,642
157,530
138,888
Number
of shares
to vest
Number
of Dividend
Shares 1
–
–
–
–
–
–
–
–
Estimated
value
£’000
–
–
–
–
Total
–
–
–
–
Dividend Shares are in lieu of dividends that would have accrued on the “Number of shares to vest” if held by the participants from the date of grant up to the date of vesting of awards.
1.
2. Richard Charkin resigned as a Director on 31 May 2018 and his award lapsed.
3. Wendy Pallot resigned as Director on 16 July 2018 and her award lapsed.
PSP awards granted during 2019
Details of PSP awards granted in 2019 (2018 PSP award) are as follows:
Individual
Scheme
Date of grant
Basis of award
Face value
£’000
Vesting at
Threshold
Vesting at
Maximum
Performance period
Nigel Newton
Penny Scott-Bayfield1
Jonathan Glasspool
PSP
(Conditional
awards)
30 July 2018
30 July 2018
30 July 2018
100% of salary
100% of salary
100% of salary
444
230
236
25%
25%
25%
100%
100%
100%
ROCE: 3 years to
28 February 2021 EPS:
3 years to 28 February 2021
1.
Penny Scott-Bayfield’s grant was based on 100% of her annual salary on her appointment. In fact, the Remuneration Committee had approved her award based on her actual salary for
the year, being £141,746. It is the intention of both parties to correct this to reflect an award based on the value of that actual salary figure, at the date of grant. An RNS announcement
will be made to the market in respect of this correction.
For awards presented above:
For 50% of awards (ROCE awards): 25% of this part of an award will vest for absolute Return On Capital Employed (“ROCE”) of 13.1% or higher (nil
vesting for below), increasing straight-line to 100% vesting of this part of an award for ROCE of 15.1% (100% for above), ROCE measured in the last
Financial Year of the three-year performance period; and
For 50% of awards (EPS awards): 25% of this part of an award will vest for a compound annual growth rate in normalised EPS over the
performance period in excess of annualised RPI (“Relative EPS growth”) of 3% increasing pro rata to 100% vesting of this part of an award for a
Relative EPS growth of 8%.
Payments to past Directors
There were no payments to past Directors during the year other than those relating to the termination of employment as set out in the next section.
Payments for loss of office
Richard Charkin resigned as Executive Director on 31 May 2018. There was no payment made to him in lieu of notice or on any ex gratia basis.
His PSP awards and Sharesave options lapsed. All sundry benefits such as life insurance and family health care also lapsed. His annual bonus for
2019 was prorated for time served during the year and subject to the normal performance test. Richard Charkin continues to be available to work
for the Company in his capacity as a consultant on an ad hoc basis. There has been no undertaking made either before or following his departure
agreeing any minimum commitment to his services to the Group. Further details of his work as a consultant for the year are given on page 55.
Wendy Pallot stepped down as Finance Director on 16 July 2018. Her pension and annual bonus for 2019 were reduced pro rata for the time of
service and her bonus for 2019 was paid after her leaving date at the usual time following the end of the 28 February 2019 year end. LTIP awards of
Wendy Pallot that were unvested at her leaving date lapsed in full.
66
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 66
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:54
Outstanding share awards
PSP awards
PSP conditional share awards have been granted for nil consideration over Ordinary shares of 1.25 pence in the Company under the Bloomsbury
2014 Performance Share Plan (“2014 PSP”). The number of PSP conditional shares awarded is calculated based on the closing mid-market share
price prevailing on the day before the date of grant. The following PSP conditional shares awarded to the Executive Directors were outstanding
during the year:
Date of
PSP award
Due date of
exercise/expiry
Price at
grant date
(pence)
At
1 March
2018
Awarded
during
the year
Exercised
during
the year
Nigel Newton
Richard Charkin1
Wendy Pallot2
Penny Scott-Bayfield3
Jonathan Glasspool
28 July 2015
8 June 2016
27 July 2017
30 July 2018
28 July 2015
8 June 2016
27 July 2017
28 July 2015
8 June 2016
27 July 2017
30 July 2018
28 July 2015
8 June 2016
27 July 2017
30 July 2018
28 July 2018
8 June 2019
27 July 2020
30 July 2021
28 July 2018
8 June 2019
27 July 2020
28 July 2018
8 June 2019
27 July 2020
30 July 2021
28 July 2018
8 June 2019
27 July 2020
30 July 2021
162.75p
162.00p
180.00p
220.00p
162.75p
162.00p
180.00p
162.75p
162.00p
180.00p
220.00p
162.75p
162.00p
180.00p
220.00p
255,238
261,544
240,689
–
208,480
213,642
78,638
153,732
157,530
150,000
–
67,588
138,888
127,812
–
–
–
–
201,851
–
–
–
–
–
–
104,545
–
–
–
107,188
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Lapsed
during
the year
255,238
–
–
–
208,480
213,642
78,638
153,732
157,530
150,000
–
67,588
–
–
–
Share price
on date of
exercise
(pence)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
At
28 February
2019
–
261,544
240,689
201,851
–
–
–
–
–
–
104,545
–
138,888
127,812
107,188
1. Richard Charkin resigned as a Director on 31 May 2018. His unvested awards lapsed.
2. Wendy Pallot resigned as Director on 16 July 2018. Her unvested awards lapsed.
3.
Penny Scott-Bayfield became a Director on 16 July 2018 and her award was granted on the basis of seven months service in the year of appointment. The conditional share award over
104,545 shares reflected her annual salary on appointment, rather than her actual salary for the remainder of the year to 28 February 2019. Accordingly, the award shown above will be
reduced by 40,115 to 64,430 shares to correct the position.
EPS
For 50% of the awards1: 25% of this part of an award will vest for a compound annual growth rate in normalised EPS over the performance period
in excess of annualised RPI (“Relative EPS growth”) of 3%, increasing pro rata to 100% vesting of this part of an award for a Relative EPS growth
of 8%.
TSR
For 50% of the awards made in 2014, 20151 and 2016: 25% of this part of an award will vest for a median TSR, increasing to 100% vesting of this part
of an award for a top quartile TSR, measured against the FTSE SmallCap (excluding investment trusts). Awards have a concurrent performance
condition that no vesting occurs for Relative EPS growth below 0%.
1. For PSP awards made in 2015 to Jonathan Glasspool in respect of his first year as a Director, 27% had TSR performance conditions and 73% have EPS performance conditions.
ROCE
For 50% of the awards made in 2017 and 2018: 25% of this part of the award will vest for absolute Return On Capital Employed (“ROCE”) of 9.2%
(2017) or 13.1% (2018) (nil vesting for below), increasing straight-line to 100% vesting of this part of an award for ROCE of 11.6% (2017) or 15.1%
(2018) (100% for above), ROCE measured in the last Financial Year of the three-year performance period. Vesting is subject to an underpin
whereby the Committee will consider the underlying performance of the business, and may apply discretion should it conclude it is appropriate
to do so.
E
C
N
A
N
R
E
V
O
G
Stock Code: BMY
www.bloomsbury.com
67
Bloomsbury AR2019_Front.indd 67
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:54
Directors’ Remuneration Report
Company Share Option Plan
Bloomsbury operates the 2014 Company Share Option Plan (“2014 CSOP”) under which the Committee may grant options over Ordinary shares of
1.25 pence in the Company with performance conditions determined by the Committee to participants below the Board. The outstanding 2014 CSOP
options granted to Executive Directors prior to their appointment as a Director that the Remuneration Policy permits the Director to retain were:
Jonathan Glasspool
At
1 March
2018
31,447
Granted
during
the year
–
Lapsed
during
the year
31,447
At
28 February
2019
Exercise
price 1
(pence)
Date of grant
Vesting date 2
Expiry date
–
159.00p
10 July 2015
July 2018
July 2025
1. The exercise price is the closing share price on the day before the grant date.
2.
CSOP options vest on the third anniversary of the grant date subject to an underpin condition of compound annual growth rate in normalised EPS over the three-year performance
period in excess of annualised RPI (“Relative EPS growth”) of 0%. CSOP options granted in 2015 failed to meet the underpin condition.
Sharesave options
Bloomsbury operates an HMRC-approved Sharesave scheme for which all UK employees are eligible to participate. There was no Sharesave offer
made to any staff in 2019. The following Sharesave options granted to the Executive Directors were outstanding at the year end:
Richard Charkin
Wendy Pallot
Jonathan Glasspool
At
1 March
2018
6,346
6,346
3,808
6,550
Granted
during
the year
Exercised
during
the year
Lapsed
during
the year
At
28 February
2019
Exercise
price
(pence)
Date of grant
–
–
–
–
–
–
3,808
–
6,346
6,346
–
–
–
–
–
6,550
141.8p 16 June 2015
141.8p 16 June 2015
16 June 2015
141.8p
12 June 2017
137.4p
Date from
which
exercisable
Sept 2018
Sept 2018
Sept 2018
Sept 2020
Expiry date
Mar 2019
Mar 2019
Mar 2019
Mar 2021
Directors’ interests in shares
The interests of the Directors who served on the Board during the year are set out in the table below:
Owned2
PSP Awards
28 February
2019
28 February
2018
Nigel Newton
Richard Charkin3
Wendy Pallot4
Penny Scott-Bayfield5
Jonathan Glasspool
Sir Richard Lambert
Jill Jones
John Warren
Steven Hall
Total
1,017,263
–
–
–
31,046
10,000
2,800
10,000
3,171
1,074,450
1,147,263
360,680
139,536
–
27,238
10,000
2,800
10,000
3,171
1,700,858
Unvested
704,084
–
–
104,545
373,888
–
–
–
–
1,182,517
CSOP
options
unvested
Sharesave
options
unvested
Vested
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
6,550
–
–
–
–
6,550
Shareholding
Guideline
Achieved 1
%
100%
n/a
n/a
0%
30.5%
n/a
n/a
n/a
n/a
Total
28 February
2019
1,721,347
–
–
104,545
411,484
10,000
2,800
10,000
3,171
2,263,517
1.
2.
The Shareholding Guideline (100% of salary) was introduced during the year ended 28 February 2013 and can be found on the Company’s website www.bloomsbury-ir.co.uk.
The guideline requires that the Executive Director must retain shares vesting from the PSP awards net of tax until the shareholding guideline has been met. The number of shares
needed to satisfy a shareholding is recalculated at the close of the next business day following the announcement of the full year results (the “Review Date”). The share price used above
is 232 pence (determined by closing price of shares the day after annual results are announced).
Owned includes shares held directly by the Director and indirectly by a nominee on behalf of the Director where the Director has the beneficial interest. It includes the shares of the
Director and of connected persons.
3. Richard Charkin resigned as a Director on 31 May 2018. His share awards lapsed upon his departure.
4. Wendy Pallot resigned as a Director on 16 July 2018. Her share awards lapsed upon her departure.
5.
Penny Scott-Bayfield became a Director on 16 July 2018. The conditional share award over 104,545 shares in fact reflected her annual salary on appointment, rather than her actual salary
for the remainder of the year to 28 February 2019. Accordingly, the award shown above will be reduced by 40,115 shares to one over 64,430 shares to correct this.
No Director has or has had any interest, direct or indirect, in any transaction, contract or arrangement (excluding service agreements) which is or
was unusual in its nature or conditions or significant to the business of the Group during the current or immediately preceding financial year.
68
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 68
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:55
Implementation of Remuneration Policy in 2020
From 1 March 2019, the Executive Directors received a pay increase of 2.5% in line with the increase for the general workforce.
Basic salaries for the Executive Directors are as follows:
Executive Director
Nigel Newton
Richard Charkin1
Wendy Pallot2
Penny Scott-Bayfield2
Jonathan Glasspool
From
1 March
2019
£’000
455
–
–
236
242
From
1 March
2018
£’000
444
363
276
–
236
1.
2.
Richard Charkin resigned as a Director on 31 May 2018. From 1 March 2018, he worked on a day rate of £1,395 plus pro rata holiday accrual which reflected an annualised salary of
£362,720.
Wendy Pallot stood down from the Board on 16 July 2018. Penny Scott-Bayfield joined the Board on 16 July 2018 at an annual salary of £230,000. Her salary was below that of her
predecessor, and below the mid-market rate, on the basis that she would progress towards a mid-market level once her expertise and performance had been proven and sustained, in
line with the Company’s approach to recruitment. For 2019 it is proposed that the salary increase be limited to that of the wider workforce. It is intended that a market benchmark review
is undertaken and any increase would be effective from July 2020 after a suitable period to assess expertise and performance.
Pension and benefits
In 2020, pension contributions (as a percentage of base salary) for Executive Directors will remain unchanged at 15%. There will be no changes to
other benefits.
Annual bonus
For 2020, the maximum bonus potential will continue to be set at 100% of salary. The maximum bonus measured against financial profit targets
(70%) and strategic objectives (30%) including a digital revenue target linked to Bloomsbury 2020, will account for 10% of the total bonus
opportunity. The strategic element will not formulaically be linked to the threshold profit target but will instead be subject to an affordability and
performance assessment by the Committee. Both the measures and targets will be disclosed retrospectively in the Annual Report on
Remuneration.
E
C
N
A
N
R
E
V
O
G
Long-term incentives
The annual PSP awards to be granted in 2020 will be subject to the following targets:
✷ relative EPS (50%) – 25% of this part of an award will vest for annualised growth in EPS over the performance period of RPI +3% increasing
pro rata to 100% vesting for annualised growth in EPS over the performance period of RPI +8%; and
✷ ROCE (50%) – 25% of this part of an award will vest for achieving ROCE at the end of the performance period of 12.2% increasing pro rata to
100% vesting for ROCE over the performance period of 15.3%.
✷ In determining these targets the Committee considers that:
– the threshold vesting absolute target for the financial year ending in 2022 (the final year of the performance period) ensures there will be no
vesting unless ROCE improves compared to the highest value for ROCE achieved in each of the financial years ended 2019, 2018 and 2017;
– the full vesting target requires management to deliver stretching performance. Full vesting, if achieved, would require a substantial
improvement in ROCE from the present level.
ROCE for the recent financial years of the Company can be found in the Financial Review section of the Strategic Report.
The awards for Executive Directors will be subject to clawback provisions and to a two-year post-vesting holding period. During the holding
period, an Executive Director (including if they stand down from the Board) may not sell their vested shares, which will remain subject to a
clawback provision.
The Remuneration Committee has approved that the Executive Directors may participate in the Company’s Sharesave scheme if operated.
Stock Code: BMY
www.bloomsbury.com
69
Bloomsbury AR2019_Front.indd 69
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:55
Directors’ Remuneration Report
Non-Executive Directors
Current annualised fees are as follows:
Non-Executive Director
Position
Sir Richard Lambert
John Warren
Jill Jones
Steven Hall
Chairman of the Board, Chair of the Nomination Committee
Chair of the Audit Committee and Senior Independent Director
Chair of the Remuneration Committee
Independent Non-Executive Director
From
1 March
2019
£’000
110
42
42
39
From
1 March
2018
£’000
108
41
41
38
PART B-2 (UNAUDITED INFORMATION)
Performance graph and table
The chart below shows the Company’s Total Shareholder Return for the period from 31 December 2009 to 28 February 2019 compared to that of
the FTSE SmallCap Media sector index over the same period. The index has been selected as it represents a broad equity market index, of which
the Company is a constituent member
250
200
150
100
50
0
Dec–08
Dec–09
Feb–11
Feb–12
Feb–13
Feb–14
Feb–15
Feb–16
Feb–17
Feb–18
Feb–19
FTSE SmallCap Media
Bloomsbury
.
The chart aligns to the Company’s accounting period, which was extended during the 14 months to 28 February 2011.
The total remuneration figures for the Chief Executive during each of the financial years of the relevant period are shown in the table below.
The total remuneration figure includes the annual bonus based on that year’s performance and PSP awards based on three-year performance
periods ending in the relevant year (EPS) or just after the relevant year (TSR). The annual bonus payout and PSP vesting level as a percentage of
the maximum opportunity are also shown for each of these years.
Year ending:
Total remuneration (£’000)
Annual bonus (%)
PSP vesting (%)
31 Dec
2009
637
51%
0%
28 Feb
2011
9741
100%
0%
29 Feb
2012
785
54%
50%
28 Feb
2013
617
0%
50%
28 Feb
2014
749
17%
50%
28 Feb
2015
799
16%
56%
29 Feb
2016
547
0%
17%
28 Feb
2017
689
42%
0%
28 Feb
2018
909
88%
0%
28 Feb
2019
951
92.5%
0%
1. Covers a period of 14 months due to the change of Accounting Reference Date.
70
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 70
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:55
Percentage change in Chief Executive’s remuneration
The table below shows the percentage change in the Chief Executive’s salary, benefits and annual bonus between the financial year ended
28 February 2018 and 28 February 2019, compared to that of the total remuneration for all employees of the Company for each of these elements
of pay.
Salary
Chief Executive (£’000)
All employees (£m)
Benefits including pension
Chief Executive (£’000)
All employees (£m)
Annual bonus
Chief Executive (£’000)
All employees (£m)
Average number of employees
Total remuneration
Year ended
28 February
2019
Year ended
28 February
2018
% change
444
27.8
96
1.5
411
2.3
683
433
25.6
92
1.2
384
2.3
627
2.5%
8.6%
4.3%
25%
7.0%
0%
8.9%
Relative importance of spend on pay
The following table shows the Company’s actual spend on pay (for all employees) relative to dividends.
Staff costs (£m)
Dividends declared (£m)
Retained profits (£m)1
1. Retained profits for 2019 and 2018 reflect the impact of adopting IFRS 9 and 15.
Year ended
28 February
2019
Year ended
28 February
2018
34.8
6.0
3.6
31.9
5.6
3.0
E
C
N
A
N
R
E
V
O
G
Voting at the Annual General Meeting
At the Annual General Meeting of 18 July 2018 the Annual Statement by the Chairman of the Remuneration Committee and the Annual Report on
Directors’ Remuneration for the financial year ended 28 February 2018 was put to an advisory vote. The voting outcomes were as follows:
Votes cast in favour
Votes cast against
Total votes cast
Abstentions on voting cards
Number
of shares
Percentage
of the vote
44,052,869
331,431
44,384,300
7,434
99.2%
0.8%
100%
The Remuneration Policy was last put to Shareholders at the Annual General Meeting held on 18 July 2017 as an ordinary resolution. The voting
outcomes were as follows:
Votes cast in favour
Votes cast against
Total votes cast
Abstentions on voting cards
Number
of shares
Percentage
of the vote
57,376,766
309,752
57,686,518
14,432
99.5%
0.5%
100%
Stock Code: BMY
www.bloomsbury.com
71
Bloomsbury AR2019_Front.indd 71
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:55
Directors’ Remuneration Report
Assistance to the Committee
Wholly independent advice on executive remuneration and share
schemes was received from the Executive Compensation practice of
Aon. Aon is a member of the Remuneration Consultants Group and is a
signatory to its Code of Conduct. During the year, fees charged by Aon
for advice provided to the Committee amounted to £25,534
(2018: £6,758) (excluding VAT).The Committee received assistance
from the Group Company Secretary and, where specifically requested
by the Committee, the Chief Executive and Finance Director.
The Committee has considered any feedback received from the
major Shareholders during the year as part of Bloomsbury’s
ongoing investor relations programme and considers the reports
and recommendations of Shareholder representative bodies and
corporate governance analysts.
Approved by the Board of Directors and signed on its behalf.
Jill Jones
Chair of the Remuneration Committee
21 May 2019
Remuneration Committee
Responsibilities and activities of the Committee
The Committee determines the Remuneration Policy and annual
remuneration plans for the Executive Directors for approval by the
Board. In particular, the Committee approves for each Executive
Director the basic salaries, pensions, other benefits, bonus awards
and the awards made under Bloomsbury’s Long Term Incentive Plan.
The Committee approves all payments of bonus and the vesting and
exercise of share-based awards before payments are made for each
Executive Director.
During 2019, the Committee reviewed its role in respect of determining
the remuneration of senior management under the 2018 Code.
This responsibility would arise in the year ending 29 February 2020.
After due consideration and discussion at both the Committee and the
Board level it was decided that the Committee would monitor the
remuneration of senior managers. This would be in addition to its
existing responsibility to approve the grant and vesting of share
incentives. The Executive Directors would remain responsible for
remuneration for senior management.
In respect of this and other changes under the 2018 Code, it was agreed
that the Committee would review and amend its terms of reference
during 2020.
Membership
At 28 February 2019, and up until signing the Report, the Committee
comprised four Independent Non-Executive Directors as follows:
Director
Jill Jones (Chair of the Committee)
Sir Richard Lambert
Steven Hall
John Warren
Appointed
in the year
(if applicable)
–
–
18 July 2018
–
Resigned
in the year
(if applicable)
–
–
–
–
The General Counsel and Group Company Secretary, Maya Abu-Deeb,
acts as secretary to the Committee. All meetings have been conducted
during the year with all members present. The Committee met
formally on six occasions during the year, including five occasions with
Executive Directors attending part of a meeting at the request of the
Committee for specific items on the agenda. The remuneration
consultants Aon plc (“Aon” - also known as New Bridge Street)
attended where needed to provide technical support. Examples of
matters discussed at meetings of the Committee included:
✷ reviewing the Remuneration Policy, the operation of the LTIP,
including awards under it, annual bonus targets and whether bonus
targets and LTIP vesting criteria were achieved;
✷ Executive Director pay;
✷ gender pay differences in the workforce; and
✷ the changes introduced by the 2018 Code.
The Committee Chair has a standing item on the agenda at each
main Board meeting, enabling remuneration matters to be raised
for discussion by the Board if required.
72
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Front.indd 72
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:55
E
C
N
A
N
R
E
V
O
G
Stock Code: BMY
www.bloomsbury.com
73
Bloomsbury AR2019_Front.indd 73
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:55
Group financial
performance
Adjusted profit before tax
+9%£14.4m
Revenue growth
+1%*
£162.7m
Robust cash generation
£27.6m
cash at 28 February 2019
Dividend increased
+6%
* 1% at constant exchange rates
74
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 74
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:03
Financial
Statements
Independent Auditor's Report
76
86 Consolidated Income Statement
Consolidated Statement of
87
Comprehensive Income
88 Consolidated Statement of Financial Position
89 Consolidated Statement of Changes in Equity
90 Consolidated Statement of Cash Flows
91 Notes to the Financial Statements
130 Company Statement of Financial Position
131 Company Statement of Changes in Equity
132 Company Statement of Cash Flows
133 Notes to the Company Financial Statements
144 Five Year Financial Summary
145 Company Information
146 Notice of the Annual General Meeting
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
75
Bloomsbury AR2019_Back.indd 75
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:03
Independent Auditor’s Report
to the members of Bloomsbury Publishing Plc
1 Our opinion is unmodified
We have audited the financial statements of Bloomsbury Publishing Plc (“the Company”) for the year ended 28 February 2019 which comprise the
Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated and Company Statement of Financial
Position, Consolidated and Company Statement of Changes in Equity, Consolidated and Company Statement of Cash Flows and the related notes,
including the accounting policies in note 2.
In our opinion:
✷ the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 28 February 2019 and of
the Group’s profit for the year then ended;
✷ the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted by
the European Union (IFRSs as adopted by the EU);
✷ the parent Company financial statements have been properly prepared in accordance with IFRSs as adopted by the EU and as applied in
accordance with the provisions of the Companies Act 2006; and
✷ the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group
financial statements, Article 4 of the IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.
We were first appointed as auditor by the directors on 4th September 2013. The period of total uninterrupted engagement is for the 6 financial
years ended 28 February 2019. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with,
UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that
standard were provided.
2 Key audit matters: including our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had
the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We
summarise below the key audit matters in arriving at our audit opinion above, together with our key audit procedures to address those matters
and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results are based on
procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our
opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.
76
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 76
26563
12 June 2019 3:36 pm
Proof 2
12/06/2019 16:03:03
The risk
Our response
The impact of uncertainties due to the UK exiting the European Union on our audit
Refer to page 29 (principal risks), page 25 (viability statement), page 51 (Audit Committee Report), page 91 (accounting policy) and page 110
to 111 (financial disclosures).
Unprecedented levels of uncertainty
All audits assess and challenge the reasonableness of
estimates, in particular as described in valuation of Goodwill
below, and related disclosures and the appropriateness
of the going concern basis of preparation of the financial
statements. All of these depend on assessments of the future
economic environment and the Group’s future prospects
and performance.
In addition, we are required to consider the other
information presented in the Annual Report including
the principal risks disclosure and the viability statement
and to consider the directors’ statement that the annual
report and financial statements 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.
Brexit is one of the most significant economic events for the
UK and at the date of this report its effects are subject to
unprecedented levels of uncertainty of outcomes, with the
full range of possible effects unknown.
We developed a standardised firm-wide approach to the consideration of the
uncertainties arising from Brexit in planning and performing our audits. Our
procedures included:
✷ Our Brexit knowledge – We considered the directors’ assessment
of Brexit-related sources of risk for the Group’s business and financial
resources compared with our own understanding of the risks. We
considered the directors’ plans to take action to mitigate the risks.
✷ Sensitivity analysis – When addressing valuation of Goodwill and other
areas that depend on forecasts, we compared the directors’ analysis to
our assessment of the full range of reasonably possible scenarios resulting
from Brexit uncertainty and, where forecast cash flows are required to
be discounted, considered adjustments to discount rates for the level of
remaining uncertainty.
✷ Assessing transparency – As well as assessing individual disclosures as
part of our procedures on valuation of Goodwill we considered all of the
Brexit related disclosures together, including those in the strategic report,
comparing the overall picture against our understanding of the risks.
Our results
As reported under valuation of Goodwill, we found the resulting estimates
and related disclosures of Goodwill and disclosures in relation to going
concern to be acceptable. However, no audit should be expected to predict
the unknowable factors or all possible future implications for a company and
this is particularly the case in relation to Brexit.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
77
Bloomsbury AR2019_Back.indd 77
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:03
Independent Auditor’s Report
to the members of Bloomsbury Publishing Plc
The risk
Our response
Carrying value of Goodwill (Academic & Professional)– £35.9m (2018: £33.3m)
Refer to page 51 (Audit Committee Report), page 95 (accounting policy) and pages 110 to 111 (financial disclosures) Risk vs 2018
Forecast based valuation
The Group has completed a number of acquisitions in
the past six years with the majority being integrated into
the Academic & Professional division; this constitutes a
single cash generating unit for impairment testing. The
recoverability of goodwill associated with the Academic &
Professional division is dependent on achieving forecast
trading and realising acquisition synergies. The estimated
recoverable amount is subjective due to the inherent
uncertainty involved in forecasting future cash flows and
selection of an appropriate discount rate, which are the basis
of the assessment of recoverability.
The effect of these matters is that, as part of our risk
assessment, we determined that the value in use of goodwill
has a high degree of estimation uncertainty, with a potential
range of reasonable outcomes greater than our materiality
for the financial statements as a whole, and possibly many
times that amount. The financial statements (note 11) disclose
the sensitivity estimated by the Group.
Our procedures included:
✷ Benchmarking assumptions: We challenged the Group’s assumptions
by comparing to externally derived data in relation to key inputs such as
projected economic growth and cost inflation.
✷ Our sector experience: We used our sector experience, with reference
to other sources of data, to assess the appropriateness of the discount
rate for each cash generating unit. We challenged the judgements
and assumptions used by the Group in their calculation based on our
knowledge of the business.
✷ Sensitivity analysis: We performed breakeven analysis on the assumptions
noted above and considered the likelihood that the drivers of breakeven
would arise.
✷ Historical comparisons: We considered the historical accuracy of key
assumptions by comparing the accuracy of the previous estimates of
revenue and cost growth to the actual amounts realised.
✷ Assessing transparency: We assessed whether the Group’s disclosures
about the sensitivity of the outcome of the impairment assessment to
changes in key assumptions reflected the risks inherent in the valuation of
goodwill.
Our results
We found the resulting estimate of the recoverable amount of goodwill to be
acceptable (2018 result: acceptable).
The risk
Our response
Revenue returns provision – Group £8.5m (2018: £7.9m), Company £3.4m (2018: £2.8m)
Refer to page 27 (Audit Committee Report), pages 93 to 94 (accounting policy) and pages 101 to 104, 116 and 138 (financial disclosures)
Risk vs 2018
Subjective Estimate
The Group typically sells its books on a sale or return basis,
and presents revenue net of estimated returns in the
financial statements.
The Group provides for returns based on past experience
using a one year average method. Estimating the level
of returns from customers is subjective in nature due to
the inherent uncertainty involved in forecasting returns
particularly due to the longer period of returns allowed in the
industry.
The effect of these matters is that, as part of our risk
assessment, we determined that the provision for returns
has a high degree of estimation uncertainty, with a potential
range of reasonable outcomes greater than our materiality
for the financial statements as a whole, and possibly many
times that amount. The financial statements (note 18) disclose
the sensitivity estimated by the Group.
Our procedures included:
✷ Assessing application: We evaluated whether the Group’s sales returns
policy was consistently applied and remained appropriate, reflecting the
underlying trends in the data and with regard to relevant accounting
standards.
✷ Historical comparisons: We obtained evidence of actual returns received
in the current year and compared to prior year’s provision to assess
historical accuracy of the Group’s provisions.
✷ Tests of details: We tested the inputs used in the returns provision
calculations at 28 February 2019 by agreeing inputs such as historical sales
and returns experienced to underlying records of the Group.
Our Results
From the evidence obtained, we considered the level of the sales returns
provision to be acceptable (2018: acceptable)
78
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 78
26563
12 June 2019 3:36 pm
Proof 2
12/06/2019 16:03:03
The risk
Our response
Recoverability of advances – Group £22.7m (2018: £22.3m), Company £10.8m (2018: £10.3m)
Refer to page 51 (Audit Committee Report), page 97 (accounting policy) and page 115 and 138 (financial disclosures) Risk vs 2018
Subjective Estimate
The Group pays royalty advances to its authors prior to the
delivery of a manuscript. The Group recovers these advances
from future sales by deductions of royalties due to the author
under the terms of the relevant royalty agreements.
Our procedures included:
✷ Historical comparisons: We have challenged the Group’s forecasts for
future royalty payments, which offset against the unearned advance, by
assessing historical accuracy of future sales forecasts across a sample of
unearned advance balances.
The advances balance is made up of a significant number
of individual advances to authors and requires the Group to
forecast future sales to monitor recoverability of advances.
Where insufficient sales are forecast by the Group for the
advance to be recovered in full, a provision is recorded
against that advance.
✷ Our sector experience: We have challenged any specific adjustments
made by the Group to the historical trends in arriving at the final provision
and provided challenge on how such a position was derived. This involved
considering specific promotions, film tie-ins, future book releases or
planned market events which could have a material impact on the
recoverability of the advances.
There is inherent uncertainty regarding the estimation of
future sales of individual titles arising from the changes in the
economic environment and the popularity of titles.
Our results
We found the resulting estimate of the carrying value of advances to be
acceptable (2018: acceptable)
The effect of these matters is that, as part of our risk
assessment, we determined that the carrying value of
advances has a high degree of estimation uncertainty, with
a potential range of reasonable outcomes greater than
our materiality for the financial statements as a whole, and
possibly many times that amount.
The risk
Our response
Acquisition of I.B. Tauris & Co. Limited ("IBT") - £3.2m intangible assets acquired (2018: £n/a)
Refer to page 51 (Audit Committee Report), page 93 (accounting policy) and pages 109 to 110 (financial disclosures) New Risk for 2019
Forecast based valuation
The Group has made a material acquisition in the year,
purchasing IBT for a total cash consideration of £5.6m.
As a result of the acquisition, in accordance with IFRS 3
Business Combinations, management has performed a fair
value assessment of the identified acquired intangible assets.
The valuation of the identified intangible assets requires
management to make an estimate over the value of each
asset identified which is reliant on a number of key input
assumptions.
The effect of these matters is that, as part of our risk
assessment, we determined that the valuation of acquired
intangible assets has a high degree of estimation uncertainty,
with a potential range of reasonable outcomes greater than
our materiality for the financial statements as a whole.
Our procedures included:
✷ Our valuation expertise: Use of our own valuation specialists to assess
the appropriateness of the intangible assets identified and the valuation
methodology applied and challenge key assumptions such as discount
rate based on our sector expertise.
✷ Benchmarking assumptions: Comparing the Group’s assumptions to
internally and externally derived data in relation to the key inputs.
✷ Historical comparisons: Assessing the completeness of intangible assets
identified against comparable market transactions. Challenging growth
assumptions by comparing to recent historical trading performance.
Our results
We found the resulting estimate of the valuation of the acquired intangible
assets to be acceptable (2018: not applicable).
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
79
Bloomsbury AR2019_Back.indd 79
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:03
Independent Auditor’s Report
to the members of Bloomsbury Publishing Plc
The risk
Our response
Revenue recognised from contracts - £8.5m (2018: £8.7m)
Refer to page 51 (Audit Committee Report), pages 93 to 94 (accounting policy) and pages 101 to 104 (financial disclosures) New Risk for 2019
Accounting judgement
There are contracts entered into by the Group for Rights
and Services revenue (including sales of copyright and
trademarks) that are complex. These arrangements may
include: the licensing or outright sale of the Group’s
intellectual property; the provision of ongoing consultancy
services; or a bundled combination of these.
The complexity of the contractual terms requires the Group
to make judgements in assessing performance obligations,
and when these obligations have been met under the
contract to allow revenue to be recognised. The Group is
also required to make judgement in allocating fair value of
the consideration to each performance obligation included
in a bundled arrangement, especially in instances where fair
value of the individual deliverables is not observable on the
open market. The Group have applied IFRS 15 in the financial
year, which has required re-assessment of these factors for
contracts entered into in previous years. As a result, the
above is a key audit matter.
For all individually significant Rights and Services contracts signed during the
year and open contracts from previous years requiring reassessment under
IFRS 15, our procedures included:
✷ Assessing application: Critically assessing the Group’s identification
of performance obligations and determination of fair value for each
deliverable in a bundled arrangement by reference to contractual terms
and other available sources of information on fair value.
✷ Test of details: Obtaining evidence that the Group had fulfilled its
obligations under the contract so as to recognise revenues.
Our results
The results of our testing were satisfactory and we considered the amount
of revenue recognised from Rights and Services contracts to be acceptable
(2018: not applicable)
The risk
Our response
Recoverability of inventory – Group £26.1m (2018: £26.7m), Company £6.2m (2018: £6.0m)
Refer to page 51 (Audit Committee Report), page 96 (accounting policy) and pages 115 and 137 (financial disclosures) Risk vs 2018
Subjective estimate
The Group has significant inventory balances which could
be at risk of obsolescence if stock levels exceed future sales
volumes at a selling price no less than cost.
The Group provides against stock based on past experience;
the provision applied varies by geographical location of the
stock and the division.
There is an inherent uncertainty in estimates of future sales
volume and the related estimates of stock obsolescence.
We note the significance of the risk is reducing in accordance
with the Group’s focus on reducing inventory balances over
the course of the year.
The effect of these matters is that, as part of our risk
assessment, we determined that the carrying value of
inventory has a high degree of estimation uncertainty, with
a potential range of reasonable outcomes greater than
our materiality for the financial statements as a whole, and
possibly many times that amount.
Our procedures included:
✷ Our sector experience: We have challenged, based on our knowledge of
the business, any specific adjustments made to the provision that would
have been recorded under the standard policy, obtaining support for
changes to the assumptions used, such as historical stock turnover period.
✷ Historical comparisons: We considered the historical accuracy of key
assumptions by comparing, on a sample basis, the accuracy of the previous
estimates of future sales volume to actual sales volumes.
✷ Test of detail: We assessed whether inventory was recorded at the lower
of cost and net realisable value by comparing, on a sample basis, the
recorded unit cost of stock against the market sales price at the time of
testing, to assess whether a provision should have been recorded.
Our results
We found the resulting estimate of the carrying value of inventory to be
acceptable (2018: acceptable)
80
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 80
26563
12 June 2019 3:36 pm
Proof 2
12/06/2019 16:03:03
The risk
Our response
Parent: Recoverability of parent company’s investment in subsidiaries – £83.3m (2018: £78.8m)
Refer to page 51 (Audit Committee Report), page 134 (accounting policy) and page 136 (financial disclosures) Risk vs 2018
Low risk, high value
The carrying amount of the parent company’s investments
in subsidiaries represents 49.4% (2018: 47.8%) of the parent
company’s total assets. Their recoverability is not at high
risk of significant misstatement or subject to significant
judgement, however there have been previous Group
reorganisations and as such a value in use impairment test
was performed. Due to their materiality in the context of the
parent company financial statements, this is considered to
be the area that had the greatest effect on our overall parent
company audit.
Our procedures included:
✷ Tests of detail: Comparing the carrying amount of 100% of the investment
balance with the relevant subsidiaries’ value in use were in excess of their
carrying amount and assessing whether those subsidiaries have historically
been profit-making.
✷ Assessing subsidiary audits: Considering the results of our audit work on
the profits and net assets of those subsidiaries.
Our results
We found the Group’s assessment of the recoverability of the investment in
subsidiaries to be acceptable (2018: acceptable).
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
81
Bloomsbury AR2019_Back.indd 81
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:03
Independent Auditor’s Report
to the members of Bloomsbury Publishing Plc
3 Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at £595,000 (2018: £520,000), determined with reference to a benchmark of Group
profit before tax (of which it represents 4.9% (2018: 4.5%)).
Materiality for the parent company financial statements as a whole was set at £505,000 (2018: £494,000), determined with reference to a
benchmark of the Company’s profit before tax, of which it represents 5.1% (2018: 4.5%).
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £29,000, in addition to other
identified misstatements that warranted reporting on qualitative grounds.
Of the Group's 4 (2018: 4) reporting components, we subjected 2 (2018: 2) to full scope audits for Group purposes. Audits for Group purposes were
performed at the reporting components in the UK and the USA, covering 90% of total Group revenue (2018: 90%), 98% of Group profit before tax
(2018: 97%) and 91% of Group total assets (2018: 94%).
The Group audit team has performed the audit of both the UK (parent company) and USA components, and has addressed the significant risk
areas detailed above. The Group team approved the following component materialities, having regard to the mix of size and risk profile of the
Group across the components:
✷ UK £505,000 (2018: £494,000)
✷ USA £267,000 (2018: £241,000)
The remaining 10% of total Group revenue, 2% of Group profit before tax and 9% of total Group assets is represented by 2 reporting
components, neither of which individually represented more than 7% of any of total Group revenue, Group profit before tax or total Group assets.
For these residual components, we performed analysis at an aggregated Group level to re-examine our assessment that there were no significant
risks of material misstatement within these.
4 We have nothing to report on going concern
The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or the Group or
to cease their operations, and as they have concluded that the Company’s and the Group’s financial position means that this is realistic. They have
also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for
at least a year from the date of approval of the financial statements (“the going concern period”).
Our responsibility is to conclude on the appropriateness of the Directors’ conclusions and, had there been a material uncertainty related to going
concern, to make reference to that in this audit report. However, as we cannot predict all future events or conditions and as subsequent events
may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of reference to a
material uncertainty in this auditor's report is not a guarantee that the Group and the Company will continue in operation.
In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Group’s and Company’s business model, including the
impact of Brexit, and analysed how those risks might affect the Group’s and Company’s financial resources or ability to continue operations over
the going concern period. We evaluated those risks and concluded that they were not significant enough to require us to perform additional
audit procedures.
Based on this work, we are required to report to you if:
✷ we have anything material to add or draw attention to in relation to the directors’ statement in Note 2 to the financial statements on the use
of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Company’s use of
that basis for a period of at least twelve months from the date of approval of the financial statements; or
✷ the related statement under the Listing Rules set out on page 47 is materially inconsistent with our audit knowledge.
We have nothing to report in these respects, and we did not identify going concern as a key audit matter.
82
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 82
26563
12 June 2019 3:36 pm
Proof 2
12/06/2019 16:03:03
5 We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on
the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the
information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have
not identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
✷ we have not identified material misstatements in the strategic report and the directors’ report;
✷ in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
✷ in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Disclosures of principal risks and longer-term viability
Based on the knowledge we acquired during our financial statements audit, we have nothing material to add or draw attention to in relation to:
✷ the directors’ confirmation within the viability statement (page 52) that they have carried out a robust assessment of the principal risks facing
the Group, including those that would threaten its business model, future performance, solvency and liquidity;
✷ the Principal Risks disclosures describing these risks and explaining how they are being managed and mitigated; and
✷ the directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what period they have done so
and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
Under the Listing Rules we are required to review the viability statement. We have nothing to report in this respect.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we
cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgments that
were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and
Company’s longer-term viability.
Corporate governance disclosures
We are required to report to you if:
✷ we have identified material inconsistencies between the knowledge we acquired during our financial statements audit and the directors’
statement that they consider that the annual report and financial statements 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; or
✷ the section of the annual report describing the work of the Audit Committee does not appropriately address matters communicated by us to
the Audit Committee; or
✷ a corporate governance statement has not been prepared by the company.
We are required to report to you if the Corporate Governance Statement does not properly disclose a departure from the eleven provisions of the
UK Corporate Governance Code specified by the Listing Rules for our review.
We have nothing to report in these respects.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
83
Bloomsbury AR2019_Back.indd 83
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:03
Independent Auditor’s Report
to the members of Bloomsbury Publishing Plc
Based solely on our work on the other information described above:
✷ with respect to the Corporate Governance Statement disclosures about internal control and risk management systems in relation to financial
reporting processes and about share capital structures:
✷ we have not identified material misstatements therein; and
✷ the information therein is consistent with the financial statements; and
✷ in our opinion, the Corporate Governance Statement has been prepared in accordance with relevant rules of the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority.
6 We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
✷ adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from
branches not visited by us; or
✷ the parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
✷ certain disclosures of directors’ remuneration specified by law are not made; or
✷ we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
7 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 46, the directors are responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; 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; assessing the Group and parent Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern; and using 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.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or other irregularities (see below), or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud, other irregularities or error and are considered material if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
Irregularities – ability to detect
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our
general commercial and sector experience and through discussion with the directors and other management (as required by auditing standards)
and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout
the audit.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including
related companies legislation), distributable profits legislation and taxation legislation and we assessed the extent of compliance with these laws
and regulations as part of our procedures on the related financial statement items.
84
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 84
26563
12 June 2019 3:36 pm
Proof 2
12/06/2019 16:03:03
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect
on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Group’s licence
to operate. We identified the following areas as those most likely to have such an effect: health and safety and employment law. Auditing
standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and
other management and inspection of regulatory and legal correspondence, if any. Through these procedures, we became aware of actual or
suspected non-compliance and considered the effect as part of our procedures on the related financial statement items. The identified actual or
suspected non-compliance was not sufficiently significant to our audit to result in our response being identified as a key audit matter.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the
financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example,
the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there
remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all
laws and regulations.
8 The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Sarah Styant (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square,
London
E14 5GL
21 May 2019
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
85
Bloomsbury AR2019_Back.indd 85
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:03
Consolidated Income Statement
For the year ended 28 February 2019
Revenue
Cost of sales
Gross profit
Marketing and distribution costs
Administrative expenses
Operating profit before highlighted items
Highlighted items
Operating profit
Finance income
Finance costs
Profit before taxation and highlighted items
Highlighted items
Profit before taxation
Taxation
Profit for the year attributable to owners of the Company
Earnings per share attributable to owners of the Company
Basic earnings per share
Diluted earnings per share
The notes on pages 91 to 129 form part of these consolidated financial statements.
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
162,679
(74,922)
87,757
(22,053)
(53,735)
14,294
(2,325)
11,969
130
(50)
14,374
(2,325)
12,049
(2,802)
9,247
161,510
(77,155)
84,355
(22,814)
(50,000)
13,114
(1,573)
11,541
151
(48)
13,217
(1,573)
11,644
(2,574)
9,070
12.37p
12.25p
12.15p
12.06p
Notes
3
4
4
6
6
4
7
9
9
86
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 86
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:03
Consolidated Statement of Comprehensive Income
For the year ended 28 February 2019
Profit for the year
Other comprehensive income
Items that may be reclassified to the income statement:
Exchange differences on translating foreign operations
Items that may not be reclassified to the income statement:
Remeasurements on the defined benefit pension scheme
Other comprehensive income for the year net of tax
Total comprehensive income for the year attributable to the owners of the Company
Year ended
28 February
2019
£’000
9,247
Year ended
28 February
2018
£’000
9,070
964
(3,943)
(5)
959
10,206
27
(3,916)
5,154
Items in the statement above are disclosed net of tax. The income tax relating to each component of other comprehensive income is disclosed in
note 7.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
87
Bloomsbury AR2019_Back.indd 87
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:03
Consolidated Statement of Financial Position
As at 28 February 2019
Assets
Goodwill
Other intangible assets
Investments
Property, plant and equipment
Deferred tax assets
Trade and other receivables
Total non-current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Retirement benefit obligations
Deferred tax liabilities
Provisions
Total non-current liabilities
Trade and other liabilities
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Translation reserve
Other reserves
Retained earnings
Total equity attributable to owners of the Company
The financial statements were approved by the Board of Directors and authorised for issue on 21 May 2019.
J N Newton
Director
P Scott-Bayfield
Director
28 February
2019
£’000
28 February
2018
£’000
Notes
11
12
13
14
15
17
16
17
23
15
20
18
20
21
21
21
21
21
44,895
21,890
300
2,110
2,376
1,360
72,931
26,076
80,506
27,580
134,162
207,093
121
2,360
147
2,628
60,644
83
60,727
63,355
143,738
942
39,388
8,651
7,118
87,639
143,738
42,139
19,885
300
2,083
2,092
1,530
68,029
26,677
76,857
25,428
128,962
196,991
170
1,993
57
2,220
55,185
23
55,208
57,428
139,563
942
39,388
7,687
6,455
85,091
139,563
88
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 88
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:03
Consolidated Statement of Changes in Equity
At 28 February 2017
Profit for the year
Other comprehensive income
Exchange differences on translating
foreign operations
Remeasurements on the defined
benefit pension scheme
Total comprehensive income
for the year
Transactions with owners
Dividends to equity holders
of the Company
Deferred tax on share-based
payment transactions
Share-based payment transactions
Total transactions with owners
of the Company
At 28 February 2018
Adjustment on initial application of IFRS 15
net of tax (see note 2w)
Adjustment on initial application of IFRS 9
net of tax (see note 2x)
At 28 February 2018 (restated)
Profit for the year
Other comprehensive income
Exchange differences on translating
foreign operations
Remeasurements on the defined
benefit pension scheme
Total comprehensive income
for the year
Transactions with owners
Dividends to equity holders
of the Company
Unclaimed dividends
Share options exercised
Deferred tax on share-based
payment transactions
Share-based payment transactions
Total transactions with owners
of the Company
At 28 February 2019
Share
capital
£’000
942
–
Share
premium
£’000
Translation
reserve
£’000
39,388
–
11,630
–
Merger
reserve
£’000
1,803
–
Capital
redemption
reserve
£’000
Share-based
payment
reserve
£’000
Own shares
held by EBT
£’000
22
–
5,492
–
(1,043)
–
Retained
earnings
£’000
81,065
9,070
Total equity
£’000
139,299
9,070
–
–
–
–
–
–
–
942
–
–
942
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3,943)
–
(3,943)
–
–
–
–
–
–
–
–
–
–
39,388
–
7,687
–
1,803
–
–
–
–
39,388
–
–
7,687
–
–
1,803
–
–
–
–
–
–
–
–
–
964
–
964
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
22
–
–
22
–
–
–
–
–
–
–
–
–
–
–
–
–
–
181
–
–
–
–
–
–
–
27
(3,943)
27
9,097
5,154
(5,041)
(5,041)
(30)
–
(30)
181
181
5,673
–
(1,043)
(5,071)
85,091
(4,890)
139,563
–
–
(857)
(857)
–
5,673
–
–
(1,043)
–
(200)
84,034
9,247
(200)
138,506
9,247
–
–
–
–
–
–
–
422
–
–
–
–
241
–
–
–
(5)
964
(5)
9,242
10,206
(5,655)
12
(27)
(5,655)
12
214
33
–
33
422
–
942
–
39,388
–
8,651
–
1,803
–
22
422
6,095
241
(802)
(5,637)
87,639
(4,974)
143,738
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
89
Bloomsbury AR2019_Back.indd 89
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
Consolidated Statement of Cash Flows
For the year ended 28 February 2019
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Finance income
Finance costs
Share-based payment charges
Tax expense
Decrease in inventories
Decrease/ (Increase) in trade and other receivables
(Decrease)/ Increase in trade and other liabilities
Cash generated from operating activities
Income taxes paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of business, net of cash acquired
Purchase of other investments
Interest received
Net cash used in investing activities
Cash flows from financing activities
Equity dividends paid
Proceeds from exercise of share options
Repayment of overdraft
Interest paid
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gain/(loss) on cash and cash equivalents
Cash and cash equivalents at end of year
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
Notes
9,247
9,070
14
12
6
6
22
7
19
19
19
19
19
470
4,139
(130)
50
498
2,802
17,076
2,315
5,834
(7,702)
17,523
(2,529)
14,994
(456)
(2,898)
(4,004)
–
116
(7,242)
(5,655)
214
(201)
(34)
(5,676)
2,076
25,428
76
27,580
434
4,002
(151)
48
202
2,574
16,179
1,399
(2,529)
6,969
22,018
(3,049)
18,969
(314)
(2,808)
–
(300)
139
(3,283)
(5,041)
–
–
(31)
(5,072)
10,614
15,478
(664)
25,428
90
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 90
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
Notes to the Financial Statements
Accounting Policies
1. Reporting entity
Bloomsbury Publishing Plc (the “Company”) is a company domiciled in the United Kingdom. The address of the Company’s registered office
can be found on page 145. The consolidated financial statements of the Company as at and for the year ended 28 February 2019 comprise
the Company and its subsidiaries (together referred to as the “Group”). The Group is primarily involved in the publication of books and other
related services.
2. Significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently
applied to all the periods presented unless otherwise stated.
a) Statement of compliance
These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and International
Financial Reporting Interpretations Committee (“IFRIC”) interpretations adopted by the European Union (“EU”) at the time of preparing these
financial statements and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
b) Basis of preparation
The consolidated financial statements have been prepared under the historical cost convention and on a going concern basis.
c) Going concern
The Group’s business activities, together with the factors likely to affect its future development, performance and position are set out in the
Strategic Review on pages 5 to 37. The financial position of the Group, its cash flows and liquidity position are described in the Financial Review
on pages 12 to 17. In addition, note 24 to the financial statements includes the Group’s objectives, policies and processes for managing its capital,
its financial risk management objectives, details of its financial instruments, and its exposures to credit risk and liquidity risk.
The Directors believe that the Group’s diversification of product and geographical spread together with its monitoring and forecasting processes
place the Group well in managing its business risks. The Group’s forecasts and projections, taking into account reasonable possible changes in
trading performance, indicate that the Group is able to operate within the level of its current available facilities including compliance with the
bank facility covenants. Details of the bank facility and its covenants are shown in note 24c.
After making enquiries of senior management and reviewing cash flow forecasts, the Directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence at least until June 2020, being the period of the detailed going
concern assessment reviewed by the Board. They therefore continue to adopt the going concern basis of accounting in preparing the annual
financial statements.
d) Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with IFRSs requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised and in any future periods affected. Critical judgements and areas where the use of estimates is significant are disclosed in
note 2v.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
91
Bloomsbury AR2019_Back.indd 91
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
Notes to the Financial Statements
Accounting Policies
e) Application of new and amended standards and interpretations
The following amendments and interpretations were introduced to accounting standards relevant to the Group during the year ended
28 February 2019. The table below summarises the impact of these changes to the Group:
Accounting standard
Description of change
Impact on financial statements
IFRS 15 Revenue from
Contracts with Customers
IFRS 9 Financial
Instruments
Other standards
A description and the impact of the adoption of IFRS 15 Revenue from Contracts with Customers is set out in note 2w.
A description and the impact of the adoption of IFRS 9 Financial Instruments is set out in note 2x.
A number of other new standards and amendments to standards
and interpretations are effective for annual periods beginning
after 1 January 2018.
The standards and amendments have not had a
material impact on the Group. Additional disclosure
has been provided where relevant.
The Group has not early adopted the following new and revised accounting standards, interpretations or amendments issued by the
International Accounting Standards Board that are currently endorsed but not yet effective:
Accounting standard
Description of change
Impact on financial statements
IFRS 16 Leases effective for
annual periods beginning
after 1 January 2019
The new standard replaces IAS 17 Leases and related
interpretations and details the requirements for the classification,
measurement and recognition of lease arrangements.
The most significant effect of the new requirements will be an
increase in lease assets and lease liabilities for leases currently
categorised as operating leases.
The nature of expenses related to those leases will now change
because the Group will recognise a depreciation charge for
right-of-use assets and an interest expense on lease liabilities.
Other standards
A number of other new standards and amendments to standards
and interpretations are effective for annual periods beginning
after 1 January 2019 and have not been applied in preparing
these financial statements.
The Group will apply IFRS 16 on 1 March 2019
and anticipates using the modified retrospective
approach. Under this approach, the cumulative
effect of adopting IFRS 16 will be recognised as
an adjustment to the opening balance of retained
earnings on 1 March 2019, with no restatement
of comparative information.
Based on the information currently available,
the Group estimates that it will recognise additional
lease liabilities of £14 million – £16 million
and a corresponding right-of-use asset of
£13 million – £15 million as at 1 March 2019.
Operating profit for the year ending 29 February
2020 is estimated to increase by approximately
£0.3 million, being the difference between the
lease expense and depreciation, and profit before
tax will decrease by approximately £0.2 million,
reflecting a higher total lease interest expense in
the initial years.
There are several practical expedients and
exemptions available under IFRS 16. The Group will
exclude leases of low value assets and short-term
leases, with a duration of less than 12 months from
the application of IFRS 16, with payments for these
leases continuing to be expensed directly to the
income statement as operating leases.
The Directors do not anticipate the application
of these standards and amendments will have
a material impact on the Group’s consolidated
financial statements.
92
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 92
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
f) Basis of consolidation
i. Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred
to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The Group measures goodwill at the acquisition date as:
✷ the fair value of consideration transferred; plus
✷ the recognised amount of any non-controlling interest in the acquiree; less
✷ the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
Where the excess is negative, a bargain purchase gain is recognised immediately in the income statement.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally
recognised in the income statement.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with the business
combination are expensed as incurred.
Any contingent consideration payable is measured and recognised at fair value at the acquisition date. Subsequent changes to the fair value of
contingent consideration are recognised in the income statement.
ii. Subsidiaries
The consolidated financial statements comprise the financial information of the Company and its subsidiaries.
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are
included in the consolidated financial statements from the date on which control commences until the date on which control ceases.
Accounting policies of subsidiaries are aligned with accounting policies adopted by the Group to ensure consistency.
All subsidiaries except Bloomsbury Publishing India Private Limited have a reporting period end of 28 February. Bloomsbury Publishing India
Private Limited has a reporting period end of 31 March, which aligns with the Indian Government’s financial year.
iii. Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any non-controlling interests and
the other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest retained in the former subsidiary is measured
at fair value when control is lost.
iv. Transactions eliminated on consolidation
Intra-Group balances and transactions, and any unrealised income and expenses arising from intra-Group transactions, are eliminated. Unrealised
gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the
investee. Unrealised losses are eliminated in the same way as unrealised gains but only to the extent that there is no evidence of impairment.
g) Revenue
IFRS 15 Revenue from Contracts with Customers provides a single, principles-based five-step model to be applied to all sales contracts. It is based
on the transfer of control of goods and services to customers and replaces the separate models for goods, services and construction contracts
previously included in IAS 11 Construction Contracts and IAS 18 Revenue. The major change is the requirement to identify and assess the
satisfaction of delivery of each performance obligation in contracts in order to recognise revenue.
Revenue represents the fair value of consideration received from the provision of goods, services and rights falling within the Group’s ordinary
activities, after deduction of trade discounts, value added tax and anticipated returns.
Where the goods or services promised within a contract are distinct, they are identified as separate performance obligations and are accounted
for separately. Where contractual arrangements consist of two or more performance obligations, such as access to multiple titles, the transaction
price is allocated between the distinct performance obligations on the basis of their relative stand-alone selling prices.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
93
Bloomsbury AR2019_Back.indd 93
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
Notes to the Financial Statements
Notes to the Financial Statements
Accounting Policies
Accounting Policies
i. Print:
✷ Print sales: Revenue from the sale of printed books is recognised at the point in time when control passes. This is generally at the point of
shipment when title passes to the customer, when the Group has a present right to payment and has satisfied the relevant performance
obligations under the contract.
A provision for anticipated returns is made based primarily on historical return rates in each territory. If these do not reflect actual returns in
future periods, then revenues could be understated or overstated for a particular period. From the adoption of IFRS 15, the provision for
anticipated future sales returns is recognised in trade and other liabilities in the statement of financial position.
ii. Digital:
✷ E-books sales: Revenue from e-book sales is recognised when content is delivered i.e. access has been given to the customer.
✷ Subscription Income: Revenue is generated from customers through the sale of digital materials to educational establishments, libraries and
professionals. Revenue for digital subscriptions is derived from the periodic subscription or update of the product. Revenue is recognised
on a straight-line basis over the period of subscription or if less the expected useful economic life of the product, unless the product is
downloadable or the goods or services are not delivered in a consistent manner over time, in which case revenue is recognised based on
the value received by the customer.
iii. Rights and Services
✷ Revenue from the licence of publishing and distribution rights, including film, paperback, electronic, overseas publishing rights, and
sponsorship, is recognised when the Group has provided the associated material and collectability is probable.
✷ Management services contracts: Revenue is primarily generated from multi-year contractual arrangements related to the delivery of online
platform build, editorial and management services. Revenue is recognised over time based on contractual milestones as the customer gains
benefit from the assets created or services provided.
h) Foreign currencies
i. Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment
in which the entity operates (“the functional currency”). These consolidated financial statements are presented in sterling as this is the most
representative currency of the Group’s operations. All financial information presented in sterling has been rounded to the nearest thousand
except where otherwise stated.
ii. Transactions and balances
Transactions in currencies other than the functional currency are recorded in the functional currency at the rates of exchange prevailing on
the dates of the transactions. Assets and liabilities in foreign currencies are translated into sterling at closing rates of exchange at the date of the
statement of financial position.
Exchange differences are charged or credited to the income statement within administrative expenses.
iii. Group companies
The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated
into the presentation currency as follows:
✷ Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial
position;
✷ Income and expenses are translated at the average exchange rates over the period; and
✷ All resulting exchange differences are recognised in other comprehensive income and presented in the translation reserve in equity.
On disposal of a foreign entity these exchange differences are recycled to the income statement.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate. Exchange differences arising are recognised in equity.
94
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 94
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
i) Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
i. Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because
it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or
deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the reporting date.
The Group recognises liabilities for anticipated tax issues based on estimates of the additional taxes that are likely to become due, which
require judgement. Amounts are accrued based on the Director’s interpretation of specific tax law in the relevant country and the likelihood
of settlement. The Directors use in-house tax experts, professional firms and previous experience when assessing tax risks. Where the final tax
outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current tax and deferred tax
provisions in the period in which such determination is made.
ii. Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial
statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for
all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is
probable that taxable profit will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and
liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination)
of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able
to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be generated to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled based upon tax
rates that have been enacted or substantively enacted by the end of the reporting period.
iii. Current and deferred tax for the year
Current and deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to other
comprehensive income or equity, in which case the deferred tax is also recognised in other comprehensive income or equity respectively.
j) Goodwill and other intangible assets
i. Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business (see note 2f)i) less
accumulated impairment losses, if any.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating units)
that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently where there is an indication
that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the
carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss in the consolidated income
statement. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
95
Bloomsbury AR2019_Back.indd 95
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
Notes to the Financial Statements
Notes to the Financial Statements
Accounting Policies
Accounting Policies
ii. Other intangible assets
Other intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and
accumulated impairment losses.
Except for goodwill and assets under construction, intangible assets are amortised on a straight-line basis in the income statement over their
expected useful lives by equal annual instalments at the following rates:
— 5% to 21% per annum
Publishing relationships
Imprints
— 3% to 10% per annum
Subscriber and customer relationships — 7% to 9% per annum
Trademarks
Product and systems development
— over the life of the trademark
— 14% to 20% per annum
Assets under construction relate to the costs of developing a product, typically an online platform, which is yet to go live.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted prospectively if appropriate.
iii. Product and systems development
Costs that are directly associated with the purchase and implementation of systems, such as software products, are recognised as intangible assets.
Likewise, costs incurred in developing a product, typically an online platform, are recognised as intangible assets.
Expenditure is only capitalised if costs can be measured reliably, the product is technically and commercially feasible, future economic benefits
are probable and the Group has sufficient resources to complete development and use the asset.
k) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment loss.
Property, plant and equipment are depreciated in order to write down their cost less residual value using the straight-line method over their
expected useful lives at the following rates:
— over the remaining life of the lease
Short leasehold improvements
Furniture and fittings
— 10% per annum
Computers and other office equipment — 20% per annum
— 25% per annum
Motor vehicles
Depreciation is prorated in the years of acquisition and disposal of an asset. The estimated useful lives, residual value and depreciation
method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected to arise from
the continued use of the asset. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognised in the income statement.
l) Impairment of tangible and intangible assets excluding goodwill
At the end of each reporting period the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is
any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other
assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the
asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the income statement.
m) Inventories
The cost of work in progress and finished goods represents the amounts invoiced to the Group for origination, paper, printing and binding.
Inventories are valued at the lower of cost and net realisable value. Cost is determined using the weighted average cost method. Net realisable
value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Provisions
are made for slow-moving and obsolete stock.
96
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 96
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
n) Royalty advances to authors
Advances of royalties to authors are included within current receivables when the advance is paid less any provision required to adjust
the advance to its net realisable value. The royalty advance is expensed at the contracted royalty rate as the related revenues are earned.
o) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and
it is probable that an outflow of economic benefits will be required to settle the obligation. When a provision is measured using the cash flows
estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money
is material).
p) Financial instruments
Financial assets and financial liabilities are recognised when the Group has become a party to the contractual provisions of the instrument. The
Group’s financial assets and liabilities are as below:
Trade receivables
Trade receivables and other receivables are measured on initial recognition at fair value, and are subsequently measured at amortised cost using
the effective interest rate method, less any impairment. Following the adoption of IFRS 9, provisions for bad and doubtful debts are based on
the expected credit loss model. The ‘simplified approach’ is used with the expected loss allowance measured at an amount equal to the lifetime
expected credit losses. In 2018, trade receivables are also stated after provision for anticipated future sales returns .
Cash and cash equivalents
Cash and cash equivalents in the statement of cash flows comprise cash in hand and at bank, other short-term deposits held by the Group and
overdrafts. Bank overdrafts are included in current liabilities in the statement of financial position.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Trade payables
Trade payables are not interest bearing and are initially recognised at fair value and subsequently at amortised cost using the effective interest
method.
q) Operating leases
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases by the lessee.
Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line
basis over the period of the lease.
r) Employee benefits
i. Defined contribution plans
Pension costs relating to defined contribution pension schemes are recognised in the income statement in the period for which related services
are rendered by the employee.
ii. Defined benefit plans
Until 1997, a subsidiary company operated a defined benefit pension scheme. The retirement obligation recognised in the statement of financial
position represents the net of the present value of the defined benefit obligation and the fair value of plan assets at the statement of financial
position date. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other
comprehensive income in the period in which they arise. Net interest is calculated by applying the discount rate to the net defined benefit
obligation and is presented as finance costs or finance income.
iii. Termination benefits
Termination benefits are recognised as an expense when the Group is demonstrably committed, without realistic possibility of withdrawal, to a
formal detailed plan either to terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer
made to encourage voluntary redundancy.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
97
Bloomsbury AR2019_Back.indd 97
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
Notes to the Financial Statements
Notes to the Financial Statements
Accounting Policies
Accounting Policies
iv. Share-based payment transactions
The Group issues equity-settled share-based payment instruments to certain employees. Equity-settled share-based payment transactions are
measured at fair value at the date of grant. The fair value determined at the grant date of equity-settled share-based payments is charged to the
income statement on a straight-line basis over the vesting period, based on the Group’s estimate of the shares that will eventually vest.
Options granted under the Company Share Option Plan and Sharesave Plan are equity-settled. The fair values of such options have been
calculated using the Black–Scholes model based on publicly available market data.
Awards granted under the Group’s Performance Share Plan are equity-settled. For the awards granted in 2016, part of any award granted under
the Plan is subject to a Total Shareholder Return performance condition. The fair value of this element of the awards is calculated using the
Stochastic model. For awards granted in 2017 or 2018, part of any award under the Plan is subject to a Return on Capital Employed performance
condition. These have been measured based on the share price at the date of grant as they are only subject to non-market conditions. The other
part of any award granted under the Plan is subject to an Earnings Per Share performance condition. The fair value of this element of the awards
is calculated using the Black–Scholes model. Where the awards are subject to a holding period, we have used the Chaffe model to determine a
discount for lack of marketability.
s) Employee benefit trust
The Company operates an employee benefit trust and has de facto control of shares held by the trust and bears their benefits and risks. The
Group considers the trust to be substantially under its control and so consolidates the financial information of the trust as stated in note 2f. The
Group records the assets and liabilities of the trust as its own and shares held by the trust are recorded at cost as a deduction from shareholders’
equity. Finance costs and administrative expenses are charged as they accrue.
t) Segmental reporting
Operating segments, which have not been aggregated, are reported in a manner that is consistent with the internal reporting provided to the
Chief Executive Officer (“CEO”), regarded as the Chief Operating Decision Maker.
The CEO views the Group primarily from a nature of business basis, reflecting the divisional performance of Consumer, made up of Children’s
Trade and Adult Trade, and Non-Consumer, made up of Academic & Professional, Special Interest and Content Services. Segment results that are
reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Performance is
evaluated based on operating profit contributions using the same accounting policies as adopted for the Group’s financial statements.
u) Dividends
Dividends are recognised as liabilities once they are appropriately authorised.
v) Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including reasonable expectations
of future events. The resultant estimates will, by definition, not necessarily equal the related actual results and may require adjustment in
subsequent accounting periods. The estimates and assumptions that may cause a material adjustment to the carrying amount of assets and
liabilities in the next financial year are:
i. Revenue recognition
Note 3 shows a breakdown of revenue by type.
This is a judgement because management is required to decide whether the revenue recognition criteria has been met for a contract. Certain
contracts entered into by the Group may include: the licensing or outright sale of the Group’s intellectual property; the provision of ongoing
consultancy services; or a bundled combination of both.
The Group considers contractual terms and makes judgements in assessing when the triggers for revenue recognition have been met,
particularly that the Group has sufficiently fulfilled its performance obligations under the contract to allow revenue to be recognised and the
allocation of revenue between multiple deliverables.
ii. Book returns
The level of sales returns liability is set out in note 18.
Printed books are normally sold on a sale-or-return basis. The timing of returns of unsold books is uncertain. A provision is made against sales
for the expected future returns of books that have not occurred by the end of an accounting period.
This is an estimate as it requires management to estimate the level of expected future returns. As books are returnable by customers, the
Group makes a provision against books sold in the accounting period which is then carried forward and offset against trade and other liabilities
(2018: trade receivables) in the statement of financial position in anticipation of book returns received subsequent to the reporting period end.
98
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 98
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
The provision is based on the assumption of the time lag following a sale before a return is made and calculated by reference to historical returns
rates and expected future returns.
iii. Author advances
Trade and other receivables in the Group Statement of Financial Position, in note 17, include Royalty advances (i.e. net unearned advances
to authors). A provision is made against gross advances (paid and payable) to the extent that they are not expected to be fully earned from
anticipated future sales of a title or subsidiary rights receivable.
This is an estimate as it requires management to estimate the future sales of a title. At the end of each financial year a review is carried out on all
published title advances. If it is unlikely that royalties from future title sales or subsidiary rights will fully earn down the advance, a provision is made
in the income statement for the difference between the carrying value and the anticipated recoverable amount from future earnings.
iv. Inventory
The level of inventories and the inventory provision are set out in note 16 to the financial statements.
For each line of inventory, a provision is made against the cost of the inventory, where the Net Realisable Value is less than cost. Net Realisable
Value is the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
This is an estimate as it requires management to estimate the net realisable value for inventory. At the end of each reporting period a review is
carried out on all published titles where inventory is held. A provision is made by the Group against unsold inventory on a title-by-title basis, with
regard to historical net sales and expected future net sales, to value the inventories at the lower of cost and net realisable value.
v. Impairment reviews
The carrying value of goodwill arising on the acquisition of companies (or groups of companies) by the Group is set out in note 11.
This is an estimate as it requires an estimation of future cash flows relating to each CGU. IFRS require management to undertake an annual test for
impairment of indefinite life assets and, for finite life assets, to test for impairment if events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. The Group currently undertakes an annual impairment test covering goodwill and other indefinite
life assets and also reviews finite life assets to consider whether a full impairment review is required.
Intangible assets recoverability is an area involving management judgement, requiring assessment as to whether the carrying value of assets can
be supported by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted at
an appropriate rate. In calculating the net present value of the future cash flows, certain assumptions are required to be made. Note 11 details the
assumptions used and sensitivities analysis performed on the value in use calculations.
w) Change of accounting policy: IFRS 15
The Group has adopted IFRS 15 Revenue from Contracts with Customers from 1 March 2018 and applied the cumulative effect method.
Comparatives for 2018 have not been restated and the cumulative impact of adoption has been recognised as a decrease to opening retained
earnings as follows:
Retained earnings
Print
Subscription income (part of digital)
Licence income (part of rights and services)
Impact on profit before tax
Taxation
Total impact at 1 March 2018
Non-current assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Current liabilities
Trade and other liabilities
Total impact at 1 March 2018
£’000
(608)
(387)
(76)
(1,071)
214
(857)
214
438
6,872
(8,381)
(857)
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
99
Bloomsbury AR2019_Back.indd 99
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
Notes to the Financial Statements
Accounting Policies
These areas of the business have been impacted by adoption of IFRS 15:
Print: Where our distributors bear the bad debt risk, revenues were previously recognised when the invoice was raised by the distributor. Under
IFRS 15, revenue is recognised when the customer receives the stock.
Subscription income: Adopting IFRS 15 has impacted the timing of recognition of certain non-subscription Perpetual Access (“PA”) digital
platform sales. Previously, revenue from sales of these products was recognised when the customer was granted access; under IFRS 15 as the
platform is updated or enhanced over time a proportion of these revenues is recognised over five years. The impact of this is to defer revenue
and profit from certain PA sales compared to the previous treatment.
Licence income (part of rights and services): Previously, revenue from the licence of brands was recognised at a point in time. Under IFRS
15, as the customer’s benefit from the brand is dependent upon our ongoing activities that support or maintain the value of the intellectual
property, the licence income is treated as a right to access and revenue recognised over time.
Returns provision: In addition to the changes above, IFRS 15 also requires that the Group’s provision for sales returns is reclassified. Previously,
the provision for returns was included on a net basis within trade receivables. The effect on transition was to increase trade and other receivables
by £7,922,000 and increase trade and other liabilities by £7,922,000.
The impact of adopting IFRS 15 on the results for the year to 28 February 2019 is shown below:
Amounts pre
IFRS 15
£’000
Transition
adjustment
£’000
In period
adjustment
£’000
Revenue
Gross profit
Operating profit
Taxation
Profit for the period
Non-current assets
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Current liabilities
Trade and other liabilities
Net assets
162,702
87,660
11,869
(2,655)
9,274
2,297
25,512
73,582
(52,193)
144,622
–
–
–
–
–
214
438
6,872
(8,381)
(857)
Amounts as
reported
£’000
162,679
87,757
11,969
(2,802)
9,247
(23)
97
100
(147)
(27)
(135)
2,376
126
52
(70)
(27)
26,076
80,506
(60,644)
143,738
x) Change of accounting policy: IFRS 9
The Group has adopted IFRS 9 Financial Instruments from 1 March 2018 and applied the cumulative effect method. Comparatives for 2018 have
not been restated and the cumulative impact of adoption has been recognised as a decrease to opening retained earnings as follows:
Retained earnings
Provision for impairment of trade receivables
Taxation
Total impact at 1 March 2018
Non-current assets
Deferred tax assets
Current assets
Trade and other receivables
Total impact at 1 March 2018
£’000
(254)
54
(200)
54
(254)
(200)
The adjustment above arises from the adoption of the forward-looking expected loss impairment model under IFRS 9, which replaces the incurred
loss model of IAS 39, when recognising provisions for impairment of trade receivables. Although there is a transition impact from adoption of the
new model there was no material impact on profit before tax for the year to 28 February 2019.
100
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 100
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
3. Revenue and segmental analysis
The Group is comprised of two worldwide publishing divisions: Consumer and Non-Consumer, reflecting the core customers for our different
operations. The Consumer division is further split out into two operating segments: Children’s Trade and Adult Trade. Non-Consumer is split
between three operating segments: Academic & Professional, Special Interest and Content Services.
Each reportable segment represents a cash-generating unit for the purpose of impairment testing. We have allocated goodwill between
reportable segments. These divisions are the basis on which the Group primarily reports its segment information. Segments derive their revenue
from book publishing, sale of publishing and distribution rights, management and other publishing services.
The analysis by segment is shown below:
Year ended 28 February 2019
External revenue
Cost of sales
Gross profit
Marketing and distribution costs
Contribution before administrative
expenses
Administrative expenses excluding
highlighted items
Operating profit/(loss) before
highlighted items/segment results
Amortisation of acquired intangible assets
Other highlighted items
Operating profit/(loss)
Finance income
Finance costs
Profit/(loss) before taxation
Taxation
Profit/(loss) for the year
Operating profit/(loss) before
highlighted items/segment results
Depreciation
Amortisation of internally generated
intangibles
EBITDA before highlighted items
Children’s
Trade
£’000
65,800
(32,671)
33,129
(9,039)
Adult Trade
£’000
Consumer
£’000
Academic &
Professional
£’000
33,454
(16,937)
16,517
(5,231)
99,254
(49,608)
49,646
(14,270)
41,245
(14,757)
26,488
(4,878)
Special
Interest
£’000
21,156
(10,234)
10,922
(2,846)
Content
Services
£’000
Non-
Consumer
£’000
1,024
(323)
701
(59)
63,425
(25,314)
38,111
(7,783)
24,090
11,286
35,376
21,610
8,076
642
30,328
(14,306)
(10,395)
(24,701)
(18,479)
(7,363)
(867)
(26,709)
9,784
–
–
9,784
–
–
9,784
–
9,784
9,784
185
891
(18)
–
873
–
–
873
–
873
891
83
10,675
(18)
–
10,657
–
–
10,657
–
10,657
10,675
268
373
10,342
177
1,151
550
11,493
3,131
(1,482)
–
1,649
–
–
1,649
–
1,649
3,131
131
1,638
4,900
713
(209)
–
504
–
–
504
–
504
713
64
209
986
(225)
(5)
–
(230)
–
–
(230)
–
(230)
(225)
7
28
(190)
3,619
(1,696)
–
1,923
–
–
1,923
–
1,923
3,619
202
1,875
5,696
Unallocated
£’000
Total
£’000
–
–
–
–
–
–
–
–
(611)
(611)
130
(50)
(531)
(2,802)
(3,333)
–
–
–
–
162,679
(74,922)
87,757
(22,053)
65,704
(51,410)
14,294
(1,714)
(611)
11,969
130
(50)
12,049
(2,802)
9,247
14,294
470
2,425
17,189
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
101
Bloomsbury AR2019_Back.indd 101
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:04
Notes to the Financial Statements
Year ended 28 February 2018
External revenue
Cost of sales
Gross profit
Marketing and distribution costs
Contribution before administrative
expenses
Administrative expenses excluding
highlighted items
Operating profit/(loss) before
highlighted items/segment results
Amortisation of acquired intangible assets
Operating profit/(loss)
Finance income
Finance costs
Profit/(loss) before taxation
Taxation
Profit/(loss) for the year
Operating profit/(loss) before
highlighted items/segment results
Depreciation
Amortisation of internally generated
intangibles
EBITDA before highlighted items
Children’s
Trade
£’000
69,150
(34,128)
35,022
(10,076)
Adult Trade
£’000
Consumer
£’000
Academic &
Professional
£’000
33,071
(18,264)
14,807
(5,258)
102,221
(52,392)
49,829
(15,334)
36,517
(14,834)
21,683
(4,378)
Special
Interest
£’000
21,308
(9,491)
11,817
(2,978)
Content
Services
£’000
Non-
Consumer
£’000
1,464
(438)
1,026
(124)
59,289
(24,763)
34,526
(7,480)
24,946
9,549
34,495
17,305
8,839
902
27,046
(13,323)
(9,777)
(23,100)
(17,666)
(6,614)
(1,047)
(25,327)
11,623
–
11,623
–
–
11,623
–
11,623
11,623
146
272
12,041
(228)
(18)
(246)
–
–
(246)
–
(246)
11,395
(18)
11,377
–
–
11,377
–
11,377
(361)
(1,368)
(1,729)
–
–
(1,729)
–
(1,729)
(228)
89
11,395
235
(361)
126
198
59
470
12,100
1,693
1,458
2,225
(182)
2,043
–
–
2,043
–
2,043
2,225
66
241
2,532
(145)
(5)
(150)
–
–
(150)
–
(150)
(145)
7
25
(113)
1,719
(1,555)
164
–
–
164
–
164
1,719
199
1,959
3,877
Unallocated
£’000
Total
£’000
–
–
–
–
–
–
–
–
–
151
(48)
103
(2,574)
(2,471)
–
–
–
–
161,510
(77,155)
84,355
(22,814)
61,541
(48,427)
13,114
(1,573)
11,541
151
(48)
11,644
(2,574)
9,070
13,114
434
2,429
15,977
Total assets
Children’s Trade
Adult Trade
Academic & Professional
Special Interest
Content Services
Unallocated
Total assets
28 February
2019
£’000
28 February
2018
£’000
9,939
7,218
58,466
14,193
135
117,142
207,093
9,163
7,788
55,302
13,349
162
111,227
196,991
Unallocated primarily represents centrally held assets including system development; property, plant and equipment; receivables; and cash.
102
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 102
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:05
External revenue by destination
Destination
Year ended 28 February 2019
United Kingdom (country of domicile)
North America
Continental Europe
Australasia
Middle East and Asia
Rest of the world
Overseas countries
Total
Year ended 28 February 2018
United Kingdom (country of domicile)
North America
Continental Europe
Australasia
Middle East and Asia
Rest of the world
Overseas countries
Total
Source
United
Kingdom
£’000
North
America
£’000
Australia
£’000
India
£’000
Total
£’000
58,407
13,248
17,802
1,463
7,317
2,722
42,552
100,959
59,638
11,669
19,152
896
7,108
2,858
41,683
101,321
54
43,478
1,594
–
289
431
45,792
45,846
20
42,705
975
–
518
263
44,461
44,481
–
–
–
11,586
–
–
11,586
11,586
–
–
–
12,087
–
–
12,087
12,087
–
–
–
–
4,244
44
4,288
4,288
–
–
–
–
3,621
–
3,621
3,621
58,461
56,726
19,396
13,049
11,850
3,197
104,218
162,679
59,658
54,374
20,127
12,983
11,247
3,121
101,852
161,510
During the year, sales to one customer exceeded 10% of Group revenue (2018: one customer). The value of these sales was £37,483,000 (2018:
£39,721,000). This customer purchases from all operating segments.
Analysis of non-current assets (excluding deferred tax assets) by geographic location
United Kingdom (country of domicile)
North America
Other
Total
The Group’s revenues by product type were as follows:
Year ended
28 February
2019
£’000
65,802
4,669
84
70,555
Year ended
28 February
2018
£’000
61,136
4,699
102
65,937
Year ended 28 February 2019
Print
Digital
Rights and Services1
Total
Children’s
Trade
£’000
58,288
4,157
3,355
65,800
Adult
Trade
£’000
27,568
4,887
999
33,454
Consumer
£’000
85,856
9,044
4,354
99,254
Academic &
Professional
£’000
29,087
10,083
2,075
41,245
Special
Interest
£’000
17,900
1,611
1,645
21,156
Content
Services
£’000
Non-
Consumer
£’000
467
135
422
1,024
47,454
11,829
4,142
63,425
Total
£’000
133,310
20,873
8,496
162,679
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
103
Bloomsbury AR2019_Back.indd 103
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:05
Notes to the Financial Statements
Year ended 28 February 2018
Print
Digital
Rights and Services1
Total
Children’s
Trade
£’000
60,921
4,127
4,102
69,150
Adult
Trade
£’000
28,059
4,270
742
33,071
Consumer
£’000
88,980
8,397
4,844
102,221
Academic &
Professional
£’000
27,070
7,866
1,581
36,517
Special
Interest
£’000
18,097
1,602
1,609
21,308
Content
Services
£’000
661
183
620
1,464
Non-
Consumer
£’000
45,828
9,651
3,810
59,289
Total
£’000
134,808
18,048
8,654
161,510
1
Rights and Services revenue includes revenue from copyright and trademark licences, management contracts, advertising and publishing services.
The below table depicts the remaining transaction price on unsatisfied or partially unsatisfied performance obligations from contracts with
customers as at 28 February 2019.
Year ended 28 February 2019
Print
Digital
Rights and Services
Total
Sales
£’000
133,310
20,873
8,496
162,679
Deferred
Income
£’000
Committed
Sales
£’000
275
2,285
585
3,145
4,880
2,499
2,445
9,824
Total
Remaining
Transaction
Price
£’000
5,155
4,784
3,030
12,969
2020
£’000
5,155
2,650
1,089
8,894
2021
£’000
–
587
715
1,302
2022
and later
£’000
–
1,547
1,226
2,773
4. Operating profit
Operating profit is stated after charging the following amounts:
Purchase of goods and changes in inventories
Auditor’s remuneration (see below)
Depreciation of property, plant and equipment
Operating leases
Highlighted items (see below)
Provision made against advances
Exchange loss
Staff costs (excluding termination benefits)
Highlighted items
Legal and other professional fees
Restructuring costs
Other highlighted items
Amortisation of acquired intangible assets
Total highlighted items
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
44,293
266
470
1,958
2,325
4,997
38
34,848
43,512
264
434
1,866
1,573
5,381
988
31,881
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
223
388
611
1,714
2,325
–
–
–
1,573
1,573
Notes
16
14
5
Notes
12
Highlighted items charged to operating profit comprise significant non-cash charges and major one-off initiatives which are highlighted in the
income statement because, in the opinion of the Directors, separate disclosure is helpful in understanding the underlying performance and
future profitability of the business.
All highlighted items are included in administrative expenses in the income statement.
Legal and other professional fees of £223,000 and restructuring costs of £388,000 were incurred as a result of the Group’s acquisition of
I.B. Tauris & Co. Limited, see note 10.
104
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 104
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:05
Auditor’s remuneration
Amounts payable to KPMG LLP and its associates in respect of both audit and non-audit services are as follows:
Year ended 28 February 2019
Year ended 28 February 2018
UK
£’000
Overseas
£’000
Total
£’000
UK
£’000
Overseas
£’000
Total
£’000
Fees payable to the Company’s Auditor
for the audit of the parent Company and
consolidated financial statements
Fees payable to the Company’s Auditor
and its associates for other services:
Audit of the Company’s subsidiaries pursuant to
legislation
Other services pursuant to legislation:
Interim review
Total
5. Staff costs
Staff costs, including Directors, during the year were:
140
5
35
180
75
11
–
86
Salaries (including bonuses)
Social security costs
Pension costs
Share-based payment charge
Staff costs (excluding termination benefits)
Termination benefits
Total
£189,000 of termination benefits are included within highlighted items.
The average monthly number of employees during the year were:
Editorial, production and selling
Finance and administration
Total
Staff costs are charged to administrative expenses.
215
140
16
35
266
5
35
180
Notes
23
22
4
75
9
–
84
215
14
35
264
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
30,116
2,912
1,322
498
34,848
613
35,461
27,861
2,699
1,119
202
31,881
246
32,127
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
583
100
683
536
91
627
Four (2018: three) Directors were accruing benefits during the year under defined contribution pension arrangements.
Total emoluments for Directors was:
Short-term employee benefits
Post-employment benefits
Total
Year ended
28 February
2019
£’000
2,612
132
2,744
Year ended
28 February
2018
£’000
2,496
141
2,637
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
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 those Directors of the global divisions, major geographic regions and departments who are actively
involved in strategic decision-making.
Stock Code: BMY
www.bloomsbury.com
105
Bloomsbury AR2019_Back.indd 105
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:05
Notes to the Financial Statements
Total emoluments for Executive Directors and other key management personnel were:
Short-term employee benefits
Post-employment benefits
Share-based payment charge
Total
6. Finance income and finance costs
Finance income
Interest on bank deposits
Other interest receivable
Return on pension plan assets
Total
Finance costs
Interest cost on pension obligations
Interest on bank overdraft and loans
Other interest payable
Total
7. Taxation
a) Tax charge for the year
Current taxation
UK corporation tax
Current year
Adjustment in respect of prior years
Overseas taxation
Current year
Adjustment in respect of prior years
Deferred tax
UK
Origination and reversal of temporary differences
Adjustment in respect of prior years
Overseas
Origination and reversal of temporary differences
Adjustment in respect of prior years
Tax rate adjustment
Total taxation expense
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
4,022
209
410
4,641
3,567
219
128
3,914
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
Notes
23
23
55
62
13
130
17
1
32
50
21
118
12
151
17
31
–
48
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
Notes
15
1,961
(3)
301
(18)
2,241
97
–
488
(24)
–
561
2,802
2,236
(576)
290
(1,334)
616
(114)
(103)
40
1,271
864
1,958
2,574
106
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 106
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:05
b) Factors affecting tax charge for the year
The tax on the Group’s profit before tax differs from the standard rate of corporation tax in the United Kingdom of 19.00% (2018: 19.08%). The
reasons for this are explained below:
Profit before taxation
Profit on ordinary activities multiplied by the standard rate of corporation tax in
the UK of 19.00% (2018: 19.08%)
Effects of:
Non-deductible revenue expenditure
Movement in unrecognised temporary differences
Different rates of tax in foreign jurisdictions
Tax losses utilised
Movement in deferred tax rate
Adjustment to tax charge in respect of prior years
Current tax
Deferred tax
Tax charge for the year before disallowable costs on highlighted items
Highlighted items:
Disallowable costs
Tax charge for the year
Year ended
28 February 2019
Year ended
28 February 2018
£’000
12,049
2,289
117
132
308
(36)
–
(21)
(24)
2,765
37
2,802
%
100.0
19.0
1.0
1.1
2.6
(0.3)
–
(0.2)
(0.2)
23.0
0.3
23.3
£’000
11,644
2,222
111
(16)
134
1
864
(1,910)
1,168
2,574
–
2,574
%
100.0
19.1
1.0
(0.1)
1.1
–
7.4
(16.4)
10.0
22.1
–
22.1
Non-deductible revenue expenditure mainly relates to disallowable foreign exchange and entertainment expenses. Different rates of tax in
foreign jurisdictions is where we are paying tax at higher rates in the US and Australia as well as paying state taxes in the US.
Adjustments to prior periods primarily arise where an outcome is obtained on certain tax matters which differs from expectations held when the
related provision was made. Where the outcome is more favourable than the provision made, the difference is released, lowering the current year
tax charge. Where the outcome is less favourable than our provision, an additional charge to current year tax will occur.
In 2017, the Group identified a potential tax exposure relating to the treatment of inventory valuation adjustments in the US. Accordingly, a
current tax provision was recognised for the potential exposure. Following finalisation of the appropriate tax treatment, it has been agreed with
the IRS that any tax deductions associated with inventory valuation adjustments will be payable over three years. Accordingly, in 2018 the £1.3
million unpaid current tax provision has been reversed, and a corresponding deferred tax liability has been recognised due to the temporary
difference that arises between the accounting and tax treatment. The £1.3 million deferred tax debit and £1.3 million current tax credit have been
recognised as an adjustment in respect of prior years in the above tax charge for 2018.
In 2018, the £576,000 UK current tax credit in respect of prior years' relates to the carry back of double taxation relief to prior years and the
settlement of an old claim with HMRC that was previously considered remote to materialise.
We are not aware of any significant unprovided exposures that are considered likely to materialise.
c) Factors affecting tax charge for future years
Reductions in the UK corporation tax rate from 19% to 17% (effective from 1 April 2020) were substantively enacted on 6 September 2016.
The enactment of the US Tax Cuts and Jobs Act on 22 December 2017 has reduced the US federal corporation tax rate from 35% to 21% from
21 January 2018. In total, the deferred tax effect of changes in tax rates for the year was a tax credit of £nil (2018: £864,000).
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
107
Bloomsbury AR2019_Back.indd 107
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:05
Notes to the Financial Statements
d) Tax effects of components of other comprehensive income
Exchange difference on translating foreign
operations
Remeasurements on the defined benefit
pension scheme
Other comprehensive income
8. Dividends
Before tax
2019
£’000
Tax charge
2019
£’000
After tax
2019
£’000
Before tax
2018
£’000
Tax charge
2018
£’000
964
(6)
958
–
1
1
964
(5)
959
(3,943)
33
(3,910)
–
(6)
(6)
After tax
2018
£’000
(3,943)
27
(3,916)
Amounts paid in the year
Prior period final 6.36p dividend per share (2018: 5.60p)
Interim 1.21p dividend per share (2018: 1.15p)
Total dividend payments in the year
Amounts arising in respect of the year
Interim 1.21p dividend per share for the year (2018: 1.15p)
Proposed 6.75p final dividend per share for the year (2018: 6.36p)
Total dividend 7.96p per share for the year (2018: 7.51p)
Year ended
28 February
2019
£'000
Year ended
28 February
2018
£'000
4,749
906
5,655
906
5,051
5,957
4,182
859
5,041
859
4,749
5,608
The Directors are recommending a final dividend of 6.75 pence per share, which, subject to Shareholder approval at the Annual General Meeting,
will be paid on 23 August 2019 to Shareholders on the register on the record date of 26 July 2019.
9. Earnings per share
The basic earnings per share for the year ended 28 February 2019 is calculated using a weighted average number of Ordinary shares in issue of
74,741,083 (2018: 74,677,559) after deducting shares held by the Employee Benefit Trust.
The diluted earnings per share is calculated by adjusting the weighted average number of Ordinary shares to take account of all dilutive potential
Ordinary shares, which are in respect of unexercised share options and the Performance Share Plan.
Weighted average shares in issue
Dilution
Diluted weighted average shares in issue
Profit after tax attributable to owners of the Company
Basic earnings per share
Diluted earnings per share
Adjusted profit attributable to owners of the Company
Adjusted basic earnings per share
Adjusted diluted earnings per share
Year ended
28 February
2019
Number
74,741,083
756,547
75,497,630
Year ended
28 February
2018
Number
74,677,559
538,096
75,215,655
£’000
9,247
12.37p
12.25p
£’000
11,299
15.12p
14.97p
£’000
9,070
12.15p
12.06p
£’000
10,472
14.02p
13.92p
108
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 108
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:06
Adjusted profit is derived as follows:
Profit before taxation
Amortisation of acquired intangible assets
Other highlighted items
Adjusted profit before tax
Tax expense
Deferred tax movements on goodwill and acquired intangible assets
Tax expense on other highlighted items
Adjusted tax
Adjusted profit
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
12,049
1,714
611
14,374
2,802
194
79
3,075
11,299
11,644
1,573
–
13,217
2,574
171
–
2,745
10,472
The Group includes the benefit of tax amortisation of intangible assets within adjusted tax as this benefit more accurately aligns the adjusted tax
charge with the expected cash tax payments.
10. Acquisitions
On 1 May 2018 the Group acquired the issued share capital of I. B. Tauris & Co. Limited ("IBT"), the academic publisher. The consideration of
£4.4 million was satisfied by the payment of £4.0 million in cash on completion and £0.4 million paid out post completion subject to working
capital and other adjustments. £0.3 million of this post completion consideration has been paid post year end. The previously disclosed
£5.8 million consideration includes the payment of pre-existing IBT obligation including loans to shareholders and the current loans and the
best estimate at that time of the payment due for working capital and other adjustments. The pre-existing IBT obligation including loans to
Shareholders and the current loans is included in overdrafts and current loans and payables and provisions in the IBT net assets acquired below
at the date of acquisition.
IBT has a world-leading list in Middle East Studies, History, Politics and International Relations. Other subject areas in which it has a sizeable presence
are Visual Culture, Classics, Ancient History and Religion. Around 90% of sales are in print, so there is significant potential to grow digital revenues.
IBT titles will be included within Bloomsbury’s digital resources. The business will operate within Bloomsbury’s Academic & Professional division.
The table below summarises the fair values to the Group included in the consolidated financial statements of the major categories of assets and
liabilities of IBT at the date of acquisition.
Net assets acquired
Identifiable intangible assets
Property, plant and equipment
Deferred tax assets
Inventories
Trade and other receivables
Cash and cash equivalents
Deferred tax liabilities
Overdraft and current loans
Payables and provisions
Total net assets acquired
Goodwill
Total
Satisfied by:
Cash consideration
Fair value
to the Group
£’000
3,200
37
662
1,054
1,557
93
(544)
(201)
(4,064)
1,794
2,613
4,407
4,407
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Identifiable intangible assets of £3,200,000 consist of publishing rights and imprints. The publishing rights have a useful life of 12 years and imprints
have a useful life of 20 years. The goodwill arising of £2,613,000 is attributable to the expected profitability of the acquired business and the
synergies expected to arise after the acquisition.
Stock Code: BMY
www.bloomsbury.com
109
Bloomsbury AR2019_Back.indd 109
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:06
Notes to the Financial Statements
The gross contractual trade receivable at acquisition is £1,539,000 of which £217,000 is the best estimate of the contractual cash flows that are not
expected to be collected.
Transaction costs of £223,000 have been expensed in the period within administrative expenses.
From 1 May 2018, revenue of £2,511,000 and loss before tax attributable to owners of the Company of £165,000 (including £311,000 highlighted
items) have been included in the consolidated income statement for the period ended 28 February 2019 in relation to IBT.
If the acquisition had occurred on 1 March 2018 the revenue and profit after tax attributable to Shareholders of the combined entity for the
current period would have been £163.3 million and £9.1 million respectively. These pro forma amounts do not include any possible synergies
from the acquisition. The pro forma information is provided for comparative purposes only and does not necessarily reflect the actual results that
would have occurred, nor is it necessarily indicative of future results of operations of the combined companies.
11. Goodwill
Cost
At start of year
Acquired through business combinations
Exchange differences
At end of year
Impairment
At start of year
Exchange differences
At end of year
Net book value
At end of year
At start of year
28 February
2019
£’000
28 February
2018
£’000
46,399
2,613
144
49,156
4,260
1
4,261
46,812
–
(413)
46,399
4,264
(4)
4,260
44,895
42,139
42,139
42,548
Goodwill is not amortised, but instead is subject to annual impairment reviews. Any impairment losses are recognised immediately in the income
statement.
Management has aligned the monitoring of goodwill to how it reviews the performance of the business. Goodwill is monitored by management at
the publishing division level. The following is a summary of goodwill allocation for each publishing division:
Children’s Trade
Adult Trade
Academic & Professional
Special Interest
Total
28 February
2019
£’000
28 February
2018
£’000
1,788
2,265
35,889
4,953
44,895
1,724
2,186
33,276
4,953
42,139
110
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 110
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:06
Impairment testing
The recoverable amount of the Group’s goodwill has been considered with regard to value-in-use calculations. These calculations use the pre-tax
future cash flow projections of each cash-generating unit (“CGU”) based on the Board’s approved budgets for the year ended 29 February 2020
and the Board-approved five-year plan. The calculations include a terminal value based on the projections for the final year of the five-year plan
with a long-term growth rate assumption applied.
The key assumptions for calculating value in use are:
Children’s Trade
Adult Trade
Academic & Professional
Special Interest
Discount rates
Revenue growth
Long-term growth
2019
%
10.8
11.4
10.2
11.6
2018
%
11.4
11.1
11.0
12.2
2019
%
(1.3)–6.3
(5.9)–6.5
1.6–15.1
4.4–4.8
2018
%
1.4–4.3
3.9–8.8
3.9–8.9
2.6–2.9
2019
%
2.0
2.0
2.0
2.0
2018
%
2.1
2.1
2.1
2.1
Discount rates
The discount rates applied to the cash flows are calculated using a pre-tax rate based on the weighted average cost of capital for the Group. This
is adjusted for risks specific to the market in which the CGU operates. The Group has considered the impact of the current economic climate in
determining appropriate discount rates.
Revenue growth rates
Growth rates have been calculated based on those applied to the Board-approved budget for the year ended 28 February 2020 and five-year
plan. They incorporate future expectations of growth in backlist revenues and identified new revenue streams. The range of growth rates noted
above covers specific rates applied for each of the next five years.
Long-term growth rates
The five-year forecasts are extrapolated to perpetuity on the basis that the relevant CGUs are long-established business units. The long-term
growth rates are blended rates formed from the territory-specific long-term growth rates.
Gross margins
Gross margins have been based on historic performance and expected changes to the sales mix in future periods.
Sensitivity
The Group has not identified any reasonably possible changes to key assumptions that would cause the carrying value of goodwill of the
Children’s Trade, Adult Trade and Special Interest CGUs to exceed its recoverable amount.
Academic & Professional has by far the largest goodwill and non-current assets. This division is going through an investment phase with the
Bloomsbury 2020 digital resources strategy to leverage our academic and professional IP assets into the academic library market, growing more
high-quality digital subscription income. There is therefore a risk in the medium term if this strategy does not succeed. However, current progress
on this strategy is very good and we are on track to deliver our targeted £5 million of profit and £15 million of revenue in 2021/22 for Bloomsbury
2020 digital resources. A 2% increase in the discount rate would not give rise to an impairment. A 8% reduction in the 1st year revenue growth
rates would lead to an impairment of £2.2 million. Reducing the long-term growth rate to 0% would not give rise to an impairment.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
111
Bloomsbury AR2019_Back.indd 111
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:06
Notes to the Financial Statements
12. Other intangible assets
Publishing
rights
£’000
Subscriber
and customer
relationships
£’000
Imprints
£’000
Trademarks
£’000
Systems
development
£’000
Product
development
£’000
Assets under
construction
£’000
Cost
At 28 February 2017
Additions
Transfers
Exchange differences
At 28 February 2018
Acquired through
business combinations
Additions
Transfers
Disposals
Exchange differences
At 28 February 2019
Amortisation
At 28 February 2017
Charge for the year
Exchange differences
At 28 February 2018
Disposals
Charge for the year
Exchange differences
At 28 February 2019
Net book value
At 28 February 2019
At 28 February 2018
13. Investments
16,109
–
–
(168)
15,941
900
70
–
–
59
16,970
8,225
962
(95)
9,092
–
1,007
36
10,135
6,835
6,849
5,790
–
–
–
5,790
2,300
–
–
–
–
8,090
1,323
262
–
1,585
–
358
–
1,943
6,147
4,205
4,427
–
–
(31)
4,396
–
–
–
–
11
4,407
2,330
349
(11)
2,668
–
349
4
3,021
1,386
1,728
Equity securities designated as at FVOCI
Total
200
19
–
(14)
205
–
17
–
–
5
227
2
4
–
6
–
6
–
12
5,587
1,110
–
(33)
6,664
–
895
–
(42)
9
7,526
3,321
802
(16)
4,107
(42)
881
5
4,951
8,125
736
1,324
(25)
10,160
–
1,245
427
–
9
11,841
4,474
1,623
(14)
6,083
–
1,538
6
7,627
651
943
(1,324)
–
270
–
675
(427)
–
–
518
–
–
–
–
–
–
–
–
Total
£’000
40,889
2,808
–
(271)
43,426
3,200
2,902
–
(42)
93
49,579
19,675
4,002
(136)
23,541
(42)
4,139
51
27,689
215
199
2,575
2,557
4,214
4,077
518
270
21,890
19,885
28 February
2019
£’000
28 February
2018
£’000
300
300
300
300
112
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 112
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:06
14. Property, plant and equipment
Cost
At 28 February 2017
Additions
Disposals
Exchange differences
At 28 February 2018
Additions
Acquired through business combinations
Disposals
Exchange differences
At 28 February 2019
Depreciation
At 28 February 2017
Charge for the year
Disposals
Exchange differences
At 28 February 2018
Charge for the year
Disposals
Exchange differences
At 28 February 2019
Net book value
At 28 February 2019
At 28 February 2018
The depreciation charge is included in administrative expenses.
Short leasehold
improvements
£’000
Furniture
and fittings
£’000
Computers and
other office
equipment
£’000
Motor
vehicles
£’000
2,878
4
–
(20)
2,862
58
–
–
3
2,923
1,450
130
–
(8)
1,572
131
–
–
1,703
1,220
1,290
921
18
–
(46)
893
22
5
–
13
933
598
91
–
(27)
662
90
–
8
760
173
231
2,521
292
(10)
(47)
2,756
357
32
(565)
12
2,592
2,027
210
(10)
(33)
2,194
248
(564)
12
1,890
702
562
133
–
–
(3)
130
–
–
(94)
(2)
34
130
3
–
(3)
130
1
(94)
(18)
19
15
–
Total
£’000
6,453
314
(10)
(116)
6,641
437
37
(659)
26
6,482
4,205
434
(10)
(71)
4,558
470
(658)
2
4,372
2,110
2,083
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
113
Bloomsbury AR2019_Back.indd 113
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:06
Notes to the Financial Statements
15. Deferred tax assets and liabilities
a) Recognised deferred tax assets and liabilities
Deferred tax is calculated in full on temporary differences using the tax rate appropriate to the jurisdiction in which the asset or liability arises and
the tax rates that are expected to apply in the periods in which the asset or liability is settled.
Movement in temporary differences during the year:
Property,
plant and
equipment
£’000
Retirement
benefit
obligation
£’000
Share-based
payments
£’000
Tax losses
£’000
At 28 February 2017
(Charge)/credit to the income statement
Credit/(charge) to equity
Exchange differences
At 28 February 2018
Adjustment on initial application of IFRS 9
(see note 2x)
Adjustment on initial application of IFRS 15
(see note 2w)
Acquired through business combinations
(Charge)/credit to the income statement
Charge to equity
Exchange differences
At 28 February 2019
411
(315)
–
(49)
47
–
–
626
(500)
–
9
182
147
114
–
–
261
–
–
(1)
(31)
–
–
229
61
(8)
(6)
–
47
–
–
–
(25)
1
–
23
109
(50)
(30)
–
29
–
–
–
67
33
–
129
Intangible
assets
£’000
(2,159)
171
–
–
(1,988)
Other
£’000
4,014
(1,870)
–
(441)
1,703
–
54
–
(544)
194
–
–
(2,338)
214
37
(266)
–
49
1,791
Total
£’000
2,583
(1,958)
(36)
(490)
99
54
214
118
(561)
34
58
16
Deferred tax assets in respect of losses are only recognised to the extent that it is anticipated they will be utilised in the foreseeable future.
The Other deferred tax asset predominantly relates to timing differences i.e. valuation adjustments and return and inventory provisions held on
the balance sheet recognised in the current tax calculation and tax return only when utilised. This predominantly relates to the US and Australia.
In 2018 the deferred tax assets decreased by £2.5 million, mainly as the remaining tax payable to be settled over the next two years for temporary
differences on how inventories are valued for tax purposes in the US has been moved out of non-current tax payables to deferred tax. £0.9 million
of the reduction was from US deferred tax assets recognised at a lower tax rate as the federal tax rate dropped from 35% to 21% during the year.
b) The analysis for financial reporting purposes is as follows:
Deferred tax assets
Deferred tax liabilities
Total
c) Unrecognised deferred tax assets
The Group had deferred tax assets not recognised in the financial statements as follows:
Trading losses
Non-trading losses
28 February
2019
£’000
28 February
2018
£’000
2,376
(2,360)
16
2,092
(1,993)
99
28 February
2019
£’000
28 February
2018
£’000
370
–
331
6
At 28 February 2019, the Group had trading losses of £1.7 million (2018: £0.7 million) and non-trading losses of approximately £nil (2018: £36,000).
A deferred tax asset has not been recognised in respect of these losses carried forward as it is not clear whether sufficient income against which
the losses may be offset will arise in the Group in the foreseeable future.
Deferred tax is not provided on unremitted earnings of subsidiaries where the Group controls the timing of remittance and it is probable that the
temporary difference will not reverse in the foreseeable future.
114
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 114
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:06
16. Inventories
Work in progress
Finished goods for resale
Total
28 February
2019
£’000
28 February
2018
£’000
3,964
22,112
26,076
4,732
21,945
26,677
The cost of inventories recognised as cost of sales amounted to £35,953,000 (2018: £35,048,000). The provision and write-down of inventories to net
realisable value recognised in cost of sales amounted to £8,340,000 (2018: £8,464,000).
17. Trade and other receivables
Non-current
Prepayments and accrued income
Current
Gross trade receivables
Less: loss allowance
Less: provision for returns
Net trade receivables
Income tax recoverable
Other receivables
Prepayments and accrued income
Royalty advances
Total current trade and other receivables
Total trade and other receivables
28 February
2019
£’000
28 February
2018
£’000
1,360
1,530
52,115
(2,102)
–
50,013
1,340
1,803
4,683
22,667
80,506
81,866
56,419
(931)
(7,922)
47,566
823
1,311
4,840
22,317
76,857
78,387
Non-current receivables relate to accrued income on long-term rights deals.
A provision is held against gross advances payable in respect of published title advances which may not be fully earned down by anticipated
future sales. As at 28 February 2019, £5,434,000 (2018: £5,640,000) of royalty advances are expected to be recovered after more than 12 months.
Trade receivables principally comprise amounts receivable from the sale of books due from distributors. The majority of trade debtors are secured
by credit insurance and in certain territories by third-party distributors.
As part of the adoption of IFRS 15 the provision for returns has been reclassified as sales returns liability within trade and other liabilities (see note 2w).
The Directors consider that the carrying amount of trade and other receivables approximates to their fair values. The Group’s exposure to credit
and currency risks is disclosed in note 24. The average number of days’ credit taken for sales of books by the Group was 112 days (2018: 115 days).
A loss allowance is made with reference to specific debts, past default experience, trading history and the current economic environment.
Movements on the Group loss allowance for trade receivables are as follows:
At start of year
Acquired through business combinations
Adjustment on initial application of IFRS 9
Amounts created
Amounts utilised
Amounts released
Exchange differences
At end of year
28 February
2019
£’000
28 February
2018
£’000
931
217
254
759
(56)
–
(3)
2,102
621
–
–
528
(143)
(75)
–
931
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
115
Bloomsbury AR2019_Back.indd 115
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:06
Notes to the Financial Statements
18. Trade and other liabilities
Current
Trade payables
Sales returns liability
Taxation and social security
Other payables
Accruals
Deferred income
Total current trade and other liabilities
Total trade and other liabilities
28 February
2019
£’000
28 February
2018
£’000
22,414
8,452
812
2,695
23,126
3,145
60,644
60,644
25,340
–
1,039
3,461
23,245
2,100
55,185
55,185
Trade payables are non-interest bearing and are normally settled on terms of between 30 and 90 days.
If actual returns were 10% higher or lower in the year revenue would have been £1.9 million lower/higher (2018: £1.8 million lower/higher).
19. Loans and borrowings
Reconciliation of movements of liabilities to cash flows arising from financing activities:
Balance at 1 March 2018
Changes from financing cash flows
Dividend paid
Proceeds from exercise of share options
Repayment of overdraft
Interest paid
Total changes from financing cash flows
Other changes
Liability-related
Overdraft acquired through business combinations
Interest expense
Total liability-related other changes
Total equity-related other changes
Balance at 28 February 2019
Liability
Bank overdrafts
used for cash
management
purposes
£’000
Share capital/
share premium
£’000
–
40,330
–
–
(201)
(34)
(235)
201
34
235
–
–
–
–
–
–
–
–
–
–
–
40,330
Equity
Other
reserves
£’000
14,142
–
241
–
–
241
–
–
–
1,386
15,769
Retained
earnings
£’000
85,091
(5,655)
(27)
–
–
(5,682)
–
–
–
8,230
87,639
Total
£’000
139,563
(5,655)
214
(201)
(34)
(5,676)
201
34
235
9,616
143,738
116
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 116
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:06
Balance at 1 March 2017
Changes from financing cash flows
Dividend paid
Interest paid
Total changes from financing cash flows
Other changes
Liability-related
Interest expense
Total liability-related other changes
Total equity-related other changes
Balance at 28 February 2018
20. Provisions
At 1 March 2018
Acquired through business combinations
Additions
Exchange difference
28 February 2019
Non-current
Current
Liability
Bank overdrafts
used for cash
management
purposes
£’000
Share capital/
share premium
£’000
–
40,330
–
(31)
(31)
31
31
–
–
–
–
–
–
–
–
40,330
Equity
Other
reserves
£’000
17,904
–
–
–
–
–
(3,762)
14,142
Retained
earnings
£’000
81,065
(5,041)
–
(5,041)
–
–
9,067
85,091
Total
£’000
139,299
(5,041)
(31)
(5,072)
31
31
5,305
139,563
Property
£’000
80
60
91
(1)
230
147
83
The property provision includes amounts provided for onerous lease commitments and dilapidations. The timing of cash flows for onerous lease
commitments is dependent on the terms of the leases.
21. Share capital and other reserves
Share capital
Authorised:
100,435,582 Ordinary shares of 1.25p each (2018: 100,435,582 Ordinary shares of 1.25p each)
Allotted, called up and fully paid:
75,328,570 Ordinary shares of 1.25p each (2018: 75,328,570 Ordinary shares of 1.25p each)
28 February
2019
£’000
28 February
2018
£’000
1,255
1,255
942
942
The Company has one class of Ordinary share which carries equal voting rights and no contractual right to receive payment. No shares
are held by the Company as Treasury shares. Directors and other employees of the Group have been granted options to purchase 1,944,515
(2018: 3,056,553) Ordinary shares with an aggregate nominal value of £24,306 (2018: £38,207) (see note 22).
Share premium
This reserve records the amount above nominal value received for shares sold less transaction costs.
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial information of foreign operations.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
117
Bloomsbury AR2019_Back.indd 117
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Notes to the Financial Statements
Merger reserve
The merger reserve comprises the amount that would otherwise arise in share premium relating to specific share issue, wherein more than 90%
of the shares in a subsidiary are acquired and the consideration includes the issue of new shares by the Company, thereby attracting merger relief
under the Companies Act 2006.
Capital redemption reserve
The capital redemption reserve arose on the purchase by the Company of its own shares and comprises the amount by which the distributable
profits were reduced on these transactions.
Share-based payment reserve
The share-based payment reserve comprises cumulative amounts charged in respect of employee share-based payment arrangements.
Own shares held by the Employee Benefit Trust
The Employee Benefit Trust (“EBT”) is an independent discretionary trust established to acquire issued shares of the Company to satisfy any of
the share-based incentive schemes (see note 22) and plans of the Company. All employees of the Group are potential beneficiaries of the EBT.
The results and net assets of the EBT are included in the consolidated financial statements of the Group.
The market value of the 500,708 shares of the Company held at 28 February 2019 (2018: 651,011) in the EBT was £1,164,000 (2018: £1,087,000).
While the trustee has power to subscribe for Ordinary shares and to acquire Ordinary shares in the market or from Treasury, it is not permitted
to hold more than 5% of the issued share capital without prior approval of the Shareholders.
As at the date of signing this Annual Report, the Trust held 500,708 Ordinary shares of 1.25 pence being approximately 0.7% of the issued
Ordinary share capital.
Retained earnings
The retained earnings reserve comprises profit for the year attributable to owners of the Company and other items recognised directly through
equity as presented on the consolidated statement of changes in equity.
22. Share-based payments
Options over shares of the ultimate parent undertaking, Bloomsbury Publishing Plc, have been granted to employees of the Group under
various schemes.
The total share-based payment charge to the income statement for the year was as follows:
Equity-settled share-based transactions
Cash-settled share-based transactions
Total
28 February
2019
£’000
28 February
2018
£’000
422
76
498
181
21
202
National Insurance contributions are payable by the Company in respect of some of the share-based payment transactions. These contributions
are payable on the date of exercise based on the intrinsic value of the share-based payments and are therefore treated as cash-settled awards. The
Group had an accrual for National Insurance at 28 February 2019 of £100,000 (2018: £22,000), of which none related to vested options.
a) The Bloomsbury Performance Share Plan (“the PSP”)
The Group operates the PSP for Directors and senior employees. Awards under the scheme are granted as conditional share awards. The number
of Ordinary shares comprised in an award is calculated using a share value equal to either the average middle-market price of the Ordinary share
for the five dealing days immediately preceding the award date or the middle-market price on the dealing day before the award date.
The vesting period is three years and 50% of the level of vesting is subject to the achievement of Earnings Per Share (“EPS”). The other 50% is
subject to Total Shareholder Return (“TSR”) performance condition for the 2016 grant and Return on Capital Employed (“ROCE”) performance
condition for the 2017 and 2018 grant. For details of the performance conditions see the Directors’ Remuneration Report on pages 54 to
72. Awards are not exercisable after the vesting date and awards that vest on the vesting date are automatically exercised. Except in certain
circumstances awards lapse if the employee leaves the Group.
118
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 118
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Outstanding at start of year
Granted during the year
Lapsed during the year
Outstanding at end of year
Exercisable at end of year
Range of exercise price of outstanding awards (pence)
Weighted average remaining contracted life (months)
Expense recognised for the year (£’000)
Year ended
28 February
2019
Number
2,449,685
620,417
(1,406,574)
1,663,528
–
Year ended
28 February
2019
–
17
386
Year ended
28 February
2018
Number
2,369,714
792,635
(712,664)
2,449,685
–
Year ended
28 February
2018
–
16
146
The share awards granted in the year to 28 February 2019 have been measured based on the share price at the date of grant as they are only
subject to non-market conditions. The inputs were:
Performance condition
Share price
Exercise price
Expected term
Expected volatility
Risk-free interest rate
Fair value charge per award
Earnings Per Share
Return on Capital Employed
220 pence
–
3 years
n/a
n/a
220 pence
220 pence
–
3 years
n/a
n/a
220 pence
Half of each award is subject to an EPS performance condition and half of each award is subject to a Return on Capital Employed condition.
The awards for Executive Directors only will be subject to clawback provisions and to a two-year post-vesting holding period.
b) The Bloomsbury Sharesave Plan 2014
The Group operates an HM Revenue and Customs approved savings-related share option scheme under which employees are granted options to
purchase Ordinary shares in the Company in three years’ time, dependent upon their entering into a contract to make monthly contributions to
a savings account over the period of the savings term. The Sharesave Plan is open to all UK employees.
Outstanding at start of year
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding at end of year
Exercisable at end of year
Range of exercise price of outstanding options (pence)
Weighted average remaining contracted life (months)
Expense recognised for the year (£’000)
Share
options
2019
Number
372,775
–
(150,303)
(46,997)
175,475
7,140
Weighted
average
exercise price
2019
Pence
140
–
142
139
138
142
Share
options
2018
Number
183,358
194,535
–
(5,118)
372,775
–
2019
137–142
17
17
Weighted
average
exercise price
2018
Pence
142
137
–
141
140
–
2018
137–142
21
56
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
119
Bloomsbury AR2019_Back.indd 119
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Notes to the Financial Statements
c) The Bloomsbury Company Share Option Plan 2014 (“the CSOP”)
The Group operates the CSOP for senior employees. The vesting period is three years and the level of vesting is subject to the achievement of
“Annualised EPS in excess of RPI” performance conditions. Options are exercisable by the participant after the vesting date whilst the participant
continues in employment with the Group up to a period ending ten years after the date of grant.
Outstanding at the start of year
Lapsed during the year
Outstanding at end of year
Exercisable at end of year
Range of exercise price of outstanding awards (pence)
Weighted average remaining contracted life (months)
Expense recognised for the year (£’000)
Share
options
2019
Number
234,093
(128,581)
105,512
–
Weighted
average
exercise price
2019
Pence
160
159
162
–
Share
options
2018
Number
315,049
(80,956)
234,093
–
2019
162
87
–
Weighted
average
exercise price
2018
Pence
160
160
160
–
2018
159–162
93
–
23. Retirement benefit obligations
Pension costs
The pension costs charged to the income statement of £1,340,000 (2018: £1,138,000) relate to the Group’s defined contribution and defined
benefit pension arrangements.
Defined contribution plans
The Group operates defined contribution retirement benefit plans for all qualifying employees.
The total cost charged to the income statement of £1,322,000 (2018: £1,119,000) represents contributions payable to these schemes by the Group
at rates specified in the rules of the schemes. At 28 February 2019, there were no prepaid contributions (28 February 2018: £nil).
Defined benefit plan
A subsidiary company operates a defined benefit scheme for some staff which is accounted for in accordance with IAS 19. Accrual of benefits
ceased in 1997, with the scheme now operated as a closed fund. There is no obligation in respect of medical costs. The scheme is actuarially
valued every three years. The last full actuarial valuation was carried out as at 28 February 2015 and updated to 28 February 2018 by a qualified
independent actuary.
Contributions are paid by the employer at the rate of £5,039 per month, plus expenses as and when required. Contributions paid to the scheme
during the year were £73,000 (2018: £71,000). The Directors’ best estimate of the contributions including administration expenses to be paid for in
the year ending 28 February 2019 is £75,000. In addition, PPF levies and other administration expenses are payable by the Group as and when due.
The Group’s policy is to fund the deficit in the scheme by additional contributions to meet the scheme’s commitment to members.
The financial assumptions used by the actuary for the update were as follows:
Discount rate
Inflation assumption
28 February
2019
£’000
28 February
2018
£’000
28 February
2017
£’000
2.70%
2.20–3.20%
2.70%
2.20–3.20%
2.60%
2.40–3.40%
The scheme is closed and there are no active paying members, therefore no increases in payments have been applied. The assumptions used are
estimates chosen from a range of possible actuarial assumptions which, due to the timescale covered, may not necessarily occur in practice.
120
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 120
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
The mortality assumptions adopted at 28 February 2019 are 90% of the standard tables S2PxA, year of birth, no age rating for males and females,
projected using CMI_2017 converging to 1.50% p.a. These imply the following life expectancies:
Male retiring in 2039
Female retiring in 2039
Male retiring in 2019
Female retiring in 2019
The amounts recognised in the income statement in respect of the defined benefit scheme are as follows:
Interest cost
Return on pension plan assets
Expenses
Total
28 February
2019
Years
28 February
2018
Years
24.7
26.7
23.0
24.9
24.9
26.8
23.1
25.0
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
(17)
13
(14)
(18)
(17)
12
(14)
(19)
A charge of £17,000 (2018: £17,000) has been included in finance costs and a credit of £13,000 (2018: £12,000) has been included in finance income.
The amounts recognised in other comprehensive income in respect of the defined benefit scheme are as follows:
Return on pension plan assets
Experience gains and losses arising on the defined benefit obligation – (loss)/gain
Effects of changes in the financial assumptions underlying the present value of the defined benefit obligation –
gain
Total
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
9
(15)
–
(6)
8
9
16
33
The amount included in the statement of financial position arising from the Group’s obligation in respect of the defined benefit pension scheme is
as follows:
Fair value of assets (with profit policy)
Present value of defined benefit obligations
Deficit in scheme
Deferred tax assets
Net liability to be recognised
Analysis for reporting purposes:
Non-current liabilities
Deferred tax assets
28 February
2019
£’000
28 February
2018
£’000
540
(661)
(121)
21
(100)
(121)
21
472
(642)
(170)
29
(141)
(170)
29
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
121
Bloomsbury AR2019_Back.indd 121
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Notes to the Financial Statements
Movements in the present value of defined benefit obligations in the year were as follows:
At start of year
Expenses
Interest cost
Benefits paid and expenses
Remeasurement losses
At end of year
Movements in the fair value of scheme assets in the year were as follows:
At start of year
Return on plan assets
Remeasurement gains
Employer contributions
Benefits paid and expenses
At end of year
The actual return on scheme assets was £22,000 (2018: £20,000).
Assets
With profits
Total assets
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
(642)
(14)
(17)
27
(15)
(661)
(684)
(14)
(17)
48
25
(642)
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
472
13
9
73
(27)
540
429
12
8
71
(48)
472
28 February
2019
£’000
28 February
2018
£’000
28 February
2017
£’000
540
540
472
472
429
429
None of the fair values of the assets shown above include any direct investments in the Company’s own financial instruments or any property
occupied by, or other assets used by, the Company. All of the scheme assets have a quoted market price in an active market.
24. Financial instruments and risk management
Capital management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to
Shareholders as well as sustaining the future development of the business. In order to maintain or adjust the capital structure, the Group may
adjust the amount of dividends paid to Shareholders and issue new shares. The Group’s overall strategy remains unchanged from 2018.
The capital structure of the Group comprises equity attributable to owners of the Company, comprising issued capital, reserves and retained
earnings as disclosed in the consolidated statement of changes in equity and note 21.
122
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 122
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Categories of financial instruments
Equity securities
Equity securities designated as at FVOCI (Level 3)
Loans and receivables
Cash and cash equivalents
Trade receivables
Accrued income
Total loans and receivables
Financial liabilities measured at amortised cost
Trade payables
Other payables due in less than one year
Sales returns liability
Accruals
Total financial liabilities measured at amortised cost
Notes
13
17
18
18
18
28 February
2019
£’000
28 February
2018
£’000
300
300
27,580
50,013
3,751
81,344
22,414
3,507
8,452
23,126
57,499
25,428
47,566
4,861
77,855
25,340
4,500
–
23,245
53,085
Net financial instruments
24,145
25,070
The equity securities are classed as level 3 as the shares are not actively traded stock. The fair value is assessed based on recent share subscriptions
where these are available and relevant to the fair value of the investment.
There is no material difference between the fair value and book value of financial assets and liabilities.
Financial risk management
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s
overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the
Group’s financial performance from the key risks of market risk (including currency risk and interest rate risk), credit risk and liquidity risk.
The Board has approved the Group Treasury policies and procedures by which the Group Treasury function is to be managed. The Group
Treasury function is headed by the Group Finance Director and is part of Bloomsbury’s Finance Department. It operates under a delegated
authority from the Board.
The Treasury management policies and procedures focus on the investment of surplus operating cash likely to be needed in order to support
Bloomsbury’s ongoing operations, foreign currency requirements and interest rate risk management. The Group does not use derivative
contracts for speculative purposes. The policies are reviewed at least on an annual basis by the Group Finance Director and any amendments are
approved by the Board. The Board is assisted in its oversight role by Internal Audit, which undertakes regular reviews of risk management controls
and procedures, the results of which are reported to the Audit Committee.
a) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group’s income or the
value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.
The Group’s activities expose it mainly to the financial risks of changes in foreign currency exchange rates and changes in interest rates. The
Group incurs costs in the same currencies as it earns revenue, creating some degree of natural hedging.
The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the Group’s financial performance. Risk management is carried out by Group Treasury under policies approved by the Board of
Directors. Group Treasury monitors the distribution of its cash assets so as to control exposure to the relative performance of any particular
territory, currency or institution.
The Board provides written principles for overall risk management, as well as policies covering specific areas, such as funding, foreign exchange
risk, interest rate risk, credit risk and investment of excess liquidity.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
123
Bloomsbury AR2019_Back.indd 123
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Notes to the Financial Statements
(i) Interest rate risk
The Group has significant interest-bearing assets in the form of cash and cash equivalents, and as such, cash flows are dependent on changes in
market interest rates.
Interest rate profile of financial instruments
Fixed rate instruments
Financial assets
Financial liabilities
Total
Variable rate instruments
Financial assets
Financial liabilities
Total
28 February
2019
£’000
28 February
2018
£’000
1,772
–
1,772
25,808
–
25,808
2,895
–
2,895
22,533
–
22,533
Fixed rate financial assets are short-term bank deposits with a maturity date range of one day to one month. Variable rate financial assets are cash
at bank.
Fair value sensitivity analysis for fixed rate financial instruments
The Group does not account for any fixed rate financial assets at fair value through profit or loss. Therefore, a change in interest rates at
28 February 2019 would not affect the income statement.
Cash flow sensitivity analysis for variable rate financial instruments
The Group derived the following sensitivities to assess the impact of changes in interest rates, based on the effect of the market volatility in the
current climate and the previous 12 months. The analysis assumes all other variables remain constant.
Impact on profit or loss and equity
1% increase in base rate of interest (2018: 1%)
0.5% decrease in base rate of interest (2018: 0.5%)
28 February 2019
28 February 2018
Profit or loss
£’000
Equity
£’000
Profit or loss
£’000
Equity
£’000
(187)
(102)
–
–
129
(71)
–
–
(ii) Currency risk
The Directors believe that in its current circumstances, the Group’s risk from foreign currency exposure is limited and no active currency risk
management by hedging is considered necessary, as a significant proportion of revenues is matched by expenditure in the same local currency,
creating some degree of natural hedging.
The Group’s exposure to foreign currency risk was as follows based on notional amounts:
GBP
USD
EURO
AUD
INR
Total
Loans and receivables
Financial liabilities
28 February
2019
£’000
28 February
2018
£’000
28 February
2019
£’000
28 February
2018
£’000
46,729
25,812
1,503
4,946
2,354
81,344
53,443
17,840
201
4,649
1,722
77,855
38,589
13,304
116
4,750
740
57,499
38,749
8,278
48
5,786
224
53,085
No significant amounts of loans and receivables or financial liabilities are denominated in currencies other than sterling, US dollars, euros,
Australian dollars or Indian rupees.
124
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 124
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Foreign currency sensitivity analysis
The Group derived the following sensitivities based on the outstanding foreign currency denominated financial assets and liabilities at the year
end. The sensitivity analysis includes loans to foreign operations within the Group where the denomination of the loan is in a currency other than
the functional currency of the lender or the borrower.
The use of a 10% sensitivity rate has been determined based on the effect of the market volatility in exchange rates between the current and
previous year end, and represents management’s assessment of the reasonably possible change in foreign exchange rates. A positive number
below indicates an increase in profit or equity.
Impact on equity
10% weakening in US dollar against pound sterling (2018: 10%)
10% strengthening in US dollar against pound sterling (2018: 10%)
10% weakening in euro against pound sterling (2018: 10%)
10% strengthening in euro against pound sterling (2018: 10%)
10% weakening in AUS dollar against pound sterling (2018: 10%)
10% strengthening in AUS dollar against pound sterling (2018: 10%)
10% weakening in INR against pound sterling (2018: 10%)
10% strengthening in INR against pound sterling (2018: 10%)
Impact on income statement
10% weakening in US dollar against pound sterling (2018: 10%)
10% strengthening in US dollar against pound sterling (2018: 10%)
10% weakening in euro against pound sterling (2018: 10%)
10% strengthening in euro against pound sterling (2018: 10%)
10% weakening in AUS dollar against pound sterling (2018: 10%)
10% strengthening in AUS dollar against pound sterling (2018: 10%)
10% weakening in INR against pound sterling (2018: 10%)
10% strengthening in INR against pound sterling (2018: 10%)
28 February
2019
£’000
28 February
2018
£’000
(689)
842
–
–
(18)
22
(147)
179
(448)
548
(126)
154
–
–
–
–
(659)
805
–
–
103
(126)
(136)
166
(210)
257
(14)
17
–
–
–
–
b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations
and arises principally from the Group’s trade and other receivables (Note 17) and cash and cash equivalents.
Cash and cash equivalents
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings as assigned by international credit-rating
agencies.
Trade receivables
The carrying amount of financial assets represents the maximum credit exposure. The amounts presented in the statement of financial position
are net of allowances for doubtful receivables, estimated by the Group’s management based on trading experience and the current economic
environment. An analysis of the relevant provisions is set out in note 17.
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime expected credit losses (“ECL”). To measure
ECLs trade receivables are split into groups with the same characteristics to calculate loss rates. Where possible we have calculated this probability
based on historic loss experience using recent sales history, the timing of when the cash was received for the debt and the level of debt not
collected for that population.
The Group determines its concentration of credit risk based on the individual characteristics of its customers and publicly available knowledge of
specific circumstances affecting those customers. The Group defines counterparties as having similar characteristics if they are related entities.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
125
Bloomsbury AR2019_Back.indd 125
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Notes to the Financial Statements
At 28 February 2019, the exposure to credit risk for gross trade receivables by geographical region was as follows:
United Kingdom
North America
Australia
India
Total
28 February
2019
£’000
28 February
2018
£’000
34,634
13,130
2,071
2,280
52,115
39,356
12,534
2,583
1,946
56,419
The Group has a significant concentration of credit risk due to its use of third-party distributors. Credit limits for the final customers are set by
the distributors based on a combination of payment history and third-party credit references. Credit limits are reviewed on a regular basis in
conjunction with debt ageing and collection history. The distributors belong to established international groups whose business includes a
number of publishing interests and clients. The Group’s risk is limited as significant amounts outstanding through the UK distributors are secured
by credit insurance, and in the US credit risk for significant amounts outstanding through distributors rests with the distributor. The balances with
the US distributor make up 95% (2018: 94%) of the North America trade receivable balance. In the United Kingdom balances with the distributors
make up 85% (2018: 88%) of the United Kingdom trade receivable balance.
c) Liquidity risk
The Directors do not consider that the Group currently has a significant exposure to liquidity risk, as the Group has limited borrowing and has
sufficient cash deposits to meet its debts as they fall due for the foreseeable future.
Cash flow budgets and forecasts are prepared by the operating entities of the Group, aggregated for the Group and regularly reviewed by the
Board, and the actual cash position of the Group and each entity is compared monthly against budget. This allows management to ensure that
each operating entity and the Group have sufficient cash to meet operational needs. Surplus cash held by the operating entities over and above
the balance required for working capital management is invested in interest-bearing accounts and money market deposits.
The Group has an unsecured revolving credit facility with Lloyds Bank Plc. At 28 February 2019, the Group had no draw down (2018: £nil) of this
facility with £12.0 million of undrawn borrowing facilities (2018: £12.0 million) available.
The facility comprises a £10–£14 million committed revolving loan facility (amount dependent on time during the year to match Bloomsbury’s
cash flow cycle), an uncommitted incremental term loan facility of up to £6 million and a £2 million overdraft facility. The overdraft facility is
repayable on demand and the loan facilities mature in May 2021. All facilities are subject to two covenants, being a maximum net debt to EBITDA
ratio and a minimum interest cover covenant.
The Group’s financial liabilities are trade payables, accruals and other payables as shown above. All other financial liabilities are due within
one year.
25. Operating leases
At 28 February 2019, the Group had the following outstanding commitments under non-cancellable operating leases:
Within one year
Later than one year and less than five years
After more than five years
Total
28 February
2019
£’000
28 February
2018
£’000
1,971
7,107
7,056
16,134
1,802
6,607
7,834
16,243
The operating leases represent rentals payable by the Group for certain office properties, vehicles and equipment. The lease at the headquarters
in Bedford Square is for a period of 20 years from January 2011. The operating leases over vehicles are in respect of company cars driven by
certain employees. The operating leases over equipment are in respect of computer and office equipment.
126
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 126
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
26. Commitments and contingent liabilities
a) Capital commitments
Property, plant and equipment
Intangible assets
Total
28 February
2019
£’000
28 February
2018
£’000
–
105
105
–
–
–
b) Other commitments
The Group is committed to paying royalty advances to authors in subsequent financial years. At 28 February 2019, this commitment amounted to
£18,581,000 (2018: £15,722,000).
c) Guarantees
The Company and certain of its subsidiaries have guarantees to Lloyds Bank Plc in place relating to the Group’s borrowing facilities – see note 24c.
27. Related party transactions
The Group has no related party transactions other than key management remuneration as disclosed in note 5.
28. Post balance sheet events
There are no post balance sheet events.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
127
Bloomsbury AR2019_Back.indd 127
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Notes to the Financial Statements
29. Investments in subsidiary companies
The Group’s subsidiary companies at 28 February 2019 are:
Country of incorporation
Proportion of equity
capital held
Nature of business
during the year
Registered
office
Subsidiary undertakings held directly by Bloomsbury Publishing Plc:
A & C Black Limited
England and Wales
Bloomsbury India UK Limited
Bloomsbury Publishing Inc.
Bloomsbury Information Limited
Bloomsbury Professional Limited
Bloomsbury Publishing PTY Limited
The Continuum International Publishing Group Limited
Hart Publishing Limited
Osprey Publishing Limited
Bloomsbury Book Publishing Company Limited
I.B. Tauris & Co. Limited
Bloomsbury Media Limited
Christian Knowledge Hub CIC
Subsidiary undertakings held through a subsidiary company:
A & C Black Publishers Limited
Christopher Helm (Publishers) Limited
Oxford International Publishers Limited t/a Berg Publishers
John Wisden and Company Limited
Shire Publications Limited
British Wildlife Publishing Limited
Bloomsbury Publishing India Private Limited
Berg Fashion Library Limited
A & C Black (Distribution) Limited
A & C Black (Storage) Limited
Adlard Coles Limited
Alphabooks Limited
F. Lewis (Publishers) Limited
Featherstone Education Limited
Hambledon and London Limited
Herbert Press Limited
John Wisden (Holdings) Limited
Methuen Drama Limited
Nautical Publishing Co Limited
Reed’s Almanac Limited
Sheffield Academic Press Limited
T & T Clark Limited
The Athlone Press Limited
Thoemmes Limited
All subsidiary undertakings are included in the consolidation.
England and Wales
USA
England and Wales
England and Wales
Australia
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
India
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Intermediate
holding company
Intermediate
holding company
Publishing
Publishing
Publishing
Publishing
Publishing
Publishing
Publishing
Publishing
Publishing
Dormant
Dormant
Publishing
Publishing
Publishing
Publishing
Publishing
Publishing
Publishing
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
1.
1.
2.
1.
1.
3.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
4.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
5.
1.
1.
128
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 128
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
The following lists all Bloomsbury registered office addresses. Please see wholly owned subsidiary list opposite for relevant registered office code.
1. 50 Bedford Square, London, WC1B 3DP, United Kingdom.
2. 1385 Broadway, Fifth Floor, New York, NY 10018, USA.
3. Level 4, 387 George Street, Sydney, NSW 2000, Australia.
4. DDA Complex, LSC, Building No. 4, Second Floor, Pocket C-6&7, Vasant Kunj, New Delhi, 110070, India.
5. C/O RSM, First Floor, Quay 2, 139 Fountainbridge, Edinburgh, EH3 9QG, United Kingdom.
For the year ended 28 February 2019, the following subsidiary companies were entitled to exemption from audit under section 479A of the
Companies Act 2006:
Subsidiary name
Bloomsbury Information Limited
Bloomsbury Professional Limited
The Continuum International Publishing Group Limited
A & C Black Publishers Limited
Christopher Helm (Publishers) Limited
Oxford International Publishers Limited t/a Berg Publishers
Berg Fashion Library Limited
John Wisden and Company Limited
Hart Publishing Limited
Osprey Publishing Limited
Shire Publications Limited
British Wildlife Publishing Limited
Bloomsbury Book Publishing Company Limited
I.B. Tauris & Co. Limited
Company
number
06409758
05233465
03833148
00189153
01953639
03143617
05728582
00135590
03307205
03471853
00868867
06810049
03830397
01761687
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
129
Bloomsbury AR2019_Back.indd 129
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Company Statement of Financial Position
As at 28 February 2019
Company Number 1984336
Assets
Intangible assets
Property, plant and equipment
Investments in subsidiary companies
Other investments
Deferred tax assets
Total non-current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Provisions
Total non-current liabilities
Trade and other liabilities
Current tax liabilities
Total current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Other reserves
Retained earnings
Total equity attributable to owners of the Company
28 February
2019
£’000
28 February
2018
£’000
Notes
32
33
34
35
36
37
38
41
39
42
42
42
42
2,639
1,645
83,250
300
470
88,304
6,156
56,977
16,996
80,129
168,433
108
108
71,874
379
72,253
72,361
96,072
942
39,388
7,920
47,822
96,072
2,522
1,717
78,843
300
63
83,445
5,957
59,304
16,332
81,593
165,038
28
28
69,394
723
70,117
70,145
94,893
942
39,388
7,498
47,065
94,893
The Company financial statements were approved by the Board of Directors and authorised for issue on 21 May 2019.
J N Newton
Director
P Scott-Bayfield
Director
130
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 130
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Company Statement of Changes in Equity
For the year ended 28 February 2019
At 28 February 2017
Profit for the year and total comprehensive
income for the year
Transactions with owners
Dividends to equity holders
of the Company
Deferred tax on share-based
payment transactions
Share-based payment transactions
Total transactions with owners
of the Company
At 28 February 2018
Adjustment on initial application of IFRS 9
net of tax (see note 31g)
At 28 Febuary 2018 (restated)
Profit for the year and total comprehensive
income for the year
Transactions with owners
Dividends to equity holders
of the Company
Unclaimed dividends
Share options exercised
Deferred tax on share-based
payment transactions
Share-based payment transactions
Total transactions with owners
of the Company
At 28 February 2019
Share
capital
£’000
942
Share
premium
£’000
39,388
Merger
reserve
£’000
1,803
Capital
redemption
reserve
£’000
Share-based
payment
reserve
£’000
22
5,492
–
–
–
–
–
942
–
942
–
–
–
–
–
–
–
–
–
–
–
39,388
–
39,388
–
–
–
–
–
–
–
–
–
–
–
1,803
–
1,803
–
–
–
–
–
–
–
942
–
39,388
–
1,803
–
–
–
–
–
22
–
22
–
–
–
–
–
–
–
22
–
–
–
181
181
5,673
–
5,673
–
–
–
–
–
422
422
6,095
Retained
earnings
£’000
39,044
Total
£’000
86,691
13,091
13,091
(5,040)
(5,040)
(30)
–
(5,070)
47,065
(171)
46,894
(30)
181
(4,889)
94,893
(171)
94,722
6,324
6,324
(5,655)
12
214
33
–
(5,655)
12
214
33
422
(5,396)
47,822
(4,974)
96,072
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
131
Bloomsbury AR2019_Back.indd 131
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:07
Company Statement of Cash Flows
For the year ended 28 February 2019
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of intangible assets
Finance income
Finance costs
Share-based payment charges
Tax expense
(Increase)/decrease in inventories
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other liabilities
Cash generated from operations
Income taxes paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of business
Purchase of other investments
Purchase of intangible assets
Interest received
Net cash used in investing activities
Cash flows from financing activities
Equity dividends paid
Proceeds from exercise of share options
Interest paid
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
Notes
6,324
13,091
290
890
(122)
330
202
1,688
9,602
(200)
5,756
(1,307)
13,851
(2,469)
11,382
(217)
(4,097)
–
(1,007)
45
(5,276)
(5,655)
214
(1)
(5,442)
664
16,332
16,996
268
794
(328)
187
88
1,598
15,698
38
(2,466)
2,318
15,588
(1,250)
14,338
(255)
–
(300)
(1,157)
96
(1,616)
(5,040)
–
(32)
(5,072)
7,650
8,682
16,332
40
40
40
40
132
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 132
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Notes to the Company Financial Statements
Accounting Policies
30. Reporting entity
Bloomsbury Publishing Plc (the “Company”) is a company domiciled in the United Kingdom. The address of the Company’s registered office can
be found on page 145. The Company is primarily involved in the publication of books and other related services.
31. Significant accounting policies
a) Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and International Financial
Reporting Interpretations Committee (“IFRIC”) interpretations adopted by the European Union (“EU”) at the time of preparing these financial
statements and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been
prepared under the historical cost convention.
The financial statements have been prepared on the going concern basis as the Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence at least until June 2020, being the period of the detailed going concern assessment
reviewed by the Board.
The Company accounting policies are consistent with the Group policies set out in note 2 to the consolidated financial statements. Key additional
policies are stated below.
b) Parent Company result
The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 not to present the Company income
statement or statement of comprehensive income. The Company’s profit for the year was £6,324,000 (2018: £13,091,000).
c) Use of estimates and judgements
The preparation of the Company financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which
the estimate is revised and in any future years affected. Critical judgements and areas where the use of estimates is significant are disclosed in note
2v for the Group and are applicable to the Company.
d) Application of new and amended standards and interpretations
The following amendments and interpretations were introduced to accounting standards relevant to the Company during the year ended
28 February 2019. The table below summarises the impact of these changes to the Company:
Accounting standard
Description of change
Impact on financial statements
IFRS 9 Financial Instruments
A description and the impact of the adoption of IFRS 9 Financial Instruments is set out in note 31g.
IFRS 15 Revenue from Contracts
with Customers
A description and the impact of the adoption of IFRS 15 Revenue from Contracts with Customers is set out in
note 2w. The impact on the Company is not material.
Other standards
A number of other new standards and
amendments to standards and interpretations
are effective for annual periods beginning after
1 January 2018.
The standards and amendments have not had a material
impact on the Group. Additional disclosure has been
provided where relevant.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
133
Bloomsbury AR2019_Back.indd 133
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Notes to the Company Financial Statements
Accounting Policie
The Company has not early adopted the following new and revised accounting standards, interpretations or amendments issued by the
International Accounting Standards Board that are currently endorsed but not yet effective:
Accounting standard
Description of change
Impact on financial statements
IFRS 16 Leases – effective
for annual periods
beginning after 1 January
2019
The new standard replaces IAS 17 Leases
and related interpretations and details the
requirements for the classification, measurement
and recognition of lease arrangements.
The most significant effect of the new
requirements will be an increase in lease
assets and lease liabilities for leases currently
categorised as operating leases.
The nature of expenses related to those leases will
now change because the Group will recognise a
depreciation charge for right-of-use assets and
an interest expense on lease liabilities.
Other standards
A number of other new standards and
amendments to standards and interpretations
are effective for annual periods beginning after
1 January 2019 and have not been applied in
preparing these financial statements.
The Company will apply IFRS 16 on 1 March 2019 and anticipates
using the modified retrospective approach. Under this approach,
the cumulative effect of adopting IFRS 16 will be recognised as
an adjustment to the opening balance of retained earnings on
1 March 2019, with no restatement of comparative information.
Based on the information currently available, the Company
estimates that it will recognise additional lease liabilities of
£8 million – £10 million and a corresponding right-of-use asset of
£7 million – £9 million as at 1 March 2019.
Operating profit for the year ending 29 February 2020 is estimated
to increase by approximately £0.1 million, being the difference
between the lease expense and depreciation, and profit before
tax will decrease by approximately £0.1 million, reflecting a higher
total lease interest expense in the initial years.
There are several practical expedients and exemptions available
under IFRS 16. The Group will exclude leases of low value assets
and short-term leases, with a duration of less than 12 months
from the application of IFRS 16, with payments for these leases
continuing to be expensed directly to the income statement as
operating leases.
The Directors do not anticipate the application of these standards
and amendments will have a material impact on the Company’s
consolidated financial statements.
e) Investment in subsidiaries
Investments in subsidiaries are recorded at cost less accumulated impairment in the statement of financial position. Investments are reviewed at
each reporting date to assess whether there are any indicators of impairment. Any impairment losses are recognised in the income statement in
the year they occur.
f) Share-based payments
The Company issues equity-settled share-based payment instruments to certain employees of the Group. Equity-settled share-based payment
transactions are measured at fair value at the date of grant. The fair value determined at the grant date of equity-settled share-based payments
is charged to the income statement on a straight-line basis over the vesting period, based on the Group’s estimate of the shares that will
eventually vest.
Options granted under the Company’s Sharesave scheme are equity-settled. The fair values of such options have been calculated using the
Black–Scholes model based on publicly available market data.
Awards granted under the Group’s Performance Share Plan are equity-settled. For the awards granted in 2016, part of any award granted under
the Plan is subject to a Total Shareholder Return performance condition. The fair value of this element of the awards is calculated using the
Stochastic model. For awards granted in 2017 and 2018, part of any award under the Plan is subject to a Return on Capital Employed performance
condition. These have been measured based on the share price at the date of grant as they are only subject to non-market conditions. The other
part of any award granted under the Plan is subject to an Earnings Per Share performance condition. The fair value of this element of the awards
is calculated using the Black–Scholes model. Where the awards are subject to a holding period, we have used the Chaffe model to determine a
discount for lack of marketability.
Awards granted under the Company’s Share Option Plan are equity-settled. The award is subject to an adjusted Earnings Per Share growth
performance condition. The fair value of this award is calculated using the Black–Scholes model.
The Company recharges a share of the share-based payment charge to subsidiaries. This recharge is made via intercompany transactions.
134
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 134
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
g) Change of accounting policy: IFRS 9
The Company has adopted IFRS 9 Financial Instruments from 1 March 2018 and applied the cumulative effect method. Comparatives for 2018
have not been restated and the cumulative impact of adoption has been recognised as a decrease to opening retained earnings as follows:
Retained earnings
Provision for impairment of trade receivables
Taxation
Total impact at 1 March 2018
Non-current assets
Deferred tax assets
Current assets
Trade and other receivables
Total impact at 1 March 2018
£’000
(211)
40
(171)
40
(211)
(171)
The adjustment above arises from the adoption of the forward-looking expected loss impairment model under IFRS 9, which replaces the incurred
loss model of IAS 39, when recognising provisions for impairment of trade receivables. Although there is a transition impact from adoption of the
new model there was no material impact on profit before tax for the year to 28 February 2019.
32. Intangible assets
Cost
At 28 February 2017
Additions
At 28 February 2018
Additions
At 28 February 2019
Amortisation
At 28 February 2017
Charge for the year
At 28 February 2018
Charge for the year
At 28 February 2019
Net book value
At 28 February 2019
At 28 February 2018
Publishing
rights
£’000
Systems
development
£’000
660
–
660
70
730
660
–
660
12
672
58
–
5,371
1,156
6,527
937
7,464
3,211
794
4,005
878
4,883
2,581
2,522
Total
£’000
6,031
1,156
7,187
1,007
8,194
3,871
794
4,665
890
5,555
2,639
2,522
The amortisation charge of £890,000 (2018: £794,000) was included in administrative expenses in the year.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
135
Bloomsbury AR2019_Back.indd 135
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Notes to the Company Financial Statements
33. Property, plant and equipment
Cost
At 28 February 2017
Additions
At 28 February 2018
Additions
At 28 February 2019
Depreciation
At 28 February 2017
Charge for the year
At 28 February 2018
Charge for the year
At 28 February 2019
Net book value
At 28 February 2019
At 28 February 2018
Short
leasehold
improvements
£’000
Furniture
and fittings
£’000
Computers and
other office
equipment
£’000
2,664
–
2,664
54
2,718
1,380
93
1,473
97
1,570
1,148
1,191
420
12
432
21
453
329
26
355
25
380
73
77
1,359
241
1,600
143
1,743
1,002
149
1,151
168
1,319
424
449
The depreciation charge of £290,000 (2018: £268,000) was included in administrative expenses.
34. Investment in subsidiary companies
Cost
At 28 February 2018
Additions
At 28 February 2019
Impairment
At 28 February 2018 and 28 February 2019
Net book value
At 28 February 2019
At 28 February 2018
Total
£’000
4,443
253
4,696
218
4,914
2,711
268
2,979
290
3,269
1,645
1,717
£’000
88,285
4,407
92,692
9,442
83,250
78,843
The additions and disposals in the year are in relation to the acquisition of I.B.Tauris & Co. Limited.
35. Other investments
Equity securities designated as at FVOCI
Total
28 February
2019
£’000
28 February
2018
£’000
300
300
300
300
136
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 136
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
36. Deferred tax assets and liabilities
Deferred tax is calculated in full on temporary differences using the tax rate appropriate to the jurisdiction in which the asset or liability arises and
the tax rates that are expected to apply in the periods in which the asset or liability is settled.
Movement in temporary differences during the year:
At 28 February 2017
Credit/(charge) to the income statement
Charge to equity
At 28 February 2018
Adjustment on initial application of IFRS 9 (see note 31g)
(Charge)/credit to the income statement
Credit to equity
At 28 February 2019
The analysis for financial reporting purposes is as follows:
Deferred tax assets
Deferred tax liabilities
Total
Property, plant
and equipment
£’000
Retirement
benefit obligation
£’000
Share-based
payments
£’000
Provisions
£’000
(2)
17
–
15
–
(24)
–
(9)
18
1
–
19
–
(16)
–
3
109
(50)
(30)
29
–
67
33
129
–
–
–
–
40
307
–
347
Total
£’000
125
(32)
(30)
63
40
334
33
470
28 February
2019
£’000
28 February
2018
£’000
470
–
470
63
–
63
Deferred tax is not provided on unremitted earnings of subsidiaries where the Company controls the timing of remittance and it is probable that
the temporary difference will not reverse in the foreseeable future.
37. Inventories
Work in progress
Finished goods for resale
Total
28 February
2019
£’000
28 February
2018
£’000
1,384
4,772
6,156
1,652
4,305
5,957
The cost of inventories recognised as cost of sales amounted to £16,231,000 (2018: £16,604,000).
The provision and write down of inventories to net realisable value recognised in cost of sales amounted to £2,018,000 (2018: £2,217,000).
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
137
Bloomsbury AR2019_Back.indd 137
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Notes to the Company Financial Statements
38. Trade and other receivables
Current
Gross trade receivables
Less loss allowance
Less provision for returns
Net trade receivables
Amounts owed by Group undertakings
Other receivables
Prepayments and accrued income
Royalty advances
Total trade and other receivables
28 February
2019
£’000
28 February
2018
£’000
30,457
(1,736)
–
28,721
12,209
2,254
2,946
10,847
56,977
37,060
(927)
(2,838)
33,295
10,045
2,116
3,456
10,392
59,304
A provision is held against gross advances payable in respect of published title advances which may not be fully earned down by anticipated
future sales. As at 28 February 2019, £3,180,000 (2018: £3,196,000) of royalty advances are expected to be recovered after more than 12 months.
The Directors consider that the carrying amount of trade and other receivables approximates to their fair values. The Company’s exposure to
credit and currency risks is disclosed in note 44. Trade receivables principally comprise amounts receivable from the sale of books due from
distributors. The average number of days’ credit taken for sales of books by the Company was 163 days (2018: 196 days).
As part of the adoption of IFRS 15 the provision for returns has been reclassified as sales returns liability within trade and other liabilities (see note 39).
Movements on the Company’s loss allowance for trade receivables are as follows:
At start of year
Adjustment on initial application of IFRS 9
Amounts created
Amounts released
Amounts utilised
At end of year
39. Trade and other liabilities
Current
Trade payables
Sales return liability
Amounts owed to Group undertakings
Taxation and social security
Other payables
Accruals and deferred income
Total current trade and other liabilities
Total trade and other payables liabilities
28 February
2019
£’000
28 February
2018
£’000
927
212
641
–
(44)
1,736
618
–
527
(75)
(143)
927
28 February
2019
£’000
28 February
2018
£’000
5,657
3,392
46,890
637
1,817
13,481
71,874
71,874
7,146
–
45,583
586
2,205
13,874
69,394
69,394
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. Non-current other payables include the
authors’ share of rights receivable falling due after more than one year.
If actual returns were 10% higher or lower in the year revenue would have been £1 million lower/higher (2018: £0.8 million).
138
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 138
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
40. Loans and borrowings
Reconciliation of movements of liabilities to cash flows arising from financing activities:
Balance at 1 March 2018
Changes from financing cash flows
Dividend paid
Proceeds from exercise of share options
Interest paid
Total changes from financing cash flows
Other changes
Liability-related
Interest expense
Total liability-related other changes
Total equity-related other changes
Balance at 28 February 2019
Balance at 1 March 2017
Changes from financing cash flows
Dividend paid
Interest paid
Total changes from financing activities
Other changes
Liability-related
Interest expense
Total liability-related other changes
Total equity-related other changes
Balance at 28 February 2018
Liability
Bank overdrafts
used for cash
management
purposes
£’000
–
–
–
(1)
(1)
1
1
–
–
Share
capital/share
premium
£’000
40,330
–
–
–
–
–
–
–
40,330
Liability
Bank overdrafts
used for cash
management
purposes
£’000
Share
capital/share
premium
£’000
–
40,330
–
(31)
(31)
31
31
–
–
–
–
–
–
–
–
40,330
Equity
Other
reserves
£’000s
7,498
–
–
–
–
–
–
422
7,920
Equity
Other
reserves
£’000s
7,317
–
–
–
–
–
181
7,498
Retained
earnings
£’000
47,065
(5,655)
214
–
(5,441)
–
–
6,198
47,822
Retained
earnings
£’000
39,044
(5,041)
–
(5,041)
–
–
13,062
47,065
Total
£’000
94,893
(5,655)
214
(1)
(5,442)
1
1
6,620
96,072
Total
£’000
86,691
(5,041)
(31)
(5,072)
31
31
13,243
94,893
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
139
Bloomsbury AR2019_Back.indd 139
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Notes to the Company Financial Statements
41. Provisions
At 1 March 2018
Created in the year
At 28 February 2019
Non-current
Current
Property
£’000
28
80
108
108
–
The property provision is in respect of dilapidations for the Bedford Square head office.
42. Share capital and other reserves
For details of share capital, share premium, merger reserve, capital redemption reserve, share-based payment reserve and retained earnings see
note 21 and the Company statement of changes in equity attributable to the owners of the Company. For details of the Company profit for the
year see note 31b.
For details of dividends see note 8.
As at 28 February 2019, the Company had distributable reserves of £47.8 million. The total external dividends relating to the year ended
28 February 2019 amounted to £6.0 million. The Company distributable reserves support over 8.0 times this annual dividend.
43. Share-based payments
Options over shares of the Company have been granted to employees of the Company and Group under various schemes. The full share-based
payment disclosures can be found in note 22.
The total share-based payment charge to the income statement for the year was:
Equity-settled share-based transactions
Cash-settled share-based transactions
Total
£296,000 (2018: £114,000) of this amount was recharged to subsidiaries of the Company.
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
422
76
498
181
21
202
140
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 140
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
44. Financial instruments and risk management
Full disclosures relating to the Group’s financial risk management strategies and other financial assets and liabilities are given in note 24 to the
consolidated financial statements.
Categories of financial instruments
Equity securities
Equity securities designated as at FVOCI (Level 3)
Loans and receivables
Cash and cash equivalents
Amounts owed by Group undertakings
Trade receivables
Accrued income
Total loans and receivables
Financial liabilities measured at amortised cost
Trade payables
Sales return liability
Accruals
Other payables
Amounts owed to Group undertakings
Total financial liabilities measured at amortised cost
Year ended
28 February
2019
£’000
Year ended
28 February
2018
£’000
Notes
35
38
38
39
39
39
300
300
16,996
12,209
28,721
1,693
59,619
5,657
3,392
13,436
2,454
46,890
71,829
16,332
10,045
33,295
2,344
62,016
7,146
–
13,648
2,791
45,583
69,168
Net financial instruments
(11,910)
(6,852)
The equity securities are classed as level 3 as the shares are not actively traded stock. The fair value is assessed based on recent share subscriptions
where these are available and relevant to the fair value of the investment.
a) Market risk
i) Interest rate risk
Interest rate profile of financial assets:
Variable rate financial assets
28 February
2019
£’000
16,996
28 February
2018
£’000
16,332
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
141
Bloomsbury AR2019_Back.indd 141
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Notes to the Company Financial Statements
Interest rate sensitivity analysis
The Company derived the following sensitivities to assess the impact of changes in interest rates, based on the effect of the market volatility in the
current climate and the previous 12 months. The analysis assumes all other variables remain constant.
Impact on profit and equity
1% increase in base rate of interest (2018: 1%)
0.5% decrease in base rate of interest (2018: 0.5%)
ii) Currency risk
The Company’s exposure to foreign currency risk was as follows based on notional amounts:
28 February
2019
£’000
28 February
2018
£’000
132
(67)
81
(44)
GBP
USD
EURO
AUD
Total
Loan and receivables
Financial liabilities
28 February
2019
£’000
28 February
2018
£’000
28 February
2019
£’000
28 February
2018
£’000
54,176
3,793
1,474
176
59,619
60,593
1,154
201
68
62,016
70,758
955
116
–
71,829
68,905
215
48
–
69,168
Foreign currency sensitivity analysis
The Company derived the following sensitivities based on the outstanding foreign currency denominated financial assets and liabilities at the
year end.
The use of a 10% sensitivity rate has been determined based on the effect of the market volatility in exchange rates between the current and
previous year end, and represents management’s assessment of the reasonably possible change in foreign exchange rates. A positive number
below indicates an increase in profit or loss and equity.
Impact on profit or loss
10% weakening in US dollar against pound sterling (2018: 10%)
10% strengthening in US dollar against pound sterling (2018: 10%)
10% weakening in euro against pound sterling (2018: 10%)
10% strengthening in euro against pound sterling (2018: 10%)
10% weakening in AUS dollar against pound sterling (2018: 10%)
10% strengthening in AUS dollar against pound sterling (2018: 10%)
28 February
2019
£’000
28 February
2018
£’000
(258)
315
(123)
151
(16)
20
(85)
104
(14)
17
(6)
8
b) Credit risk
The Company has a significant concentration of credit risk due to its use of third-party distributors. Credit limits for the final customers are set
by the distributors based on a combination of payment history and third-party credit references. Credit limits are reviewed on a regular basis
in conjunction with debt ageing and collection history. The distributors belong to established international groups whose business includes a
number of publishing interests and clients. The Company’s risk is limited as significant amounts outstanding through the UK distributors are
secured by credit insurance. The balances with the distributors make up 85% (2018: 88%) of the gross trade receivable balance.
142
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 142
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
c) Liquidity risk
The Group has an unsecured revolving credit facility with Lloyds Bank Plc. At 28 February 2019, the Group had no draw down (2018: £nil) of this
facility with £12.0 million of undrawn borrowing facilities (2018: £12.0 million) available.
The facility comprises a £10–£14 million committed revolving loan facility (amount dependent on time during the year to match Bloomsbury’s
cash flow cycle), an uncommitted incremental term loan facility of up to £6 million and a £2 million overdraft facility. The overdraft facility is
repayable on demand and the loan facilities mature in May 2021. All facilities are subject to two covenants, being a maximum net debt to EBITDA
ratio and a minimum interest cover covenant.
45. Operating leases
At 28 February 2019, the Company had the following outstanding commitments under non-cancellable operating leases:
Within one year
Later than one year and fewer than five years
After more than five years
Total
28 February
2019
£’000
28 February
2018
£’000
953
3,288
5,446
9,687
876
3,322
6,243
10,441
The operating leases represent rentals payable by the Company for certain office properties, vehicles and equipment; see note 25 for further
details.
46. Commitments and contingent liabilities
a) Capital commitments
Property, plant and equipment
Intangible assets
Total
28 February
2019
£’000
28 February
2018
£’000
–
105
105
–
–
–
b) Other commitments
The Company is committed to paying royalty advances in subsequent financial years. At 28 February 2019, this commitment amounted to
£10,957,000 (2018: £9,061,000).
c) Guarantees
The Company and certain of its subsidiaries have guarantees to Lloyds Bank Plc in place relating to the Group’s borrowing facilities; see note 44c.
The Company has guaranteed the liabilities of certain of its UK subsidiaries, being those listed in note 29, to enable them to take the audit
exemption under section 479A of the Companies Act 2006.
47. Related parties
Trading transactions
During the year the Company entered into the following transactions and had the following balances with its subsidiaries:
Sale of goods to subsidiaries
Management recharges
Commission payable to subsidiaries
Finance income from subsidiaries
Amounts owed by subsidiaries at year end
Amounts owed to subsidiaries at year end
28 February
2019
£’000
28 February
2018
£’000
8,553
9,667
(5)
77
12,209
46,890
10,759
9,843
–
232
10,045
45,583
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
All amounts outstanding are unsecured and will be settled in cash. No provisions have been made for doubtful debts in respect of the amounts
owed by subsidiaries.
Key management remuneration is disclosed in note 5.
Stock Code: BMY
www.bloomsbury.com
143
Bloomsbury AR2019_Back.indd 143
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Five Year Financial Summary
Revenue
Adjusted profit†
Adjusted diluted EPS‡
Dividend per share
Return on Capital Employed
Net assets
Net cash*
2015
£’000
111,125
12,079
14.73p
6.10p
9.0%
124,154
10,021
2016
£’000
123,725
13,028
15.24p
6.40p
9.2%
132,967
5,166
2017
£’000
142,564
12,039
12.63p
6.70p
8.2%
139,299
15,478
2018
£’000
161,510
13,217
13.92p
7.51p
9.9%
139,563
25,428
2019
£’000
162,679
14,374
14.97p
7.96p
11.0%
143,738
27,580
† Adjusted profit is profit before taxation, amortisation of acquired intangible assets and other highlighted items.
‡ Adjusted diluted EPS is calculated from adjusted profit with tax on adjusted profit deducted.
* Net cash is cash and cash equivalents net of the bank overdraft.
144
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 144
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Company Information
Chairman
Executive Directors
Independent Non-Executive Directors
Sir Richard Lambert – Non-Executive Chairman
Nigel Newton – Founder and Chief Executive
Penny Scott-Bayfield – Group Finance Director
Jonathan Glasspool – Executive Director
John Warren – Senior Independent Director
Jill Jones
Steven Hall
Company Secretary
Maya Abu-Deeb
Registered Office
50 Bedford Square
London
WC1B 3DP
+44 (0) 20 7631 5600
Registered number
01984336 (England & Wales)
Auditor
Bankers
Stockbrokers and Financial Advisers
Registrars
Legal Notice
KPMG LLP
15 Canada Square
London
E14 5GL
Lloyds Bank
25 Gresham Street
London
EC2V 7HN
Investec Investment Banking
30 Gresham Street
London
EC2V 7QP
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Certain information in this document has not been audited or otherwise independently verified and no representation or warranty, express or implied, is made as to, and no reliance
should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of the Company or any of its affiliates, advisors or
representatives shall have any liability whatsoever (in negligence or otherwise) for any loss whatsoever arising from any use of this document, or its contents, or otherwise arising in
connection with this document.
This document does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase any shares in the Company, nor shall it or any part of it or the
fact of its distribution form the basis of, or be relied on in connection with, any contract or commitment or investment decisions relating thereto, nor does it constitute a recommendation
regarding the shares of the Company.
Certain statements, statistics and projections in this document are or may be forward looking. By their nature, forward looking statements involve a number of risks, uncertainties or
assumptions that may or may not occur and actual results or events may differ materially from those expressed or implied by the forward-looking statements. Accordingly, no assurance
can be given that any particular expectation will be met and reliance should not be placed on any forward-looking statement. Accordingly, forward-looking statements contained in
this document regarding past trends or activities should not be taken as representation that such trends or activities will continue in the future. You should not place undue reliance on
forward-looking statements, which are based on the knowledge and information available only at the date of this document’s preparation. For a description of certain factors that may
affect Bloomsbury’s business, financial performance or results of operations, please refer to the Principal risks included in this Annual Report and Accounts, see pages 26 to 29.
The Company does not undertake any obligation to update or keep current the information contained in this document, including any forward looking statements, or to correct any
inaccuracies which may become apparent and any opinions expressed in it are subject to change without notice.
References in this report to other reports or materials, such as a website address, have been provided to direct the reader to other sources of Bloomsbury information which may be of
interest. Neither the content of Bloomsbury’s website nor any website accessible by hyperlinks from Bloomsbury’s website nor any additional materials contained or accessible thereon,
are incorporated in, or form part of, this report.
Stock Code: BMY
www.bloomsbury.com
145
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Bloomsbury AR2019_Back.indd 145
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Notice of the Annual General Meeting
Bloomsbury Publishing Plc
To be held at the registered office of
Bloomsbury Publishing Plc at:
50 Bedford Square
London
WC1B 3DP
On Wednesday 17 July 2019 at 12.00 noon
To Bloomsbury Shareholders
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to any aspect of the contents of this document or what action you should take, you are recommended to seek your
own financial advice immediately from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent
financial adviser authorised under the Financial Services and Markets Act 2000.
If you sell or have sold or otherwise transferred all of your shares in Bloomsbury Publishing Plc, please send this document together with the
accompanying documents as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale
or transfer was effected for delivery to the purchaser or the transferee.
146
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 146
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Letter to Shareholders
21 May 2019
Dear Shareholder
Bloomsbury Publishing Plc - Annual General Meeting
I am pleased to inform you that this year’s Annual General Meeting (“AGM”) of Bloomsbury Publishing Plc (the “Company”) will be held at
50 Bedford Square, London WC1B 3DP on Wednesday 17 July 2019 at 12.00 noon.
Information regarding the AGM, including the information required by section 311A of the Companies Act 2006 is available from
www.bloomsbury-ir.co.uk.
The AGM is an important opportunity for the Directors to listen to the shareholders and respond to their questions. It is also when shareholders
are asked to vote in favour of various resolutions related to the running and management of the Company. This document provides details of
the resolutions to be voted upon at the AGM and includes the formal notice convening the AGM. You will also find notes in the section entitled
“Explanatory Notes to the Resolutions” relating to the resolutions that you will be asked to consider and vote on at the AGM. Resolutions 1 to 13
will be proposed as ordinary resolutions and resolutions 14 to 16 will be proposed as special resolutions.
If you have elected to receive information from the Company in hard copy, you will have received the Annual Report & Accounts 2019 with this
document. Shareholders who have not elected to receive hard copy documents can view or download the Annual Report & Accounts 2019 and
this Notice from our website at www.bloomsbury-ir.co.uk.
This year, you will not receive a form of proxy for the AGM in the post. Instead, you will find instructions in the section entitled “Explanatory Notes
to the Notice” to enable you to vote electronically and how to register to do so. To register, you will need your Investor Code, which can be found
on your share certificate. Submission of a proxy vote will not preclude you from attending and voting at the AGM in person and you may request
a paper form of proxy from our Registrar, Link Asset Services. Proxy votes should be submitted as early as possible and in any event by no later
than 12.00 noon on Monday 15 July 2019 in order to count towards the vote.
The Directors consider that all the resolutions that are to be considered at the AGM are in the best interests of the Company and its shareholders
as a whole and are most likely to promote the success of the Company for the benefit of shareholders as a whole. The Directors unanimously
recommend that you vote in favour of all the proposed resolutions as they intend to do so in respect of their own interests (both beneficial and
non-beneficial).
Yours faithfully
Maya Abu-Deeb
General Counsel & Group Company Secretary
Bloomsbury Publishing Plc
21 May 2019
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
147
Bloomsbury AR2019_Back.indd 147
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
Notice of the Annual General Meeting
Bloomsbury Publishing Plc
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Bloomsbury Publishing Plc (the “Company”) will be held at 50 Bedford Square,
London, WC1B 3DP on Wednesday 17 July 2019 at 12.00 noon.
You will be asked to consider and vote on the resolutions below. Resolutions 1 to 13 will be proposed as ordinary resolutions and resolutions
14 to 16 will be proposed as special resolutions.
Ordinary Business
Shareholders are asked to consider and, if thought fit, to pass the following resolutions as ordinary resolutions:
2.
1.
To receive the audited accounts of the Company for the year ended 28 February 2019, together with the Report of the Directors and the
report of the Auditor thereon.
To approve the Annual Statement by the Chairman of the Remuneration Committee and the Annual Report on Directors’ Remuneration
for the year ended 28 February 2019, as set out on pages 54 to 55 and 62 to 72 respectively of the Company’s Annual Report and
Accounts for the year ended 28 February 2019.
To declare a final dividend of 6.75p per Ordinary share.
3.
To appoint Leslie-Ann Reed as a Director of the Company.
4.
To re-appoint John Warren as a Director of the Company.
5.
To re-appoint Steven Hall as a Director of the Company.
6.
To re-appoint Nigel Newton as a Director of the Company.
7.
To re-appoint Penny Scott-Bayfield as a Director of the Company.
8.
9.
To re-appoint Jonathan Glasspool as a Director of the Company.
10. To re-appoint Sir Richard Lambert as a Director of the Company.
11. To re-appoint KPMG LLP as Auditor of the Company to hold office until the conclusion of the next Annual General Meeting at which
financial statements for the Company are laid before the Company.
12. To authorise the Directors to determine the remuneration of the Auditor on behalf of the Company.
Special Business
Shareholders are asked to consider and, if thought fit, to pass the following resolutions of which Resolution 13 will be proposed as an ordinary
resolution and resolutions 14, 15 and 16 will be proposed as special resolutions.
13. THAT:
a.
the Directors be generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the "Act") to exercise
all the powers of the Company to allot any shares in the Company and to grant rights to subscribe for or convert any security into
shares in the Company to such persons and on such terms as they think proper up to a maximum aggregate nominal amount of
£313,869 provided that:
i.
ii.
iii.
this authority shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of this
resolution or, if earlier, 15 months from the date of passing of this resolution, unless previously varied, revoked or renewed by
the Company in general meeting; and
the Company shall be entitled to make, before the expiry of such authority, any offer or agreement which would or might
require shares to be allotted or rights to subscribe for or convert any security into shares in the Company to be granted after
the expiry of such authority and the Directors may allot any shares pursuant to such offer or agreement as if such authority
had not expired; and
the Directors may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate
to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws
of, any territory or any other matter; and
b.
all prior authorities to allot any shares in the Company and to grant rights to subscribe for or convert any security into shares in the
Company given to the Directors by resolution of the Company be revoked but without prejudice to the allotment of any shares
already made or agreed to be made pursuant to such authorities.
14.
THAT: if Resolution 13 is passed, the Directors be authorised to allot equity securities (as defined in the Companies Act 2006 (“the Act”))
for cash under the authority given by that resolution and/or to sell Ordinary shares held by the Company as treasury shares for cash as if
section 561 of the Act did not apply to any such allotment or sale such authority to be limited:
i.
to the allotment of equity securities in connection with a rights issue, open offer or other pre-emptive offer in favour of holders of
Ordinary shares in the Company where the equity securities respectively attributable to the interests of all such holders of Ordinary
shares are proportionate (as nearly as may be) to the respective numbers of and/or rights attaching to Ordinary shares held by
them, subject to such exceptions, exclusions or other arrangements as the Directors may deem necessary or expedient to deal with
fractional entitlements or legal or practical problems under the laws of any territory or the requirements of any regulatory body or
any stock exchange or otherwise in any territory;
148
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 148
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:08
ii.
iii.
to the allotment of equity securities pursuant to the terms of the Company’s existing employees’ share or share option schemes or
any other employees’ share scheme approved by the shareholders of the Company in general meeting; and
to the allotment of equity securities or sale of treasury shares (otherwise than under paragraph i. and ii. above) up to a nominal
value not exceeding in aggregate £47,080;
and shall expire at the conclusion of the next Annual General Meeting of the Company after passing this resolution or, if earlier, 15
months from the date of passing of this resolution, unless previously varied, revoked or renewed by the Company in general meeting,
and provided that the Company may, before such expiry, make any offer or agreement which would or might require equity securities
to be allotted or Ordinary shares held by the Company as treasury shares to be sold after such expiry and the Directors may allot equity
securities or sell treasury shares pursuant to any such offer or agreement as if the power hereby conferred had not expired; and all prior
powers granted under section 571 of the Act revoked, provided that such revocation shall not have retrospective effect.
15. THAT: if Resolution 13 is passed, the Directors be authorised, in addition to any authority granted under Resolution 14, to allot equity
securities (as defined in the Companies Act 2006 (“the Act”) for cash under the authority given by Resolution 13 and/or to sell Ordinary
shares held by the Company as treasury shares for cash, as if section 561 of the Act did not apply to any such allotment or sale, such
further authority to be:
a.
limited to the allotment of equity securities or sale of treasury shares up to a nominal amount of £47,080; and
b. used only for the purposes of financing (or refinancing, if the authority is to be used within six months after the original transaction)
a transaction which the Directors determine to be an acquisition or other capital investment of a kind contemplated by the
Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the date of
the notice of this resolution;
and shall expire at the conclusion of the next Annual General Meeting of the Company after passing this resolution or, if earlier, 15
months from the date of passing of this resolution, unless previously varied, revoked or renewed by the Company in general meeting,
and provided that the Company may, before such expiry, make any offer or agreement which would or might require equity securities
to be allotted or Ordinary shares held by the Company as treasury shares to be sold after such expiry and the Directors may allot equity
securities or sell treasury shares pursuant to any such offer or agreement as if the power hereby conferred had not expired; and all prior
powers granted under section 571 of the Act revoked, provided that such revocation shall not have retrospective effect.
16. THAT: the Company be authorised, pursuant to section 701 of the Companies Act 2006 (“the Act”), to make market purchases (as
defined in section 693(4) of the Act) of any of its Ordinary shares of 1.25p each (“Ordinary shares”) in such manner and on such terms as
the Directors may from time to time determine provided that:
a.
b.
c.
d.
the maximum number of Ordinary shares authorised to be purchased is 7,532,857 Ordinary shares being 10% of the issued Ordinary
shares of the Company at the date of the notice of this resolution;
the maximum price (exclusive of expenses) which may be paid for each Ordinary share is an amount equal to 105 per cent of the
average of the middle market quotations for an Ordinary share taken from the London Stock Exchange Daily Official List for the five
business days immediately preceding the date on which such share is contracted to be purchased and the minimum price (exclusive of
expenses) which may be paid for each Ordinary share is 1.25 pence;
the authority hereby conferred shall, unless previously varied, revoked or renewed, expire at the conclusion of the next AGM of the
Company to be held after passing this resolution or 15 months from the date of passing of this resolution, whichever shall be the
earlier; and
the Company shall be entitled under such authority to make at any time before its expiry or termination any contract to purchase
its own shares which will or might be concluded wholly or partly after the expiry or termination of such authority and may purchase
its own shares pursuant to such contract.
By order of the Board
Maya Abu-Deeb
General Counsel & Group Company Secretary
Bloomsbury Publishing Plc
21 May 2019
Registered Office
50 Bedford Square
London
WC1B 3DP
Stock Code: BMY
www.bloomsbury.com
149
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Bloomsbury AR2019_Back.indd 149
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:09
Explanatory Notes to the Resolutions
Resolutions 1 to 13 are proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than half of the
votes cast must be in favour of the resolution.
Resolutions 14 to 16 are proposed as special resolutions. This means that for each of those resolutions to be passed, at least three-quarters of
the votes cast must be in favour of the resolution.
Resolution 1 (ordinary resolution) – Report and Accounts
To receive the report of the Directors and the financial statements for the year ended 28 February 2019, together with the report of the Auditor.
Resolution 2 (ordinary resolution) – Approval of Annual Statement by the Chairman of the
Remuneration Committee and Annual Report on Directors’ Remuneration
The Directors are required to prepare the Directors’ Remuneration Report, comprising an annual report detailing the remuneration of the
Directors and an annual statement by the Chair of the Remuneration Committee. These are set out on pages 54 to 55 and 62 to 72 of the
Annual Report & Accounts. The Company is required to seek shareholders’ approval in respect of the contents of the Remuneration Report
on an annual basis (excluding the part containing the Directors’ Remuneration Policy) and of the annual statement. The vote for Resolution 2
is an advisory one.
Resolution 3 (ordinary resolution) – Final dividend
The Board proposes a final dividend of 6.75p per share for the year ended 28 February 2019. If approved, the recommended final dividend
will be paid on 23 August 2019 to all shareholders on the register on the record date of 26 July 2019. Payments will be made by cheque
or BACS (where there is an existing dividend mandate). The final dividend equates to an aggregate distribution to shareholders of
approximately £5.1 million, making approximately £6.0 million in aggregate for the interim and final dividend together for the year ended
28 February 2019.
Resolutions 4 to 10 (ordinary resolutions) – Re-appointment of Directors
In accordance with best practice for issuers listed on the Main Market of the London Stock Exchange and the Articles of Association of the
Company (“Articles”), all the Directors will retire at the AGM and, being eligible, offer themselves for re-appointment except for Jill Jones
who will resign as a Director of the Company. Shareholders will be asked to vote on the appointment of Leslie-Ann Reed as a Director of the
Company with effect from 17 July 2019. The Nomination Committee recommended Leslie-Ann’s appointment to the Board following its
review of the skills, knowledge and experience needed and a rigorous and thorough search process.
Leslie-Ann is currently an Independent Non-Executive Director and Chair of the Audit Committee of the AIM-listed company Learning
Technologies Group plc, and a Non-Executive Director of the German-listed company ZEAL Networks SE where she is Vice Chair of the
Supervisory Board and Chair of the Audit Committee. Until May 2018 she was a Non-Executive Director and Chair of the Audit Committee of the
London listed publisher Quarto Group, Inc. Leslie-Ann is a Chartered Accountant. She graduated from Leeds Metropolitan University with a BA
(Hons) in Accountancy and began her career at Arthur Anderson. She has since held senior finance roles in various media and professional
services companies, namely Universal Pictures, Polygram Music, EMI Music and Warner Communication Inc, acted as an advisor to Marwyn
Investment Management, and was Chief Financial Officer of the B2B media group Metal Bulletin plc and the online auctioneer Go Industry plc.
The Board has considered the appraisal of the performance of each Director offering themselves for re-appointment and has concluded that
each of them makes positive and effective contributions to the meetings of the Board and the committees on which they sit and that they
demonstrate commitment to their roles.
The Board is satisfied that each Non-Executive Director offering themselves for appointment or re-appointment is independent in character
and there are no relationships or circumstances likely to affect their character or judgement.
Biographies of each of the Directors are available from the Company’s website: www.bloomsbury-ir.co.uk.
The Board unanimously recommends the appointment or re-appointment of each of the Directors.
Resolution 11 (ordinary resolution) – Reappointment of the Auditor
The Board recommends that the incumbent External Auditor, KPMG LLP (who have been in office since the 2013/14 financial year), be
reappointed for a further year so that they are able to audit the Company’s report and accounts for the year ending 29 February 2020.
Resolution 12 (ordinary resolution) – Remuneration of the Auditor
The Board proposes that it be authorised to determine the level of the Auditor’s remuneration for the year ending 29 February 2020.
Resolution 13 (ordinary resolution) – Authority to allot Ordinary shares
This is an ordinary resolution to replace the general authority, last given at the 2018 AGM, for the Directors to be authorised to allot Ordinary
shares pursuant to section 551 of the Act. This resolution, if passed, would give the Directors the authority to allot up to 25,109,523 Ordinary
shares of 1.25 pence with a nominal value of £313,869, representing approximately 33.33% of the issued Ordinary share capital of the
Company at the date of this Notice.
This authority, if granted, will expire on the earlier of the conclusion of the Company’s next AGM and 15 months from the date of passing this
resolution. The Board has no present intention of exercising the authority granted by this resolution save in the circumstances referred to
below. The Board intends to seek its renewal at subsequent AGMs of the Company.
150
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 150
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:09
As at the date of signing the Directors’ Remuneration Report for the 2019 Annual Report & Accounts, the Directors had beneficial holdings
of Ordinary shares in the Company which, in aggregate, amounted to approximately 1.43% of the Ordinary shares in issue. The Directors
have been granted awards under the Company’s share award schemes that, if they were to fully vest, would entitle the Directors to further
Ordinary shares which in aggregate would amount to approximately a further 1.53% of the Ordinary shares in issue.
Resolutions 14 and 15 (special resolutions) – Disapplication of statutory pre-emption provisions
If the Directors wish to allot new shares and other equity securities, or to sell treasury shares, for cash (other than in connection with an
employee share scheme), Company Law requires that these shares are offered first to shareholders in proportion to their existing shareholdings.
The Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the date of this
Notice supports the annual disapplication of pre-emption rights in respect of allotments of shares and other equity securities and sales of
treasury shares for cash representing no more than 5% of the issued Ordinary share capital of the Company (exclusive of treasury shares),
without restriction as to the use of proceeds of those allotments.
Accordingly, the purpose of Resolution 14 is to authorise the Directors to allot new Ordinary shares pursuant to the allotment authority given
to them by Resolution 13, or to sell treasury shares, for cash (i) pursuant to the terms of the Company’s employees’ share schemes, (ii) in
connection with a pre-emptive offer or rights issue to shareholders or (iii) otherwise up to a nominal value equivalent to 5% of the issued
Ordinary share capital (exclusive of treasury shares) without the shares first being offered to existing shareholders in proportion to their
existing shareholdings.
The Board also intends to adhere to the provisions in the Pre-Emption Group’s Statement of Principles and not to allot shares or other equity
securities or to sell treasury shares for cash on a non pre-emptive basis pursuant to the authority in Resolution 14 in excess of an amount
equal to 7.5 per cent of the issued Ordinary share capital (excluding treasury shares), within a rolling three-year period, other than: with prior
consultation with shareholders; or in connection with an acquisition or specified capital investment which is announced contemporaneously
with the allotment or which has taken place in the preceding six-month period and is disclosed in the announcement of the allotment.
The Pre-Emption Group’s Statement of Principles also supports the annual disapplication of pre-emption rights in respect of allotments of
shares and other equity securities and sales of treasury shares for cash representing no more than an additional 5% of issued Ordinary share
capital (exclusive of treasury shares), to be used only in connection with an acquisition or specified capital investment in respect of which
sufficient information is made available to shareholders to enable them to reach an assessment of the potential return.
Accordingly, and in line with the template resolutions published by the Pre-Emption Group, the purpose of Resolution 15 is to authorise the
Directors to allot new shares and other equity securities pursuant to the allotment authority given by Resolution 13, or sell treasury shares, for
cash up to a further nominal amount equivalent to 5% of the issued Ordinary share capital (exclusive of treasury shares) only in connection
with an acquisition or specified capital investment which is announced contemporaneously with the allotment, or which has taken place
in the preceding six-month period and is disclosed in the announcement of the issue. If the authority given in Resolution 15 is used, the
Company will publish details of the placing in its next annual report.
If Resolutions 14 and 15 are passed, the authority will expire on the earlier of the conclusion of the Company’s next AGM and 15 months from
the date of passing the resolutions.
The Board considers the authorities in Resolutions 14 and 15 to be appropriate in order to allow the Company flexibility to finance business
opportunities or to conduct a pre-emptive offer or rights issue without the need to comply with the strict requirements of the statutory
pre-emption provisions. The Directors have no current intention to exercise the authorities granted by Resolutions 14 and 15. The Company
has not allotted Ordinary shares or sold treasury shares for cash on a non-pre-emptive basis in the previous five years other than 869,054
shares allotted during December 2014 in connection with the acquisition of Osprey Publishing, 247,393 shares allotted during August 2016 in
connection with the acquisition of Berg Fashion Library and shares allotted under employee share option schemes.
Resolution 16 (special resolution) – Authority for the Company to purchase Ordinary shares
This is a resolution to replace the general authority, last given at the 2018 AGM, for the Company to purchase its own Ordinary shares and
either to cancel them or to hold them as treasury shares. The Company would be authorised to make market purchases of up to 7,532,857
Ordinary shares with a nominal value of £94,161, being equivalent to 10% of the issued Ordinary share capital (excluding treasury shares) at
the date of this Notice.
Treasury shares are not taken into account in calculations of earnings per share and may only be transferred pursuant to an employee
share scheme, cancelled or sold for cash. Shares would only be purchased if the Directors consider such purchases are in the best interests of
shareholders generally and can be expected to result in an increase in earnings per share. The authority will only be used after considering
the prevailing market conditions, other investment opportunities, appropriate gearing levels and the overall financial position of the
Company. Any purchases would be market purchases through the London Stock Exchange. The upper and lower limits on the price which
may be paid for those shares are set out in the resolution itself.
This authority would, if granted, expire on the earlier of the conclusion of the Company’s next AGM and 15 months from the date of passing
this resolution.
The Directors believe it is prudent to seek this general authority to be able to act if circumstances arise in which they consider such purchases
to be in the best interests of shareholders generally. The Directors have no current intention to exercise the authority granted by this
resolution. The Company has not purchased its own Ordinary shares in the previous five years and holds no shares in treasury as at the date
of this Notice.
Stock Code: BMY
www.bloomsbury.com
151
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Bloomsbury AR2019_Back.indd 151
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:09
Explanatory Notes to the Notice
1.
Entitlement to attend and vote. Shareholders included on the register of members (in relation to Ordinary shares held in CREST, pursuant
to Regulation 41 of the Uncertificated Securities Regulations 2001) at close of business on 15 July 2019 will be entitled to attend and vote at the
AGM in respect of the number of Ordinary shares registered in their name at that time. Changes to the register of members after that time will
be disregarded in determining the rights of any person to attend or vote at the meeting.
2. Appointment of proxies. If a shareholder meets the criteria set out in Note 1 above, they are entitled to attend and vote or may appoint
one or more proxies to attend, speak and vote on their behalf. A proxy need not be a shareholder of the Company. A shareholder can only
appoint a proxy using the procedures set out in these notes. If a shareholder wishes their proxy to speak on their behalf at the meeting,
they will need to appoint their own choice of proxy (who is not the Chairman) and give instructions directly to the proxy. A shareholder
may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. A shareholder may not
appoint more than one proxy to exercise rights attached to any one share. A vote withheld is not a vote in law, which means that the vote
will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, the shareholder’s proxy will vote
or abstain from voting at their discretion. The shareholder’s proxy will vote (or abstain from voting) as they think fit in relation to any other
matter which is put before the AGM.
Shareholders are recommended to vote their shares electronically at www.signalshares.com. On the home page, search “Bloomsbury
Publishing Plc” and then register or log in, using your Investor Code. To vote at the AGM, click on the “Vote Online Now” button by not
later than 12.00 noon on Monday 15 July 2019 (or 48 hours (excluding weekends and public holidays) before the time appointed for any
adjournment of it). Electronic votes and proxy votes should be submitted as early as possible and in any event, to be received by no later
than 12.00 noon on Monday 15 July 2019. Any power of attorney or other authority under which the proxy is submitted must be sent to
the Company’s Registrar (Link Asset Services, PXS1, 34 Beckenham Road, Beckenham, Kent BR3 4ZF) so as to have been received by the
Company’s Registrars by not later than 12.00 noon on Monday 15 July 2019 (or 48 hours (excluding weekends and public holidays) before
the time appointed for any adjournment of it).
You are entitled to request a hard copy form of proxy directly from the Registrar, Link Asset Services, whose contact details can be found
in Note 14. If a paper form of proxy is requested from the Company’s Registrar, it must be completed and sent to the Company’s Registrar
(Link Asset Services, PXS1, 34 Beckenham Road, Beckenham, Kent, BR3 4ZF) so as to have been received by the Company’s Registrars by not
later than 12.00 noon on Monday 15 July 2019 (or 48 hours (excluding weekends and public holidays) before the time appointed for any
adjournment of it).
3. Appointment of proxies through CREST. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy
appointment service may do so for the AGM and any adjournment(s) thereof by utilising the procedures described in the CREST Manual.
CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s),
should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must
be properly authenticated in accordance with Euroclear UK & Ireland Limited’s (“EUI”) specifications and must contain the information
required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer’s
agent (ID - RA10) not later than 48 hours before the time appointed for holding the AGM. For this purpose, the time of receipt will be taken
to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is
able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to a proxy
appointed through CREST should be communicated to the proxy by other means. For further information on CREST procedures, limitations
and systems timings, please refer to the CREST Manual. In all cases, for a proxy form to be valid, the CREST Voting Service information must be
received by the Company’s Registrar no later than 48 hours before the time appointed for the holding of the AGM.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special
procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST
Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member
or sponsored member or has appointed a voting service provider(s), to procure that their CREST sponsor or voting service provider(s)
take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In
this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those
sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST
Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
4. Appointment of proxy by joint members. In the case of joint holders, where more than one of the joint holders purports to appoint a
proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names
of the joint holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior).
152
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 152
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:09
5. Changing proxy instructions. To change your proxy instructions simply submit a new proxy appointment using the methods set out in
Note 2. Note that the cut-off time for receipt of proxy appointments (see above) also applies in relation to amended instructions; any
amended proxy appointment received after the relevant cut-off time will be disregarded. Where you have appointed a proxy using the
hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact Link Asset Services at
PXS1, 34 Beckenham Road, Beckenham, Kent BR3 4ZF. If you submit more than one valid proxy appointment, the appointment received last
before the latest time for the receipt of proxies will take precedence.
6.
Termination of proxy appointments. In order to revoke a proxy instruction electronically please follow the method set out in Note 2 and
elect to withhold your vote on each resolution. To revoke a hard copy proxy instruction you will need to inform the Company by sending a
signed hard copy notice clearly stating your intention to revoke your proxy appointment to Link Asset Services at PXS1, 34 Beckenham Road,
Beckenham, Kent BR3 4ZF. In the case of a shareholder which is a company, the revocation notice must be executed under its common seal
or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under
which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice.
The revocation notice must be received by Link Asset Services no later than 12.00 noon on Monday 15 July 2019. If you attempt to revoke
your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy
appointment will remain valid. Appointment of a proxy does not preclude you from attending the AGM and voting in person. If you have
appointed a proxy and attend the AGM in person, your proxy appointment will automatically be terminated.
7. Corporate representatives. A corporation which is a shareholder can appoint one or more corporate representatives who may exercise,
on its behalf, all its powers as a shareholder provided that no more than one corporate representative exercises powers over the same shares.
8.
Issued shares and total voting rights. As at 20 May 2019 (being the last business day prior to the date of this Notice), the Company’s issued
share capital comprised 75,328,570 Ordinary shares of 1.25 pence each (subject to any changes that will be notified to you at the beginning of
the AGM). Each Ordinary share carries the right to one vote at a General Meeting of the Company and, therefore, the total number of voting
rights in the Company as at 20 May 2019 is 75,328,570.
9. Questions at the AGM. Any shareholder attending the meeting has the right to ask questions. Under section 319A of the Companies Act
2006, the Company must answer any question relating to the business being dealt with at the meeting, except in certain circumstances,
including (i) if to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information,
(ii) the answer has already been given on a website in the form of an answer to a question, or (iii) if it is undesirable in the interest of the
Company or the good order of the meeting that the question be answered.
10. Website publication of audit concerns. Under Section 527 of the Companies Act 2006, shareholders meeting the threshold requirements
set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to: (i) the
audit of the Company’s accounts (including the Auditor’s Report and the conduct of the audit) that are to be laid before the AGM; or (ii) any
circumstance connected with an Auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and
reports were laid in accordance with section 437 of the Act. The Company may not require the shareholders requesting any such website
publication to pay its expenses in complying with sections 527 or 528 of the Act. Where the Company is required to place a statement on
a website under section 527 of the Act, it must forward the statement to the Company’s Auditor not later than the time when it makes the
statement available on the website. The business which may be dealt with at the AGM includes any statement that the Company has been
required under section 527 of the Act to publish on a website.
11. Nominated Persons. Any person to whom this Notice is sent who is a person nominated under section 146 of the Act to enjoy information
rights (a “Nominated Person”) may, under an agreement between them and the shareholder by whom they were nominated (“Relevant
Member”), have a right to be appointed (or to have someone else appointed) as a proxy for the AGM. If a Nominated Person has no such
proxy appointment right or does not wish to exercise it, they, under any such agreement, may have a right to give instructions to the
Relevant Member as to the exercise of voting rights. Your main point of contact in terms of your investment in the Company remains the
Relevant Member (or, perhaps, your custodian or broker) and you should continue to contact them (and not the Company) regarding
any changes or queries relating to your personal details and your interest in the Company (including any administrative matters). The only
exception to this is where the Company expressly requests a response from you. The statement of the rights of shareholders in relation to the
appointment of proxies does not apply to Nominated Persons. The rights described in this regard can only be exercised by shareholders of
the Company.
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
F
I
I
Stock Code: BMY
www.bloomsbury.com
153
Bloomsbury AR2019_Back.indd 153
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:09
Explanatory Notes to the Notice
12. Members’ Rights. Under section 338 and section 338A of the Companies Act 2006, a member or members meeting the qualification criteria
in those sections have the right to require the Company (i) to give to members of the Company entitled to receive notice of the AGM, notice
of a resolution which may properly be moved and is intended to be moved at the AGM and/or (ii) to include in the business to be dealt with
at the AGM any matter (other than a proposed resolution) which may be properly included in the business. A resolution may properly be
moved or a matter may properly be included in the business unless (a) (in the case of a resolution only) it would, if passed, be ineffective
(whether by reason of inconsistency with any enactment or the Company’s constitution or otherwise); or (b) it is defamatory of any person;
or (c) it is frivolous or vexatious. Such a request may be in hard copy form or in electronic form, must identify the resolution of which notice
is to be given or the matter to be included in the business, must be authorised by the person or persons making it. The request must be
received by the Company not later than the later of the dates falling six weeks before the AGM and the time of giving this Notice of AGM, and
(in the case of a matter to be included in the business only) must be accompanied by a statement setting out the grounds for the request.
13. Documents. Copies of the following documents will be available for inspection at the Company’s Registered Office, 50 Bedford Square,
London WC1B 3DP, during usual business hours on any weekday, Saturdays and public holidays excepted, from the date of this Notice until
the date of the AGM and at the place of the AGM for 15 minutes prior to and during the meeting:
✷ copies of the service agreements under which the Executive Directors of the Company are employed by the Company or its subsidiaries;
✷ copies of letters of appointment of the Non-Executive Directors;
✷ a copy of the Articles of Association of the Company; and
✷ the terms of reference of the Audit Committee, the Remuneration Committee and Nomination Committee of the Board.
14. Communication. Except as provided above, members who have general queries about the AGM should call the Company’s shareholder
helpline on 0871 664 0300 if calling within the United Kingdom or +44 (0) 371 664 0300 if calling from outside the United Kingdom. Lines are
open between 9:00am and 5:30pm Monday to Friday. Calls to the helpline from within the United Kingdom cost 12p per minute plus network
extras. Calls to the helpline from outside the United Kingdom will be charged at applicable international rates. Calls may be recorded and
monitored for security and training purposes; no other methods of communication will be accepted. You may not use any electronic address
provided in this Notice of Meeting to communicate with the Company for any purposes other than those expressly stated.
15. Website giving information regarding the AGM. Information regarding the meeting, including the information required by section 311A
of the Companies Act 2006, is available from www.bloomsbury-ir.co.uk.
154
Bloomsbury Publishing Plc Annual Report and Accounts 2019
Bloomsbury AR2019_Back.indd 154
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:03:09
Bloomsbury AR2019_Front.indd 6
26563
12 June 2019 3:36 pm
Proof 11
12/06/2019 16:02:31
26563 12 June 2019 3:36 pm Proof 11Bloomsbury Publishing Plc ANNUAL REPORT & ACCOUNTS y/e 28 February 2019BLOOMSBURY PUBLISHING PLCAnnual Report & Accounts 2019Bloomsbury Publishing Plc50 Bedford Square, London, WC1B 3DP Telephone +44 (0) 20 7631 5600www.bloomsbury.com www.bloomsbury-ir.co.ukSTOCK CODE: BMYBloomsbury AR2019_Front.indd 112/06/2019 16:02:31