27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2Bloomsbury Publishing Plc Annual Report and Accounts for the year ended 29 February 2020Stock code: BMY27040-Bloomsbury-AR2020 - strategic.indd 311-Jun-20 9:49:40 PM 27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2Be entrepreneurialindependentindependentBe independentBe collaborativeBe author-focusedBe ethicalBe optimisticBe determinedBe sustainableBe inclusivecollaborativeethicaldeterminedinclusiveentrepreneurialAuthor focussedoptimisticsustainableBloomsbury Publishing Plc is an entrepreneurial, independent, worldwide publisher listed on the London Stock Exchange with offices in London, Oxford, New York, Sydney and New Delhi, and a joint venture presence in China. Our missionOur mission is to be an entrepreneurial, independent publisher of works of excellence and originality to a worldwide audience.Our purposeOur purpose is to inform, educate, entertain and inspire readers of all ages. We champion a life-long love of reading and learning to help build a reading culture with all the benefits which that brings society.Our values 27040-Bloomsbury-AR2020 - strategic.indd 311-Jun-20 9:49:46 PM 27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2ContentsOverviewYear highlights 02Bloomsbury at a glance 04Global Bestsellers 2019/2020 05Chairman’s Statement 06Strategic ReportChief Executive’s Review 10Marketplace 18Business Model 20Strategy 22Key Performance Indicators 25Divisional Overview 26– The Non-Consumer Division 26– The Consumer Division 30– Group Functions supporting our Publishing Divisions 35Financial Review 36Risk Factors and Risk Management 40Corporate Responsibility 46– Stakeholder Engagement 58GovernanceChairman's Introduction to Corporate Governance 66Corporate Governance Framework 67Board of Directors 68Directors’ Report 70Corporate Governance Report 75Nomination Committee Report 81Audit Committee Report 84Directors’ Remuneration Report 88Section 172 Directors’ Duties Statement 108Financial StatementsIndependent Auditor’s Report 112Consolidated Income Statement 120Consolidated Statement of Comprehensive Income 121Consolidated Statement of Financial Position 122Consolidated Statement of Changes in Equity 123Consolidated Statement of Cash Flows 124Notes to the Financial Statements 125Company Statement of Financial Position 164Company Statement of Changes in Equity 165Company Statement of Cash Flows 166Notes to the Company Financial Statements 167Additional InformationFive Year Financial Summary 182Company Information 183Legal Notice 184Notice of the Annual General Meeting 18527040-Bloomsbury-AR2020 - strategic.indd 111-Jun-20 9:49:47 PM Year Highlights
Financial highlights
Revenue
£m
£162.8m
+0%
Dividend1
pence per share
1.28p
-84%
2020
2019
2018
2017
2016
£162.8m
2020
£162.7m
£161.5m
£142.6m
£123.7m
2019
2018
2017
2016
Adjusted profit2
£m
£15.7m
+9%
1.28p
7.96p
7.51p
6.70p
6.40p
2020
2019
2018
2017
2016
Profit before tax
Adjusted diluted EPS3
£m
£13.2m
+10%
pence per share
16.77p
+12%
Diluted EPS
pence per share
13.84p
+13%
2020
2019
2018
2017
2016
£13.2m
2020
16.77p
2020
£12.0m
£11.6m
£9.4m
£10.4m
2019
2018
2017
2016
14.97p
13.92p
12.63p
15.24p
2019
2018
2017
2016
£15.7m
£14.4m
£13.2m
£12.0m
£13.0m
13.84p
12.25p
12.06p
9.81p
12.93p
1 Bloomsbury had intended to declare a final dividend for the year of 6.89 pence per share. This would have resulted in a total dividend for the year of 8.17 pence
per share, up 3% on the previous year. As previously announced, Bloomsbury has decided in light of coronavirus to conserve cash and therefore will not be paying
a cash dividend. It is now proposed, subject to Shareholder approval, that the dividend is instead settled through the issuance of new ordinary shares by way of
bonus issue to Shareholders, with a value equivalent to the proposed final dividend. Further information is set out in the Notice of Annual General Meeting on
pages 188 to 196.
2 Adjusted profit is profit before taxation, amortisation of acquired intangible assets and other highlighted items.
3 Adjusted diluted EPS is calculated from adjusted profit with taxation on adjusted profit deducted.
• Profit before taxation and highlighted items* grew by 9% to
• Net cash of £31.3 million at 29 February 2020, up 14% (2019:
£15.7 million, up from £14.4 million in 2018/2019
£27.6 million)
• Revenues increased to £162.8 million (2018/2019: £162.7
million) despite the impact of coronavirus on our Chinese
sales in January and February
• Profit before taxation grew by 10% to £13.2 million
(2018/2019: £12.0 million)
• Diluted earnings per share, excluding highlighted items*,
grew by 12% to 16.77p (2018/2019: 14.97p)
• Diluted earnings per share grew by 13% to 13.84p
(2018/2019: 12.25p)
• Cash conversion of 96% (2018/2019: 128%), excluding the
acquisition of the rights of Oberon Books Limited
• Subject to Shareholder approval, proposed bonus issue,
in lieu of, and with a value equivalent to, proposed final
dividend of 6.89p per share
* Highlighted items comprise amortisation of acquired intangible assets and
legal, other professional costs and restructuring costs relating to ongoing and
completed acquisitions and one-off costs relating to the coronavirus.
02
Bloomsbury Publishing Plc
www.bloomsbury.com
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OVERVIEW
Operational highlights
Non-Consumer
Consumer
• Excellent Academic & Professional performance, with profit
before taxation and highlighted items* up by 58% to £4.8
million (2018/2019: £3.0 million) and revenue up 4%
• Non-Consumer profit before taxation and highlighted items*
up by 85% to £6.7 million and revenues grew by 4% to £66.0
million (2018/2019: £63.4 million)
• Non-Consumer profit before taxation grew by 159% to £5.0
million (2018/2019: £1.9 million)
• Bloomsbury Digital Resources (“BDR”) revenues up 32% to
£8.3 million and moves into profit
• Profit before taxation and highlighted items* of £8.9 million
(2018/2019: £10.7 million)
• Consumer revenue of £96.8 million (2018/2019: £99.3 million)
• Strong Adult Trade performance, with revenue up 12% to
£37.4 million (2018/2019: £33.5 million) and profit before
taxation and highlighted items* of £1.6 million (2018/2019:
£0.9 million)
• Children’s Trade delivered profit before taxation and
highlighted items* of £7.3 million (2018/2019: £9.8 million)
and revenue of £59.4 million (2018/2019: £65.8 million)
• Digital format sales now comprise 22% of Non-Consumer
• Resilient sales of Harry Potter titles, in line with last year
revenues, a CAGR of 18% over four years
• Acquisition of Oberon’s rights in December 2019 completed
for £1.2 million, strengthening our digital resources with its
high quality drama IP
• BDR partnerships with Human Kinetics launched and Taylor
& Francis in development as well as the new National Theatre
collection included in Drama Online
Read more about our markets on pages 18 to 20
• Children’s revenue affected by the timing of and fewer
frontlist titles from Sarah J. Maas
• Excellent audio performance from our new Audio division,
with an expert team delivering 190% revenue growth by
focusing on production of key titles and delivering bestsellers
• Appointment of Paul Baggaley as Editor-In-Chief of
Bloomsbury Adult Trade, one of the most highly-regarded
figures in the industry who joined us from Macmillan in
March 2020
* Highlighted items comprise amortisation of acquired intangible assets and
legal, other professional costs and restructuring costs relating to ongoing and
completed acquisitions and one-off costs relating to the coronavirus.
No Visible Bruises by Rachel Louise
Snyder was a New York Times
bestseller
Crescent City: House of Earth
and Blood by Sarah J. Maas was
number one on the New York Times
bestseller list
Women Rowing North by Mary
Pipher was one of Bloomsbury’s top
selling titles in ebook format
Lose Weight & Get Fit by Tom Kerridge
was in the Nielsen Bookscan Non-
Fiction Top 10 for four weeks, with
its highest position at number 4, and
the Sunday Times Manual chart at
number 3
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Stock code: BMY
Annual Report and Accounts 2020
03
Bloomsbury at a glance
Bloomsbury is a global publisher of books and other media for general readers, children, students, teachers, researchers and
professionals. Bloomsbury offers authors and illustrators access to these markets in multiple formats and via multiple channels
throughout the world. Our entrepreneurial teams in London, Oxford, New York, Sydney, New Delhi and China (through our joint
venture partnership with China Youth Publishing Group and its subsidiary Roaring Lion Media) serve all territories.
Our mission and purpose are set out on the front inside cover of this Annual Report; our strategy for achieving our mission and
purpose is summarised on pages 22 to 23 of the Strategic Report.
Strong financial position and liquidity
Diversified portfolio of content and services
Global brand recognition
Access to global markets and partners
Strong financial position and liquidity
Access to global markets and partners
Global markets and partners
Bloomsbury has grown strongly over the past five
years, both through organic digital growth, and
by acquisition. The bulk of Bloomsbury’s turnover
each year comes from its backlist: repeat sales on
older titles and services. Over 63% of revenues
comes from outside the United Kingdom. An
increasing percentage of revenue derives from
digital formats, much of which is annuity-based
income. Bloomsbury had cash reserves of £31
million at 29 February 2020: the result of better
working capital performance over the past five
years, as well as a more profitable product mix.
Bloomsbury has relationships with over 1,200
customers in over 90 countries worldwide.
Bloomsbury’s customer base ranges from small
independent bookshops to large online retailers.
In addition, we have relationships with wholesalers
for print and ebooks, which supply retail customers
and libraries, both public and academic.
Bloomsbury also sells direct to academic and
educational institutions, and corporate and
professional bodies via our Academic and
Professional digital resource platforms, and direct
to consumers via our consumer-facing websites.
Brand reputation
Diversified portfolio of content and services
Diversified portfolio
Bloomsbury’s brand reputation is for excellence
and originality, and our brand is recognised
worldwide due to Bloomsbury’s high-calibre
authors and illustrators. Our publishing is known
for its high production values and award-winning
design, and our Academic list for its scholarly
excellence and focus on digital delivery to the
modern student.
Read more about our business model on page 20
Bloomsbury has a back catalogue of over
50,000 active titles and digital services. These
appeal to a wide range of audiences, with an
increasing percentage classified as "must have"
for professionals, academics and students.
Our Consumer lists are increasingly diverse,
with sizeable lists in specific areas of non-fiction,
such as sport, crime and natural history, as well
as bestselling award-winning fiction lists for
both adults and children.
Our two operating divisions
The Group is organised as two worldwide publishing Divisions supported by global back office functions.
These Divisions reflect the core customers for our different operations.
Non-Consumer Division
Consumer Division
The Non-Consumer Division comprises the Academic &
Professional, Special Interest and Education publishing
subdivisions within Bloomsbury. The Division provides
content for the following end-users:
• Academic institutions
• Students and academics
• Libraries
• Corporates
• Professional bodies
£6.7m
• Primary and secondary
schools
• Teachers and trainee
teachers
£66.0m
The Consumer Division publishes trade books for both
adults and children in print, ebook and audio book
formats in both the UK and the USA, and sells these
books globally. The categories of titles that are published
in each of these Consumer subdivisions are as follows:
• Adult Trade – fiction, non-fiction and cookery
• Children’s Trade – fiction, non-fiction, picture books,
pre-school titles and activity books
£8.9m
£96.8m
profit*
*Profit before taxation and amortisation, and excluding highlighted items
revenue
profit*
*Profit before taxation and amortisation, and excluding highlighted items
revenue
Read more about our publishing Divisions in the Divisional Overview on pages 26 to 35
Full details on each Division’s performance are in the Chief Executive’s Review on pages 12 to 13
04
Bloomsbury Publishing Plc
www.bloomsbury.com
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27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2Global Bestsellers 2019/2020Note: Rank is based on revenue.PrintEbookAudio1 Harry Potter Box Set: The Complete Collection (Children’s Paperback)J.K. Rowling2 Harry Potter and the Goblet of Fire – Illustrated EditionJ.K. Rowling3 Harry Potter and the Philosopher’s Stone J.K. Rowling4 Dishoom: From Bombay with LoveShamil Thakrar, Naved Nasir and Kavi Thakrar 5 Crescent City: House of Earth and BloodSarah J. Maas6 Lose Weight & Get FitTom Kerridge7 Harry Potter and the Chamber of SecretsJ.K. Rowling8Harry Potter and the Philosopher’s Stone - Illustrated Edition J.K. Rowling9 Harry Potter and the Prisoner of AzkabanJ.K. Rowling10 Harry Potter and the Goblet of FireJ.K. Rowling1 Three WomenLisa Taddeo2 Priory of the Orange TreeSamantha Shannon3 Dutch HouseAnn Patchett4 Women Rowing NorthMary Pipher5 City of GirlsElizabeth Gilbert6 Kingdom of AshSarah J. Maas7 CirceMadeline Miller8 Court of Thorns and RosesSarah J. Maas9 Throne of GlassSarah J. Maas10 Court of Mist and FurySarah J. Maas1 Silk RoadsPeter Frankopan2 Throne of GlassSarah J. Maas3 Priory of the Orange TreeSamantha Shannon4 Heir of FireSarah J. Maas5 Lost ConnectionsJohann Hari6 Crown of MidnightSarah J. Maas7 Norse MythologyNeil Gaiman8 Chasing the ScreamJohann Hari9 Jonathan Strange & Mr NorrellSusanna Clarke10 Seven Deaths of Evelyn HardcastleStuart TurtonStock code: BMYAnnual Report and Accounts 202005OVERVIEW27040-Bloomsbury-AR2020 - strategic.indd 511-Jun-20 9:50:48 PM 27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 206Bloomsbury Publishing PlcBloomsbury Publishing’s financial year ended on 29 February 2020 – three weeks before coronavirus locked down the UK economy – and it went well. The results underlined three key features of the Company: the continuing success of its diversification strategy, the growth of its Non-Consumer business, and its strong balance sheet and liquidity.Profits before tax and highlighted items grew by 9% to £15.7 million, which was in line with market expectations, and adjusted diluted earnings per share rose by 12% to 16.77 pence. Over the past five years, the successful delivery of Bloomsbury’s growth strategy has lifted revenues by 32% and profits before tax and highlighted items by 21%.The feature of these latest results has been the growth of the Non-Consumer Division, where profits before tax and highlighted items rose 85% to £6.7 million. We are now seeing the results from our long-term investment in Bloomsbury Digital Resources, which moved into profits this year after a sales increase of 32% to £8.3 million. Digital format sales now make up 22% of divisional revenues, and have delivered a compound annual growth rate of 18% since 2016. The Adult Trade side had a strong year, driven by the success of such titles as The Anarchy by William Dalrymple, Such a Fun Age by Kiley Reid, and The Dutch House by Ann Patchett. Profits were down on Children’s Trade – for so long the engine of Bloomsbury’s growth – despite the continuing resilience of Harry Potter titles, where sales were in line with the previous year. The numbers here were affected by the timing of frontlist titles from Sarah J. Maas, whose latest book – Crescent City: House of Earth and Blood – has been topping the bestseller lists in the past few months. Overall profits from the Consumer Division came in at £8.9 million before tax and highlighted items, compared with £10.7 million a year earlier.High rates of cash conversion and a strong balance sheet have always been features of the Company’s business, and this year is no exception. Net cash at the year end was up from £27.6 million to £31.3 million, after the acquisition of Oberon Books Limited, which will further strengthen our digital resources with its quality drama products.In normal circumstances, this performance would have more than justified the continuation of Bloomsbury’s extraordinary dividend record – 24 years of uninterrupted growth in the annual cash payment. But these are exceptional times. As the business uncertainties multiplied after the year end with the coronavirus pandemic impacting all aspects of the economy, the Board decided that it was in the best long-term interests of all the stakeholders in the Company – Shareholders, employees, customers, authors and suppliers – to conserve our resources while the storm raged. So, instead of the normal cash dividend, we are proposing that the dividend is settled through the issuance of new ordinary shares by way of a bonus issue to Shareholders, with a value equivalent to a final dividend for the year of 6.89 pence per share.Since the year end, the Company has taken further steps to strengthen its balance sheet and increase its liquidity. In his Chief Executive’s Review, Nigel Newton will spell out these and other measures Bloomsbury has taken to counter the current uncertainties.The Company’s reaction to the crisis has been impressive. It was quicker off the mark than most to protect the wellbeing of its staff as the virus spread. And everyone has adapted with extraordinary pace and commitment to the new conditions of working from home. With a team like this, a very strong balance sheet, a great list of forthcoming titles and continued growth in the digital business, we can be confident that Bloomsbury will pull through these difficult times in good shape.At the end of February, Nigel Newton was awarded the London Book Fair’s Lifetime Achievement Award, for his “huge contribution to the book industry”. That seemed a good note on which to end the financial year.Sir Richard LambertNon-Executive Chairman“High rates of cash conversion and a strong balance sheet have always been features of the Company’s business, and this year is no exception.” Sir Richard LambertNon-Executive ChairmanChairman’s Statementwww.bloomsbury.com27040-Bloomsbury-AR2020 - strategic.indd 611-Jun-20 9:50:53 PM 27040 11 June 2020 9:44 pm
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27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2Sunday Times bestsellers Sunday Times bestsellers included The Anarchy by William Dalrymple, City of Girls by Elizabeth Gilbert, The Priory of the Orange Tree by Samantha Shannon, Mudlarking by Laura Maiklem, Three Women by Lisa Taddeo, The Dutch House by Ann Patchett and Such a Fun Age by Kiley Reid←27040-Bloomsbury-AR2020 - strategic.indd 811-Jun-20 9:50:54 PM 27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 210Chief Executive’s Review18Marketplace20Business Model22Strategy25Key Performance Indicators26Divisional Overview, Non-Consumer30Divisional Overview, Consumer35Divisional Overview, Group Functions supporting our Publishing Divisions36Financial Review40Risk Factors and Risk Management46Corporate ResponsibilityStrategic Report27040-Bloomsbury-AR2020 - strategic.indd 911-Jun-20 9:50:55 PM 27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2Chief Executive’s Review10Bloomsbury Publishing PlcOverviewThe year ended 29 February 2020 saw a robust performance by Bloomsbury, particularly given the impact of coronavirus in China in the last two months of the financial year. Group profit before tax and highlighted items increased by 9% to £15.7 million (2018/2019: £14.4 million). Group profit before tax increased by 10% to £13.2 million (2018/2019: £12.0 million).Our Bloomsbury Digital Resources digital growth strategy continues to perform very well, delivering 32% revenue growth year-on-year and generating profit. This strong growth demonstrated the demand for, and quality of, our digital content, platforms and infrastructure. There was healthy revenue growth both from increased sales of existing products, as well as new partnerships and new products.In December 2019, we acquired the drama publisher Oberon Books Limited for £1.2 million, further strengthening our presence as the leading publisher in drama and the performing arts. Also in December 2019, we entered the domestic Chinese market with Bloomsbury China, a new joint venture with China Youth Publishing Group and Roaring Lion Media. Continuing our international growth is a key part of our strategy, and this partnership enables the business to further accelerate that goal. Performance was in line with the Board’s expectations and so there was no management bonus for the year (2018/2019: £2.3 million). The highlighted items of £2.5 million consist of the amortisation of acquired intangible assets of £1.7 million (2018/2019: £1.7 million), one-off restructuring costs and legal and other professional fees relating to the acquisitions of £0.6 million (2018/2019: £0.6 million), and one-off costs relating to the coronavirus of £0.2 million. The effective rate of tax for the year was 21% (2018/2019: 23%). The adjusted effective rate of tax, excluding highlighted items, was 19% (2018/2019: 21%). Diluted earnings per share, excluding highlighted items, grew 12% to 16.77 pence (2018/2019: 14.97 pence). Including highlighted items, profit before tax was £13.2 million (2018/2019: £12.0 million) and diluted earnings per share grew 13% to 13.84 pence (2018/2019: 12.25 pence).Cash and financingBloomsbury’s cash generation continued to be robust with cash at the year end of £31.3 million, up £3.8 million. During the year, we invested £1.8 million of capital expenditure in BDR, and the £1.2 million cash consideration for the acquisition of Oberon Books Limited was paid on completion in December 2019. The Group has an unsecured revolving credit facility with Lloyds Bank Plc. The facility comprises a committed revolving loan facility of £8 million in the first half and an additional £4 million in the second half, totalling £12 million, to match Bloomsbury’s cashflow cycle, and an uncommitted incremental term loan facility of up to £6 million. The facilities are subject to two covenants, being a maximum net debt to EBITDA ratio of 2.5x and a minimum interest cover covenant of 4x. Subsequent to the year end, the maturity of the facility was extended to May 2022 and the covenants were amended to exclude IFRS 16. StrategyDelivering the Bigger Bloomsbury Initiatives We delivered good results on the eight initiatives announced in May 2019, with highlights including: −Growing the profits of the Academic & Professional division: Delivered £1.8 million (58%) growth in profit before taxation and highlighted items. −Maximising the success of Bloomsbury Digital Resources: Moved into profit for the first time and delivered 32% growth in BDR revenue. −Growing the profits of the Adult division: Delivered £1.6 million profit before taxation and highlighted items, up £0.7 million. −Reducing our finished goods stock further: Further 1% reduction in inventories on a like-for-like basis. −Growing the revenues of acquisitions: 49% growth in I.B. Tauris revenues, acquired in May 2018, contributing to the Non-Consumer growth. −Increasing the focus on Bloomsbury’s nine biggest assets, starting with Harry Potter, Sarah J. Maas and Tom Kerridge: Delivered 23 bestsellers globally. “Our Bloomsbury Digital Resources digital growth strategy continues to perform very well, delivering 32% revenue growth year-on-year and generating profit.” Nigel NewtonFounder and Chief Executive www.bloomsbury.com27040-Bloomsbury-AR2020 - strategic.indd 1011-Jun-20 9:50:56 PM STRATEGIC REPORT
13.84p
diluted earnings per
share
+32%
growth in BDR revenue
£13.2m
group profit before tax
− As the originating publisher of J.K.
Rowling’s Harry Potter, to ensure
that new children discover and read
it for pleasure every year.
Progress 2019/2020: Harry Potter
and the Philosopher’s Stone was
the 10th bestselling Children’s title
on Nielsen BookScan in the UK, 22
years after first publication.
• International expansion
− Expand international revenues
and reduce reliance on UK market.
Progress 2019/2020: delivered
overseas revenues of 63% of Group
revenue; achieved BDR international
sales growth of 31% this year.
• Employee experience and
engagement
Our colleagues are among our most
important assets, and our success
is driven by their expertise, passion
and commitment. We understand the
importance of attracting, supporting
and engaging colleagues wherever
they work.
− To be an attractive employer for
all individuals seeking a career in
publishing regardless of background
or identity, so adding cultural value
to our business operations and
performance.
− Accelerating the growth of
Bloomsbury’s sales in the USA,
Australia and India: International
sales are 63% of revenue.
− Increasing employee engagement
through strategic initiatives: Good
progress in engagement and
delivery of key initiatives.
Following the success of the Bigger
Bloomsbury Initiatives, we are now
renewing our focus on Bloomsbury’s
long-term growth strategy, which
is aimed at diversifying into digital
channels and building quality revenues,
increasing earnings and building on
the strategic success of the last five
years. To achieve this, we are focused
on a number of long-term strategic
objectives, which include:
• Non-Consumer
− Grow Bloomsbury’s portfolio in
Non-Consumer publishing. These
are characterised by higher, more
predictable margins and greater
digital and global opportunities.
Progress 2019/2020: delivered
85% growth in profit before tax
and highlighted items and revenue
growth of 4%.
− Achieve BDR revenue of £15
million and profit of £5 million for
2021/2022.
Progress 2019/2020: delivered £8.3
million revenue, up 32%.
• Consumer
− Discover, nurture, champion
and retain high-quality authors
and illustrators in our Consumer
Division, while looking at new ways
to leverage existing title rights.
Progress 2019/2020: Sunday Times
bestsellers included Such a Fun
Age by Kiley Reid, The Anarchy by
William Dalrymple, City of Girls by
Elizabeth Gilbert, Three Women by
Lisa Taddeo and The Dutch House
by Ann Patchett.
− Grow our key authors through
effective publishing across all
formats alongside strategic sales
and marketing.
Progress 2019/2020: Crescent City:
House of Earth and Blood by Sarah
J. Maas was Number One on the
New York Times bestseller list, and
we established our Specialist Audio
division.
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Annual Report and Accounts 2020
11
Chief Executive’s Review
continued
− Focus on targeted initiatives to
create an environment that nurtures
talent, stimulates creativity and
collaboration, is respectful of
difference and supports wellbeing.
Progress 2019/2020: continuing
focus on employee engagement
and development initiatives,
including Employee Voice Meetings,
Management Development
Programme, mentoring scheme,
formation of Diversity and
Inclusion (“D&I”) Networks, which
complement and inform the
activities of our D&I Focus Group,
and introduction of Core Hours to
support flexible working.
• Sustainability
− Maximise our use of sustainable
resources whilst seeking to reduce
carbon emissions.
Progress 2019/2020: increased use
of print-on demand technology to
over 20,000 titles, implementation
of Sustainability Working Group to
promote positive environmental
actions and reduced greenhouse
gas emissions from fuel and
electricity use.
Underpinning our strategy, our
strengthened balance sheet will help to
ensure we have sufficient working capital
to weather the impact of coronavirus
and to ensure we are able to fulfil our
long-term growth plans. We have
already implemented cost savings while
balancing the need to retain our staff
and acquire future titles, as Bloomsbury’s
proven business model is to commission
titles one to two years ahead of
publication.
Acquisitions
As previously announced, in December
2019, we acquired the rights of drama
publisher Oberon Books Limited for
£1.2 million, all of which was satisfied
in cash on completion. This acquisition
further strengthens our presence as
the leading publisher in drama and the
performing arts.
Also in December 2019, we entered
the domestic Chinese market with
Bloomsbury China, a new joint venture
with China Youth Publishing Group and
Roaring Lion Media. The investment is
de minimis.
Post year end in March 2020, as
previously announced, we acquired
certain assets of Zed Books Limited, the
London-based academic and non-fiction
publisher. The consideration was £1.75
million, of which £0.875 million was
satisfied in cash on completion and the
remainder to be paid within 12 months.
Zed will operate within Bloomsbury’s
Academic & Professional division.
In the second half, the Special Interest
division took over the publishing part
of our Content Services division, to
generate further synergies following
the successful restructure of the Special
Interest division. Digital projects,
including IZA World of Labor, moved to
the Academic & Professional division.
Comparatives have been restated to
reflect this.
Dividend
Bloomsbury had intended to declare a
final dividend for the year of 6.89 pence
per share. This would have resulted in a
total dividend for the year of 8.17 pence
per share, up 3% on the previous year.
As previously announced, Bloomsbury
has decided, in light of coronavirus, to
conserve cash and therefore will not
be paying a cash dividend. It is now
proposed, subject to Shareholder
approval, that the dividend is instead
settled through the issuance of new
ordinary shares by way of bonus issue to
Shareholders, with a value equivalent to
the proposed final dividend.
Subject to Shareholder approval at
our AGM on 21 July 2020, the bonus
issue will be made on 28 August 2020
to Shareholders on the register on the
record date of 31 July 2020.
Bloomsbury is proud of its strong
track record of 24 years of consecutive
dividend growth. Our intention would be
to reintroduce cash dividend payments
as soon as market conditions allow us to
do so.
Non-Consumer Division
The Non-Consumer Division consists of
Academic & Professional and Special
Interest. Revenues in the Division
increased by 4% to £66.0 million
(2018/2019: £63.4 million). Within this,
Academic & Professional revenues
grew by 4% to £43.1 million (2018/2019:
£41.5 million). Profit before taxation
and highlighted items for the Non-
Consumer Division increased by 85%
to £6.7 million (2018/2019: £3.6 million).
Profit before taxation grew by 159% to
£5.0 million (2018/2019: £1.9 million).
The profit growth reflects improved
Academic & Professional and Special
Interest profitability and the £0.7 million
increase in BDR profit.
The strategic growth initiative BDR
has made Bloomsbury into a leading
B2B publisher in the academic and
professional information market and
significantly accelerated the growth of
its digital revenues. Key achievements
during the year, which demonstrate
the opportunities to further leverage
content and market other services on our
digital platforms and through the sales
infrastructure we have developed, were:
− Launch of five new digital resources
during the year as planned;
− Growth of Bloomsbury Collections
to over 9,000 front and backlist
Bloomsbury Academic titles; over
20% higher than last year. These
include titles from I.B. Tauris, the
British Film Institute and our newly
expanded frontlist collections;
− Launch of the new content
partnership with Human Kinetics,
the world’s leading sports
science publisher;
− Development of our content
partnership with Taylor & Francis;
− Launch of our content partnership
with the National Theatre in
September 2019, further endorsing
and significantly expanding the
video offering of our award-winning
Drama Online platform; and
− Continuing our customer retention
rate above 90%.
Within Special Interest, profit before
taxation and highlighted items has
increased by 227% to £1.9 million
(2018/2019: £0.6 million) and revenue
was 4% higher at £22.9 million
(2018/2019: £21.9 million). These
results demonstrate the impact of the
restructuring under the new Head of
Special Interest Publishing, with a clear
focus on publishing for key communities
and reduced overheads.
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Consumer Division
The Consumer Division consists of Adult
and Children’s Trade publishing. The
Consumer Division generated revenue of
£96.8 million (2018/2019: £99.3 million).
Profit before taxation and highlighted
items was £8.9 million (2018/2019: £10.7
million). Profit before taxation was £8.8
million (2018/2019: £10.7 million). The
strong performance from the Adult
division and resilient Harry Potter sales
were tempered by the impact of timing
and fewer frontlist titles from Sarah J.
Maas.
Adult Trade
The Adult division achieved very strong
growth with a 12% increase in revenue
to £37.4 million (2018/2019: £33.5
million) and profit before taxation and
highlighted items increasing by 77% to
£1.6 million (2018/2019: £0.9 million),
from success in front and backlist titles,
and the continued impact of strategic
changes in the division.
Bestsellers in the year included
Dishoom: From Bombay with Love by
Shamil Thakrar, Kavi Thakrar and Naved
Nasir, Tom Kerridge’s Lose Weight & Get
Fit, the global bestseller, The Anarchy
by William Dalrymple, the number one
Sunday Times bestseller Three Women
by Lisa Taddeo, the Sunday Times
bestsellers The Dutch House by Ann
Patchett and City of Girls by Elizabeth
Gilbert, and the New York Times
bestsellers Elderhood by Louise Aronson
and No Visible Bruises by Rachel Louise
Snyder.
Children’s Trade
Children’s sales were £59.4 million
(2018/2019: £65.8 million). Sales of
the Harry Potter titles were in line with
last year, with the Harry Potter and the
Goblet of Fire Illustrated Edition by
J.K. Rowling and Jim Kay published in
October. The standard edition of Harry
Potter and the Philosopher’s Stone was
the tenth bestselling children’s book
of the year on UK Nielsen Bookscan,
22 years after it was first published –
every year these classics reach a new
generation of readers.
Sarah J. Maas’ new bestselling title,
Crescent City: House of Earth and Blood,
was published at the end of the financial
year, compared to two new frontlist
£59.4m
Children’s revenues
£43.1m
Academic &
Professional revenues
hardback titles in the previous year, and
total sales for this author were 32% lower
than last year. Other highlights on the
Children’s list included the second in
Brigid Kemmerer’s Cursebreaker series,
A Heart So Fierce and Broken, the latest
title in the Fantastically Great Women
series by Kate Pankhurst, and backlist
titles We’re Going on an Egg Hunt by
Laura Hughes, Norse Mythology by Neil
Gaiman, Holes by Louis Sachar and The
Explorer by Katharine Rundell, alongside
her new novel The Good Thieves.
Audio
Bloomsbury’s new Audio division has
delivered 190% revenue growth by
focusing on production of key titles,
distributed through an exclusive deal
with Audible. This expert team has
enabled us to produce 131 titles to date,
launching with the Audible bestseller,
The Madness of Crowds by Douglas
Murray, as well as The Dutch House by
Ann Patchett and Three Women by Lisa
Taddeo.
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Chief Executive’s Review
continued
• Book Aid International and The Soho
Center US: Book donations to these
charities;
• EmpathyLab: Working closely with this
charity and many of our authors, we
ensure that children and the books
they read support the teaching of
empathy;
• In addition, for every copy of Dishoom:
From Bombay with Love sold, we
donate towards the price of a meal for
a hungry child to both of Dishoom’s
chosen charities, Magic Breakfast and
The Akshaya Patra Foundation.
IFRS 16
During the year IFRS 16, Leases (“IFRS
16”), was introduced. Adoption of this
standard has reduced the amount
of rent and lease charges, increased
depreciation charges and finance costs
and increased the value of assets and
liabilities. The net reduction to profit
before taxation for the year ended 29
February 2020 was £0.2 million. The
impact on EBITDA was an increase of
£2.1 million and the impact on operating
profit was an increase of £0.3 million.
Throughout this Review, we have used
profit before tax and amortisation as this
provides the fairest profit comparison
between the results to
29 February 2020, which include IFRS 16,
and the previous year’s results,
which have not been restated.
Board changes
As previously announced, Jonathan
Glasspool, Executive Director and
Managing Director for the Non-
Consumer Division, is retiring and will
leave Bloomsbury at the end of July
2020, after 20 years’ service.
I would like to thank Jonathan for his
exceptional contribution to Bloomsbury,
building the major Academic &
Professional publisher that Bloomsbury
sought to add to its trade portfolio. The
Academic & Professional division is now
an impressive, award-winning business in
its own right.
We are delighted that Jenny Ridout,
Bloomsbury’s Global Head of Academic
Publishing, has been promoted to be
the new Managing Director of the Non-
Consumer Division. Jenny’s knowledge
of digital and academic publishing, and
her proven commercial abilities, are
Charitable initiatives
As part of Bloomsbury’s ongoing
commitment to the wider communities
in which we operate, we are proud to
support a wide range of charitable
initiatives. Highlights include:
• National Literacy Trust: Our three-
year partnership with the National
Literacy Trust with a particular focus
on Hastings, one of the UK’s most
deprived local authority areas;
• Publishing Children’s books in
partnership with three leading
UK charities: the RSPB, Royal
Botanic Gardens, Kew and
The Woodland Trust;
• World Book Day: We are extremely
proud to support World Book Day,
the most important, inclusive reading
initiative in the UK;
• Pathways Project: Aiming to
increase the representation of
underrepresented groups in children’s
illustration; Bloomsbury led workshops
and mentoring;
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27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2a very strong basis for achieving the growth expectations we have for this part of the business. Jenny has been with Bloomsbury for over 15 years, since the inception of the Division in 2008, and will continue her role as Global Head of Academic Publishing. Jenny also joins Bloomsbury’s Executive Committee.Bloomsbury’s purpose, values and cultureOur purpose at Bloomsbury is to inform, educate, entertain and inspire readers of all ages by publishing works of excellence and originality to a global audience. We champion a life-long love of reading and learning to help build a reading culture with all the benefits which that brings society. Embedded in our purpose is the social good that comes from our publishing. Many of our books are in themselves a social good which have made a positive impact on readers and, in a few cases, helped make the world a better place. The Harry Potter series, aside from its commercial success, encouraged more reluctant readers – especially boys – to pick up a book and read for pleasure around the world than any other book published at the time. Books about structural racism like Why I’m No Longer Talking to White People About Race by Reni Eddo-Lodge and White Rage by Carol Anderson have the power to educate and contribute to a change of attitudes in society. Personal narratives like Wendy Mitchell’s memoir Somebody I Used to Know, about suffering with Alzheimer’s, encourage people to come forward to talk about their own personal experience and open up the conversation around important subjects like dementia. And titles such as The Sustainable(ish) Living Guide by Jen Gale and Clearing the Air by Tim Smedley have informed readers about the climate change crisis and offered practical ways they can be part of the solution in living more sustainably.Our clear sense of purpose, and our shared values, as set out on the front insider cover of this Annual Report, are the foundation of Bloomsbury’s strategy for building a sustainable business and guide our priorities and decision-making throughout the Company. They shape our culture and define Bloomsbury’s character. They unite and connect colleagues around the world and are the cornerstone of our approach to publishing. We are committed to helping authors, both new and established, bring original and powerful works across an array of genres and subjects to readers and learners worldwide, sharing ideas, knowledge and experience, and challenging the status quo. Our independence allows us the freedom to publish in a manner that reflects the value we place on being inclusive by publishing works from a wide spectrum of international – and often contrarian – voices. We are entrepreneurial in the way we seek out new opportunities to reach more readers and learners, whether by entering into new markets, as we have done with Bloomsbury China, or leveraging our digital rights and our resources in response to the increasing demand for digital products. Determination, optimism and high standards underline the actions we take in pursuit of our purpose, and inform our dealings with all our business partners – from authors to suppliers to customers. During the year, we re-articulated our guiding principles to our colleagues, through Company-wide Employee Voice meetings, an internal management training programme, a fortnightly newsletter from the Chief Executive and, more recently since working from home during the pandemic, with live online video Town Halls attended by over 500 employees worldwide, with questions from staff and answers from Nigel Newton speaking to Bloomsbury employees about Bloomsbury's values at the Company Highlights eventSTRATEGIC REPORTStock code: BMYAnnual Report and Accounts 20201527040-Bloomsbury-AR2020 - strategic.indd 1511-Jun-20 9:51:02 PM Chief Executive’s review
continued
management and in other forums.
We continue to monitor and assess
Bloomsbury’s culture and its alignment
with our strategic objectives through
direct engagement with our workforce,
including, most importantly, by way
of the Employee Voice Meetings
Programme, more detail about
which can be found in the Corporate
Responsibility section on pages 50 to 53.
Management action in
response to the coronavirus
pandemic
People
In response to the coronavirus pandemic,
management acted quickly to implement
proactive measures to protect our staff
and continue working effectively with
our authors, illustrators, customers and
suppliers. Staff globally are working
safely and effectively from home.
Financing
We have extended the maturity of
our facilities with Lloyds Bank Plc from
May 2021 to May 2022, and amended
covenants to exclude IFRS 16.
Cost savings
Management has also taken the
following proactive measures to
conserve cash and reduce costs:
• Board taking salary or Board fee
reductions of 30%, saving £0.03
million per month;
• Salary reductions across the majority
of staff, weighted to more senior staff,
saving £0.2 million per month;
• Participating in Government schemes
in the UK and USA to support staff
and businesses, saving £0.7 million per
month for the first two months and
£0.1 million thereafter;
• Recruitment freeze and furloughing
14 staff, with top-up salaries for the
majority of those affected, saving
£0.03 million per month; and
• Reducing discretionary spend to a
minimum, including marketing and
non-essential capital expenditure,
saving an average of £0.9 million
per month.
Equity Placing
On 17 April 2020, Bloomsbury
announced the successful completion of
the non-pre-emptive placing of 5.0% of
ordinary shares, raising gross proceeds
of £8.4 million. Acting in the long-term
interests of all stakeholders, this placing
strengthened our balance sheet to
ensure we have sufficient working capital
to weather the impact of coronavirus
without damaging Bloomsbury’s
business; being able to retain our staff
and acquire future titles is a crucial part
of this.
Future publishing
Our publishing list for 2020/2021
includes Quidditch Through the Ages
Illustrated Edition by J.K. Rowling and
Emily Gravett, Fantastic Beasts and the
Wonder of Nature in association with
the Natural History Museum exhibition,
Sarah J. Maas’ number one New York
Times bestseller Crescent City: House of
Earth and Blood, Humankind by Rutger
Bregman, Susanna Clarke’s Piranesi,
Brigid Kemmerer’s A Vow so Bold and
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Deadly, and the authorised History of
GCHQ, Behind the Enigma, by Professor
John Ferris.
Outlook
There is no immediate certainty around
the severity and duration of the impact
of the coronavirus pandemic on our
business and therefore the Board is
unable to provide guidance for the year
ending 28 February 2021 at this time.
The coronavirus crisis and imposition of
Government lockdowns and restrictions
and retail closures continue to impact
all our key markets of the UK, USA,
Australia and India, as well as many other
important markets. Orders for print
books, which comprised 79% of the
Group's revenue for the year ended 29
February 2020, are being affected in all
our markets. Our UK, USA and Australia
warehouses remain open and continue
supply to customers. We have positive
sales prospects through Amazon, even
as they prioritise essential crisis services,
with strong growth in demand for
ebooks.
April 2020 year-to-date revenue is 3%
below last year, with print revenues at
87% of last year’s sales and academic
digital revenues up over 52% year-on-
year.
Our strategy of expanding and
leveraging our digital rights and
products means that we are well placed
to benefit from increased demand
for our digital resources, audio and
ebooks as we are with direct supply
from Amazon, Bloomsbury.com,
Waterstones.com and most internet
retailers selling print books. Strong
digital growth continues from academic
institutional customers as libraries
pivot swiftly to digital resources and
reduce print purchases to support
remote learning for students. However,
academic institutions face major
uncertainties over student recruitment,
particularly international students, and
when students will be allowed to return.
This could bring financial uncertainty for
many of our digital resource customers.
Should a prolonged downside scenario
not materialise, the equity placing
proceeds will be used for future growth
opportunities. Bloomsbury has a
successful track record of acquisitive
growth via 26 strategic acquisitions and
we continue to see opportunities in the
Academic markets.
Nigel Newton
Chief Executive
The Board has modelled a severe but
plausible downside scenario, including
the impact of coronavirus. This assumes:
• Print revenues are reduced by
60%–65% for the three months of
expected global restrictions to July
2020 and gradual recovery through to
March 2021;
• Downside assumptions about
extended debtor days to the end of
2021; and
• In this scenario, we extend the
cost reduction measures already
implemented, as set out above.
Under this pessimistic downside
scenario, we expect our business
model to be able to manage these
downside assumptions and stay within
the headroom of our current banking
facilities.
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Annual Report and Accounts 2020
17
Marketplace
Bloomsbury Publishing Plc is an entrepreneurial,
independent, global publisher listed on the London Stock
Exchange with offices in London, Oxford, New York, Sydney
and New Delhi. Bloomsbury publishes in English across
trade and academic markets around the world, and recently
entered the Chinese domestic market through a Beijing-
based joint venture.
Bloomsbury’s publishing cuts across a broad range of
sectors, genres and countries, spanning trade fiction to
children’s books to academic humanities and social sciences
monograph publishing. As such, it is interested in a large
variety of global trends, many behaving and developing
differently depending on the type of publishing and the
region it applies to. The most common and longest running
global trend is the continued growth of online retail sales
across all markets. Other key trends are more driven by the
sector of publishing.
In Bloomsbury’s Children’s and Adult Trade markets,
consumers remain loyal to print books but audio books have
increased in popularity globally with consumers choosing to
also listen to books, particularly when on the go. Children’s
books remain the growth area of the consumer market,
particularly in print formats. Independent and high street
retail shops remain challenged as more consumers buy online.
The coronavirus pandemic is exacerbating this trend as many
high streets across the world have been closed for extended
periods of time; it is not known if these retailers will have a
v-shaped recovery post the global lockdown ending.
The coronavirus crisis is also impacting the academic
publishing market. It is believed that the coronavirus
outbreak may have a negative effect on university budgets
internationally, and also possibly impact student enrolment,
particularly in those universities that are dependent on
foreign students’ attendance to boost their budgets.
However, the global academic library market has remained
stable over several years and the demand for digitally
delivered academic content has continued to increase.
The onset of the coronavirus pandemic has dramatically
accelerated this shift. Another long-term trend that continues
to make news is that the research and academic bodies in
many of Bloomsbury’s markets are demanding an increase
to the amount of scholarly content published as free-to-view
“open access”. So far this demand is focused on scientific,
technical and medical content and associated journals,
and not in the humanities book publishing areas where
Bloomsbury publishes.
Each of Bloomsbury’s publishing Divisions has identified
and tracked these and other ongoing trends, implementing
mitigation strategies that place Bloomsbury in a solid position
to respond successfully to them, and to future trends.
US
£42.4m
UK
£104.4m
Non-Consumer Division
The Non-Consumer Division consists of the following
Bloomsbury publishing sub-divisions: Academic &
Professional; Bloomsbury Digital Resources; Special
Interest; and Education. The Non-Consumer Division
delivered revenue of £66.0m million (2018/2019: £63.4
million). Profit before taxation and highlighted items
was £6.7 million (2018/2019: £3.6 million).
The Non-Consumer Division has identified the following
key global trends and is responding to them:
• Shift to digitally delivered academic content:
Bloomsbury has continued to significantly broaden its
digital portfolio across all its divisions and experienced
academic digital revenue growth of more 32% during
the year, compared to overall academic market growth
of 1–2%.
• Open access: There continues to be increased
demand for open access humanities publications,
but little funding to enable it to happen. Bloomsbury
is well-positioned should this change, as it has long
published open access content and offers all its
academic authors the option to publish their research
work with Bloomsbury on a Gold open access basis.
• Coronavirus impact on university budgets:
Bloomsbury is significantly broadening its customer
base by selling direct to institutions globally, reducing
individual country exposure and broadening its
customer base.
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Australia
£11.1m
Bloomsbury
enters domestic
Chinese market
In December 2019,
Bloomsbury announced
its entry to the
domestic Chinese
market through a joint
venture with China
Youth Publishing
Group and Roaring
Lion Media. China is an
increasingly important
and fast-growing
publishing market for
trade and academic
publishing. China is
expected to continue
its growth rate and is
projected to surpass
the USA as the world’s
largest economy by
2030.
India
£4.8m
UK
£104.4m
Consumer Division
The Consumer Division consists of Adult and Children’s
Trade publishing. The Consumer Division delivered
revenue of £96.8m million (2018/2019: £99.3 million).
Profit before taxation and highlighted items was £8.9
million (2018/2019: £10.7 million). The Consumer Division
has identified the following key global trends and is
responding to them.
• Increase in digital audio book popularity:
Bloomsbury has established a specialist Audio
publishing division to maximise the opportunity
presented by the increasing popularity of audio books,
and during the year delivered significant frontlist
success with Lisa Taddeo’s Three Women and Ann
Patchett’s The Dutch House.
• Children’s books remain growth area: Bloomsbury’s
strategic focus on its picture book list delivered
14% growth in UK sales value, and its ongoing
implementation of its Harry Potter publishing and sales
and marketing strategy keeps this leading brand front
and centre across global markets.
• Continued growth of online retail: There continues to
be growth of online retail sales. In the UK, Bloomsbury
launched a new initiative offering to support
independent retailers during the coronavirus crisis by
using Bloomsbury.com to sell and deliver books to
their customers.
• Continued decline in ebook sales: Though digital
audio is thriving, sales of ebooks continues to decline
in most markets.
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19
Business Model
Valuable intellectual property
Talent
Talent
Valuable
intellectual
property
Talent
Strong financial position and liquidity
Diversified portfolio of content and services
Diversified portfolio of content and services
Key resources
Strong financial
position and
liquidity
Diversified
portfolio of
content and
services
Key activities
Global brand
recognition
Global brand recognition
Access to global markets and partners
Access to global markets and partners
Access to global
markets and partners
• Focus on digital publishing
• Growing Bloomsbury’s
portfolio in Non-Consumer
publishing
• Acquisition of rights from
authors, illustrators and
other copyright owners
• Leveraging existing
intellectual property rights
• International
expansion
• Strategic acquisitions in
key areas of publishing
• Traditional wholesalers
• Online retailers – print and
and retailers
digital (ebooks and
audio books)
• Digital content
aggregators
• Direct to academic and
educational institutions,
libraries and corporates
Channels
Market segments
Non-Consumer
• Academic institutions
• Students and academics
• Libraries
• Corporates
• Professional bodies
• Primary and
secondary schools
• Teachers and
trainee teachers
• Adult Trade: fiction,
• Children’s Trade: fiction,
Consumer
non-fiction and cookery
non-fiction, picture
books, pre-school titles
and activity books
Creating value for stakeholders
Consumers and society
Publishing works of excellence and
originality to inform, educate, entertain
and inspire, supporting literacy and
culture and fostering a passion for
reading and learning.
Authors and illustrators
Helping our authors and illustrators
to create stories and communicate
ideas to a global audience, connecting
them with readers worldwide through
multiple formats and channels.
Economic and social contribution
to our communities through tax
contributions, charitable donations and
partnerships, and employee time.
Shareholders
The opportunity to invest in a resilient,
global publishing company with a
diversified portfolio operating in
global markets.
Employees
Creating rewarding work, enabling
ongoing professional development.
Providing the opportunity to align
with a business with a strong socially
responsible purpose, entrepreneurial
spirit and compelling global
opportunity in a dynamic marketplace.
Partners
Generating business activity that
creates commercial opportunity for
our suppliers, business partners and
commercial customers.
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Strategy
Our overall growth strategy and long-term focus remains unchanged; to invest in high value intellectual property, to publish works
of excellence and originality, to build our diversified portfolio of content and services across our Consumer and Non-Consumer
Divisions, and to diversify into digital channels to build quality revenues and increase earnings.
Our strategic priorities
International expansion
• Expand international revenues
and reduce reliance on the
UK market.
Continuing our international
growth in order to reduce reliance
on the UK market as well as
take advantage of the biggest
academic market in the USA and
significant growth potential in
India and China is a key part of
our strategy.
2019/2020 progress:
− Delivered overseas revenues of
63% of Group revenue;
− Achieved Bloomsbury Digital
Resources international sales
growth of 31% in international
markets; and
− Entry into the domestic Chinese
market with Bloomsbury China:
a new joint venture with China
Youth Publishing Group and
Roaring Lion Media.
Non-Consumer publishing
• Grow Bloomsbury’s portfolio
in Non-Consumer publishing.
Non-Consumer publishing is
characterised by higher, more
predictable margins, is less reliant
on retailers and presents greater
digital and global opportunities.
Non-Consumer revenues are
derived from our Academic &
Professional, Educational and
Special Interest publishing.
2019/2020 progress:
− Delivered 85% growth in profit
before tax and highlighted items
and revenue growth of 4%;
− Acquisition of drama publisher
Oberon Books Limited,
strengthening our presence as
the leading publisher in drama
and the performing arts.
• Achieve Bloomsbury Digital
Resources revenue of £15 million
and profit of £5 million for
2021/2022.
Our Bloomsbury Digital Resources
digital growth strategy, combining
digital products of excellence
with the strength and range of our
partnerships enables us to deliver
growth from the high-quality
platforms and infrastructure we have
built and are continuing to build.
2019/2020 progress:
− Delivered £8.3 million revenue,
up 32%;
− Delivered five new products and
five new modules; and
− Established new partnerships with
the National Theatre, Taylor &
Francis, Human Kinetics and the
Donmar Warehouse.
Consumer publishing
• Discover, nurture and retain
high-quality authors and
illustrators, while looking at new
ways to leverage existing title
rights.
2019/2020 progress:
− Sunday Times bestsellers
included Such a Fun Age by
Kiley Reid, The Anarchy by
William Dalrymple, City of Girls
by Elizabeth Gilbert, Three
Women by Lisa Taddeo and The
Dutch House by Ann Patchett.
New York Times bestsellers
included Elderhood by Louise
Aronson and No Visible Bruises
by Rachel Louise Snyder.
• Grow our key authors through
effective publishing across all
formats alongside strategic
sales and marketing.
2019/2020 progress:
− Crescent City: House of Earth
and Blood by Sarah J. Maas was
Number One on the New York
Times bestseller list; and
− Specialist Audio division
established.
• As the originating publisher
of J.K. Rowling’s Harry Potter
series, ensure that new children
discover and read it for pleasure
every year.
2019/2020 progress:
− Harry Potter and the
Philosopher’s Stone was the
tenth bestselling Children’s title
on Nielsen Bookscan in the UK,
22 years after first publication.
Link to KPIs
Link to KPIs
Link to KPIs
1
2
3
4
1
2
4
1
3
22
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STRATEGIC REPORT
Key to KPIs:
1 Revenue growth
2 Adjusted PBTA
3 Digital resources revenue growth
4 Adjusted operating profit margin
5 Employee engagement
6 Gender diversity
7 Environmental performance
Sustainability
• Maximise our use of sustainable
resources while seeking to
reduce carbon emissions.
We recognise our responsibilities
to conserve resources and we
are committed to monitoring
and improving the environmental
impact of our operations.
2019/2020 progress:
− Decrease in greenhouse gas
emissions from location based
and vehicle fuel use*;
− Decrease in greenhouse gas
emissions from electricity use*;
− Decrease in water consumption*;
− Increased use of print-on-
demand technology: over
20,000 titles; and
− Implementation of Sustainability
Working Group to promote
positive environmental actions
within the Group.
*An analysis of our environmental performance
during the year is set out on in the Strategic
Report on pages 55 to 57.
Employee experience
and engagement
• Be an attractive employer for
all individuals seeking a career
in publishing regardless of
background or identity, adding
cultural value to our business
operations and performance.
• Focus on targeted initiatives
to create an environment that
nurtures talent, stimulates
creativity and collaboration,
is respectful of difference and
supports wellbeing.
Our colleagues are amongst our
most important assets, and our
success is driven by their expertise,
passion and commitment. We
understand the importance
of attracting, supporting and
engaging colleagues wherever
they work.
2019/2020 progress:
Continuing focus on employee
engagement and development
initiatives, including:
− Ongoing Employee Voice
Meetings, listening to each of
our employees’ views;
− Continued provision of
Management Development
Programme for line managers;
− Introduction of mentoring
scheme for early and mid-career
employees;
− Formation of Diversity and
Inclusion Networks that
complement and inform the
activities of our Diversity and
Inclusion Working Group; and
− Introduction of Core Hours to
support flexible working.
Link to KPIs
Link to KPIs
5
6
7
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27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2Delivering the 2019 Bigger Bloomsbury InitiativesIn May 2018 we announced our Bigger Bloomsbury Initiative to focus on key growth drivers with targeted strategies across the Group. We delivered good results on the eight initiatives announced in May 2019. Following the success of the Bigger Bloomsbury Initiatives, we are now renewing our focus on Bloomsbury’s long-term growth strategy, which is aimed at diversifying into digital channels and building quality revenues, increasing earnings and building on the strategic success of the last five years. To achieve this, we are focused on a number of long-term strategic initiatives as set out on the immediately preceding pages.1Growing the profits of the Academic & Professional division: • Delivered £1.8 million (58%) growth in Academic & Professional profit before taxation and highlighted items.2Maximising the success of Bloomsbury Digital Resources: • Moved into profit for the first time and delivered 32% growth in BDR revenue.3Growing the profits of the Adult division:• Delivered £1.6 million profit before taxation and highlighted items, up £0.7 million.4Reducing our finished goods stock further: • Further 1% reduction in inventories on a like-for-like basis.5Growing the revenues of acquisitions: • 49% growth in I.B. Tauris revenues, acquired in May 2018, contributing to the Non-Consumer growth. 6Increasing the focus on Bloomsbury’s nine biggest assets, starting with Harry Potter, Sarah J. Maas and Tom Kerridge:• Delivered 23 bestsellers globally. 7Accelerating the growth of Bloomsbury’s sales in the USA, Australia and India: • International sales 63% of revenue.8Increasing employee engagement through strategic initiatives: • Good progress in engagement and delivery of key initiatives.www.bloomsbury.com24Bloomsbury Publishing PlcStrategycontinued27040-Bloomsbury-AR2020 - strategic.indd 2411-Jun-20 9:51:11 PM STRATEGIC REPORT
Key Performance Indicators
Financial measures
Revenue growth
£162.8m
+0%
Adjusted PBTA
£15.7m
+9%
2020
2019
2018
0%
1%
13%
Link to risks
A
2020
2019
2018
£15.7m
£14.4m
£13.2m
Link to risks
A B C
D F
Digital resources revenue growth
Adjusted operating profit margin
£8.3m
+32%
2020
2019
2018
9.8%
+12%
2020
2019
2018
32%
34%
20%
Link to risks
B
Non-Financial measures
Employee engagement I
Gender diversity
I
9.8%
8.8%
8.1%
Link to risks
A B C
D F
Environmental performance
– greenhouse gas emissions
(absolute tonnes CO2e) J K
51
Employee Voice Meetings
connecting employees
with the Board and senior
management
6
Active employee Diversity
and Inclusion networks
Key to risks:
28.5%
Female Board members
(2019: 28.5%)
19.7%
UK median gender
pay gap
(2019: 21.9%)
22
Vehicle fuel use
(2019: 35)
71.4%
Female Executive
Committee members
(2019: 62.5%)
69%
Female employees
(2019: 71%)
18.3%
UK mean gender
pay gap
(2019: 22.9%)
291
Electricity use: location-
based emissions
(2019: 314)
43
Stationary fuel use
(2019: 46)
A Market B Importance of digital publishing C Acquisitions D Title acquisition E Information and technology systems
F Financial valuations G Intellectual property H Reliance on key counterparties
J Legal and compliance K Reputation
Talent management
I
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27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2The Non-Consumer DivisionThe 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, Bloomsbury purchased Oberon Books Limited, a performing arts publishing company specialising in play-text publishing. This has been integrated into the Methuen Drama imprint. In March 2020, Bloomsbury purchased certain assets of Zed Books Limited, an academic publisher specialising in Africa studies, economics, development, politics and books about the Global South. The Non-Consumer Division produces a large portfolio of scholarly and B2B digital resources sold direct to institutions, schools and companies worldwide, Over 1,100 international academic institutions and 2,600 corporate customers now purchase digital resources direct from Bloomsbury. The Division publishes a print and ebook programme of over 2,000 new titles per year across the arts, humanities and social sciences, law and tax, as well as specialist content for 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). In addition to its publishing programme, the Division provides consultancy services to corporations and institutions round the world. The markets we serveThe Non-Consumer Division serves the following end users: • The international research community and higher education students, who use our books and digital resources, which are purchased by academic libraries and institutions worldwide;• UK and Eire professionals, who use our online law, accounting and tax services;• 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.Jonathan GlasspoolExecutive Director and Managing Director, Non-Consumer DivisionJonathan 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.Divisional facts£66.0m Revenue – total£3.3m Revenues – other territories£48.9m Revenue – UK£6.7m PBTA*£13.8m Revenue – US10.42% PBTA margin** PBTA is profit before taxation, amortisation of acquired intangible assets, restructuring costs and legal and other professional fees relating to acquisitions. www.bloomsbury.com26Bloomsbury Publishing PlcDivisional Overview27040-Bloomsbury-AR2020 - strategic.indd 2611-Jun-20 9:51:14 PM STRATEGIC REPORT
Value generating activities
Description
Academic book publishing
in print and ebook 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 ebooks, with a significant USA
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.
strategic goals
strategy for growth
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 and content
aggregators.
• 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
• Grow institutional revenues
internationally, especially in
North America.
• Grow revenues from digital-only
products and services to £15
million revenue and £5 million
profit by 2022.
• Expand number of revenue
streams from non-book sources.
• Create rich content and
compelling services for niche
communities of special interest.
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Divisional Overview
continued
Our books were
recognised by Choice*
with a number of
Outstanding Academic
Title awards, including:
1
2
3
4
5
6
7
8
9
Food studies:
a Hands-On Guide
Future sounds:
the temporality of noise
History and film:
a tale of two disciplines
Life itself is an art:
the life and work of
Erich Fromm
Literature's children:
the critical child and the
art of idealization
Modernism and the law
Rereading Childhood
Books: A Poetics
The meaning of the
circus: the communicative
experience of Cult, Art,
and Music as an Art
History of Illustration
Contemporary Peruvian
cinema: history, identity
and violence on screen
10
The Shari’a: History,
Ethics and Law
11
Bloomsbury Popular
Music (Bloomsbury
Digital Resources)
*Choice is a publishing unit of the Association
of College and Research Libraries.
Examples of recent Non-Consumer prizes and awards
• History of Illustration won the Best
Edited Collection (Ray and Pat
Browne Award) from the Popular
Culture Association/American
Culture Association.
• An Introduction to Popular Culture
in the US: People, Politics, and
Power was awarded the John
G. Cawelti Award for the Best
Textbook/Primer in Popular and
American Culture from the Popular
Culture Association/American
Culture Association.
• When Genres Collide: Down Beat,
Rolling Stone, and the Struggle
Between Jazz and Rock won the
IASPM Canada Book prize from the
International Association for the
Study of Popular Music – Canada
Branch.
• The Politics of 1930s British Literature
won the ISCHE First Book Award.
• Fellini’s Eternal Rome won the
Flaiano Prize from Premi Flaiano.
• Shakespeare on the Record was
awarded the Harley Prize from the
British Records Association.
• Empire of the Winds was given the
Penang Book Prize for 2019 from
the Penang Institute.
• Nomads and Soviet Rule won
the Alexander Nove Prize from
BASEES.
• Feminist Judgments in International
Law edited by Loveday Hodson
and Troy Lavers was awarded the
2020 ASIL Certificate of Merit
for a Preeminent Contribution to
Creative Scholarship.
• Secured Credit in Europe by Teemu
Juutilainen won the 2016–2018 KG
Idman Prize.
• Unity in Adversity by Charlotte
O’Brien was awarded the 2019
SLSA Book Prize.
• Among many Bloomsbury finalists,
A Cultural History of Work Volumes
1–6 was awarded the PROSE
Award for Multivolume Reference.
• Feminist Judgements in International
Law was recognised by the
2019–2020 ASIL Book Awards
with the Certificate of Merit for
a Preeminent Contribution to
Creative Scholarship, from the
American Society of International
Law.
Shortlistings of note
• 2020 British Book Awards
(administered by the Bookseller):
Academic, Educational and
Professional Publisher of the Year.
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27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2The Consumer DivisionThe Consumer Division publishes books for both adult and child readers. It publishes around 600 new titles per year and these books are published in print, ebook and audio book formats under the following imprints: Bloomsbury Absolute, Bloomsbury Activity Books, Bloomsbury Children’s Books, Bloomsbury Circus, Bloomsbury Publishing and 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 are coordinated by experienced editorial and publishing staff 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, Lisa Taddeo, 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 serveOur publishing serves the global bookshop and online retail market, in print, audio and ebooks; and rights sales to foreign publishing houses. The UK market is the largest market based on Divisional sales.Emma HopkinManaging Director, Consumer DivisionEmma is responsible for all Consumer publishing. She joined Bloomsbury in 2011 to run the Children’s publishing business and was promoted to manage the Adult Trade Division as well in 2016 following a Company restructure. Previously, she was Managing Director of Macmillan Children’s Books. She has also held sales and marketing roles at Houghton Mifflin, Pan Macmillan and Routledge.Divisional facts£96.8m Revenue – total£12.7m Revenues – other territories9.2% PBTA margin£55.5m Revenue – UK£9.8m Revenue – ebooks only worldwide£28.6m Revenue – US£8.9m PBTA**PBTA is profit before taxation, amortisation of acquired intangible assets, restructuring costs and legal and other professional fees relating to acquisitions.www.bloomsbury.com30Bloomsbury Publishing PlcDivisional Overviewcontinued27040-Bloomsbury-AR2020 - strategic.indd 3011-Jun-20 9:51:38 PM STRATEGIC REPORT
Value generating activities Description
Children’s Trade
publishing
Harry Potter publishing
Publishing and promoting activity books, fiction, non-
fiction, picture books, preschool books in print, audio
book and ebook formats.
Reimaging and promoting J.K. Rowling’s children’s
novels with illustrated editions by Jim Kay, Chris
Riddell and Olivia Lomenech Gill. Our ambition is to
introduce new children to reading these books for
pleasure every year.
Adult Trade fiction
To publish bestselling, award-winning fiction in print,
audio and ebook formats.
Adult Trade non-fiction
To publish bestselling and award-winning non-
fiction in the following areas: biography, food and
drink, history, memoir, popular science and popular
psychology, including some illustrated books.
strategy for growth
strategic goals
Strategy for growth
• Growing the lists by focused and
global acquisition of titles.
• Increased 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 and retaining talent
to the list by providing excellent
author care.
Strategic goals
• Grow Adult Trade market share
in UK and USA.
• Grow Children’s Trade market
share in UK and USA.
• Ensure our titles are regularly
listed on The New York Times
bestseller and Sunday Times
bestseller charts.
• Focus on audio publishing
and integrating it into our
publishing strategy.
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Divisional Overview
continued
Examples of recent prizes and awards:
Adult Trade division
USA winners
1
2019 National Book
Award Distinguished
Contribution to American
Letters Lifetime
Achievement Award
Edmund White
UK winners
1
2
3
The ALA Carnegie
Medal for Excellence
in Non-fiction
Heavy by Kiese Laymon
The Charleston John
Maynard Keynes Prize
Mary Robinson (author of
Climate Justice)
The EU Prize
for Literature
All Among the Barley by
Melissa Harrison
2
4
5
6
7
2019 Center for Fiction
Awards First Novel Prize
In West Mills by
De’Shawn Charles
Winslow
The Kitschies
Red Tentacle
Circe by Madeline Miller
The Kerry Group Irish
Novel of the Year Award
Travelling in a Strange
Land by David Park
Whiting Award in
Non-fiction
Heart Berries by Terese
Marie Mailhot
Last Laugh Award
A Shot in the Dark by
Lynn Truss
8
9
National Geographic
Traveller Reader Awards
Around the World in 80
Trains by Monisha Rajesh
Guild of Food
Writers Award,
Food Book Award
Lateral Cooking by
Niki Segnit
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STRATEGIC REPORT
Design Awards
UK Winners
ABCD (Academy of Book Cover
Design) award in SciFi/Fantasy
category
Folk by Zoe Gilbert
British Book Design and
Production Awards, Brand/Series
Identity
Eat Like a Local
Shortlistings of note: UK
ABCD (Academy of Book Cover
Design) in SciFi/Fantasy category
Circe by Madeline Miller
ABCD (Academy of Book Cover
Design) in SciFi/Fantasy category
Red Birds by Mohammed Hanif
Waterstones Beautiful Book of
the Year
Circe by Madeline Miller
British Book Design and
Production Awards
Everest: The Remarkable Story
of Edmund Hillary and Tenzing
Norgay by Alexandra Stewart
and Joe Todd Stanton
The Silk Roads: A New History of
the World, Illustrated Edition by
Peter Frankopan and Neil Packer
The Tales of Beedle the Bard,
Deluxe Illustrated Edition by J.K.
Rowling and Chris Riddell
Shortlistings of note: US
The 2019 Original Art Show
Migration by Jenni Desmond
Moth by Daniel Egneu
Examples of recent prizes and awards:
Children’s Trade division
USA winners
UK winners
1
2
3
4
2019 National Book
Award Young People’s
Literature
1919: The Year that
Changed America by
Martin Sandler
2019 The Boston Globe
Horn Book Awards
This Promise of Change
by Jo Allen Boyce and
Debbie Levy
2020 ALAN Award for
lifetime contribution to
adolescent literature
Nikki Grimes
2020 AAAS/Subaru SB&F
Prize for Excellence in
Science Books Hands On
Science Book:
Can you Crack the Code?
by Ella Schwartz
1
2
3
4
5
Blue Peter Book Award
Winner of Winners
Harry Potter and the
Philosopher’s Stone by
J.K. Rowling
Laugh Out Loud Book
Awards
I Bet I Can Make You
Laugh by Joshua Siegal
Foyles Book of the Year
The Good Thieves by
Katherine Rundell
Sainsbury’s Book Award
The Awesome Book of
Space by Adam Frost
Books are my Bag
Readers Award
(young adult)
Toffee by Sarah Crossan
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Divisional Overview
continued
Adult Trade division
Shortlistings of note: UK
• The International Dylan Thomas Prize:
Folk by Zoe Gilbert
• The International Dublin Literary Award:
Lincoln in the Bardo by George Saunders
Home Fire by Kamila Shamsie
• Orwell Prize for Political Writing:
The Growth Delusion by David Pilling
• RSL Ondaatje Prize:
Small Days and Nights by Tishani Doshi
• CWA Awards:
To The Lions by Holly Watt (CWA Ian Fleming Steel
Dagger for best thriller)
The House on Half Moon Street by Alex Reeve (CWA
Sapere Historical Dagger for best historical crime novel)
• The Rathbones Folio Prize:
Can You Tolerate This? by Ashleigh Young
• Irish Book Awards:
This is Happiness by Niall Williams (Novel of the Year)
Nicole Flattery (Newcomer of the Year, and Short Story
of the Year, for her story ‘Parrot’)
Louise Kennedy (Short Story of the Year)
• Wilbur Smith Adventure Writing Prize:
To the Lions by Holly Watt
• Books Are My Bag Readers Awards Fiction:
Circe by Madeline Miller
• Books Are My Bag Readers Awards Beautiful Book:
Circe by Madeline Miller
• Jhalak Prize: Suncatcher by Romesh Gunesekera
• Palestinian Book Awards: Zaitoun by Yasmin Khan
• Guild of Food Writers Award, First Book Award:
The New Art of Cooking by Frankie Unsworth
• Jhalak Prize: Built by Roma Agrawal
Shortlistings of note: US
• 2019 The Booker Prize:
10 Minutes, 38 Seconds in this Strange World by Elif
Shafak (finalist)
The Man Who Knew Everything by Deborah Levy
(longlisted)
• 2019 PEN America Literary Awards John Kenneth
Galbraith Award for Nonfiction:
One Person, No Vote by Carol Anderson
• 2019 National Book Critics Circle Awards:
Nonfiction: No Visible Bruises by Rachel Louise Snyder
• 2019 LA Times Book Prize Art Seidenbaum Award
for First Fiction:
In West Mills by De’Shawn Charles Winslow
• 2019 LA Times Book Prize Current Interest:
No Visible Bruises by Rachel Louise Snyder
• 2019 NAACP Image Awards Outstanding Literary
Work Poetry: A Bound Woman Is a Dangerous Thing
by DaMaris B. Hill
Children’s Trade division
Shortlistings of note: UK
• An Post Irish Book Awards: Dept 51 @ Eason Teen &
Young Adult Book of the Year:
Toffee by Sarah Crossan
• Books Are My Bag Readers Awards: Children’s
Fiction: The Good Thieves by Katherine Rundell
• An Post Irish Book Awards: Specsavers Children’s
Book of the Year (Senior):
The Lost Tide Warriors by Catherine Doyle
• An Post Irish Book Awards: Dept 51 @ Eason Teen
& Young Adult Book of the Year:
The M Word by Brian Conaghan
• An Post Irish Book Awards: Dept 51 @ Eason Teen
& Young Adult Book of the Year:
All The Invisible Things by Orlagh Collins
• Goodreads Choice Award 2019:
A Curse So Dark and Lonely by Brigid Kemmerer
• Laugh Out Loud Book Awards 2020: Picture Book
Baby’s First Bank Heist by Jim Whalley, illustrated by
Stephen Collins
• Laugh Out Loud Book Awards 2020: (9–13)
I Swapped My Brother on the Internet by Jo Simmons,
illustrated by Nathan Reed
• Laugh Out Loud Book Awards 2020: (9–13)
Kid Normal and the Rogue Heroes by Greg James and
Chris Smith illustrated by Erica Salcedo
Shortlistings for British Book Awards
• Children’s Book of the Year:
The Good Thieves by Katherine Rundell
• Narrative Non Fiction Book of the Year:
Three Women by Lisa Taddeo
• Lifestyle Non Fiction Book of the Year:
Dishoom: From Bombay with Love by Shamil Thakrar,
Kavi Shakrar and Naved Nasir
• Editor of the Year: Alexis Kirschbaum
Shortlistings of note: USA
• 2019 NAACP Image Awards Outstanding Literary
Work Children:
Ruby Finds a Worry by Tom Percival
• 2020 Edgar Awards Young Adult:
Wild and Crooked by Leah Thomas
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27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2STRATEGIC REPORTStock code: BMYAnnual Report and Accounts 202035Group functions supporting our publishing divisions Sales, Marketing and Sales OperationsKathleen Farrar is Managing Director – Group Sales and Marketing 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. She joined Bloomsbury through the acquisition of Continuum International Publishing in 2011, having begun her career in publishing in 1988, and has held various senior production and editorial roles. Finance and TechnologyPenny Scott-Bayfield is Group Finance Director and is also responsible for technology and internal controls and risk management (see Board biographical details).Description of service to the Group• Provide sales and marketing services to the Group across print, ebooks, digital audio books and digital platforms.• Manage marketing budgets to maximise marketing spend return on investment across the Group. Deliver profitable sales across retail and wholesale channels.• Manage retail relationships including Group terms negotiations.• Manage Sales Operations function.Description of service to the Group• Cost-efficient on-time delivery of high-quality print and digital product for sale globally.• Devise, document and manage Production-editorial operations. Description of service to the Group• 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.• Evaluate, implement and test internal controls in connection with effective risk management.Contribution to strategic aims• Manage Group sales and marketing campaigns and deliver global sales and marketing KPIs.• 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.• Manage print numbers with the Operations team to control stock expenditure.Contribution to strategic aims• Optimise margins through Group-based tender processes for pre-press, manufacturing and freight, and through efficient operations.• Provide framework for digital publishing strategy by drafting and managing XML-first workflows, with allied future proofing of content and IP storage.• Support global stock control initiatives with agile and flexible print models.Contribution to strategic aims• Financial reporting, forecasting and business partnering to drive delivery of results, efficiencies and support decision-making across Bloomsbury.• Provide exemplary author care through excellent royalty services.• Deliver digital platforms to grow digital revenues in line with Bloomsbury Digital Resource growth strategy.• Provide technology services across the Group to support business strategy and effective and efficient working.Read more about our strategy on pages 22 to 2427040-Bloomsbury-AR2020 - strategic.indd 3511-Jun-20 9:51:59 PM “Profit before tax
increased by 10% to
£13.2 million (2019:
£12.0 million)”
Penny Scott-Bayfield
Group Finance Director
Financial Review
Revenue
In 2020, Group revenues increased to £162.8 million (2018/2019: £162.7 million).
Non-Consumer Division revenues grew by 4%, generated by 4% growth in both
Academic & Professional, and Special Interest division sales. Academic & Professional
revenue included the 32% growth in Bloomsbury Digital Resources (“BDR”). Total
revenues in the Consumer Division were 3% below last year, with strong Adult division
growth of 12% while Children’s was impacted by fewer key frontlist titles.
In the second half, the Special Interest division took over the publishing part of our
Content Services division, to generate further synergies following the successful
restructure of the Special Interest division. Digital projects moved to the Academic
& Professional division. Comparatives have been restated to reflect this.
Revenues by territory
Revenues sold overseas totalled £102.0 million, being 63% of total revenues.
The chart on the right shows where Group revenues were generated for the year
ended 29 February 2020.
Revenues by type
Digital sales grew by 16%, driven by growth in BDR revenues, up 32%, and in audio
sales, up 190%, with ebook sales growth of 1%. Print sales reduced by 3% in the
year, with increased Adult sales and resilient Non-Consumer sales offset by lower
Children’s print revenues. Rights and services revenues increased by 12%, generated
by strong sales of Consumer title rights.
The chart on the right shows the proportion of Group revenue that each product
type generates.
Profit
Profit before tax and highlighted items increased by 9% to £15.7 million (2018/2019:
£14.4 million). Profit before tax increased by 10% to £13.2 million (2018/2019:
£12.0 million).
The increased profit was driven by the excellent performance of the Non-Consumer
Division, with profit before taxation and highlighted items up 85% to £6.7 million.
Within this, Academic & Professional profitability increased by 58%, including profit
generated by BDR for the first year, an increase of £0.7 million, and Special Interest
profitability increased by 227%.
The operating profit margin increased year-on-year to 8.3% from 7.4%, with improved
profitability and 0.2% from the impact of IFRS 16. The operating profit margin before
highlighted items increased year-on-year to 9.8% from 8.8%, with 0.2% from the
impact of IFRS 16. This was driven by the Academic & Professional performance.
Administrative expenses, excluding highlighted items, were down by 2%.
Highlighted items in the year were: the amortisation of acquired intangible assets
of £1.7 million (2018/2019: £1.7 million), legal, other professional and restructuring
costs relating to ongoing and completed acquisitions of £0.6 million (2018/2019: £0.6
million) and one-off costs relating to the coronavirus of £0.2 million (2018/2019: nil).
Interest
The net finance cost was £0.2 million (2018/2019: £0.1 million net finance income). The
finance income of £0.3 million relates to bank interest and the unwinding of interest
on long-term revenue contracts. The finance cost of £0.5 million predominantly
relates to interest on lease liabilities.
Taxation
The tax charge of £2.7 million (2018/2019: £2.8 million) is a reported effective rate of
tax of 20.6%, lower than the reported rate of 23.3% for the prior year. Excluding the
effect of highlighted items, the effective tax rate for the Group was 19.0% (2018/2019:
21.4%). The lower tax rate this year is primarily due to the profit mix in overseas
territories.
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Earnings per share
Diluted earnings per share before
highlighted items were up by 12% to
16.77 pence (2018/2019: 14.97 pence), as
a result of the growth in profit. Diluted
earnings per share after deducting
highlighted items were up by 13% to
13.84 pence (2018/2019: 12.25 pence).
Information on distributable reserves can
be found on page 175. Information on
the dividend can be found in the Chief
Executive’s Review on page 12.
New standards
IFRS 16, Leases, was adopted during
the year.
At the transition date of 1 March 2019,
the adoption of IFRS 16 resulted in the
Group recognising right-of-use assets
of £13.6 million and lease liabilities of
£14.5 million. There is a reduction of
£0.3 million for prepaid rental amounts
now netted against the right-of-use
assets and a reduction of £1.2 million to
liabilities for deferred rent-free amounts
netted against the right-of-use asset.
Prior to the adoption of IFRS 16,
rental payments were charged to the
income statement on a straight-line
basis. Under IFRS 16 rental costs in the
income statement are replaced with
depreciation on the right-to-use asset
and interest charges on the lease liability.
The adoption of IFRS 16 gives rise to a
net £0.2 million charge in profit before
tax for the year ended 29 February 2020.
See note 2w of the financial statements
for the impact assessment of the
adoption of IFRS 16.
STRATEGIC REPORT
Cash
Cash and cash equivalents were £31.3
million (2019: £27.6 million). Cash flow
conversion in the year was 96% (2019:
128%).
The net cash generated from operating
activities, including the effect of
highlighted items, was £16.6 million
(2019: £15.0 million). This movement is
due to a combination of increased profit
and the impact of IFRS 16 classification
changes (£2.0 million), offset by
increased working capital. Cash used in
investing activities was principally the
cost of internally generated intangible
assets such as product and system
development as well as the acquisition
of Oberon Book’s publishing rights
(“Oberon”) and the investment in the
joint venture; Beijing CYP & Gakken
Education Development Co., Ltd.
Cash used in financing activities mainly
comprised dividend payments of £6.0
million (2019: £5.7 million).
Revenues by territory
n UK 64%
n USA 26%
n Australia 7%
n India 3%
Revenues by type
n Print 79%
n Digital 15%
n Rights and Services 6%
Capital structure
Our balance sheet at 29 February 2020
is summarised in the table below:
Goodwill and acquired
intangible assets
Internally generated
intangible assets
Investments
Property, plant and
equipment
Net right-of-use assets
and lease liability
Net deferred tax assets
Working capital
Other non-current assets
and liabilities
Total net assets before
net cash
Net cash
Total net assets
2020
£m
2019
£m
58.8
59.5
7.9
0.5
7.3
0.3
1.9
2.1
(1.2)
0.4
49.9
–
–
45.9
0.2
1.0
118.4 116.1
27.6
149.7 143.7
31.3
Net assets per share were 199 pence
(2019: 190 pence). The main movements
on the balance sheet are in right-of-use
assets, lease liabilities, working capital
and cash. Right-of-use assets and lease
liabilities have been recognised during
the year on the adoption of IFRS 16.
Working capital has increased due
to strong sales at the end of the year,
increasing trade debtors, and higher
royalty advances. The increased profit,
partly offset by increased working
capital, has driven the £3.7 million
improvement in net cash.
Inventories increased by 4% to £27.2
million (2019: £26.1 million). On a like-
for-like basis, excluding the effect of
acquisitions (reduced by £0.2 million) and
on a constant currency basis (reduced by
£0.3 million), this increase was 2% or £0.6
million. Included in inventories, finished
goods, on a like-for-like basis, excluding
the effect of acquisitions (reduced by
£0.1 million) and on a constant currency
basis (reduced by £0.3 million), reduced
by 1%. Trade and other liabilities
increased by 2% to £61.8 million (2019:
£60.6 million). Trade payables are up
£3.0 million to £25.4 million (2019: £22.4
million) due to timing of title releases
and printing. Accruals are £3.4 million
lower than last year at £19.7 million (2019:
£23.1 million) primarily as there is no
management bonus payable for the year
(2019: £2.3 million).
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Stock code: BMY
Annual Report and Accounts 2020
37
Financial Review
generation. The Income Statement
items that are excluded from adjusted
profit measures are referred to as
highlighted items.
Alternative performance 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. 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:
Highlights
£162.8m
Revenue
£15.7m
Adjusted PBTA
16.77p
Adjusted diluted
EPS (pence per
share)
12.2%
ROCE
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 and
lease liabilities.
continued
Liquidity
The Group has an unsecured committed
revolving credit facility with Lloyds Bank
Plc. The facility comprises £8.0 million
in the first half and an additional £4.0
million in the second half, totalling £12.0
million, to match Bloomsbury’s cashflow
cycle. The facilities are subject to two
covenants, being a maximum net debt
to EBITDA ratio of 2.5x and a minimum
interest cover of 4x. Post year end,
the maturity of the loan facilities was
extended from May 2021 to May 2022.
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.
Acquisitions
In December 2019, the Company
acquired Oberon for £1.2 million, all of
which was paid in cash at completion.
For the year ended 29 February 2020,
Oberon contributed £0.2 million of
revenue to the Academic & Professional
division.
Also in December 2019, we entered
the domestic Chinese market with
Bloomsbury China, a new joint venture
with China Youth Publishing Group
(“CYPG”) and Roaring Lion Media
(“RLM”). The investment is de minimis.
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.
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
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STRATEGIC REPORT
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
IFRS 16 presentation changes
Adjusted cash generated from operating activities
Less: Purchase of property, plant and equipment
Less: Purchase of intangible assets
Net cash generated
Operating profit
Cash conversion
2020
£m
18.3
0.1
(2.0)
16.4
(0.3)
(3.1)
13.0
13.5
96%
2019
£m
17.5
1.2
–
18.7
(0.5)
(2.9)
15.3
12.0
128%
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 below. The currency adjustment is calculated
by applying the monthly foreign exchange rates used in 2019 to convert the overseas revenue into sterling. This has been applied
on a month-by-month basis to the 2020 revenue. This method allows better comparability given the seasonality of the business.
Group revenue 2020 –
reported
Currency adjustment
2020 – currency adjusted
2019 – reported
Group revenue 2020 –
reported
Currency adjustment
2020 – currency adjusted
2019 – reported
Group operating profit
before highlighted items
2020 – reported
Currency adjustment
2020 – currency adjusted
2019 – reported
Children's
Trade
£’000
59,354
(319)
59,035
65,800
Adult
Trade
£’000
37,416
(301)
37,115
33,454
Consumer
£’000
Academic &
Professional
£’000
Special
Interest
£’000
Non-
Consumer
£’000
96,770
(620)
96,150
99,254
43,123
(283)
42,840
41,514
22,879
(83)
22,796
21,911
United
Kingdom
£0’000
North
America
£’000
104,440
–
104,440
100,959
42,415
(1,293)
41,122
45,846
Australia
£’000
11,107
379
11,486
11,586
66,002
(366)
65,636
63,425
India
£’000
4,810
(72)
4,738
4,288
Children's
Trade
£’000
Adult
Trade
£’000
Consumer
£’000
Academic &
Professional
£’000
Special
Interest
£’000
Non-
Consumer
£’000
7,400
46
7,446
9,784
1,667
(40)
1,627
891
9,067
6
9,073
10,675
4,906
(54)
4,852
3,043
1,974
(25)
1,949
576
6,880
(79)
6,801
3,619
Total
£’000
162,772
(986)
161,786
162,679
Total
£’000
162,772
(986)
161,786
162,679
Total
£’000
15,947
(73)
15,874
14,294
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
Annual Report and Accounts 2020
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Risk Factors and Risk Management
The focus of Bloomsbury’s risk
management process is on identifying,
evaluating and managing risk, with the
goal of supporting the Group in meeting
its strategic and operational objectives.
Further explanation of the Group’s
risk management and internal control
framework is provided in the Corporate
Governance section on page 86, and is
summarised below.
Risk management: Risks facing
the business are identified and
assessed on a regular basis
←
Internal control: Internal
controls are designed and
deployed to mitigate these risks
to an accepted level
←
Assurance: Assurance activities
assess whether the controls are
effective and risks are mitigated
to an acceptable level in practice
The Board
←
Audit Committee
←
Operational level
Bloomsbury’s risk management
framework is designed to provide
the Board with oversight of the most
significant risks faced by the Group.
During the year, the Company
implemented a new process to review,
identify and monitor emerging and
existing risks, assess the level of risk
in each case and identify those risks
that are considered to be significant to
the Group.
The rating of risks takes into account the
likelihood of the risks happening and
the potential financial and non-financial
impacts they could have. Risks are
rated twice:
• The first rating is based on the
potential exposure if nothing is done
to manage or mitigate the risk, in order
to assess the significance of the risk
to the Group’s business and provide a
baseline (“gross risk rating”); and
• The second rating takes into account
the mitigations and controls currently
in place to manage the risk and/or
the impact of the risk, and indicates
the current status of the risk (“net risk
rating”). This informs decisions about
what additional action may be required
to further mitigate the risk, according
to the Company’s risk appetite.
The most material risks are those which
have a higher probability and which,
if they were to occur, would have a
material impact on the Company’s
financial results, strategy, reputation or
operations. These risks are classed as
the Group’s principal risks.
Outlined in the table starting on page 41
of this section of the Annual Report, and
shown on the risk heat map on this page,
are the principal risks that management
have identified to the Group. These risks
are included in the table on the basis of
the gross risk rating described above;
the actions taken in mitigation and the
controls applied to manage these risks
are described alongside each risk. The
risk heat map illustrates the net risk
ratings of these risk areas after mitigation
and controls.
The risk register is monitored and
reviewed internally throughout the year.
Not all the risks listed in the table
starting on page 41 of this section of the
Annual Report, are within management’s
control and other factors besides those
listed 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
on page 73 of the Directors’ Report with
regards to forward-looking statements.
Details on financial risk management are
given in note 25.
The coronavirus pandemic, which
has resulted in the imposition of
Government lockdowns, restrictions and
retail closures in all our key markets of
the UK, USA, Australia and India, as well
as many other important markets, is an
ongoing risk which management and
the Board actively continue to monitor.
This is discussed further under the
section headed “Market” in the table
starting on page 41 of this section of the
Annual Report.
Principal risks
The table starting on the next page
provides a description of the risks that
management considers significant
for the Group’s business. Other risks
besides those listed could also affect the
Group and are monitored throughout
the year.
The relative net risk ratings of the
principal risks (after mitigation and
controls) are illustrated schematically
in the following chart:
d
o
o
h
i
l
e
k
L
i
Impact
1. Market
2.
Importance of digital publishing
3. Acquisitions
4. Title acquisition (Consumer publishing)
Information and technology systems
5.
6. Financial valuations
Intellectual property
7.
8. Reliance on key counterparties
9. Talent management
10. Legal and compliance
11. Reputation
During the year, the Company
implemented a new process to identify
and monitor emerging and existing risks,
and to assess the level of risk in each
case and the likely impact on the Group’s
business should the risk occur, in order
to identify those risks that are considered
to be significant to the Group. The table
on pages 41 to 44 summaries those risks
which are considered significant, being
risks which have a higher probability and
which, if they were to occur, would have
a material impact on our financial results,
strategy, reputation or operations,
together with the action taken, and
controls implemented, by management
to mitigate these risks.
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STRATEGIC REPORT
Key area
Market
Risk
Description
Mitigation
A
Market volatility: Impact of the
coronavirus pandemic
Sales of print books in the Group’s
key markets are being impacted
by the imposition of Government
lockdowns, restrictions and retail
closures.
• Close monitoring of revenue streams and affected
supply chains, with increased marketing and sales
activities focused on unaffected retail channels such as
online retailers, supermarkets and the Company’s own
website Bloomsbury.com.
• Increased focus on promoting digital book sales (ebooks
and audio books) and BDR products (as academic
institutional customers pivot to digital resources to
support remote learning for students).
Increased dependence on
internet retailing
• Grow expert marketing teams skilled in internet sales.
• Engage with multiple internet retailers and support
Growth of online retailers may
impact on the discoverability
of Bloomsbury titles and lead
to a reduction in sales channels
available to the Group.
Sales of used books
Sales of used books for academic
purposes erode backlist sales.
independent retailers.
• Focus on promoting sales from the Company’s own
website and on direct sales to customers.
• Increase focus on developing other marketing
opportunities and other revenue streams, e.g. Academic
& Professional digital products, rights and services.
• Digital subscriptions are offered to support B2B model
by selling direct to institutions rather than to students.
Rental of textbooks
• Develop digital platforms to deliver, on a subscription
Importance
of digital
publishing
B
basis, the content that readers demand.
USA 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.
BDR revenues and profit
• Develop a portfolio of high-quality online content
Revenue and profit from BDR
products and services may not
grow in line with our stretching
targets.
Higher project and development
costs may be required or
incurred than were budgeted for,
impacting profit.
services in markets we understand well.
• Use third party content and content partnerships to
scale up projects quicker and create economies of scale.
• Annual and monthly BDR budgets and reforecasts are
monitored against BDR targets on a weekly basis.
• The business case for each BDR product requires
approval by the Group Finance Director and Managing
Director of the Non-Consumer Division. Costs and
profitability by project are tracked and reviewed against
budget on a monthly and quarterly basis by senior
management to identify any corrective action required.
Any budget overspend requires approval of the Group
Finance Director and Managing Director of the Non-
Consumer Division.
Unforeseen circumstances may
delay development of new online
content services.
• Standardise the digital delivery platform to simplify and
speed up the development and implementation of new
digital content services.
Reduced budgets for academic
libraries and institutions may
impact on revenue.
• Adoption of flexible sales models where budgets for
annual subscriptions are restricted.
• Broaden the international institutional customer
base so that the Company is not reliant on sales in
specific territories.
section headed “Market” in the table
starting on page 41 of this section of the
Annual Report.
Principal risks
The table starting on the next page
provides a description of the risks that
management considers significant
for the Group’s business. Other risks
besides those listed could also affect the
Group and are monitored throughout
the year.
The relative net risk ratings of the
principal risks (after mitigation and
controls) are illustrated schematically
in the following chart:
d
o
o
h
i
l
e
k
i
L
Impact
1. Market
3. Acquisitions
2.
Importance of digital publishing
4. Title acquisition (Consumer publishing)
5.
Information and technology systems
6. Financial valuations
7.
Intellectual property
8. Reliance on key counterparties
9. Talent management
10. Legal and compliance
11. Reputation
During the year, the Company
implemented a new process to identify
and monitor emerging and existing risks,
and to assess the level of risk in each
case and the likely impact on the Group’s
business should the risk occur, in order
to identify those risks that are considered
to be significant to the Group. The table
on pages 41 to 44 summaries those risks
which are considered significant, being
risks which have a higher probability and
which, if they were to occur, would have
a material impact on our financial results,
strategy, reputation or operations,
together with the action taken, and
controls implemented, by management
to mitigate these risks.
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Risk Factors and Risk Management
continued
Key area
Risk
Description
Mitigation
Acquisitions
M&A activity
C
Acquisitions could deliver
lower than expected return on
investment. Poor acquisitions
may result in potential
impairment charges.
• Potential acquisition targets are assessed by the
members of the Executive Committee. Thorough
pre-acquisition due diligence is conducted by relevant
functions, including finance, legal, publishing and sales.
Capital allocation for acquisitions is determined at
Group level and approved by the Board. Integration
plans are developed at Divisional level and are
implemented by a cross-functional team of experts, with
Divisional oversight.
• Regular reports are presented to the Board throughout
the year on post-acquisition performance, including an
assessment of any variation to the expected return on
investment.
Title acquisition
(Consumer
publishing)
D
Information
and technology
systems
E
Commercial viability
• Advances over a certain limit are required to be
Titles may be acquired that
are not commercially or
critically successful.
Cybersecurity/malware attack
Unauthorised access to the
Company’s systems may result in
fraud, data privacy breach, theft
of intellectual property, inability
to access, or damage to, vital
systems and assets, thus causing
financial and reputational damage
to the Group.
Inadequate internal access
controls or security measures
Inadequate controls over certain
processes could lead to sensitive
data being inadvertently revealed
internally or externally.
authorised by the Chief Executive and Group Finance
Director.
• Financial forecasts are prepared prior to acquisition to
predict commercial success.
• Focus on acquiring world rights where possible in order
to increase sales opportunities and mitigate the risk
posed by competing editions in open markets.
• Clear responsibility for systems, restrictions on software
installation, increasing use of the cloud, information
back-up, monitoring security risks, internal control
reviews of the systems and up-to-date anti-virus
software are amongst the measures in place.
• Training provided to all staff on cybersecurity risk.
• Sensitive personal data is stored securely and protected
with password controls or encryption. User access
controls are embedded in the Company’s finance
systems.
Financial
valuations
F
Judgemental valuation of assets
and provisions
• Consistent and evidence-based approach to
assumptions.
• Board approval of key assumptions.
Significant assets and provisions
in the balance sheet depend
on judgemental assumptions,
e.g. goodwill, advances,
intangible rights, inventory and
returns provisions.
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STRATEGIC REPORT
Key area
Risk
Description
Mitigation
Intellectual
property
G
Erosion of copyright
Erosion of traditional copyrights.
• Continue policy of support for copyright and intellectual
property rights as a fundamental facet of publishing.
Erosion of territorial copyrights as
a result of global internet retailing.
• Continue to police infringements of the Group’s
territorial copyrights and take appropriate action to
enforce such rights.
Open access.
• Develop digital services that deliver mixed open access
Infringement of Group IP by
third parties
Failure to adequately manage and
protect the Group’s intellectual
property rights (including
trademarks and copyright) may
damage the value of our core
assets and impact on profits.
Reliance on key
counterparties
H
Failure of key counterparties or
breakdown in key counterparty
relationships
Talent
management
I
The failure of key counterparties
could result in a significant
disruption to the Company’s
business activities, resulting
in lower levels of trading and
revenues. A breakdown in
key commercial relationships
could impact on future
publishing opportunities.
Failure to retain key talent and
create the conditions in which
the Group’s employees can
thrive
Loss of key talent could lead
to loss of skill and knowledge
from the business, result in
decreased efficiency, impact on
staff motivation and undermine
external relationships.
and proprietary content in the form that customers
demand and will continue to pay for.
• Adopt robust anti-piracy and procedures.
• Undertake targeted enforcement action against third
party infringers.
• Ensure appropriate digital rights management
protection of ebooks and digital formats.
• Relationships with key counterparties are closely
monitored and actively managed by senior managers.
This includes frequent and regular engagement with key
counterparties in order to ensure open communication
and cooperation and to identify potential issues
that may impact on the Company’s business at the
earliest opportunity. Other mitigations include having
appropriate contracts and service level agreements in
place, and interrogating the business continuity plans of
key counterparties.
• Continued focus on employee development through
training and mentoring programmes for early and mid-
career employees.
• Provision of executive coaching for senior staff.
• Ongoing Employee Voice Programme, allowing
every employee to have their voice heard directly by
senior management and the Board. HR initiatives are
implemented in response to matters raised during
Employee Voice Meetings.
• Formal appraisal system provides the opportunity to
identify learning and development opportunities to
support career progression and succession planning.
• Formation of a Diversity and Inclusion Working Group
and related Diversity and Inclusion networks.
• Global staff turnover by Division and functional area is
reported to the Executive Committee and monitored
against agreed thresholds.
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Annual Report and Accounts 2020
43
Risk Factors and Risk Management
continued
Key area
Risk
Description
Mitigation
Legal and
compliance
J
Breach of key contracts by the
Company
Breach of a key contract by the
Company could result in a claim
for damages and/or termination
of the contract by the relevant
counterparty, resulting in financial
loss to the Group.
Failure to comply with
applicable regulations
Failure to comply with regulations
relating to the reporting of annual
financial reports may lead to
a range of sanctions including
fines, imprisonment, reputational
damage and delisting.
Failure to comply with privacy
regulations may result in
significant fines and reputational
damage.
• Relevant individuals within the business who are
engaged in activities which relate to or are governed
by key contracts are made aware of the terms of such
contracts. Legal advice is sought from the Group’s legal
function where appropriate to ensure performance by
the Company in accordance with contractual terms.
• Annual Report and Accounts is reviewed internally by
the Head of Group Finance and the Group Finance
Director, and externally by the Group’s appointed
Auditor. Material balances are tested in accordance
with relevant standards. The Group Company Secretary
advises on content requirements under relevant
regulation/legislation.
• Mitigation in respect of the risk of a data breach is noted
above in connection with Information Technology and
Systems.
• Since the introduction of the General Data Protection
Regulation ("GDPR"), which came into force in May
2018, the Company has implemented a range of
measures to ensure compliance with the requirements
of GDPR. These include the implementation of policies
and guidance in key areas, the provision of training to
employees, reviewing and updating the Company’s data
collection methods and marketing communications,
updating supplier terms and conditions, and updating
privacy policies on the Company’s websites. The
Company has appointed a Data Protection Officer to
oversee GDPR compliance.
Reputation
K
Investor confidence
• Diversify the portfolio of products and services to
City confidence undermined by
events outside of the Company’s
control, e.g. collapse of a retailer.
reduce dependencies on individual customers, sales
channels and markets.
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STRATEGIC REPORT
Changes during the year
Acquisitions have been added as a principal risk as growth
through acquisitions represents a key element of the
Group’s strategy.
Reliance on key counterparties has been added as a principal
risk. The outbreak of the coronavirus pandemic has highlighted
the potential risks to the Group associated with the failure of key
counterparties and/or the disruption to services provided by
such counterparties.
Talent management has been added as a principal risk. The
Group recognises that the success of its business is dependent
on attracting and retaining appropriately skilled talent to deliver
high quality and original products and services.
Legal and compliance has been added as a principal risk in
recognition of the potential impact of failing to perform in
respect of key contractual arrangements, the failure to comply
with regulatory requirements applicable to listed companies,
and the failure to comply with increased regulation around
data privacy.
Brexit was added as a risk during 2018/2019 due to the
uncertainty arising from the prolonged negotiation process for
the UK’s departure from the EU. The Company has implemented
measures and undertaken logistical planning to mitigate
potential interruptions to its supply chain and operations that
may arise as a result of the UK’s departure. As a result of such
measures, Brexit is no longer considered a principal risk to
the Group.
Volatility of paper costs has been removed from the risk register
as this is no longer considered a principal risk. 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. As a
result of these mitigating measures, this is considered to pose a
moderate risk to the Group.
Viability statement and going
concern assessment
Provision 31 of the 2018 UK Corporate Governance Code
requires the Board 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 and emerging 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 pages 41 to 44) 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. We have evaluated all the principal risks
above and focused our sensitivity analysis on what the
Board believes to be the key risks to viability:
• Market volatility: including the impact of the coronavirus
pandemic;
• Increased dependence on internet retailing; and
• Failure of key counterparties or breakdown in key
counterparty relationships.
We have developed plausible downside scenarios for each
of these risk areas and quantified the impact on the Group’s
revenue, profit and cashflows. All scenarios modelled
significant impact on print revenues and delayed customer
payments due to the coronavirus.
The analysis took account of the Group’s current funding,
forecast requirements and existing banking facilities.
The severe but plausible downside scenario, including the
impact of coronavirus, assumes:
• Print revenues are reduced by 60%–65% for the three
months of expected global coronavirus restrictions to
July 2020 and gradual recovery through to March 2021;
• Downside assumptions about extended debtor days to
the end of 2021; and
• Cost reduction measures already implemented.
Under this severe but plausible downside scenario, the
Group has sufficient liquidity to be able to manage these
downside assumptions.
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 Board has a reasonable expectation that the Group has
adequate resources to continue in operational existence
for at least 12 months from the date of approval of the
financial statements, being the period of the detailed going
concern assessment reviewed by the Board, and therefore
continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
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 2023.
Stock code: BMY
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27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2Our literary heart and social purposeAt the heart of our business is a strong social purpose – to inform, educate and entertain, to inspire a love for reading and learning, to promote literacy and to help build a reading culture.Bloomsbury’s activities have a significant beneficial social impact globally through the publication of a diverse and inclusive range of titles from an international author base, and by providing access to a wide range of resources to support learning and research at different levels of the educational system.Through our publishing, we celebrate diversity and creativity, encourage dialogue and debate, champion free speech and human rights, and challenge the status quo; all fundamental aspects of a democratic and culturally rich society. Many of our books are in themselves a social good, driving change.In addition to the social purpose that guides Bloomsbury’s activities generally, the Board aims to take account of other social, environmental and ethical issues which may be relevant to Bloomsbury’s operations. Our communityOur 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. Our Children’s Trade division is 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. During the year, we made a donation of £10,000 to the NLT and we have been working with the NLT 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 Charitable Partnerships section below). • In 2019, Bloomsbury published Dishoom: From Bombay with Love, written by the head chef and co-founders of the successful Dishoom restaurant chain, Shamil Thakrar, Naved Nasir and Kavi Thakrar. Inspired by Dishoom’s Meal for a Meal Initiative, Bloomsbury has donated a portion of its proceeds from book sales to Dishoom’s charity partners, Magic Breakfast (UK) and the Akshaya Patra Foundation (Mumbai), to help children in need by providing healthy breakfasts to the most vulnerable. To date, in New Delhi and London, our donations have enabled the provision of 31,689 breakfasts for homeless people, something we are extremely proud of. • In August 2018, Bloomsbury published Sea Prayer, a powerful book by Khaled Hosseini in response to the Syrian refugee crisis. By donating £1 per every copy sold to UNHCR – the UN refugee agency – Bloomsbury has, to date, raised over £100,000 in support of UNHCR’s activities caring for refugees around the world. • In June 2020, Bloomsbury made a donation of $10,000 to Black Lives Matter.• We support good causes that promote literacy and literature. We are a proud sponsor of, and partner with, World Book Day, the most important, inclusive reading initiative in the UK, established by UNESCO to promote reading amongst children and adults, Their mission is to give every child and young person a book of their own. In 2019, we published Bad Mermaids meet the Witches by Sibeal Pounder in support of World Book Day and in 2020, Kid Normal and the Loudest Library by Greg James and Chris Smith. During the year, we made a donation to the Waterstones Children’s Laureate in support of the 2019–2022 award. • Our US office has also 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 Australia 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.Nigel Newton speaking to Bloomsbury employees about Bloomsbury's social purpose at the Company Highlights eventwww.bloomsbury.com46Bloomsbury Publishing PlcCorporate Responsibility27040-Bloomsbury-AR2020 - strategic.indd 4611-Jun-20 9:52:03 PM 27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2• 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 248,000 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 over 17,000 books to Book Aid International. Our Australia office has donated books to the Children’s Book Council of Australia and, in response to the Australian bushfires, donated books to go in care packs for children impacted by the bushfires, and for use in auctions and fundraising sales in aid of bushfire appeals. 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.Charitable partnerships• Bloomsbury has entered into a three-year partnership with the NLT with the mission of supporting the NLT in its efforts to overcome literacy challenges facing the residents of Hastings – identified by Ofsted as one of the country’s worst performing boroughs, and by the NLT as one of the towns in the UK with the worst literacy rates. Bloomsbury’s annual financial support will help the NLT to deliver outreach activities via schools, community centres and food banks to help children and adults of Hastings who are most in need. In addition to financial support, Bloomsbury will provide access to the skills and expertise of its staff and authors to the NLT along with significant book gifting, competitions and promotional support. To date, our partnership with the NLT has involved an array of reading events based in the NLT’s Hub in Hastings, including town-wide reading moments, competitions and meet-and-greet sessions with Radio One celebrities and Kid Normal authors, Greg James and Chris Smith.Through our publishing we celebrate diversity and creativity, encourage dialogue and debate, champion free speech and human rights, and challenge the status quo; all fundamental aspects of a democratic and culturally rich society. • Our Children’s publishing division publishes books in partnership with three leading UK charities whose key focus is nature conservation and wildlife. They are the RSPB, Royal Botanic Gardens, Kew, and The Woodland Trust. These partnerships involve the publication of titles by Bloomsbury that support the activities of these charities, and embed their public mission statements into the commercial world of bookselling, reaching far beyond their membership pool with titles across all age groups from 3 years and above. We are experts at commissioning high profile authors with excellent credentials and, in many cases, who have empathy and links with these charities. Our longevity in sustaining these collaborations is evident in our relationship with the RSPB. It now spans nearly ten years, with sales of over 750,000 units and includes nearly 30 successful books that remain perennial favourites, reprinting year-on-year. A royalty is paid to the relevant charity for each book sold.• Bloomsbury also works closely with EmpathyLab, which is the first organisation to build children's empathy, literacy and social activism through a systematic use of high-quality literature. The strategy builds on new scientific evidence showing the power of reading to build real life empathy skills. Working closely with this charity and many of our authors, we ensure that children and the books they read support the teaching of empathy.• We sponsor achievement prizes for students within USA 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 Artists. Both organisations have a substantial education remit in the creative arts. STRATEGIC REPORTStock code: BMYAnnual Report and Accounts 20204727040-Bloomsbury-AR2020 - strategic.indd 4711-Jun-20 9:52:14 PM Corporate Responsibility
continued
Patronus on a Postcard
To celebrate the 20th
anniversary of Harry Potter
and the Prisoner of Azkaban
by J. K. Rowling, Bloomsbury
worked with BookTrust, the
UK’s largest children’s reading
charity, to challenge 26 artists
to create original, postcard-
sized masterpieces of Patronus
animals, with all proceeds
going to BookTrust. The
auction proved a huge success
with the original artworks
receiving combined bids of
over £12,000.
Jim Kay's postcard-sized illustration
of the stag Patronus
Elizabeth Gilbert speaking about her book City of
Girls at an event at the How to Academy
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 USA.
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. For example, one
UK employee volunteers for a local
charity and attends the local primary
school to help young children with
their reading. USA employees also
support various organisations; one
employee is a board member of
the Children’s Book Council, and
another is a mentor at a not-for-profit
organisation connecting self-identified
people of colour who are interested in
publishing and literature to publishing
professionals. 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 ILF 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.
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 ran the
Brighton Marathon for Breast Cancer
Care with a large proportion of the
funds raised donated by Bloomsbury
employees. A team also collected over
5,000 stamps for Macmillan Cancer
Support as part of their stamp appeal.
Bloomsbury also held a Christmas
Crafternoon for Mind, the mental health
charity. Our US office participates
in food, coat and feminine hygiene
product drives, and donates these to the
homeless and vulnerable communities in
New York City; and groups of employees
arrange visits to charity centres at
Christmas to sing carols.
Promoting diversity amongst
writers and illustrators
In addition to promoting diversity within
its own workforce, Bloomsbury is also
active in promoting diversity amongst
writers and illustrators.
• Pathways Project: The Pathways
Project specifically aims to increase the
representation of underrepresented
groups in Children’s illustration
and Bloomsbury led the first week
of workshops and mentoring for
their first intake of 30 mentees in
December 2019.
• Spread the Word: Spread the Word
kickstarts the careers of London’s
best new writers, and energetically
campaigns to ensure that publishing
truly reflects the diversity of the
city. They support the creative and
professional development of writing
talent by engaging those already
interested in literature and those who
will be, and by advocating on behalf of
both. Four Bloomsbury editors spoke
at a workshop on their London writes
award programme.
• Writing Squad: Writing Squad is a
development programme for writers
aged 16 to 21 living, working or
studying in the north of England.
Bloomsbury hosted a workshop
and party for five new writers
introducing them to publishing and to
literary agents.
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Literary events for the
community
Bloomsbury’s public events series,
The Bloomsbury Institute, produced
19 literary events during the year and
welcomed over 1,000 writers, editors and
publishers into Bloomsbury’s London
offices for its talks, workshops and panel
events with Bloomsbury authors. In
2019, it hosted collaborative events in
partnership with London Horror Festival,
BookMachine, the Publishing Training
Centre and the London Library. The
Bloomsbury Institute events are open to
the public on a ticketed basis, and are
free for Bloomsbury staff to attend.
Our response to the
coronavirus pandemic
Bloomsbury has undertaken a number of
initiatives to help support and inspire the
community during the crisis:
• Recognising that many people will
be combining working from home
and looking after children, we made
our Bloomsbury Education online
product Bloomsbury Early Years free
to all. Whilst the activities are aimed at
children aged up to five years old and
tied into the curriculum in England for
that age group (the “EYFS”), there is
plenty of inspiration for children who
are a bit older too.
• We have given free online access
to textbooks to support school and
university students and instructors
with remote learning, both through
partnerships with Kortext, Vitalsource,
BibliU, Redshelf and Classoos,
and direct to customer. This also
includes additional online resources
and activities for home learning,
including videos, lesson plans and
teaching tools.
• The National Theatre Collection on
Bloomsbury’s online resource Drama
Online was made available for free
to pupils and teachers at UK state
schools and state-funded further
education colleges via remote access
from home. Over 2,600 state schools
and colleges signed up to the National
Theatre Collection in the first two
weeks of this offer going live to access
these resources at home. Bloomsbury
also extended the free trial period
for academic institutions including
universities, libraries and independent
schools until the end of May 2020 to
continue to support the educational
community across the globe.
• In response to the nearly immediate
migration to online classes,
Bloomsbury Digital Resources created
an expanded access initiative to
present Bloomsbury as part of a
solution to the educational issues
created by this unprecedented
crisis. This initiative allows libraries to
gain free access to all of our online
resources so their faculty, staff, and
students can take advantage of our
rich trove of scholarly databases,
ebooks, and historical archives during
this time of rapid transition to digital
learning, research, and teaching. In
addition to extending gratis access,
we have conducted outreach via email,
social media, and other channels to our
author base, library contacts, faculty,
and many more to ensure that those
with new access have the information
they need about the features and tools
to make best use of our resources.
The response has been significant.
Since 1 March 2020, Bloomsbury
Digital Resources has set up 4,317
trials for 947 unique institutions. We
will continue to build out our digital
learning strategy as we focus on
providing more solutions for a rapidly
shifting academic landscape.
• In April 2020, Katherine Rundell
launched The Book of Hopes: Words
and Pictures to Comfort, Inspire and
Encourage Children in Lockdown
with the support of Bloomsbury’s
editorial and publicity teams. Curated
by Katherine, this extraordinary
collection has contributions from over
110 children’s writers and illustrators
– “professional hunters of hope” –
including Lauren Child, Frank Cottrell
Boyce, Sophie Dahl, Emily Gravett,
Anthony Horowitz, Greg James and
Chris Smith, Catherine Johnson,
Michael Morpurgo, Patrick Ness, Axel
Scheffler, Danny Wallace, Jacqueline
Wilson and of course, Katherine
Rundell herself. Dedicated to “the
doctors, nurses, carers, porters,
cleaners and everyone currently
working in hospitals“, The Book of
Hopes is available to read for free in
full on the NLT website. We intend
to publish The Book of Hopes, a
gift book based on the project, this
autumn in support of NHS Charities
Together.
STRATEGIC REPORT
Partnership with the NLT
Since Bloomsbury’s partnership with
the NLT began in July 2019, Bloomsbury
has worked with the NLT to host events
for the authors of the Kid Normal series,
Greg James and Chris Smith, and an
exclusive storytelling night in Hastings
Library for Harry Potter Book Night.
In 2020, we will support the NLT’s
emergency appeal to help the people of
Hastings avoid the worst impact of the
global coronavirus pandemic. We are
doing this by funding the Hastings Hub
Facebook page and donating 25,000
books to children and adults in need.
In April 2020, The Book of Hopes was
launched by Katherine Rundell with
the support of Bloomsbury's editorial
and publicity teams, and is available to
read for free in full on the NLT website.
Bloomsbury will publish a gift book
in autumn 2020 in support of NHS
Charities Together.
Members of the Publishing Training Centre attend
an event hosted by the Bloomsbury Institute
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27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 251 Employee Voice Meetings6 Active employee Diversity and Inclusion networksOur peopleBloomsbury 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 and practices are directed at creating a workplace that attracts, motivates, develops and retains high-calibre employees. Effective engagement with employees is an essential aspect of achieving this.Bloomsbury has in place a wide range of effective mechanisms to engage with employees. A key element of our engagement strategy is our Employee Voice Meeting (“EVM”) programme. This programme allows employees to have their voices heard directly by senior management and by the Board. EVMs are held routinely throughout the year, with a selection of employees from different levels across the Group being invited to attend scheduled meetings by rotation. These meetings provide every employee of Bloomsbury with the opportunity to share their views on Bloomsbury’s strategy, communications, training, compensation and benefits, and other matters of concern or interest to them with Bloomsbury’s senior management and the Board. Meetings are chaired by members of the Executive Committee on rotation, and Non-Executive Directors are also invited to attend these meetings. Employees are encouraged to share their honest views on the understanding that the matters discussed will not be attributed to particular individuals in the reports, which are provided to the other members of the Executive Committee or the Board on the outcomes of the meetings. The Executive Committee and the Board are provided at each of their respective meetings with the minutes of EVMs on an anonymous basis together with a list of the key themes arising out of EVMs. This form of engagement with employees across the Group enables senior management and the Directors of Bloomsbury to keep a finger on the pulse of the organisation and to gain Corporate ResponsibilityThe Bloomsbury London Book Fair team celebrate Nigel Newton's London Book Fair Lifetime Achievement AwardBloomsbury employees at the Company Highlights eventwww.bloomsbury.com50Bloomsbury Publishing Plccontinued27040-Bloomsbury-AR2020 - strategic.indd 5011-Jun-20 9:52:19 PM STRATEGIC REPORT
Employment policies and
HR initiatives
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 continued
to implement and develop a wide
range of strategic HR initiatives directed
at further promoting this culture and
creating a rewarding and inclusive work
environment and ongoing professional
opportunities for colleagues, while also
responding appropriately to matters
raised during EVMs. These initiatives are
reflected in the Group’s employment
policies and practices set out on pages
52 to 53, which include:
• The ongoing provision of a
Management Development
programme for all UK line managers
across all departments within
the business to support personal
development, career progression and
the ability to grow their leadership
and management capabilities so that
they are equipped to progress in
their careers;
• The operation of a Mentoring Scheme
to enable employees in the business
to succeed and develop in their roles
with the help of a mentor;
• The provision of executive
coaching for employees in senior
leadership positions;
• Following the completion of a
Diversity and Inclusion survey, the
setting up of Diversity and Inclusion
networks to address the priorities
identified pursuant to that survey and
support the activities of our Diversity
and Inclusion Working Group;
• The implementation 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 implementation of Summer
Hours to support more flexible
working by enabling employees to
finish work early on Fridays over the
summer months;
• The refinement of Bloomsbury’s
formal appraisal programme to
provide greater focus on identifying
opportunities for career development;
• The revision of the annual leave policy,
to grant staff additional holiday in the
period between Christmas and New
Year, so that employees are no longer
required to take this period from their
personal annual holiday allowance;
• The reduction of notice periods for
entry level and early career roles, and
the reduction of probationary periods
for the same level of roles;
• The provision of a global Employee
Assistance Programme to support
employee wellbeing 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.
Prospective apprentices from the London Apprenticeship Scheme attending a
Career Kickstarter Day at Bloomsbury
unfiltered feedback from employees on
Bloomsbury’s strategy, communications,
employee compensation and
benefits, and approach to employee
development, as well as employees’
views on the senior leadership team
overall. The Board and the Executive
Committee discuss and approve new
policies based on the outcome of
these meetings.
EVMs also provide an effective means
for the Board and senior management
to monitor the Company’s culture in
order to ensure that it aligns with the
Company’s values and purpose, and
continues to support the delivery of the
Company’s strategy.
Other mechanisms, in addition to EVMs,
through which Bloomsbury engages with
employees including:
• Town Halls;
• Employee networks and focus groups;
• Weekly newsletters to all employees
globally;
• The Company’s bi-annual Highlights
meeting; and
• Monthly divisional meetings.
Bloomsbury’s formal appraisal
programme also provides the
opportunity for colleagues to give
and receive feedback on performance
and discuss opportunities for career
development.
In response to the coronavirus pandemic
and the transition to working from
home by Bloomsbury’s workforce
globally, we have significantly increased
the frequency of communications
with employees with the objective of
providing clear guidance on measures
being taken by Bloomsbury in response
to the pandemic, and to provide
assistance, support and reassurance to
employees in the face of the challenges
posed by the crisis. This has included
regular communications from the
Chief Executive to all staff, including
by way of online Town Halls, daily
updates from Bloomsbury’s Health &
Safety Committee, the establishment
of numerous online social networks
to enable colleagues to connect with
one another during the period of
lockdown and social distancing, and the
provision of access to private medical
consultations over the telephone.
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Corporate Responsibility
continued
Key employment policies and practices
Supported by territory heads of HR, 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.
Key features of the Group’s employment policies and practices are:
Employment policy
Description
Employee engagement
Employee development
Performance and merit
Through the EVM programme, Bloomsbury encourages employees to share their views with
management and with each other on matters relating to employee interests and the conduct of
Bloomsbury’s business overall. In turn, Bloomsbury provides a good degree of openness and
transparency on its activities and performance through information provided to employees.
Employees are kept updated by way of the engagement mechanisms outlined above on matters
affecting them individually and relating to the performance of the Group as a whole, including
information about ongoing HR initiatives, daily sales figures, book releases and related publicity,
project achievements, corporate news and commentary from external media and other sources.
Weekly and other regular team meetings and internal bi-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.
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 individuals to progress to
increasing levels of seniority as they gain capabilities and expertise. Recruitment is supported by
territorial Human Resources functions, enabling vacancies across our offices worldwide to be filled
internally where employees of an appropriately high calibre seek new opportunities. Bloomsbury
supports personal and professional development through a range of training programmes, one
being the Management Development Programme. This programme is designed to promote
personal growth and enhance leadership and relationship skills, and is specifically targeted at line
managers. Our objective is to provide these individuals with the tools and training they need to
achieve more in their existing roles and to advance through the organisation if their achievements
merit it. Our Mentoring Scheme provides support and development to employees who choose to
participate by sharing the wealth of knowledge and experience that the Bloomsbury workforce has
to offer, along with opportunities to connect with colleagues across departments and divisions.
The Scheme enables the mentee to tap into the existing knowledge, skills and experience of their
mentors, and enhance these areas for themselves to aid their own career development.
Senior employees agree personal objectives and are rewarded based on performance determined
by the Group’s results and the achievement of such objectives. Senior managers are accountable
for the performance of their teams and determine the most appropriate approach to performance
management for each team. All employees participate in Bloomsbury’s formal annual appraisal
process which serves as mechanism for managing performance and identifying opportunities for
career development. 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. Our Core Hours Working policy encourages and supports flexible working by allowing
employees to choose a working pattern which suits them. The Summer Hours policy also enables
employees to finish work early on Fridays over the summer months.
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Employment policy
Description
Health and wellbeing
The global Employee Assistance Programme is available to support employee wellbeing 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. In addition,
employees have access to an on-site massage therapist and to free consultations with a private GP.
Social and literary
events
Human rights
Ethical behaviour
Equality of opportunity
Bloomsbury’s public events series, The Bloomsbury Institute, is open to all staff and provides the
opportunity for Bloomsbury employees to meet the authors we publish. In addition, Bloomsbury
runs an internal “Lunches Live” catered events series for employees, which feature the authors
of Bloomsbury’s forthcoming publications in conversation with their editor. Bloomsbury’s Social
Committee organises informal social events to connect staff from across the Company.
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. Bloomsbury’s Modern Slavery and Human Trafficking Statement can be found on our
investor relations website www.bloomsbury-ir.co.uk.
We expect employees, Directors, and subcontractors to behave ethically in their work relationships
and dealings with third parties on behalf of Bloomsbury. Compliance with ethical behaviour Group
policies such as for anti-bribery and corruption, dealing in Bloomsbury shares and modern slavery
and human trafficking is an employment term of Group employment contracts. Bloomsbury’s
Whistleblower policy enables employees, other categories of workers and third parties to have any
concerns relating to the Group confidentially addressed. Details of these policies can be found at
www.bloomsbury-ir.co.uk.
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. 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. Further information on
our approach to diversity and inclusion is set out below under the heading Diversity.
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.
Employment KPIs
The senior management team monitors staff-related KPIs (e.g. joiners and leavers) on an ongoing basis in order to assess the
effectiveness of the Group’s policies and practices in attracting and retaining talent.
Health and safety
Bloomsbury’s Facilities Manager reports to the Chief Executive in respect of Health and Safety (“H&S”) and heads an H&S
team that ensures compliance with the Company’s H&S policy. At least annually, the Board and the senior management 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.
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Corporate Responsibility
continued
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 29 February
2020 the number of employees by each
gender is:
In line with UK regulations, Bloomsbury
has provided information on its
gender pay gap in the UK (see
www.bloomsbury-ir.co.uk). We have
benchmarked our Gender Pay Gap
against the publishing industry and will
continue to identify best practices that
can reduce the pay gap.
All employees of the Group1
n Female
499 (69%)
n Male
223 (31%)
Senior managers of the Group2
n Female
5
n Male
2
Directors of the Group
Parent Company
n Female
2
n Male
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.
We recognise that attracting talented
people from all walks of life enriches our
business and performance and the lives
of our employees. Diversity and inclusion
is essential to our productivity, creativity
and innovation, and to creating an
environment in which our employees feel
able to do their best work. A Diversity
and Inclusion Working Group was
established during 2019 with the aim of
fostering a working environment that is
welcoming and supportive of differences
and individual wellbeing, while at the
same time promoting an inclusive culture
in which our workforce feels connected
by a common purpose and shared
values.
During the year, the Company asked all
UK staff to participate in a Diversity and
Inclusion survey in order to gain a better
understanding of the demographics
of our workforce and identify areas of
priority for the Diversity and Inclusion
Working Group to address.
Some of the actions we have taken in
response to the survey and to promote
diversity within Bloomsbury (as well as
to support increased diversity within
the wider publishing ecosystem) are as
follows:
• Six support networks have been
established (BAME, Carers, Disabled,
LGBTQ+, Parents/Guardians and
Mental Health) to promote an
inclusive and supportive culture
within Bloomsbury. These networks
also complement the activities of the
Diversity and Inclusion Working Group
by providing valuable feedback and
helping to set priorities for future
action;
• A Diversity and Inclusion Policy to
formalise the Company’s approach
towards diversity and inclusion has
been approved by the Board and
adopted;
• Employees will be provided with
ongoing training in unconscious bias,
equality and diversity to reinforce
Bloomsbury’s culture of equal
treatment of all employees;
• Working with the Publishers’
Association and LDN Apprenticeships,
Bloomsbury helped to establish the
country’s first Publishing Assistant
Apprenticeship programme. This
scheme places young candidates from
lower socio-economic backgrounds
into publishing houses for a year of
continuous learning through work
experience and individual study
modules, and leads to the award
of a Level 3 Publishing Assistant
Apprenticeship Standard accredited
by AIM Awards. It launched in October
2019, when Bloomsbury welcomed
two apprentices to the Academic
Production department. Bloomsbury
continues to sit on the programme’s
Advisory Board; and
• On an ongoing basis, Bloomsbury
partners with Creative Access – an
organisation dedicated to recruiting
under-represented talent into the
creative industries – not only to attract
and hire promising candidates into
entry-level and early-career roles, but
to build their careers through training
and awareness programmes for the
employee and employer.
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.
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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 of
Bloomsbury, led by the Chief
Executive, have overall responsibility
for the development of Bloomsbury’s
environmental policy and the Company’s
approach to sustainability.
During 2019/2020, we established
a Sustainability Working Group to
expand the Group’s activities in respect
of environmental performance. The
Working Group’s focus is to consider
ways in which we can improve our
environmental footprint by becoming
more energy efficient and developing
sustainable working practices. The
Working Group has created three
sub-groups in order to action change
where appropriate both within
Bloomsbury and in collaboration with
our business partners (The Individual,
The Corporate and The Collaborative).
The Sustainability Working Group
reports to the Executive Committee,
which considers and, where appropriate,
approves action aimed at reducing our
impact on the environment.
Our direct operations are predominantly
office-based and are considered
to have a relatively low impact on
the environment. 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. 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.
Lights are generally fitted with motion
detectors and our office policy is to turn
off lights and non-essential electrical
equipment out of hours when not in use.
We only use energy-efficient light bulbs
and we are rolling out a programme
to upgrade these to LED lamps
where possible.
We use 100% recyclable cardboard
packaging for our shipments from our
offices and do not purchase any plastic
packaging.
We supply point of use drinking water
and do not supply plastic or paper cups.
We are ESOS compliant and have
recently taken advice from Energy
Team (UK), who carried out phase
two of our ESOS compliance. We
continue to consider and apply their
recommendations to reduce our carbon
footprint.
We have previously taken advice from
the Carbon Trust and continue to apply
their recommendations to reduce
our carbon footprint. For example,
the roll-out of LED lamps to replace
energy-efficient lamps, ensuring heating
systems are regularly maintained and
programmed efficiently, and turning off
unnecessary electrical equipment out of
hours, amongst other measures.
The 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 and/or in direct response to
market demand. 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. Our
focus on digital formats and products
allows millions of students to access
essential resources without using
paper, and enables consumers to
purchase Bloomsbury titles in ebook
and audio book formats should they
wish to avoid the consumption of
paper products.
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.
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. Paper
and cardboard collection points are
provided in every room and next to
every photocopier. All general waste is
disposed of in clear sacks for sorting at
the relevant recycling centre.
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Corporate Responsibility
continued
Greenhouse gases, waste generation and water consumption
We report on our greenhouse gas emissions as required by the Companies Act 2006 (Strategic Report and Directors’ Report)
Regulations 2013. We also report on our greenhouse gas emissions, waste production and water consumption in alignment
with the 2006 Government Guidelines; Environmental Key Performance Indicators: Reporting Guidelines for UK Businesses. In
respect of greenhouse gases, we report in respect of stationary fuel use (onsite consumption of natural gas and diesel), vehicle
fuel use, refrigerant use and electricity use 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. The analysis of the Group’s Scope 1 and Scope 2 emissions, together with waste production and water consumption, is
performed by an independent external adviser, Trucost, based on data we have provided, including utility bills, vehicle fuel data,
and expenditure on business travel. This information is unaudited and is shown in the tables below and on page 57 of this section
of the Annual Report.
Environmental performance
During the year, there was a decrease (in absolute tonnes CO2e) in emissions from stationary fuel use (-6%), a decrease in
emissions from vehicle fuel use (-39%), a decrease in location-based emissions from electricity use (-7%), and a decrease in water
consumption (-41%) as compared to the previous reporting period.
However, during the year 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:
• The inclusion for the first time of refrigerants in reporting for Bloomsbury’s US office. This data was not previously available; and
• A significant office move involving the relocation of a large number of employees from Bloomsbury’s main London office to
newly occupied premises, and the vacating of a second London office upon termination of the lease, generating an increased
volume of waste in the form of furniture, office materials, packaging and other waste.
Greenhouse Gas Emissions: Scope 1
Quantity
Absolute
tonnes CO2e
Normalised tonnes
CO2e per £m revenue
2019/2020 2018/2019 2019/2020 2018/2019
43
46
0.3
0.3
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.
Annual consumption in kWh collected from fuel
bills, converted according to DEFRA guidelines
for the London office (Headquarters). Data
scaled up by number of employees to estimate
emissions for Alton, 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 Bath is added this
year for analysis whereas office at Salem Road
was closed by middle of last year.
Refrigerants
Company cars
Emissions from
refrigerant
leakage.
Emissions from
petrol and diesel
consumption.
Refrigerant R410A used in US office in
2019/2020 financial year.
49
01
0.3
0.0
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.
22
35
0.1
0.2
Total Scope 1
114
81
0.7
0.5
1 Refrigerant used in the USA was not tracked previously
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Greenhouse Gas Emissions: Scope 2
Greenhouse
gases
Scope 2 Impacts
Definition
Data source and calculation methods
Electricity use –
location-based
emissions
Greenhouse
gas emissions
resulting from
electricity
purchased.
Annual consumption of directly purchased
electricity in kWh collected for the London,
Alton, Haywards Heath, Oxford, Salem Road, 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.
Electricity use
– market-based
emissions
Market-based
emission for
purchased
electricity.
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
Normalised tonnes
CO2e per £m revenue
2019/2020 2018/2019 2019/2020 2018/2019
291
314
1.8
1.9
366
382
2.2
2.4
Total Scope 2
291
314
1.8
1.9
Other environmental indicators
Water
Definition
Data source and calculation methods
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.
1 This decrease may be due in part to a change in calculation methods from the preceding year
Quantity
Normalised cubic
Absolute cubic metres
metres per £m turnover
2019/2020 2018/2019 2019/2020 2018/2019
4,2551
7,196
26
44
Waste
Definition
Data source and calculation methods
2019/2020 2018/2019 2019/2020 2018/2019
Quantity
Absolute tonnes
Normalised tonnes per
£m turnover
Landfill
General office
waste (which
includes a
mixture of
paper, card,
wood, plastics
and metals) sent
to landfill sites
Annual quantity of waste generated in London
offices, Oxford, India and Australia are provided.
UK disclosed data scaled up to estimate quantity
for operations in the rest of UK and US offices.
76.58
74.99
0.47
0.46
Recycled
General office
waste sent
to recycling
facilities
Annual quantity of waste generated in London
offices, Oxford, India and Australia are provided.
UK disclosed data scaled up to estimate quantity
for operations in the rest of UK and US offices.
98.71
57.96
0.61
0.36
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Corporate Responsibility
continued
Engagement with stakeholders
We believe that effective engagement with out key stakeholders, and consideration of their interests, is an essential
aspect of our ability to achieve our mission and purpose, and ensuring Bloomsbury's continued success.
A summary of the ways in which we engage with key stakeholders and consider their interests in conducting our business
is set out below.
Shareholders
Why they matter
Our Shareholders provide capital,
including for growth, while providing
challenge and feedback on our
business model and strategic plans.
We rely on their confidence, support
and investment to deliver our
strategy and Bloomsbury’s long-term
sustainable success.
What matters to them
• Long-term value creation through
a mix of capital appreciation and
dividends;
• Timely and relevant information on
performance against expectations;
• Dividend Policy;
• Remuneration Policy;
• Strategy for future growth; and
• Opportunities for engagement with
management.
Shareholders
Customers – Wholesale and Retail
Ways we engage
Our Executive Directors maintain an
investor relations annual plan, which
includes:
• Presentations given to Shareholders
upon the release of annual or interim
results;
• Meetings with current and
prospective Shareholders following
annual and interim results;
• Feedback from institutional and
private client brokers following
investor engagement; and
• Reporting to the Board on investor
matters and investor feedback.
The Chairman offers meetings with our
top ten Shareholders twice a year.
The Company’s Annual Report and
Accounts provides information about
the Company’s performance and
governance.
Key information and investor
presentations are published on the
Company’s investor relations website
(www.bloomsbury-ir.com).
The Company’s Annual General
Meeting (“AGM”) provides a forum
for all Shareholders to address
questions to the Board and vote on
key resolutions.
In 2019, Shareholders with a holding
over 1% were consulted in respect of
proposed revisions to the Company’s
Remuneration Policy, which will be put
to Shareholders for approval at the
2020 AGM.
How we consider the interests
of our stakeholders
The Board is kept informed of
all feedback received as part
of Shareholder meetings and
consultations.
Shareholder feedback on
Bloomsbury’s strategy and
performance has been positive;
this has affirmed Bloomsbury’s
commitment to its current strategy
and areas of focus. See the Strategic
Report on pages 10 to 17, which
explains the Company’s performance
and investment decisions during
2019/2020.
The Board recognises that Bloomsbury
has a broad range of investors and
aims to deliver long-term sustainable
value while recognising their diverse
interests (e.g. capital appreciation vs
divided earnings). The Board considers
these diverse interests in approving
annual budgets and longer-term
strategic planning.
Shareholder feedback on the
proposed revisions to the Company’s
Remuneration Policy have been taken
into account and reflected in the Policy,
which will be put to Shareholders for
approval at the 2020 AGM.
Feedback received from Shareholders
in response to the Annual Report
and Accounts, and at the Company’s
AGM in respect of matters relating
to governance, are taken into
consideration by the Board in deciding
whether any revisions to its corporate
framework are required.
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How we consider the interests of
our stakeholders
Topics raised during the engagement
process vary from author to author. A
key topic of engagement in respect
of new acquisitions will be terms,
including the scope of rights granted
and royalties payable.
Other topics of engagement include
the quality of editorial work, jacket
design, marketing and publicity
campaigns and sales activities. These
are considered and responded to on a
case by case basis.
Author surveys have yielded a
consistently high level of scores. The
Board is provided with survey results
for consideration and to identify ways
in which author satisfaction can be
improved or enhanced.
Authors
Corporate Customers
Authors and illustrators
Why they matter
Authors are the lifeblood of
our Company.
What matters to them
• Publication of the author’s works to a
high and consistent standard, in line
with the author’s vision for the work;
• Effective sales and marketing
representation in relevant markets;
• Appropriate compensation;
• Timely and relevant information on
the publication process and sales
and marketing strategy for their
works; and
• For academic authors, to maximise
their impact on the scholarly
community, secure tenure and
promotion at academic institutions,
secure research funding and
enhance their professional
reputation.
Ways we engage
Supporting authors in realising
their best works and ensuring
that their works are brought to
market successfully requires close
collaboration throughout the entire
publishing process, from editorial and
design, to sales and marketing, to
production and distribution.
Frequent and ongoing engagement
with authors and/or their literary
agents enables us to help authors
achieve their vision and to address any
concerns they may have during the
publishing process.
In respect of academic publications,
monthly production surveys and
post-publication editorial surveys
are conducted with authors in order
to monitor author satisfaction and
address any issues identified.
Authors are also provided with a
review and marketing update three
months following publication of their
works, so that they are kept informed
of relevant marketing activities.
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Corporate Responsibility
continued
Engagement with stakeholders
Shareholders
Employees
Suppliers
Customers – Academic and Educational Institutions
Society (including community and the environment)
How we consider the interests
of our stakeholders
Significant issues arising out of
engagement with key suppliers
were reported to the Board for
consideration, including engagement
over commercial terms.
Various supplier reporting processes
have been strengthened, including in
respect of credit risk, bad debt and
retail customer charges and returns.
Factors impacting on the provision of
services (such as internal restructuring
by print supplier or restrictions on
storage space) were taken into
account by Bloomsbury in placing
work with relevant suppliers.
The Board is committed to high
standards of ethical business conduct.
The policies and procedures relevant
to business conduct are available to
all employees and are incorporated
by reference into our contracts with
suppliers.
Employees
Why they matter
Our employees are key to
delivering Bloomsbury’s purpose
and strategy, and are the driving
force behind Bloomsbury’s
sustainable success.
What matters to them
• Recognition and fair
remuneration;
• Career development and
progression;
• To work in a stimulating, positive,
ethical and inclusive
environment for a business with
a strong social purpose;
• To have a voice in Bloomsbury’s
business;
Suppliers
Why they matter
Building strong relationships with
our suppliers enables us to obtain
the best value and quality of service.
We rely on our suppliers to provide
specialist services, which enable
us to bring our publications and
products to market. We wish to work
with suppliers who understand our
priorities and will adhere to our way of
working and to our values.
What matters to them
• Shared success;
• Appropriate compensation for
services provided;
• Prompt payment;
• Predictable workloads;
• Engagement with management;
• Provision of timely information
and
• The long-term health of the
business.
Ways we engage
Information about the ways we
engage with our employees is
set out on pages 50 to 53 of the
Strategic Report.
How we consider the
interests of our stakeholders
Information about how we
consider the interests of our
employees and the outcome of our
engagement is set out on pages
50 to 53 of the Strategic Report.
required to manage
service provision;
• Clear processes; and
• Impact of legislative or regulatory
changes which may impact on
service provision.
Ways we engage
Engagement with key suppliers
is ongoing and frequent, and is
managed by the Heads of the
relevant functional divisions. Regular
formal meetings as well as day-
to-day engagement ensure close
collaboration and the effective flow of
information required for the successful
and timely provision of services.
In the case of printers, this includes
the successful delivery of finished
stock according to Bloomsbury’s
publication schedules.
In the case of Bloomsbury’s
distributors, this includes the ability
to meet customer demand and
expectations, exercise effective credit
control, and appropriately manage
stock levels.
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Customers – Wholesale and Retail
Customers – wholesale and retail
Ways we engage
Why they matter
Senior management meets with key
Wholesalers and retailers are
customers at relevant book fairs.
Bloomsbury’s primary route to market.
Bloomsbury’s sales team meets
regularly with customers, to discuss
forthcoming titles and publishing
programmes. Sell-ins to customers
occur on a monthly, quarterly or annual
basis, depending on the customer.
Our sales and marketing teams liaise
with key retailers on an ongoing basis
on a range of matters with a view to
maximising sales.
Collaboration with such parties is an
important aspect of ensuring a work is
published successfully.
Regular engagement with key
customers builds trust and nurtures
long-term relationships, which
in turn encourages support for
Bloomsbury titles.
Wholesale and retail customers
provide valuable insight into consumer
trends and advice on optimum release
dates in order to maximise sales.
What matters to them
• Maximising sales;
• Maximising revenue and margins;
• Ensuring a level playing field across
wholesalers and retailers;
• Reliability of publishing schedules;
• Timely delivery of stock; and
• Promotional support.
How we consider the interests of
our stakeholders
Key topics of engagement included:
• Commercial terms;
• Sales activity and sales trends;
• Matters relevant to maximising
the success of particular titles,
including cover designs, publication
dates, marketing plans and retailer
promotions;
• Promotional support for
individual titles; and
• Logistical issues.
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Corporate Responsibility
continued
Engagement with stakeholders
Customers – Academic and Educational Institutions
Customers – academic and educational institutions,
corporate customers
Why they matter
Academic and educational institutions
and professional organisations are
becoming increasingly important
customers in respect of Bloomsbury’s
digital products, and consequently for
the delivery of our long-term strategy
of focusing on digital opportunities to
grow our business.
Ways we engage
Bloomsbury has in place a range of
engagement mechanisms to ensure
we understand the priorities of these
customers. These include:
• Regular site visits by our sales team
to academic libraries;
What matters to them
• Access to high quality, relevant and
comprehensive content to support
academic courses and research,
and in the case of professional
organisations, the activities of their
employees or members;
• Applying funding to deliver the best
value to their own stakeholders; and
• To ensure a swift, accurate and cost-
effective way to purchase and access
relevant products.
• Direct meetings with a wide range of
senior academics and university staff
to understand their requirements;
• Attendance of publishing
directors and sales team at
principal library conferences and
professional organisation annual
membership events; and
• Regular surveys of student, faculty
and library users in respect of all
aspects of Bloomsbury’s publishing
and, in particular, in respect of
new products.
How we consider the interests of
our stakeholders
Feedback from our customers and
their stakeholders informs:
• How Bloomsbury develops new and
existing products; and
• Product pricing the various
sales models Bloomsbury offers
(subscription vs perpetual access
sales, short-term loans, evidence or
usage-based sales).
In response to feedback from
librarians, we are developing user case
studies to support librarians’ internal-
facing activities.
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Society (including community and the environment)
Society (including community and the environment)
Society (including community and the environment)
Why it matters
At the heart of Bloomsbury is a strong
social purpose – to inform, educate,
and entertain, to inspire a love for
reading and to promote literacy.
Making a positive contribution to
the wider communities in which
we operate is therefore integral
to our activities. In addition, the
environmental impact of Bloomsbury’s
business activities is a growing
consideration for us and we are
committed to effecting improvements
where practicable.
Ways we engage
The very essence of our business
is engagement with wider society,
through the dissemination of stories
and ideas, the stimulation of debate
and dialogue, the support of learning
and research and the enrichment
of culture.
Information about our charitable
donations, charitable initiatives and
direct community engagement is
set out on pages 46 to 49 of the
Strategic Report.
What matters
• That Bloomsbury behaves
as a responsible and ethical
corporate citizen;
• That we support relevant charities;
• That we contribute to
community success; and
• That we manage our
environmental footprint.
Bloomsbury also works in partnership
with theatres and other organisations
to publish their cultural output in the
form of play texts and programme
texts to accompany performances.
The inclusion of live performance
collections in Bloomsbury’s
educational databases, made
available for free to schools, provides
a means of extending audience reach
and ensuring cultural heritage is
embedded within the curriculum.
Expanding the Group’s activities
on sustainability is a key priority for
us. Information on our activities in
this area is set out in the Corporate
Responsibility section on page 55.
How we consider the interests of
our stakeholders
The Board supports Bloomsbury’s
wider social purpose and charitable
initiatives, including as part of the
approval of the Company’s budget
and strategic plan, where applicable.
The Board considers the long-
term impact on the environment
of Bloomsbury’s operations in its
decision-making and receives annual
reporting on the Group’s greenhouse
gas emissions, generation of waste,
and consumption of water, with
comparisons to prior years. Details
of the Group’s environmental
performance can be found in the
Corporate Responsibility section on
pages 56 to 57.
The Executive Committee and
the Board receive presentations
on the activities of Bloomsbury’s
Sustainability Working Group,
considers recommendations from
the Working Group for proposed
sustainability initiatives and approves
action where appropriate to improve
Bloomsbury’s environmental footprint.
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27040 11 June 2020 8:07 pm Proof 227040 11 June 2020 8:07 pm Proof 2Bloomsbury Professional A selection of books published by Bloomsbury Professional: Chambers’ Corporate Governance Handbook: Eighth Edition by Andrew D. Chambers, Privacy and Libel Law: The Clash with Press Freedom by Paul Tweed, Cyber Security: Law and Guidance by Helen Wong MBE, Cornerstone on Information Law by Damien Welfare, Conduct and Accountability in Financial Services by Stacey English and Sussanah Hammond and Human Trafficking and Modern Slavery Law and Practice by Philippa Southwell, Michelle Brewer and Ben Douglas-Jones QC. Bloomsbury Professional publishes high quality books and digital products for lawyers, tax practitioners, accountants and business professionals.←27040-Bloomsbury-AR2020 - governance.indd 6411-Jun-20 9:50:03 PM 27040 11 June 2020 8:07 pm Proof 227040 11 June 2020 8:07 pm Proof 2Annual Report and Accounts 202066Chairman’s Introduction to Corporate Governance67Corporate Governance Framework68Board of Directors70Director’s Report75Corporate Governance Report81Nomination Committee Report84Audit Committee Report88Directors’ Remuneration Report108Section 172 Directors’ duties statementGovernance27040-Bloomsbury-AR2020 - governance.indd 6511-Jun-20 9:50:05 PM 27040 11 June 2020 8:07 pm Proof 227040 11 June 2020 8:07 pm Proof 2On behalf of the Board, I am pleased to introduce Bloomsbury’s Corporate Governance Report for the financial year ending 29 February 2020. Compliance with the 2018 UK Corporate Governance CodeThis year, the Company is reporting against the UK Corporate Governance Code published in July 2018 (the “Code”), which applies to accounting periods beginning on or after 1 January 2019. The Code is published on the Financial Reporting Council’s (“FRC”) website at www.frc.org.uk. During the year, the Board has focused on reviewing and strengthening the measures implemented by the Company to ensure compliance with the 2018 Code. This Corporate Governance Report and the Strategic Report set out how the Company has applied the Code principles and adhered to Code provisions throughout the year.The Board believes that for the financial year ended 29 February 2020, the Company has complied with all applicable principles and provisions of the Code, save in respect of the provisions that relate to pension contributions for Executive Directors (as explained in the Directors’ Remuneration Report on page 102), and to the determination of senior manager remuneration by the Remuneration Committee (as explained in the Directors’ Remuneration Report on page 107).Stakeholder engagementThe Board believes that the manner in which it conducts its business is important and it is committed to maintaining the highest standards of corporate governance, which underpin Bloomsbury’s ability to deliver long-term value and success for the benefit of all of its stakeholders. The Board is mindful of its duties to stakeholders under section 172 of the Companies Act 2006. More detail on how the Board has discharged its duties under section 172 to promote the success of the Company, having regard to the Company’s key stakeholders as part of its decision-making, can be found in the Strategic Report on pages 58 to 63.Purpose, values and cultureThe Board is closely involved in setting the tone for Bloomsbury’s culture and embedding it throughout the Group. During the year, we re-articulated the values which inform Bloomsbury’s culture and guide the Company in achieving its purpose, and confirmed these to all employees across the Group. Our values are a key aspect of Bloomsbury’s ethos and guide the workforce as they pursue the delivery of Bloomsbury’s strategy. The Board believes that an engaged and committed workforce is integral to the achievement of Bloomsbury’s strategic objectives, and organisational culture is central to this. To this end, the Board is informed on key matters and actions arising out of Employee Voice Meetings, which are held regularly as part of the Company’s employee engagement programme. More details on the output of employee engagement can be found in the Strategic Report on pages 50 to 53.Diversity and inclusionThe Board recognises the benefits that diversity and inclusion can bring to the effectiveness of Board decision-making where different skillsets and perspectives are present. The Nomination Committee supports the Board in overseeing the Company’s diversity and inclusion policy, and further information can be found in the Nomination Committee Report on pages 82 to 83.Board evaluationI led an internal process to evaluate the effectiveness of the Board, its Committees and each individual Director. The outcome of the evaluation confirmed that the Board and its Committees continue to operate effectively and that all of our Directors continue to demonstrate commitment to their role. Further information relating to the Board evaluation can be found on pages 79 to 80 of this section of the Annual Report.Board changesBloomsbury announced in October 2019 that Jonathan Glasspool, an Executive Director since 2015, will be stepping down from the Board at the forthcoming Annual General Meeting and retiring from Bloomsbury at the end of July 2020 after 20 years’ service. We thank Jonathan for his exceptional hard work and contribution to Bloomsbury. Sir Richard Lambert Chairman of the BoardSir Richard LambertChairman of the Boardwww.bloomsbury.comChairman’s Introduction to Corporate Governance66Bloomsbury Publishing Plc27040-Bloomsbury-AR2020 - governance.indd 6611-Jun-20 9:50:09 PM Corporate Governance Framework
GOVERNANCE
Board
The Board provides leadership and governance for the Company, while having regard to the interests of Shareholders as well
as other stakeholders. It determines, and oversees the execution of, the Group’s strategy, and is responsible for the overall
management, control and performance of the Group’s business. The Board is involved in determining the Company’s purpose
and values, and monitoring organisational culture. The Board establishes appropriate risk management and internal control
procedures, and determines the risk appetite for the Company. Certain matters are reserved for the Board’s approval, with
others being delegated to Board Committees or to the Company’s Executive Committee as appropriate. Full details are
available on the Company’s website (www.bloomsbury-ir.co.uk).
Audit Committee
• Monitors the integrity of financial
statements and narrative
reporting;
Nomination Committee
• Reviews the structure, size and
composition of the Board;
Remuneration Committee
• Determines the remuneration and
benefits of Executive Directors;
• Considers Board experience
• Monitors the remuneration of
• Monitors and reviews the
and diversity;
senior managers;
effectiveness of the internal audit
function;
• Monitors internal financial and
operational controls;
• Oversees risk management;
• Reviews the External Auditor’s
independence and leads the audit
tender process; and
• Reviews the effectiveness of the
external audit process.
• Considers the appointment of
new Directors and oversees
succession planning;
• Oversees policy and strategy
regarding workforce diversity and
inclusion; and
• Oversees Director induction,
monitoring conflicts, time
commitments, training and
evaluation of Board members.
• Oversees workforce pay practices
and policies; and
• Approves the targets for
performance-related
remuneration schemes and share
incentive plans.
Chief Executive
• Responsible for the day-to-day
management of the Group; and
• Responsible for the execution of
the approved Group strategy.
Financial matters are managed by
the Group Finance Director.
Executive Committee
• Led by the Chief Executive.
• Responsible for managing all
operational aspects of the
Group, the implementation of the
Company’s strategic initiatives in
all areas and for identifying and
managing Group risks.
• Membership comprises of the
Executive Directors, the Group
General Counsel and Company
Secretary, the heads of the
Group’s two operational Divisions
and the heads of Group functions.
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27040 11 June 2020 8:07 pm Proof 227040 11 June 2020 8:07 pm Proof 2NRNAppointed: 18 July 2017Sir 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 Trustee of the Kimmeridge Trust. 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 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, Chancellor of the University of Warwick from 2008 to 2016 and as the senior independent member of the Foreign and Commonwealth Office’s Supervisory Board from 2012 to 2017.Appointed: 11 May 1986Nigel 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. Nigel Newton serves as a member of the Advisory Committee of Cambridge University Library, Board member of the US-UK Fulbright Commission and President of Book Aid International. He has served as a member of the Booker Prize Advisory Committee, Chairman of the Charleston Trust, Chair of World Book Day, member of the Publishers Association Council, Trustee of the International Institute for Strategic Studies, Chairman of the British Library Trust, head of the Selwyn Association and member of Cuckmere Haven SOS.Appointed: 23 July 2015Jonathan Glasspool joined Bloomsbury in 1999 and was appointed to the Bloomsbury Board in July 2015. He is Managing Director of Bloomsbury’s Non-Consumer Division and has executive responsibility 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, an MA in English from Bristol University, and an MBA with Distinction from Warwick Business School. Jonathan will retire from the Company in July 2020.Appointed: 16 July 2018Penny 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.Sir Richard LambertNon-Executive Chairman Nigel NewtonFounder and Chief Executive Jonathan Glasspool Executive Director Penny Scott-Bayfield Group Finance Director www.bloomsbury.comBloomsbury Publishing Plc68Board of Directors27040-Bloomsbury-AR2020 - governance.indd 6811-Jun-20 9:50:15 PM 27040 11 June 2020 8:07 pm Proof 227040 11 June 2020 8:07 pm Proof 2RCommittee member:A Audit CommitteeR Remuneration Committee N Nomination Committee Chair of Committee Executive Director Non-Executive DirectorNRANANRAAppointed: 23 July 2015John Warren joined the Bloomsbury Board in July 2015 and is the Senior Independent Director, 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 prior to that, United Biscuits (Holdings) Plc.Appointed: 1 March 2017Steven 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.Appointed: 17 July 2019Leslie-Ann Reed joined the Bloomsbury Board in July 2019. She is currently an Independent Non-Executive Director and Chair of the Audit Committee of Learning Technologies Group plc, Induction Healthcare Group Limited and Centaur Media plc. She was formerly a Non-Executive Director and Chair of the Audit Committee of the London listed publisher Quarto Group Inc and Vice Chair of the Supervisory Board and Chair of the Audit Committee of the German-listed company ZEAL Networks SE. Leslie-Ann is a Chartered Accountant by profession, and has held senior finance roles in various media and professional services companies, namely Universal Pictures, Polygram Music, EMI Music and Warner Communications 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.John Warren Senior Independent Director Steven Hall Independent Non-Executive Director Leslie-Ann Reed Independent Non-Executive Director Maya Abu-Deeb Group 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.Stock code: BMYAnnual Report and Accounts 2020GOVERNANCE6927040-Bloomsbury-AR2020 - governance.indd 6911-Jun-20 9:50:24 PM 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 29 February
2020. 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 (“LR”) and
Disclosure Guidance and Transparency Rules (“DTR”) of the
Financial Conduct Authority.
Information
Future developments of the Company
Risk factors and risk management
Use of financial instruments, financial risk management
objectives and policies
Sustainability
Greenhouse gas emissions
Viability statement
Governance arrangements
Directors
Employment policies and employee engagement
Diversity
Stakeholder engagement
S172 statement
This Directors’ Report forms part of the Company’s Strategic
Report, as required under the Companies Act 2006 (Strategic
and Directors’ Report) Regulations 2013. The Strategic Report
also serves as the Management Report for the purposes of
DTR 4.1.8R, and includes the reporting requirements of the EU
Non-Financial Reporting Directive, as incorporated into the
Companies Act (see pages 20, 25 and 46 to 63 of the Strategic
Report).
Information that is relevant to this Report and information
required under the Companies Act 2006 and LR 9.8.4R
is incorporated by reference and can be found in the
following sections:
Section in the Annual Report
Strategic Report
Strategic Report
Financial Statements
Page
10 to 11, and 16 to 17
40 to 45
157 to 160
Strategic Report
Strategic Report
Strategic Report
Corporate Governance Report
Corporate Governance Report
Strategic Report
Strategic Report
Strategic Report
Corporate Governance Report
55
56 to 57
45
75 to 80
68 to 69
50 to 53
54
58 to 63
108
Overseas activities
The Group has overseas subsidiaries that are based and
operate in North America, Australia and India, and a joint
venture company that operates in China. 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.
The impact may be substantial; the extent will depend on
the changing positions of the Group’s major wholesale print
and digital customers, academic institutions and Government
restrictions, and in particular on their impact on retailers. The
Company’s strategy of expanding and leveraging its digital
rights and products means that it is well placed to benefit from
increased demand for our digital resources, audio books and
ebooks as it is with direct supply.
Overseas branches
The Company has no branches outside of the UK.
Results
The Financial Review on pages 36 to 39 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 £10.5
million (2019: £9.2 million).
Material post-balance sheet events
Details of material post-balance sheet events are set out at
note 29.
In addition to the matters referenced there, since the year end,
Government restrictions and retail closures have been imposed
in all of the Group’s key markets of the UK, USA, Australia and
India, as well as many other important markets.
It is not possible to estimate the extent of the impact on the
Group’s earnings for the year ended 28 February 2021 as there
are mostly unknowns for the Group, as for the world as a whole.
Since the year end, the Company has taken measures to
strengthen its balance sheet and increase liquidity to ensure
it has sufficient working capital to weather the impact of
coronavirus and avoid damaging the Group’s business in the
long-term. The key actions have been cost savings, extending
our financing facility and raising £8.4 million through the non-
pre-emptive placing of Ordinary shares.
Dividend
Bloomsbury had intended to declare a final dividend for the
year of 6.89 pence per share. This would have resulted in a total
dividend for the year of 8.17 pence per share, up 3% on the
previous year.
As previously announced, Bloomsbury has decided, in light
of the coronavirus crisis, to conserve cash and therefore will
not be paying a cash dividend. It is now proposed, subject
to Shareholder approval, that the dividend is instead settled
through the issuance of new Ordinary shares by way of bonus
issue to Shareholders, with a value equivalent to the proposed
final dividend.
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GOVERNANCE
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 UK Corporate Governance Code. Accordingly,
the Chairman on behalf of the Board, confirms that each
Director proposed for re-election at the 2020 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. At the
2020 AGM, Jonathan Glasspool, an Executive Director, will not
stand for re-election as he will be retiring from Bloomsbury in
July 2020.
The Company may remove a Director from office by passing an
ordinary resolution.
Powers of Directors
The powers of Directors are described in the Articles, the
Companies Act 2006 and in the schedule of matters reserved
for the Board, a copy of which is available on the Company’s
website at www.bloomsbury-ir.co.uk.
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
No political donations were made by the Group during
the current or previous year. Information about charitable
donations made by the Company during the year is set out in
the Corporate Responsibility section on pages 46 to 48.
Articles of Association
The Company’s Articles may only be amended by special
resolution of the Shareholders. The Articles are available on
the Company’s website at www.bloomsbury-ir.co.uk.
Subject to Shareholder approval at our AGM on 21 July 2020,
the bonus issue will be made on 28 August 2020 to Shareholders
on the register on the record date of 31 July 2020.
The dividends paid and proposed by the Company for the year
ended 29 February 2020 and year ended 28 February 2019 are
as follows:
Dividend
2020 Final
(proposed)
2020 Interim
Total
2019 Final
2019 Interim
Total
Dividend
per share
Total
dividend
Record
date
Paid/payable
date
–
1.28p
1.28p
6.75p
1.21p
7.96p
–
–
–
6 Dec 2019
£1.0m 8 Nov 2019
£1.0m
£5.1m 26 July 2019 23 Aug 2019
£0.9m 2 Nov 2018 29 Nov 2018
£6.0m
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 pages 68 to 69. The Directors serving on
the Board of the Company during the year were as follows:
Date appointed in
the year
(if applicable)
Date resigned in
the year
(if applicable)
Non-Executive Chairman
Sir Richard Lambert
Independent Non-Executive Directors
Jill Jones
John Warren
Steven Hall
Leslie-Ann Reed
Executive Directors
Nigel Newton
Penny Scott-Bayfield
Jonathan Glasspool
–
–
–
17 July 2019
–
–
–
–
–
17 July 2019
–
–
–
–
–
–
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 95
to 96. 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.
Appointment and replacement of Directors
The Company is governed by its Articles of Association
(“Articles”), the Companies Act 2006 and related legislation
with regard to the appointment and replacement of Directors.
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
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Annual Report and Accounts 2020
71
Directors’ Report
continued
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 2019
Movement during the year
As at 29 February 2020
Fully paid Ordinary
shares in issue
75,328,570
–
75,328,570
On 17 April 2020, the Company announced the completion of
the non-pre-emptive placing (“Placing”) of 3,766,428 Ordinary
shares in the capital of the Company (“Placing Shares”),
representing 5% of the issued share capital of the Company
prior to the Placing, all of which were admitted to the Official
List of the Financial Conduct Authority (“FCA”) and to trading
on the main market for listed securities of the London Stock
Exchange (“LSE”) on 21 April 2020.
Pursuant to the Placing, and as at the date of this Directors’
Report, there were 79,094,998 fully paid up issued shares, all
listed on the LSE. The Directors are authorised to issue up to a
further 21,343,095 Ordinary shares until the earlier of the date
of next AGM of the Company, currently 21 July 2020, or 21
October 2020 should the date of the 2020 AGM be delayed for
any reason.
Details of the issued share capital can be found in note 22.
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 they, or any person with an interest in shares,
have 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 they, 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 that is not a
fully paid share, although such discretion may not be exercised
in a way which the 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.
Share dilution
In respect of dilution limits, the Company adheres to the
updated “Investment Association Principles of Remuneration”
issued in November 2019. In particular:
• The rules of the Company’s Long Term Incentive 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 2020 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.
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There are no significant agreements to which the Company is a
party that alter or terminate upon a change of control following
a takeover bid except in respect of the Group’s revolving credit
facility described at note 25c.
The Company’s share incentive schemes (see note 23 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.
Cautionary statement
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, 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 and Risk Management 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.
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:
Fully paid Ordinary shares held
by EBT
As at 1 March 2019
Released to satisfy vesting of awards
As at 29 February 2020
500,708
19,615
481,093
As at 29 February 2020 and up to the signing of this Report,
the EBT held 481,093 Ordinary shares of 1.25 pence in the
Company, being less than 0.61% 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 and the authority granted by Shareholders at the 2019
AGM for the Company to purchase its own shares was, at the
end of the reporting period, still valid. This authority allows
the Company to make market purchases of up to 10% of the
issued Ordinary share capital as at 21 May 2019 (excluding
treasury shares).
Substantial shareholdings
As at 29 February 2020, the Company had been notified under
DTR 5 of the following interests of 3% or more in the issued
share capital of the Company.
Institution
Montanaro Asset Management Limited
Majedie Asset Management Limited
BlackRock Inc
1 Based on 75,328,570 issued shares.
Ordinary shares
number million
% issued
shares1
3.3
3.5
4.1
4.31%
4.64%
5.46%
All notifications made to the Company under DTR 5 are
published on the Regulatory Information Service and on the
Company’s website (www.bloomsbury-ir.co.uk).
Between 29 February 2020 and 8 June 2020 (being the latest
practicable date before the publication of this Report), the
Company received further notifications under DTR 5, with the
most recent position being as follows (based on 79,094,998
issued shares as these notifications were released following the
Placing):
• Chelverton UK disclosed a holding of 4.86%; and
• Canaccord Genuity Group disclosed a holding of 11.48%.
Change 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.
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Annual Report and Accounts 2020
73
Directors’ Report
continued
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.
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’ statement regarding the adoption of the
going concern basis of accounting is set out in the Strategic
Report on page 45 and at note 2c.
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 UK governing the preparation and dissemination
of financial statements may differ from legislation in other
jurisdictions.
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 184 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
In accordance with DTR 4.1.12R, each of the Directors, whose
names and roles are set out in the Corporate Governance
section on pages 68 to 69, confirm that to the best of their
knowledge:
• The financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the parent Company and the undertakings included in
the Group taken as a whole; and
• The Management Report (which includes the Strategic
Report and the Directors’ Report) includes a fair review of
the development and performance of the business and the
position of the Group, together with a description of the
principal risks and uncertainties that it faces.
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 20 May 2020.
By order of the Board
Maya Abu-Deeb
General Counsel and Company Secretary
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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 Shareholders and other key stakeholders.
Governance structure and Board
effectiveness
Role of the Board
The Board is responsible for the overall leadership of the
Group. The Board determines, and oversees the execution
of, the Group’s strategy, and is responsible for the overall
management, control and performance of the Group’s
business. The Board reviews and monitors internal controls,
risk management, principal risks, governance and viability
of the Company, and is closely involved in developing and
monitoring the Group’s values and culture. The Board is
ultimately responsible to the Shareholders for the direction,
management, performance and long-term sustainable success
of the Company.
Board oversight of culture and values
The Company’s core values as set out on the inside front cover
of this Annual Report are central to its purpose: to inform,
educate, entertain and inspire readers of all ages all over the
world. These values fundamentally inform the strategy adopted
by the Company in pursuing that purpose, and the behaviours
and activities of the Company’s workforce in achieving the
Company’s strategic objectives. The Board is closely involved
in shaping the Company’s values and monitors the culture of
the Company with the assistance of its Committees.
The Board receives regular updates from the Company’s
Director of Human Resources on key themes and issues
arising out of the Company’s programme of Employee Voice
Meetings and is provided with detailed minutes of each of
these meetings. The Non-Executive Directors have a standing
invitation to attend Employee Voice Meetings and in this
way are able to assess organisational health through direct
engagement with a wide range of employees during such
meetings. Further information on the Company’s Employee
Voice Programme is set out in the Strategic Report on page 50.
The Board also receives updates from the Head of the
Company’s Diversity and Inclusion Working Group on the
Company’s activities in this area. Other ways in which the Board
monitors culture include reviewing the results of employee
surveys, monitoring staff turnover levels and receiving regular
whistleblowing reports.
The Board has not identified any significant issues pursuant to
its monitoring activities which require corrective action.
The Board recognises the importance of these matters and we
continue to focus on developing relevant policies.
Engagement with stakeholders
Details of the Company’s engagement with key stakeholders
are set out in the Strategic Report on pages 58 to 63. In respect
of engagement with the workforce, the Board considers the
method of engagement through the forum of Employee Voice
Meetings as described above to be effective as it provides
a means for the Board to hear directly from employees on
matters of concern to them, and provides insight on how to
enhance employee satisfaction and work effectiveness within
the Company. The Board is actively involved in considering and
developing the Company’s response to matters raised during
Employee Voice Meetings.
Powers and responsibilities of the Board
The Company’s Articles of Association set out the Board’s
powers. The Board has a formal schedule of matters specifically
reserved for its own decision. A copy of this schedule can be
found on the Company’s website at www.bloomsbury-ir.co.uk.
The schedule was reviewed and updated during the financial
year to ensure that it complies with the Code and other legal
and regulatory requirements, and reflects best corporate
practice.
The key responsibilities of the Board include:
• Reviewing and setting long-term objectives and commercial
strategy;
• Developing and monitoring the Company’s values and
culture;
• Considering stakeholder interests in decision-making;
• Reviewing and approving the annual operating and capital
expenditure budget;
• Reviewing the Company’s performance in light of the
Group’s strategy, objectives, business plans and budgets;
• Approving an extension of the Group’s activities into new
business or geographic areas;
• Approving any decision to cease to operate all or any
material part of the Group’s business;
• Approving major changes to the Group’s corporate, senior
management and control structure or share capital structure;
• Approving the Annual Report and Accounts, the half-year
statements and associated announcements;
• Approving the dividend policy and declaration of dividends;
• Approving significant changes to accounting policies;
• Approving the treasury policy;
• Monitoring the Group’s risk management policy and
procedures, oversight of the internal risk control framework
and carrying out an annual review of their effectiveness;
• Approving all material contracts, acquisition of titles, net
advances and major investments above a specified level;
• Approving resolutions to be put to the AGM and circulars to
Shareholders;
• Approving changes to the structure, size and composition
of the Board, following recommendations of the Nomination
Committee;
• Approving appointments to the Board;
• Approving the Remuneration Policy upon recommendation
of the Remuneration Committee;
• Approving the remuneration of Non-Executive Directors; and
• Approving various Company policies.
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Annual Report and Accounts 2020
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Corporate Governance Report
continued
Board Committees
The Board has three Committees to assist in the discharge
of its duties: the Audit Committee, Nomination Committee
and Remuneration Committee. The Chairs and members
of these Committees are appointed by the Board on the
recommendation of the Nomination Committee in consultation
with the respective Committee Chair. Each of the Committees
have formally delegated duties and responsibilities under
their written terms of reference, which are approved by the
Board and can be found on the Company’s website, www.
bloomsbury-ir.co.uk. Each Committee’s terms of reference
was reviewed and updated during the financial year to ensure
that it complies with the Code and other legal and regulatory
requirements, and reflects best corporate practice.
All main Board meetings provide standing items for
each Committee Chair to update the Board after each
Committee meeting. Committees also submit reports and
recommendations to the Board on any matter which they
consider significant to the Group.
The main roles and responsibilities of the Board Committees
are summarised in the Corporate Governance Framework set
out page 67 of this section.
The Board may also appoint a sub-committee of the Board as
and when required.
Further information on the activities of each Committee is
detailed within the separate Committee reports.
Composition of the Board
As at the date of this report, the Board comprises the Non-
Executive Chairman, three Executive Directors: the Chief
Executive, the Group Finance Director and the Managing
Director of the Academic and Professional publishing division,
and three independent Non-Executive Directors, one of
whom is appointed as the Senior Independent Director. The
biographies of the Directors appear on pages 68 to 69 of this
section.
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GOVERNANCE
Division of responsibilities
Chairman
• Ensuring the effective operation of the Board and its Committees in conformity with the highest
standards of governance;
• Leading, chairing and managing the Board;
• Promoting a culture of openness and debate at Board level and ensuring constructive relations between
Non-Executive and Executive Directors;
• Setting the Board agenda and ensuring adequate time is available for discussion on all agenda items;
• Ensuring the Board receives accurate, clear and timely information;
• Leading the performance evaluation of the Board and Committees;
• Ensuring that there is effective communication with Shareholders and other stakeholders;
• Considering the composition and succession planning of the Board and its Committees;
• Ensuring the Board’s Committees are properly structured with appropriate of terms of reference; and
• Ensuring that Directors receive a tailored induction programme when joining the Board.
Chief Executive
• Managing the Group’s business and implementing Board decisions, policies and strategies;
• Developing the Group’s corporate strategy and objectives for recommendation to the Board;
• Providing leadership to the Executive Committee to achieve strategic objectives;
• Promoting the desired culture to the Company’s workforce and ensuring that operational policies and
practices drive appropriate behaviours;
• Leading effective engagement with Shareholders and other stakeholders; and
• Monitoring, reviewing and managing the risk framework and strategies with the Board.
Group Finance
Director
• Providing day-to-day management of the Group’s financial affairs;
• Managing the Group’s financial planning, reporting and analysis;
Senior
Independent
Director
Non-Executive
Directors
• Supporting the Chief Executive in developing and implementing strategy; and
• Leading other functional areas such as tax, treasury, internal controls and risk management, and
corporate finance.
• Acting as a sounding board for the Chairman;
• Serving as an intermediary for the other Directors and Shareholders as necessary;
• Meeting with Shareholders on matters where usual channels are deemed inappropriate; and
• Leading the annual evaluation of the Chairman of the Board.
• Scrutinising and holding to account the performance of management and individual Executive Directors
against agreed performance objectives;
• Providing constructive challenge to the Executive Directors;
• Contributing to the development of proposals on strategy and proposed corporate initiatives; and
• Monitoring the integrity of financial information, financial and non-financial controls and systems of risk
management.
Company
Secretary
• Advising the Board, through the Chairman, on all governance-related matters and best practice;
• Providing advice and services to the Directors and Board Committees where requested; and
• Ensuring clear and timely information flow to the Board and its Committees.
There is a clear separation of the roles of the Chairman and Chief Executive to prevent any individual from having unfettered
powers of decision. A formal statement describing the division of responsibilities between the Chief Executive and the Chairman
together with details of the roles and responsibilities for each of the Chairman, Chief Executive and Senior Independent Director,
can be found at www.bloomsbury-ir.co.uk.
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Stock code: BMY
Annual Report and Accounts 2020
77
Corporate Governance Report
continued
Activities of the Board during the year
A key area of focus for the Board throughout the year was an
ongoing assessment of the measures implemented by the
Company in respect of revisions to its governance framework
to ensure compliance with the newly effective Code’s
principles and provisions. Consideration of such matters has
been a standing agenda item at Board meetings throughout
the year. Notable items which the Board discussed as part of
this assessment included:
• The effectiveness and appropriateness of Employee Voice
Meetings as the method of engagement with the Company’s
workforce;
• The Board’s monitoring and understanding of organisational
culture and values;
• The identification of key stakeholders and their interests, and
the Company’s engagement with the relevant stakeholders;
The following key matters are standing agenda items at every
Board meeting:
• Updates from the Audit, Nomination and Remuneration
Committee Chairs;
• Report from the Chief Executive;
• Report from the HR Director on HR initiatives and outcomes
of Employee Voice Meetings;
• Report from the Group Finance Director;
• Discussion of strategy and key strategic objectives;
• In-depth focus on a principal risk; and
• Corporate Governance update.
During the year, among other matters, the Board considered
the following:
• Review and setting of long-term objectives and commercial
strategy for the Company’s operations supported by an in-
depth review of the publishing market;
• Review and approval of the annual budget;
• Review of the management accounts, short and long-term
forecasts, key performance indicators and full year forecasts;
• Review of progress against agreed financial and strategic
objectives and internal and external forecasts;
• Review and approval of the Annual Report and Accounts, the
half-year statements and associated announcements;
• Approval of the interim and final dividends;
• Regular reports by Executive Directors on operational
matters;
• The acquisition of Oberon Books Limited and certain assets
from Zed Books Limited;
• The Company’s entry to the domestic Chinese market
through a joint venture with China Youth Publishing Group
and Roaring Lion Media;
• The management and review of the risks of the Company;
• Review of the Group Treasury policy;
• Review of the Group’s tax strategy;
• Review and approval of revised terms of reference for all the
Committees;
• Review and approval of the Company’s mission, purpose and
values statement;
• Consideration of the Company’s key stakeholders and their
interests, and review of stakeholder engagement;
• Review of other routine corporate governance matters, in
particular, ensuring compliance with the Code;
• Review of the Group’s whistleblowing procedures; and
• Evaluation of the Board’s own effectiveness.
In addition to its regular meetings throughout the year, the
Board convenes annually with members of the Company’s
Executive Committee and other key operational employees
of the Company for the Board Strategy Day, during which
the Board undertakes an in-depth review of key areas of
the Company’s business, sets the strategic direction of the
Company and reviews performance against previously agreed
strategic objectives.
Whistleblowing
Under the Code, the Board is responsible for approving and
overseeing the Group’s whistleblowing policy and ensuring that
adequate procedures are in place for staff to raise concerns
in confidence. The Company has an approved whistleblowing
policy which can be viewed at www.bloomsbury-ir.co.uk. The
Board is provided with an update of all significant matters that
are reported under the policy.
Conflicts of interest procedures
The Board has reviewed the interests of the Directors and the
Company maintains a register of areas of potential conflict
of interest for Directors. Additionally, Directors are required
to declare any new interests at the start of all Board and
Committee meetings. 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, the
Director affected by the conflict will absent themselves from
the 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. Directors may also
notify the Company, via the Company Secretary, at any time, of
any potential or future direct or indirect conflicts that may arise,
or that may possible conflict with the interests of the Company.
Any such notifications are required to be considered and, if
thought appropriate, authorised by the Board.
Director independence
The Board has reviewed the independence of each Non-
Executive Director and considers all the Non-Executive
Directors who serve 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. The Board
meets the requirement under the Code that at least half the
Board (excluding the Chairman) should be independent Non-
Executive Directors.
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GOVERNANCE
Time commitments
The time commitments of Directors are considered on
appointment and annually. The Board is satisfied that there
are no Directors whose time commitments are considered to
be a matter of concern and that each of the Directors have
sufficient time to meet their Board responsibilities. None of
the Executive Directors have taken up more than one Non-
Executive Director role at a FTSE 100 company or any other
significant appointment. Additional appointments are not to be
undertaken without prior approval of the Board.
Board information and support
All Directors have access to the advice of the Company
Secretary where required. Directors also have access to
independent professional advice, if required, at the Company’s
expense.
Attendance at Board and Committee meetings
The table below shows the attendance of Directors at Board and Committee meetings during the year ended 29 February 2020.
During the year, there were seven scheduled Board meetings. 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.
Committee
appointments
Chairman
Sir Richard Lambert
R
N
Executive Directors
Nigel Newton
Penny Scott-Bayfield
Jonathan Glasspool
Non-Executive Directors
Jill Jones1
John Warren2
Steven Hall3
Leslie-Ann Reed4
N
A
A
A
A
R
R
R
R
N
N
N
N
Board
Remuneration
Audit
Nomination
7/7
7/7
7/7
7/7
4/4
6/7
7/7
3/3
8/8
–
–
–
4/4
7/8
8/8
4/4
–
–
–
–
2/2
4/4
4/4
2/2
2/2
2/2
–
–
1/1
2/2
2/2
1/1
1 Jill Jones resigned as a Director of the Company on 17 July 2019.
2 John Warren was unable to attend one Board meeting and one Remuneration Committee meeting due to an external
commitment. Prior to the meetings, Mr Warren communicated his comments on the business of the Board and the
Committee to their respective Chairs.
3 Steven Hall became Chair of the Remuneration Committee on 17 July 2019.
4 Leslie-Ann Reed was appointed as a Director of the Company on 17 July 2019. In addition to the meetings
above, Leslie-Ann Reed attended a Board meeting as an observer prior to joining the Board.
Committee member:
A Audit Committee
R Remuneration Committee
N Nomination Committee
Board and Committee evaluation for 2019/2020
The Board
The Board conducts an annual formal evaluation of its
performance. For 2019/2020 this was conducted internally.
The 2019/2020 evaluation of the Board took place towards the
end of the financial year. It was led by the Chairman, supported
by the Company Secretary, who used questionnaires
completed by all the Directors to appraise the performance
of the Board and to discuss any improvements needed to the
Board processes. The Chairman also conducted one-to-one
interviews with each of the Directors. He then reported to the
Board and to the Nomination Committee where his findings
were considered. Overall, the results of the evaluation were
positive and showed that the Board continued to work well
together, with strong commitment from the Executive and
Non-Executive Directors. The evaluation concluded that the
performance of the Board, its Committees, the Chairman
and each of the Directors continued to be effective. The
composition and size of the Board was considered to be
appropriate, with an appropriate balance of experience, skills
and capabilities. All Directors demonstrated commitment
to their roles and contributed effectively. The main areas
identified by the evaluation for continued focus were:
• The further development and articulation of long-term
strategy; and,
• The further improvement in the effectiveness of the
Company’s internal operational systems and processes,
including IT systems.
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Annual Report and Accounts 2020
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27040 11 June 2020 8:07 pm Proof 227040 11 June 2020 8:07 pm Proof 2Progress against the 2018/2019 evaluationA summary of the Board’s progress against the actions arising from the 2018/2019 evaluation are set out below:ActionProgressIt would be appropriate to further the engagement of members of senior management in Board meetings.Presentations have been delivered by members of the senior management at Board meetings during the course of the year, including from members of the Sales and Marketing, IT and Finance teams.The Board should engage more on strategy and longer-term trends.A routine “Strategy” item is included on each Board agenda and remains an area of focus.The Company should review the methods by which the Company measures the satisfaction of authors with the service provided by the Company. Author engagement and satisfaction was considered as part of the Board’s overall consideration of stakeholder engagement. Further information on the Company’s engagement with key stakeholders is set out in the Strategic Report on pages 58 to 63.Succession planning and appraisals.Increased focus on career development and training as a means of supporting effective succession planning will be integrated into the formal appraisal process for 2019/2020.Board CommitteesBoard Committees are evaluated annually against their terms of reference and against adherence to relevant requirements of the Code and applicable regulations, 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 and 2020, 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. The ChairmanThe present Chairman, Sir Richard Lambert, joined the Board in July 2017 and was considered independent upon his appointment. For 2019/2020, the Senior Independent Director led the evaluation of 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 2020 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. Induction, training and developmentUpon appointment to the Board, all Directors undertake a comprehensive induction process, which includes dedicated time with the Executive team and senior management. Directors are also provided with induction materials, which comprise an overview of the Group and its organisational structure, the responsibilities of being a Director of a UK-listed Company, Board policies and procedures, minutes of previous Board and Committee meetings and details of the Board’s external advisers, amongst other information. In July 2019, Leslie-Ann Reed joined the Board and was supported by an induction programme of introductory meetings with Executive and Non-Executive Directors, senior management and advisers, and which included joining the Board for a routine Board meeting prior to her formal appointment. The Board and Committees receive regular updates on key governance and compliance issues during meetings. During the year, the External Auditor KPMG provided updates on developments in corporate governance, and auditing and financial reporting standards. External remuneration consultants New Bridge Street led a day’s training on long term incentive plans for the Non-Executive Directors, and Deloitte LLP provided an update on new requirements under the 2018 Code.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 Chairs 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. The Senior Independent Director is also available to Shareholders as required.www.bloomsbury.comBloomsbury Publishing Plccontinued80Corporate Governance Report27040-Bloomsbury-AR2020 - governance.indd 8011-Jun-20 9:50:28 PM 27040 11 June 2020 8:07 pm Proof 227040 11 June 2020 8:07 pm Proof 2Dear Shareholder,I am pleased to present my report to you as Chair of the Nomination Committee which describes how the Committee has carried out its responsibilities during the year.Composition of the CommitteeThe Committee is comprised of the Chairman of the Board, who chairs the Committee, three Independent Non-Executive Directors and the Chief Executive. The members of the Committee during the year were:DirectorAppointed in the year (if applicable)Resigned in the year (if applicable)Sir Richard Lambert (Chair of the Committee)––Nigel Newton––Jill Jones–17 July 2019John Warren––Steven Hall––Leslie-Ann Reed17 July 2019–The Committee met twice during 2019/2020. The Committee members’ attendance can be seen on page 79 of this section of the Annual Report.Role of the CommitteeThe terms of reference of the Committee set out its role and authority. These are reviewed annually and can be found on the Company’s website, www.bloomsbury-ir.co.uk. In summary, the Committee’s responsibilities include:• Reviewing the size, structure and composition of the Board and making recommendations for changes to the Board where necessary;• Regularly monitoring and assessing the skills, knowledge, experience and diversity of the Board and senior management;• Reviewing the results of the Board performance evaluation process to include reviewing the composition and diversity of the Board and its Committees (taking into consideration the balance of skills, experience and knowledge required) and how effectively Board members work together to achieve objectives;• Reviewing annually the time required from Non-Executive Directors and the number of external appointments held and, in respect of any additional external appointments notified to the Board, considering the type of role, the expected time commitment and any impact which this might have on the Director’s duties to the Company; • Overseeing plans for the orderly succession to Board and senior management positions, taking into account the leadership requirements of the Company in the context of the challenges and opportunities facing the Company;• Leading the process for new appointments to the Board;• Identifying and making recommendations to the Board on potential candidates for appointment to the Board and senior management positions;• Overseeing the induction of new Directors and monitoring ongoing conflicts, time commitments, training and evaluation of the Board; and• Overseeing the Company’s approach to diversity and related initiatives in the context of developing a diverse pipeline for succession. Board appointment processThe Board appointment process is as follows: • The annual evaluation of Board effectiveness enables the Committee to identify any gaps in the skills, knowledge and experience needed or forecast in anticipation of Director resignations;Sir Richard LambertChair of the Nomination CommitteeAnnual Report and Accounts 2020GOVERNANCE81Stock code: BMYNomination Committee Report27040-Bloomsbury-AR2020 - governance.indd 8111-Jun-20 9:50:30 PM Nomination Committee Report
continued
• The Committee then carries out a more detailed
consideration of the Board’s structure, balance, diversity 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.
Activities of the Committee during the year
In 2019, the Nomination Committee completed the process
of recruiting a Non-Executive Director to replace Jill Jones,
who was not 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. Her appointment was
subsequently approved by Shareholders at the 2019 AGM.
Other matters considered by the Committee during the year
included:
• The gender balance for direct reports to senior
management;
• Succession plans for the Board and senior management;
• Conflicts of interest, time commitments, independence of
directors, training and evaluation of the Board;
• Diversity and inclusion in the Bloomsbury workforce;
• The format of the Board evaluation and once completed, the
consideration of the results and feedback; and
• Review of revised terms of reference for the Committee.
Oversight of the Company’s diversity and
inclusion policy and practices
Central to the Company’s mission and purpose is the
promotion and dissemination of a multiplicity of voices on a
vast range of topics from an international author base. Diversity
and inclusion therefore inform the strategy which the Company
adopts to realise its purpose. The Board recognises that
diversity within the Company’s workforce and at senior levels of
management may further serve this purpose and support the
delivery of Bloomsbury’s strategic objectives.
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. The Committee receives periodic updates from
the Director of Human Resources and the Head of the Diversity
and Inclusion Working Group in respect of diversity and
inclusion initiatives across the business. Further information
in respect of diversity and inclusion can be found in the
Corporate Responsibility section on page 54. The Committee
has approved the Company’s Diversity and Inclusion Policy.
Board diversity
The Board recognises the benefits of greater diversity on the
Board and in senior management positions throughout the
Group. 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. With the
retirement of Jonathan Glasspool in July 2020, one-third of the
Directors will be women.
New appointments to the Board are selected by the
Nomination Committee using independent search consultants
based on merit as the best candidate for the role. The
Board appreciates how diversity can enhance the Board’s
effectiveness in decision-making where different skillsets and
perspectives are present in the boardroom and may consider
different aspects of diversity such as ethnicity, education and
social background in connection with new appointments.
The Board considers there to be a diverse pipeline of senior
management with respect to gender balance. A majority of
the Executive Committee and their direct reports are women.
Board diversity
Gender
Balance of the Board
Tenure
n Male
5
n Female 2
n Chairman
1
n Non-Executive 3
n Executive
3
n 0–2 years
n 2–4 years
n 4–6 years
n 6+ years
2
2
2
1
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GOVERNANCE
intends to take a more structured approach towards below
Board succession planning by identifying high potential
individuals within the business and providing a structured
opportunity for such individuals to develop the skills and
experience that would enable them to move into higher tier
and/or senior management positions. Earlier in the year, the
Company commenced running a bespoke Management
Development programme targeted at UK line managers
across all departments within the business to support personal
development and career progression. The purpose of the
programme is to enable individuals to develop the critical
knowledge, skills, and behaviours needed in senior business
positions. The intention is to run the programme twice per
annum and eventually to roll the programme out globally.
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 Code for
a FTSE 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 2019 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 95 to 96.
Sir Richard Lambert
Chair of the Nomination Committee
20 May 2020
Further information on the gender balance at different levels of
the Company can be found in the Company’s Gender Pay Gap
Report on its website (www.bloomsbury-ir.co.uk).
The Board is also committed to ensuring development of a
more diverse executive pipeline and will be considering action
to broaden the diversity of the global workforce.
Board balance by experience and skills
Bloomsbury Board members bring a wide range of experience
and skills which support the Company's strategy. All Board
members have strong leadership experience at global
business and institutions. The Board believes it has an
appropriate balance of skills, experience and knowledge, but
the composition of the Board is kept under review to ensure
any skill gaps are taken into consideration as part of ongoing
succession planning. Details of the Board’s skills are set out at
the bottom of this page.
Succession planning
The Committee considers succession planning at each
meeting. Ensuring that suitable plans are in place for orderly
succession to both the Board and senior management
positions to ensure business continuity is even more significant
in light of the coronavirus pandemic, due to the risk of Board
members and members of senior management becoming
incapacitated.
The Committee focuses on succession planning at Board level
in particular and during the year discussed succession plans for
the Chief Executive. The size, structure and composition of the
Board together with the knowledge, skills and experience of
Directors is kept under review as part of assessing the overall
effectiveness of the Board. In the event that a Director were
to announce their resignation from the Board, the Committee
would identify any resulting gaps in the skills mix and would
make recommendations to the Board where appropriate on
the skills, knowledge and experience that the replacement
candidate should have. On the whole, the Board is satisfied
that plans are in place for orderly succession to the Board.
The Board is committed to recognising and nurturing a talent
pipeline within the various management levels across the
Group to ensure that opportunities are created to develop key
individuals within the business. In 2020/2021, the Company
Composition of the
Executive Committee
Executive Committee
direct reports
Board skills
Plc experience
Publishing and media
Digital and technology
CEO experience
Finance experience
Executive compensation
Audit and Risk
Governance
Global markets
M&A
Business to business operations
ESG
n Male
2
n Female 5
n Male
17
n Female 30
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27040 11 June 2020 8:07 pm Proof 227040 11 June 2020 8:07 pm Proof 2Dear Shareholder,I am pleased to present my report to you as Chair of the Audit Committee which describes the Committee’s operations during the financial year ended 29 February 2020.Composition of the CommitteeThe Committee is comprised of 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. Leslie-Ann Reed also has extensive financial and Audit Committee experience. In addition, another Committee member, Steven Hall, is experienced in the field of publishing, enabling the Committee to have competence relevant to the sector in which the Company operates. The members of the Committee during the year were:DirectorAppointed in the year (if applicable)Resigned in the year (if applicable)John Warren (Chair of the Committee)––Jill Jones–17 July 2019Steven Hall––Leslie-Ann Reed17 July 2019–The Committee met four times during 2019/2020. The Committee members’ attendance can be seen on page 79 of this section of the Annual Report. 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 or Auditors to share any concerns that they may have.Role of the CommitteeThe terms of reference of the Committee set out its role and authority. These are reviewed annually and can be found on the Company’s website, www.bloomsbury-ir.co.uk. In summary, the Committee’s responsibilities include:• Monitoring the integrity of the financial and narrative statements of the Company and any formal announcements relating to the Company’s financial performance; reviewing significant financial reporting judgements contained therein;• Overseeing the review of the Annual Report and Accounts and advising the Board on whether taken as a whole it is fair, balanced and understandable and provides the necessary information for Shareholders to assess the Company’s performance, business model and strategy;• Reviewing and advising the Board on the going concern assessment and viability statement;• Evaluating the Company’s internal controls (including financial controls and controls relating to legal and regulatory compliance) and risk management systems;• Reviewing and approving the statements made in the annual report and accounts in respect of the Company’s internal control policies and risk management procedures;• Monitoring and reviewing the effectiveness and independence of the Company’s internal audit function;• Making 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; John WarrenChair of the Audit Committeewww.bloomsbury.comAudit Committee Report84Bloomsbury Publishing Plc27040-Bloomsbury-AR2020 - governance.indd 8411-Jun-20 9:50:37 PM GOVERNANCE
• Reviewing and monitoring the External Auditor’s
• The adequacy of sensitivity disclosures in relation to
independence and objectivity and the effectiveness of
the audit process, taking into consideration relevant UK
professional and regulatory requirements;
Academic & Professional goodwill, particularly in the context
of the coronavirus pandemic (note 11);
• The impact of the coronavirus pandemic on the going
• Developing and implementing policy on the engagement of
the External Auditor to supply non-audit services, taking into
account relevant guidance regarding the provision of non-
audit services by the external audit firm;
• Reporting 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
• Reporting to the Board on how it has discharged its
responsibilities.
Activities of the Committee during the year
During the year, amongst 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 results and associated
announcements, recommending them to the Board for
approval;
• The Annual Report and Accounts, recommending them to
the Board for approval;
• The analysis supporting the viability statement and the going
concern assessment;
• The appointment and remuneration of the External Auditor;
• The External Auditor’s audit strategy for the year, agreeing
the risks identified therein;
• The effectiveness of the Internal Audit function. For
2019/2020, the Committee considered that it would be
appropriate to adopt a revised approach to the internal audit
function, which is further described below under the heading
of Internal Audit;
• At each meeting, the Group’s internal controls policies and
associated risk management framework 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
and Risk Management section on pages 40 to 45, which also
explains how each risk is managed and mitigated; and
• Revised terms of reference for the Committee.
Significant financial reporting matters
The Committee considered:
• The impact of adopting IFRS 16 and the resulting changes
including disclosure requirements. Further details are
supplied in note 2w to the financial statements;
• Assessment of whether the acquisition of Oberon Books
Limited should be treated as an asset purchase or a business
combination under IFRS 3;
• The adequacy of provisions made in relation to key balance
sheet estimates, specifically including the sales return
provision and provision against unearned author advances;
concern assessment;
• The treatment of rights and services revenues from licences
over 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.
External Auditor
The Audit Committee has primary responsibility for making
a recommendation on the appointment, reappointment
and removal of the External Auditor and approving their
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.
Sarah Styant has been KPMG’s audit partner for the Company
since the 2018/2019 audit and attends all meetings of the
Committee. During the year, the Committee 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 External Auditor’s work and whether the
External Auditor deployed sufficient resources to complete
their agreed programme; and
• The independence and objectivity of the External Auditor,
confirmed in a letter addressed to the Committee.
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 2019 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.
Stock code: BMY
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Audit Committee Report
continued
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 can be
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. Other than the half
year review, during 2019/2020, KPMG did not supply any non-
audit services to the Group.
Internal controls 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 Board has put in place an ongoing process for identifying,
evaluating and managing the significant risks faced by the
Group. This procedure has been in place for the year under
review and up to the date of approval of this Annual Report.
The procedure will regularly be reviewed by the Board and the
Audit Committee to ensure that the procedures implemented
continue to be effective and that, where appropriate,
recommendations are made to management to improve the
procedures.
The Audit Committee reviews the internal control and risk
management systems and internal financial controls while
the Board considers the principal risks to the business, the
countermeasures in place and the Group’s appetite for risk.
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.
Until 2018/2019, 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 considered
reports from External and Internal Audit to ensure that
adequate measures were being taken by management to
address risk and control issues. Following consideration by the
Committee, it was determined that a risk-based approach to
internal controls should be adopted from 2019/2020 onwards,
to ensure that internal controls policies and procedures directly
and adequately address the specific risk factors relevant to the
Company. Further explanation is provided below under the
heading Internal Audit.
Internal controls are reviewed regularly throughout the year
with relevant business areas and consideration is given to
identifying any actions required to improve the effectiveness
of the key controls. The Audit Committee receives reports on
the internal controls and progress in respect of any actions
identified as necessary to improve the system of controls three
times a year.
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.
Overall, 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 audit
The internal audit function is responsible for providing
independent assurance to management and the Audit
Committee on the design and effectiveness of internal
controls to mitigate strategic, financial, operational, and
compliance risks.
During 2019/20, the Committee determined that it would
be appropriate to co-source the function using both internal
and external resources, while retaining its oversight, and the
Committee approved the engagement of Grant Thornton for
this purpose. Martin Gardner, partner at Grant Thornton, was
appointed as the Head of Internal Audit, reporting to the Chair
of the Audit Committee.
During the year, the Company worked with Grant Thornton
to deliver a risk-based audit approach to internal controls and
internal audit. Key controls covering the Group’s key risk areas
were developed and reviewed in consultation with the heads
of relevant business areas and with Grant Thornton. These are
reviewed and reported to the Audit Committee three times
a year.
The internal audit mandate and plan for the relevant year is
approved by the Committee, and is aligned to the Company’s
greatest areas of risk. In preparing Bloomsbury’s internal audit
plan for 2020/2021, Grant Thornton identified those areas from
the Group risk register that could have a significant impact on
the business, should the risk crystallise. Out of the auditable
areas identified, the Committee approved the internal audit
plan proposed by Grant Thornton to conduct two risk-based
audits in the following areas:
• Key financial controls: to review the internal control
framework covering period-end close, including areas such
as accounts payable, accounts receivable and accruals; and
• Cybersecurity: to review cyber and information security
arrangements, focused on ensuring that key controls are
in place.
Internal control and risk management framework
The preparation of the consolidated financial statements
of the Company is the responsibility of the Group 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 Company’s system of internal financial control aims to
safeguard the Group’s assets, ensures that proper accounting
The Risk Factors and Risk Management section on pages 40
to 45 sets out how the Board has taken account of the Group’s
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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 Company has in place
a Group Whistleblower Policy and an Anti-Bribery and
Corruption Policy.
• 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.
• Risk and control review: The framework for oversight of
the Group’s internal controls and risk management process
by the Board and the Audit Committee is described above.
In addition, the Executive Committee (which comprises
the divisional and Group function heads and Executive
Directors) are asked to review the Group risk register and
accompanying controls and actions 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 regularly reviews the
significant Group 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 Group
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.
• 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 (and approval by
the Chief Executive of acquisitions over a specific threshhold),
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.
• Internal audit: For 2019/2020, a risk-based audit approach
was used to identify and assess the key internal controls
across the Group worldwide. 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.
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.
Committee effectiveness
The Committee’s annual evaluation review, which was
conducted as part of the 2019/2020 Board evaluation,
confirmed that the Committee was continuing to function
effectively.
John Warren
Chair of the Audit Committee
20 May 2020
Stock code: BMY
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27040 11 June 2020 8:07 pm Proof 227040 11 June 2020 8:07 pm Proof 288Bloomsbury Publishing PlcDear Shareholder,I am pleased to present my first Directors’ Remuneration Report (the “Report”) as Chair of the Remuneration Committee for Bloomsbury Publishing Plc for the year ended 29 February 2020. I would like to take this opportunity to thank Jill Jones for her commitment and contribution during her time as Chair of the Committee. The Report has been prepared on behalf of the Bloomsbury Board by the Remuneration 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 proposed new Remuneration Policy for the Executive and Non-Executive Directors to be put to Shareholders for approval at the 2020 AGM and which, subject to Shareholders’ approval, will operate from 1 March 2020 and become formally effective from the 2020 AGM; and • Part B, the Annual Report on Remuneration, which discloses how the current Remuneration Policy (approved by Shareholders at the 2017 AGM) was implemented for the year ended 29 February 2020 and how the proposed Remuneration Policy referred to above will be implemented for the year ending 28 February 2021 (subject to Shareholders’ approval). The Annual Report on Remuneration will also be subject to an advisory Shareholder vote at the forthcoming AGM on 21 July 2020. Performance and reward for 2019/2020The Group delivered a strong performance over the year to 29 February 2020 which was reflected in the financial results. Group profits before taxation and highlighted items increased by 9% to £15.7 million. Profits before taxation increased by 10% to £13.2 million. The Company had intended to declare a final dividend for the year of 6.89 pence per share. This would have resulted in a total dividend for the year of 8.17 pence per share, up 3% on the previous year. As previously announced, and as explained in the Chief Executive’s Review on page 12, the Company has decided, in light of the coronavirus pandemic, to conserve cash and will not therefore be paying a cash dividend. It is now proposed, subject to Shareholder approval, that the dividend is instead settled through the issuance of new Ordinary shares by way of bonus issue to Shareholders, with a value equivalent to the proposed final dividend.Annual bonusAnnual 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”). For 2019/2020, the Committee set a stretching threshold target for profit, taking into account the Group’s budget, analyst consensus forecasts and other factors. Profit above the threshold target set by the Committee accrues into a bonus pool (until the pool becomes fully funded), with distributions from the pool linked to achievement of financial and strategic objectives. Despite positive achievement during the year, there was a nil payout for Executive Directors under the bonus scheme in respect of 2019/2020, due to the bonus pool being insufficiently funded.Long Term Incentive Plan (“LTIP”) vesting The LTIP awards granted on 27 July 2017 (“2017 PSP Award”) and due to vest in July 2020 were subject to EPS and ROCE performance conditions. Up to half of the award could vest under each of these two performance conditions, with the ROCE element subject to an additional underpin whereby the Committee would consider the underlying performance of the business and apply discretion should it consider it appropriate to do so.Steven HallChair of the Remuneration Committee www.bloomsbury.comDirectors’ Remuneration Report27040-Bloomsbury-AR2020 - governance.indd 8811-Jun-20 9:50:41 PM GOVERNANCE
Bloomsbury delivered EPS growth of 7.4% in excess of RPI
over the three-year performance period, resulting in 91% of
this element vesting, and ROCE of 12.2%, which exceeded
the maximum target of 11%. Accordingly, the 2017 PSP Award
will vest in July 2020 at 96% of maximum. The Committee
considers that this result appropriately reflects the progress
Bloomsbury has made over the last three years. All vested
shares for Executive Directors will be subject to an additional
two-year holding period, which will ensure that awards to
Executive Directors will remain aligned with our Shareholders
for an extended period. The outcome of the 2017 PSP Award
is also shown in tabular form in Part B of the Remuneration
Report on page 99.
Review of the Remuneration Policy and
remuneration arrangements for 2020/2021
The current Directors’ 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.
In line with UK reporting regulations, the Company is required
to submit a new Policy to Shareholders for approval at the
2020 AGM.
During the year, the Committee undertook a comprehensive
review of the current Policy to ensure that it continues to
incentivise the sustainable delivery of the Board’s strategy,
strong financial performance and the creation of long-term
Shareholder value, with input from Committee members,
Executive Directors, Shareholders and the Company’s
independent advisers. Whilst it was determined that the overall
structure of the current Policy continues to operate effectively
and should remain unchanged, the new Policy has been
updated to reflect the 2018 Code, Shareholders’ feedback
and recent developments in market and best practice. The
maximum incentive opportunities will remain unchanged. A
summary of the key changes are:
• The maximum pension contribution rate for new Executive
Directors joining the Board will be aligned with the employer
contribution rate available to the wider workforce;
• Executive Directors will be expected to build and maintain a
shareholding equivalent to 200% of basic salary (increased
from 100% of basic salary). Executive Directors will be
expected to retain all shares from vested PSP Awards or
purchase shares until the guideline is met;
• When an individual steps down as an Executive Director,
they will be expected to retain the full shareholding guideline
of 200% of basic salary (or actual shareholding if lower)
tapering down to nil over two years; and
• The circumstances in which malus and clawback can be
enforced have been widened to ensure that the Committee
has the ability to prevent payments for failure.
The Committee is also proposing a change to the PSP
performance measures for the 2020 PSP Award. The
Committee is keen to ensure that performance measures
for PSP awards are simple, reward the successful execution
of the Company’s strategy, support long-term sustainable
performance and align with the Shareholders’ interests. The
performance measures attached to the 2020 PSP Award will
be based on EPS (60%), Non-Consumer operating profit (15%),
Consumer operating profit (15%) and BDR revenue (10%). While
ROCE will not be used as a metric for the 2020 PSP Award,
the Committee considers that strong performance under
each of the selected metrics will in turn positively contribute
to stronger return on capital. The Committee will keep the
measures and weightings under review to ensure that they
continue to support the long-term success of the Company.
Given the impact of the coronavirus crisis on the sector, the
Committee is still in the process of finalising the detail of the
target ranges, and is currently in the process of consulting with
our major Shareholders. Once finalised, our current intention
is to disclose the detail of the targets on our website ahead of
the AGM.
The annual bonus for 2020/2021 will continue to be based on
a combination of financial and operational metrics. Inevitably,
the detail of the targets will need to be adapted to reflect
the very specific challenges that the business will face in the
coming months. When determining outcomes for the year,
the Committee will need to be particularly mindful of overall
affordability and the approach taken for the wider employee
population and exercise discretion as appropriate.
In line with the Group’s general workforce, for 2020/2021, an
annual increase of 2% was applied to the Executive Directors’
base salaries and to the fees of the Chairman of the Board with
effect from 1 March 2020. The Chairman of the Board and
the Executive Directors approved a similar increase of 2% to
Non-Executive Directors fees for 2020/2021. Since the coming
into effect of these increases, all the Directors (Executive
and Non-Executive) have voluntarily agreed to a temporary
reduction of 30% to base salary and fee payments for a period
of at least three months from 1 April 2020, as one of a number
of measures taken by the Company to mitigate the impact of
the coronavirus crisis by conserving cash and reducing costs.
Similar arrangements have also been implemented across the
employee base. The Company intends to review this approach
in July 2020, and consider whether any further extension of
the arrangement is required. At the end of the financial year,
consideration will be given to whether it is appropriate to
reimburse (either in part or in full) the discounted element of
salary/fees in respect of the year. This assessment will take into
account various factors, including evolving market conditions,
the underlying financial health of the business and the
approach taken for wider employees.
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 will be reviewed further during the
course of the year.
Stock code: BMY
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Directors’ Remuneration Report
continued
Executive Director changes
On 29 October 2019, the Company announced that Jonathan
Glasspool will step down from the Board on 21 July 2020,
being the date of the AGM, and will retire from Bloomsbury
on 31 July 2020. He will not receive any payment in lieu of
notice or any ex-gratia payment, and he will not be granted
an award under the 2020 PSP Award. The Committee has
determined that Jonathan shall be eligible for any bonus that
may be awarded in respect of 2020/2021 on a time pro-rated
basis. In light of his long service, the Committee decided to
confirm Jonathan’s status as a “good leaver” for the purposes
of outstanding incentive awards. All awards will be subject to
time pro-rating, with performance assessed at the end of the
relevant performance period.
Implementation of the new Policy in 2020/2021
The Committee consulted with Shareholders regarding
the changes to the Policy and the final proposals reflect
the feedback received from Shareholders. The Committee
is grateful to Shareholders for the time they have given to
participating in the consultation process. Your contributions
resulted in changes to our proposal and helped to frame
the Committee’s discussions and facilitate a more robust
decision-making process.
We hope that you will find this 2020 Remuneration Report clear
and helpful, and of course welcome Shareholder feedback.
Steven Hall
Chair of the Remuneration Committee
20 May 2020
Part A – Remuneration Policy Report
Introduction
The Directors’ Remuneration Policy is set out in this section.
This Policy will be put to a binding Shareholder vote at the
AGM on 21 July 2020 and, if approved, will immediately come
into effect from this date.
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 and driving sustainable long-term value for
Shareholders;
• Align the interests of the Executive Directors with those of
the Shareholders and wider stakeholders; and
• Not pay more than is necessary.
The current Policy was approved by Shareholders at the 2017
AGM with strong support from 99.4% of Shareholders.
In determining the new Policy, the Committee followed a robust
decision-making process. The Committee discussed the detail of
the Policy over a series of meetings in 2019 and early 2020 taking
into account the strategic priorities of the business, evolving
market practice and investor guidance. In line with the 2018 UK
Corporate Governance Code (the “Code”), the Committee also
assessed the Policy against the principles of clarity, simplicity, risk
management, predictability, proportionality and alignment to
culture. Throughout this Policy review process, input was sought
from both the management team, while ensuring that conflicts
of interests were suitably mitigated, and the Committee’s
independent advisers. The Committee also consulted with
major Shareholders, their representatives and institutional proxy
agencies, as outlined below.
While the key features of the current Policy remain unchanged,
the new Policy has been updated to reflect feedback from
Shareholders, the 2018 Code and recent developments in
market and best practice. Key changes to the new Policy include:
• Pensions – pension contributions for any new Executive
Director appointments will be set in line with the applicable
wider workforce rate;
• Shareholding guidelines – the in-employment shareholding
guideline for Executive Directors has been increased from
100% of salary to 200% of salary. A post-employment
shareholding guideline has also been introduced; and
• Malus and clawback – the circumstances under which malus
and clawback can be applied have been expanded.
Other minor changes have been made to the Policy to increase
flexibility and transparency as well as aid its operation and to
reflect evolving market practice.
Consideration of Shareholder views
As part of this year’s Policy review, the Remuneration
Committee engaged directly with major Shareholders and
their representative bodies. All feedback received during
this process was carefully considered by the Committee, and
resulted in changes to our proposals prior to the finalisation of
the new Policy.
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In general, the Committee considers any Shareholder feedback received in relation to the remuneration resolutions tabled at
the AGM each year. This feedback, plus any additional feedback received during any Shareholder meetings from time to time, is
considered as part of the Group’s annual review of the Remuneration Policy and its implementation. 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 at any time.
Remuneration Policy for Executive Directors – 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.
Performance targets
• N/A
Element
Salary
Purpose and link
to strategy
Operation
• Reflects the value
of the individual
and their role
• Reflects skills and
experience over
time
• Provides an
appropriate level of
basic fixed income
avoiding excessive
risk taking arising
from over-reliance
on variable income
• Normally reviewed annually
and effective 1 March,
although salaries may be
reviewed more frequently or
at different times of the year
if the Committee determines
that this is appropriate
• Takes into account the role,
personal experience and
performance, business
performance, wider
workforce policies, and
comparisons against
companies with similar
characteristics and sector
comparators
Maximum
opportunity
• No maximum base
salary or maximum
salary increase
operated
• Annual increases
are typically linked
to those of the
wider workforce,
but with scope for
higher increases
in circumstances
including (but not
limited to):
• Change in role
• Where salaries
are below market
levels
• Enhanced
performance and
experience of the
individual
Pension
• Provides role-
appropriate
retirement benefits
• Opportunity for
Executive Directors
to contribute
to their own
retirement plan
• Defined contribution/
• For new Executive
• N/A
salary supplement or cash
payment in lieu of pension
contribution
Directors, the
maximum
contribution rate
will be in line with
the employer
contribution rate
available to the
majority of the
workforce
• For incumbent
directors, up to 15%
of salary
Other
benefits
• To aid retention
and recruitment
• Benefits include but are
• There is no
• N/A
not limited to: company car
or car allowance, and the
provision of private medical/
permanent health insurance
and life assurance
maximum but
benefits will be
appropriate in the
context of the role
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Annual Report and Accounts 2020
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Directors’ Remuneration Report
continued
Element
Purpose and link
to strategy
Operation
Maximum
opportunity
Performance targets
Annual bonus • Incentivises annual
delivery of financial
and strategic goals
• Maximum bonus
only payable
for achieving
demanding targets
Long term
incentives:
Performance
Share Plan
(PSP)
• Aligned to main
strategic objectives
of delivering
sustainable profit
growth and
Shareholder return
• Normally paid in cash, but
may be delivered in shares
at the discretion of the
Committee
• Not pensionable
• Performance assessed over a
one year period
• Measures and targets are set
each year, normally based on
the Group’s business plan as
at the start of the financial
year
• Annual bonus outcomes
are typically determined by
the Committee following
the year end based on
performance against pre-
determined objectives
• Where awards are deferred
into shares, dividends (or
equivalents) may be payable
on any shares that vest
• Annual grant of nil cost
options or conditional
awards (or economic
equivalent) which normally
vest subject to continued
service and performance
targets assessed over three
years
• Any vested shares must
normally be held by the
Executive for a further two
years
• Dividend (or equivalents)
may be payable to the extent
that shares under award vest
• 100% of salary
• Group financial objectives
(majority)
• Strategic objectives, including
personal objectives (minority)
• Performance measures may be
varied year-on-year based on the
Company’s strategic priorities
• The level of payout for threshold
performance will vary depending
on the nature of the measure and
the stretch of the targets. For
performance between threshold
and maximum hurdles, award
levels are appropriately scaled
• The Committee may adjust
the formulaic outcome where
it believes the outcome does
not reflect the Committee’s
assessment of the underlying
financial or non-financial
performance of the Company/
individual or is not appropriate in
the context of circumstances that
were unexpected or unforeseen at
the start of the bonus year
• Malus and clawback provisions
apply. Further details set out
below
• Normal grant policy
is 100% of basic
salary in respect of
any financial year
• Under the
• Vesting of PSP awards will
be based on performance
against relevant financial and
strategic non-financial metrics as
determined by the Committee
Shareholder
approved plan
rules, enhanced
award levels may
be granted up
to 150% of salary
(e.g. upon an
Executive Director’s
appointment)
• Up to 25% of awards will vest at
threshold performance increasing
to full vesting at maximum
performance levels
• For awards granted in 2020,
vesting will be based on EPS
(60%), Non-Consumer operating
profit (15%), Consumer operating
profit (15%) and BDR revenue (10%)
• The Committee may adjust
the formulaic outcome where
it believes the outcome does
not reflect the Committee’s
assessment of the underlying
financial or non-financial
performance of the Company/
individual or is not appropriate in
the context of circumstances that
were unexpected or unforeseen at
the time of grant
• Malus and clawback provisions
apply. Further details set out
below
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GOVERNANCE
Maximum
opportunity
Performance targets
• Prevailing HMRC
• N/A
limits apply
Element
All-employee
share plans
Purpose and link
to strategy
• To encourage
employee share
ownership by
employees
and therefore
alignment with
Shareholders
Operation
• Eligible to participate in
any HMRC-approved all-
employee plan on the same
basis as other employees
• The Company currently
operates an HMRC tax-
advantaged savings plan to
fund the exercise of share
options over three or five-
year savings arrangements
(Sharesave)
• The exercise price may be
discounted by up to 20%
• Provides tax advantages to
UK employees
Notes to the Policy table:
1 A description of how the Company intends to implement this Policy in 2020/2021 is set out in the Annual Report on Remuneration. As noted on page 89, a
temporary reduction has been made to salaries and fees for Board Directors in respect of the current year. Where such temporary reductions are made, the
Company reserves the ability to reimburse (either in part or in full) the discounted element of salary/fees in respect of the year having taken into account all factors
deemed relevant (e.g. underlying financial health).
2 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. Targets
are set by the Committee taking into account internal and external reference points, including the Company’s business plan, to ensure that they are appropriately
stretching.
Annual bonus – The annual bonus metrics are designed to provide an appropriate balance between incentivising Executive Directors to meet financial targets for
the year and to deliver on specific strategic objectives to ensure the business is well positioned to deliver sustainable financial growth and Shareholder value in the
future. The annual bonus performance targets are therefore based on a combination of financial, operational and strategic objectives, which provide clear alignment
to the Company’s KPIs and strategic priorities.
PSP – For the 2020 PSP Award, the Committee has taken the opportunity to review performance metrics to ensure that they continue to support the strategic
ambitions of the Company as well as the creation of sustainable value for Shareholders. The Committee continues to consider EPS an appropriate measure that
encourages management to grow earnings for Shareholders over the longer term. Consumer and Non-Consumer profit targets as well as BDR revenue targets
have been included this year to align with the Company’s strategy of growing our product portfolio and our digital presence in a sustainable and balanced way. The
Committee will keep the measures and weightings under review to ensure that they support the long-term success of the Company.
Malus and clawback provisions
The annual bonus and PSP incorporate malus and clawback
provisions. These enable the Company to reduce the size
of unvested awards and to claw back awards for up to three
years following the date when the performance outcome is
determined, and in respect of the PSP, three years from the
date of vesting. The circumstances under which malus and
clawback may be applied include:
• Material misstatement in the Company’s financial results;
• Assessment of performance conditions based on an error, or
on inaccurate or misleading information;
• Serious misconduct on the part of the participant;
• Serious reputational damage; or
• Material corporate failure.
The above circumstances apply for all annual bonus and PSP
awards made from 2020 onwards. Previous incentive awards
are subject to malus and clawback provisions in the first three
circumstances only. The Committee is satisfied that the above
provisions provide robust safeguards against inappropriate
payment of incentive awards.
Further details
The Committee reserves the right to make remuneration
payments and payments for loss of office (which includes
exercising related discretions) that are not in line with this 2020
Policy if the terms of the payment were agreed:
1) Before the Policy came into effect, if the payment was made
in line with the policy in force at the time or was otherwise
approved by Shareholders;
2) At a time when the recipient was not subject to the Policy,
provided the Committee does not consider the payment to
have been made in consideration of the recipient becoming
subject to the Policy.
For these purposes “payment” means any payment that would
otherwise be subject to the Policy and, in relation to a share
award, will not be considered to have been “agreed” any later
than the date of grant.
The Committee may make minor amendments to the Policy
(e.g. for regulatory, exchange control, tax or administrative
purposes or to take account of a change in legislation) without
obtaining Shareholder approval for that amendment.
Stock code: BMY
Annual Report and Accounts 2020
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Directors’ Remuneration Report
continued
Awards granted under the Company’s share plans will be
operated in accordance with the relevant plan rules and
applicable regulations. Under the plan rules, the Committee
retains a number of discretions concerning the operation of the
Company’s share plans. This includes:
3 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.
4 In addition, a further performance scenario, comprising fixed pay and the
maximum value of incentive arrangements with 50% share price growth
applied to the PSP, has been included.
• Determining the participants (including for Executive
Directors and below the Board), timing of grants, size of
awards and performance conditions;
5 Basic salaries, pension and car allowance used are effective as at 1 March
2020. During 2020/2021, in light of the coronavirus pandemic and its impact on
the Company, the Executive Directors voluntarily agreed to a 30% reduction in
their salaries. These reductions have not been reflected in the above scenarios.
• Determining the vesting of awards, including both the timing
6 For simplicity, no share price growth (other than in the scenario stated above)
and level of vesting;
• Where possible under the plan rules, determining that
awards may be settled in cash rather than shares, where
the Committee considers this appropriate (e.g. due to local
securities law); and
• Making adjustments in accordance with the relevant
provisions of the relevant plan rules, including adjustments to
awards to reflect one off corporate events, such as a change
in the Group’s capital structure.
Reward scenarios
The remuneration package comprises both fixed elements
(base salary, pension and benefits) and performance-based
variable elements (cash bonus and PSP). The structure of the
remuneration packages for on-target and stretch performance
for each of the Executive Directors for 2020/2021, in line with
the Remuneration Policy, is illustrated in the bar charts below.
Nigel Newton - Chief Executive (£’000)
Maximum +
share price
appreciation
33%
Maximum
33%
27%
31%
27%
13% £1,719k
31%
£1,487k
Target
55%
23% 23%
£1,023k
Minimum
100%
£559k
0
500
1000
1500
2000
Penny Scott-Bayfield - Group Finance Director (£’000)
Maximum +
share price
appreciation
Maximum
32%
37%
27%
32%
27%
14% £879k
32%
£759k
Target
54%
23% 23%
£519k
Minimum
100%
£279k
0
200
400
600
800
1000
Fixed elements
Bonus
PSP
Share price appreciation
Notes:
1 The minimum performance scenario comprises the fixed elements of
remuneration only, based on salary, pension and car allowance as per policy
for 2020/2021.
2 The target level of bonus is assumed 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.
has been factored into the calculations. The value of any Sharesave awards and
notional dividends accruing on vested PSP shares has been excluded.
Executive Director share ownership
guidelines
Under the guidelines, the Executive Directors are expected
to build and maintain a shareholding equivalent to 200% of
basic salary (increased from 100% of salary) with no upper limit
on the number of shares they may hold. Executive Directors
are expected to retain all shares arising from vested PSP
awards (net of tax) or purchase shares until the shareholding
guideline is met.
Executive Directors will be subject to a post-employment
shareholding guideline. Further detail on the operation
of shareholding guidelines are set out in the Annual
Remuneration Report.
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.
All remuneration components, as set out in the Policy Table
above, would typically apply to a new Executive Director
appointment. Salary would be provided at such a level as
required to attract the most appropriate candidate and may
be set initially at a below market level on the basis that it may
progress once expertise and performance has been proven
and sustained. Pensions and related benefits would normally
be set in line with the wider workforce. New appointments
would be eligible to participate in the incentive plans up to
the maximum limits set out in the Policy Table. In addition,
the Committee may offer additional cash and/or share-based
elements to replace remuneration forfeited on joining the
Company. 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.
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GOVERNANCE
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.
The remuneration package for a newly appointed independent
Non-Executive Director would be set in accordance with the
approved remuneration policy in force at that time. Newly
appointed independent Non-Executive Directors would not
receive pension benefits or variable remuneration.
Service contracts for Executive Directors and
payments for loss of office
Service contracts of the Executive Directors are not of a fixed
term and are terminable by either the Company or the Director
under a notice period of up to 12 months by either party.
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 their 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 normally 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 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.
Remuneration Policy for Non-Executive Directors
The Policy on Non-Executive Director fees is set out below.
Element
Purpose and link
to strategy
Non-
Executive
Director fees
• Reflects responsibilities
and time commitments
of each role
• Reflects fees paid
by similarly sized
companies
Performance
targets
N/A
Operation
Maximum opportunity
• No maximum fee
or maximum fee
increase operated
• Annual increases are
typically linked to
those of the wider
workforce, time
commitment and
responsibility levels
• Details of current fee
levels are set out in
the Annual Report on
Remuneration
• The Chairman and Non-
Executive Directors receive
an annual fee for carrying
out their duties
• Additional fees may
be payable for chairing
Board Committees and/
or to reflect additional
time commitments
and responsibilities if
appropriate
• Fees are normally paid
monthly in cash
• Where appropriate certain
benefits (including travel,
expenses and associated
taxes) may be provided
• Fee levels are reviewed
on a periodic basis,
with reference to the
time commitment and
responsibilities of the
role and market levels in
companies of comparable
size and complexity
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Stock code: BMY
Annual Report and Accounts 2020
95
Directors’ Remuneration Report
PART B – ANNUAL REPORT ON
REMUNERATION
Factors considered when determining Executive
Director remuneration
When determining Executive Director remuneration, the
Committee has due regard for the factors set out in the Code.
Our Executive remuneration arrangements, which comprise
fixed pay, an annual bonus and LTIP Award, are simple and
aligned with market practice for UK listed companies. They
also incorporate a number of features so as not to encourage
excessive risk taking. These include the LTIP holding period
and in-employment and post-employment shareholding
guidelines, both of which support long-term stewardship of the
Company. Incentives are also subject to malus and clawback
provisions, which have been enhanced this year.
The Remuneration Policy Report sets out the maximum
opportunity for each component of pay, but actual outcomes
vary depending on performance against financial and strategic
objectives. The Committee reviews these objectives, as well
as the targets set, on an annual basis to ensure they continue
to reward the successful execution of the Company’s strategy,
support long-term sustainable performance and align with the
Shareholders’ interests.
The Committee hopes that this Directors’ Remuneration
Report clearly and transparently discloses the remuneration
paid to, or earned, by the Directors in respect of the financial
year ended 29 February 2020, and how we are proposing to
pay them for 2020/2021.
continued
The annual fees of Non-Executive Directors, 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.
The Non-Executive Directors and Chairman do not participate
in the Company’s incentive schemes.
Each of the Non-Executive Directors has similar general terms
for their agreement, which can be found on Bloomsbury’s
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.
Consideration of employment conditions
elsewhere in the Group
The Committee is updated during the year on workforce
remuneration policies, including variable pay schemes and
benefits for employees across the Company as a whole, and
takes these into account when setting the Policy for Executive
Directors. The Committee does not formally consult with
employees on the Executive Remuneration Policy.
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. For
example, participation in the PSP is limited to our most senior
employees.
Under its terms of reference, the Committee is responsible for
annual approval of the Group bonus pool as well as the level
of bonus outturns for all those who participate in the Group
bonus scheme, including Executive Directors and managers
below Board. The Committee also considers the general basic
salary increase for the broader employee population when
determining the annual salary increases for the Executive
Directors. The Company’s CEO pay ratio as well as the relative
increase in the Chief Executive’s 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.
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PART B–1 (AUDITED INFORMATION) Single total figure table of remuneration for 2019/2020
Directors’ remuneration for 2019/2020
Details of the remuneration of each of the Directors are as follows:
Year ended
28/29
February
Basic salary
or fees
£’000
Benefits
£’000
Annual
bonus3
£’000
Long term
incentives4
£’000
Pension
benefits
£’000
Executive Directors
Nigel Newton
Jonathan Glasspool
Penny Scott-Bayfield
Non-Executive Directors
Sir Richard Lambert
Steven Hall
John Warren
Jill Jones1
Leslie-Ann Reed2
Total
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
455
444
242
236
236
142
111
108
41
39
42
41
16
41
25
–
1,168
1,051
25
29
17
15
7
2
–
–
–
–
–
–
–
–
–
–
49
46
–
411
–
218
–
128
–
–
–
–
–
–
–
–
–
–
–
757
702
–
373
–
–
–
–
–
–
–
–
–
–
–
–
–
1,075
–
68
67
36
36
35
14
–
–
–
–
–
–
–
–
–
–
139
117
Total
fixed
remuneration
£’000
Total
variable
remuneration
£’000
548
540
295
287
278
158
111
108
41
39
42
41
16
41
25
–
1,356
1,214
702
411
373
218
–
128
–
–
–
–
–
–
–
–
–
–
1,075
757
Total
£’000
1,250
951
668
505
278
286
111
108
41
39
42
41
16
41
25
–
2,431
1,971
1 Jill Jones resigned as a Director of the Company on 17 July 2019. Her 2020 fees are up until the date of her resignation.
2 Leslie-Ann Reed was appointed as a Director of the Company on 17 July 2019. Her 2020 fees are from the date of her appointment.
3 Figures shown for bonus payments relating to 2019 are those received during the year based on performance and basic salary received during the previous year.
4 Figures shown for 2020 relate to PSP Awards granted in 2017, which will vest following completion of the three-year performance on 27 July 2020. Vested shares
will be subject to an additional two-year holding period. These awards have been valued using a three-month average share price to the 29 February 2020 of
£2.815. Of these values, £230,484 and £122,393 relate to share price growth over the performance period for Nigel Newton and Jonathan Glasspool, respectively.
Based on the share price on 19 May 2020 (£2.11), the value of the 2017 PSP Awards for Nigel Newton and Jonathan Glasspool would be £487,540 and £258,896
respectively.
More details on the content of the headings in the above
table, including a description of the other benefits received
by the Directors, their pension contributions and the targets
for the 2019/2020 bonus, are set out below under the relevant
headings below.
Basic salary
The Executive Directors all received an increase in basic salary
of 2.5% with effect from 1 March 2019 in accordance with
normal policy. Such increase was in line with the average salary
increases for all employees across the Group.
The basic salaries for the Executive Directors from 1 March
2019 were as follows:
From
1 March 2019
£’000
455
242
236
From
1 March 2018
£’000
444
236
230
Executive Director
Nigel Newton
Jonathan Glasspool
Penny Scott-Bayfield
Stock code: BMY
Other benefits
Benefits comprised a car or car allowance (excluding Penny
Scott-Bayfield), medical cover, permanent health cover, life
assurance, the value of options held in the Sharesave scheme
(except for Nigel Newton as he does not hold any such
options), and Company schemes offered to staff generally,
such as buying books for private use at the staff discount rate.
Pensions
In accordance with the policy, pension contributions in
2019/2020 were 15% of basic salary for Nigel Newton,
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.
Annual Report and Accounts 2020
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Directors’ Remuneration Report
continued
Bonus for 2019/2020
The purpose of the Bloomsbury Annual Management Bonus
Scheme (“the Bonus Scheme”) is to incentivise annual delivery
of financial and strategic goals. There are 51 staff in the Bonus
Scheme globally, including the Executive Directors. 70% of
the bonus relates to Group profits and 30% relates to other
strategic objectives.
The Committee sets stretching annual targets for the profit
element of the 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).
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 incentivises management to achieve
profits over and above expectations. Although the profit target
set by the Committee for 2019/2020 was achieved in full and
there was good achievement against the strategic objectives,
due to the bonus pool not funding above the profit target
threshold, there was a nil payout under the Bonus Scheme
for Executive Directors and senior management in respect of
2019/2020.
Profit target element of bonus for 2019/2020
The Group profit bonus objective accounts for 70% of the
total bonus opportunity for Executive Directors. At the start
of the year, the Committee set a stretching threshold target
for profit before taxation and highlighted items (“Adjusted
profit”) of £15.7 million after assessing the Group’s budget,
analyst consensus forecasts and other factors. As set out
in the Strategic Report, Bloomsbury performed in line with
expectations for the year ended 29 February 2020, achieving
Adjusted profit of £15.7 million. However, due to the bonus
pool not funding above the profit target threshold, no bonus
was payable in respect of the profit element of the target.
Strategic objectives element of bonus
for 2020
At the start of the year, the Committee reviewed the
2018/2019 strategic objectives and decided to amend these
for 2019/2020 by the addition of two objectives, one relating
to sales development of acquisitions and the second relating
to employee engagement. Within these seven objectives,
stretching targets were set for each. While strong progress was
made in a number of strategic areas, no bonus was payable
in respect of the strategic element of the bonus, due to the
bonus pool not funding above the profit target threshold. An
overview of the strategic objectives is set out below:
Strategic objective
Aim
Earlier profit realisation
Reduce the dependency on the final two months
of the year
Metric – Measured profit
Cost saving
Improve the efficiency of the Group
Metric – Measured cost
Sales development of
six major properties
Improve revenue and earnings
Metric – Net revenue
Inventory reduction
Reduce working capital and improve ROCE
Metric – Net finished goods stock value
Digital revenue
Achieve the milestones within the Bloomsbury
2020 strategy
Metric – BDR 2020 revenue
Sales development
of acquisitions
Focus on the performance of recent acquisitions
Metric – Revenue arising from recent acquisitions
Improved employee
engagement
Total
Measure the progress and effectiveness of
employee engagement initiatives
Metric – Employee turnover
Respective weightings
Nigel
Newton
Jonathan
Glasspool
Penny
Scott-Bayfield
5%
5%
2%
3%
10%
2%
3%
30%
5%
5%
–
3%
10%
4%
3%
30%
5%
10%
–
3%
7%
2%
3%
30%
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Vesting of PSP Awards
The PSP Awards granted on 27 July 2017 (“2017 PSP Award”) are set to vest on 27 July 2020 based on performance over a three-
year period ending 29 February 2020. The performance conditions for this award are as disclosed in previous Annual Reports. The
level of vesting for the 2017 PSP awards is as follows:
Metric
Relative EPS growth
(50% of awards)
ROCE1
(50% of awards)
Total estimated vesting
of 2017 PSP Awards
Performance condition
Compound annual growth in
normalised EPS over the performance
period in excess of annualised RPI
(“Relative EPS growth”)
ROCE measured in the last financial
year of the three-year performance
period
Threshold target2
3%
Stretch target2
8%
Actual
7.4%
9.2%
11.6%
12.2%
% Vesting
46%
(out of a
maximum
of 50%)
50%
(out of a
maximum
of 50%)
96%
1 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. On review, the Committee was satisfied that the outcome was consistent with Company performance over the last three years.
2 The level of vesting for achievement between threshold and stretch targets is calculated on a straight-line basis from 25% at threshold to 100% at stretch. No
vesting for achievement below threshold, and 100% vesting for achievement above the stretch target.
Based on the above, values for the 2017 PSP Awards are as follows:
Executive
Type of award
Nigel Newton
Jonathan Glasspool
Conditional award with
EPS and ROCE
performance conditions
Number
of shares at
grant
Number
of shares
to lapse
Number
of shares
to vest
Number
of Dividend
Shares 1
Estimated
value
£’0002
Total
240,689
9,628
231,061
18,345
249,406
127,812
5,112
122,700
9,742
132,442
702
373
1 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.
2 Estimated value is calculated using a three-month average share price to the 29 February 2020 of £2.815. The actual value of shares received will vary depending
on the share price at the end of the holding period.
PSP Awards granted during 2019/2020
Details of PSP Awards granted in 2019/2020 (“2019 PSP Award”) are as follows:
Individual
Nigel Newton
Penny
Scott-Bayfield
Jonathan
Glasspool
Scheme
Date of grant
Date of vest
21 Aug 2019 21 Aug 2022
PSP
(Conditional
awards)
21 Aug 2019 21 Aug 2022
Basis of award
(% of base
salary)
100%
100%
21 Aug 2019 21 Aug 2022
100%
Face value1
£’000
455
Vesting at
threshold
25%
Vesting at
maximum
100%
236
242
25%
100%
25%
100%
Performance
period
ROCE: 3 years to
28 February 2022
EPS: 3 years to 28
February 2022
1 Face value was determined using a share price of 230p (closing mid-market price of a share on the dealing day before the grant was made).
For awards presented above:
• 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%; and
• For 50% of awards (ROCE awards): 25% of this part of an award will vest for absolute ROCE of 12.2% or higher (nil vesting for
below), increasing straight-line to 100% vesting of this part of an award for ROCE of 15.3% (100% for above), ROCE measured in
the last financial year of the three-year performance period.
The awards will be subject to malus and clawback provisions.
Any vested shares must be held by the Executive Directors for a further two years.
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Directors’ Remuneration Report
continued
Payments to past Directors
There were no payments to past Directors during the year.
Payments for loss of office
There were no payments for loss of office during the year.
On 29 October 2019, the Company announced that Jonathan Glasspool will retire from the Company in July 2020. Jonathan will
step down from the Board on 21 July 2020, being the date of the AGM, and will retire from the Company on 31 July 2020. He
will not receive any payment in lieu of notice or any ex-gratia payment, and he will not be granted an award under the 2020 PSP
Award. The Committee has determined that Jonathan shall be eligible for any bonus that may be awarded in respect of 2020/2021
on a time pro-rated basis. The Committee has further confirmed Jonathan’s status as a “good leaver” for the purposes of
outstanding incentive awards. All awards will be subject to time pro-rating and performance (as assessed at the end of the relevant
performance period).
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:
Nigel Newton
Penny Scott-Bayfield1
Jonathan Glasspool
Date of
PSP award
8 June 2016
27 July 2017
30 July 2018
21 August 2019
30 July 2018
21 August 2019
8 June 2016
27 July 2017
30 July 2018
21 August 2019
Due date of
exercise/
expiry
Price at
grant date
(pence)
At
1 March
2019
Awarded
during
the year
Exercised
during
the year
Lapsed
during
the year
Share price
on date of
exercise
(pence)
At
29
February
2020
162.00p 261,544
8 June 2019
180.00p 240,689
27 July 2020
220.00p 201,851
30 July 2021
230.00p
21 August 2022
220.00p 104,545
30 July 2021
230.00p
21 August 2022
162.00p 138,888
8 June 2019
180.00p 127,812
27 July 2020
30 July 2021 220.00p 107,188
21 August 2022
230.00p
–
–
–
– 197,901
– 102,500
–
–
–
– 105,090
– 261,544
–
–
–
–
–
–
40,115
–
–
–
– 138,888
–
–
–
–
–
–
–
–
– 240,689
– 201,851
– 197,901
–
64,430
– 102,500
–
–
– 127,812
– 107,188
– 105,090
1 Penny Scott-Bayfield became a Director on 16 July 2018. Her 2018 PSP award over 104,545 shares reflected her annual salary on appointment, rather than her
actual salary from the date of her appointment to 28 February 2019. Accordingly, the award was reduced by 40,115 to 64,430 shares to correct the position.
EPS
For 50% of all 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%.
TSR
For 50% of awards made in 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%.
ROCE
For 50% of the awards made in 2017, 2018 and 2019: 25% of this part of the award will vest for absolute Return On Capital
Employed (“ROCE”) of 9.2% (2017) or 13.1% (2018) or 12.2% (2019) (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) or 15.3% (2019) (100% for above), ROCE being 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.
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GOVERNANCE
Sharesave options
Bloomsbury operates an HMRC-approved Sharesave scheme in respect of which all UK employees are eligible to participate.
The following Sharesave options granted to the Executive Directors were outstanding at the year end:
Jonathan Glasspool
Penny Scott-Bayfield
At
1 March
2019
6,550
–
–
Granted
during
the year
–
4,870
9,740
Exercised
during
the year
–
–
–
Lapsed
during
the year
–
–
–
At
29 February
2020
6,550
4,870
9,740
Exercise
price
(pence)
Date of grant
137.4p 12 June 2017
12 July 2019
184.8p
12 July 2019
184.8p
Date from
which
exercisable
Expiry date
Sept 2020 Mar 2021
Sept 2022 Mar 2023
Sept 2022 Mar 2023
Directors’ interests in shares
Under the current Remuneration Policy, Executive Directors are required to build up a shareholding in the Company equal to
100% of their salary ("Shareholding Guideline") to align their interests with that of Shareholders. For 2020/2021, the Shareholding
Guideline for Executive Directors is increasing to 200% of salary. Executive Directors will normally be expected to retain any
vested shares (net of tax) until the Shareholding Guideline has been achieved.
Following the AGM, Executive Directors will also be subject to a post-employment shareholding guideline. After ceasing to be an
Executive Director, individuals will be expected to maintain a shareholding equivalent to 200% of salary (or actual shareholding
if lower), tapering down to nil over two years. This guideline may be disapplied in certain cases (e.g. due to compassionate
circumstances). The new guideline will apply to shares vesting after the adoption of the new Policy.
Shareholding Guidelines do not apply to the Chairman or Non-Executive Directors.
The interests of the Directors who served on the Board during the year are set out in the table below:
Owned2
PSP Awards
Nigel Newton
Penny Scott-Bayfield3
Jonathan Glasspool
Sir Richard Lambert
Jill Jones4
John Warren
Steven Hall
Leslie-Ann Reed5
Total
29 February
2020
1,017,263
–
30,975
10,000
–
10,000
3,171
–
1,071,409
28 February
2019
1,017,263
–
30,975
10,000
2,800
10,000
3,171
–
1,074,209
Unvested
640,441
166,930
340,090
–
–
–
–
–
1,147,461
CSOP
options
unvested
–
–
–
–
–
–
–
–
–
Vested
–
–
–
–
–
–
–
–
–
Sharesave
options
unvested
Total
29 February
2020
– 1,657,704
176,670
382,485
10,000
–
10,000
3,171
–
21,160 2,240,030
9,740
11,420
–
–
–
–
–
Shareholding
Guideline
achieved1
%
100%
0%
27.9%
N/A
N/A
N/A
N/A
N/A
1 The Shareholding Guideline 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 normally 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 218 pence (determined by closing price of shares the day after annual results are announced).
2 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 Penny Scott-Bayfield became a Director on 16 July 2018. Her 2018 PSP Award over 104,545 shares reflected her annual salary on appointment, rather than her
actual salary from the date of her appointment to 28 February 2019. Accordingly, the award was reduced by 40,115 to 64,430 shares to correct the position.
4 Jill Jones resigned as a Director of the Company on 17 July 2019.
5 Leslie-Ann Reed was appointed as a Director of the Company on 17 July 2019.
6 There have been no changes in the interests of each of the Directors during 2019/2020.
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.
Overall, the Committee considers that the Remuneration Policy has operated as it intended during 2019/2020 and that the pay
outcomes are aligned with the experience of Shareholders and other stakeholders over the relevant performance period.
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Directors’ Remuneration Report
continued
Implementation of Remuneration Policy in
2020/2021
From 1 March 2020, the Executive Directors received a
pay increase of 2% in line with the increase for the general
workforce.
Basic salaries for the Executive Directors are as follows:
Executive Director
Nigel Newton
Penny Scott-Bayfield
Jonathan Glasspool
From 1 March 2020
£’000
464
240
247
From 1 March 2019
£’000
455
236
242
As noted in the Chair’s Annual Statement on page 89, the
Executive Directors have voluntarily agreed to a temporary
reduction of 30% to their base salary payments for a period of
at least three months from 1 April 2020, as one of a number of
measures taken by the Company to mitigate the impact of the
coronavirus crisis by conserving cash and reducing costs. The
Company intends to review this approach in July 2020, and
consider whether any further extension of the arrangement
is required. At the end of the financial year, the Board will
give consideration to whether it is appropriate to reimburse
(either in part or in full) the discounted element of salary/fees
in respect of the year. This assessment will take into account
various factors, including evolving market conditions, the
underlying financial health of the business and the approach
taken for wider employees.
Pension and benefits
In 2020/2021, pension contributions (as a percentage of
base salary) for Executive Directors will remain unchanged at
15%. Pension contributions for any new Executive Director
appointments will be set in line with the applicable wider
workforce rate, which is determined by the age of the
employee and ranges from 4% for those under 40 to 7% for
those over 50. We appreciate that market practice in this area
continues to evolve, and we will keep this under review in future
years.
There will be no changes to other benefits.
Annual bonus
Annual bonuses for 2020/2021, will be consistent with the
Remuneration Policy. The maximum bonus potential will
continue to be set at 100% of salary. When determining annual
bonuses, the Committee will consider both financial and
strategic performance of the Group over the year, taking into
account overall affordability. Specific measures and targets
will be disclosed retrospectively in the Annual Report on
Remuneration.
To the extent any annual bonus is payable to the Executive
Directors, the Committee will be mindful of the experience of
all our stakeholders groups over the year, in particular the wider
employee population.
Any bonus payable will be subject to malus and clawback
provisions.
Long-term incentives
Annual PSP awards will be granted to Executive Directors in
2020/2021 (“2020 PSP Award”) at 100% of salary in line with
awards in prior years. When granting awards for 2020, the
Committee will be cognisant of the current volatility across the
market. When granting awards, the Committee will consider
the share price on the grant date as well as the average price
used to grant awards over multiple years.
The 2020 PSP Award will be subject to the following
performance measures:
• EPS (60%)
• Non-Consumer operating profit (15%)
• Consumer operating profit (15%)
• BDR revenue (10%)
Given the impact of the global coronavirus crisis on the sector,
the Committee is still in the process of finalising targets and
consulting with Shareholders. Once finalised, our intention is to
disclose the detail of the targets on the Company's website.
The awards for Executive Directors will be subject to malus and
clawback provisions and to a two-year post-vesting holding
period. During the holding period, an Executive Director 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.
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27040 11 June 2020 8:07 pm Proof 227040 11 June 2020 8:07 pm Proof 2Non-Executive DirectorsFrom 1 March 2020, the Non-Executive Directors received an increase to their fees of 2% in line with the increase for the general workforce. Current annualised fees are as follows:Non-Executive DirectorPositionFrom 1 March 2020 £’000 From 1 March 2019 £’000Sir Richard LambertChairman of the Board, Chair of the Nomination Committee113 111John WarrenChair of the Audit Committee and Senior Independent Director4342Steven HallChair of the Remuneration Committee and Independent Non-Executive Director4341Leslie-Ann Reed1Independent Non-Executive Director40251 Leslie-Ann Reed was appointed as a Director of the Company on 17 July 2019. Her 2019 fees are from the date of her appointment.As noted in the Chair’s Annual Statement on page 89, the Non-Executive Directors have voluntarily agreed to a temporary reduction of 30% to their fee payments for a period of at least three months from 1 April 2020, as one of a number of measures taken by the Company to mitigate the impact of the coronavirus crisis by conserving cash and reducing costs. The Company intends to review this approach in July 2020, and consider whether any further extension of the arrangement is required. At the end of the financial year, the Board will give consideration to whether it is appropriate to reimburse (either in part or in full) the discounted element of salary/fees in respect of the year. This assessment will take into account various factors, including evolving market conditions, the underlying financial health of the business and the approach taken for wider employees.PART B–2 (UNAUDITED INFORMATION)Performance graph and tableThe chart below shows the Company’s Total Shareholder Return for the period from 31 December 2009 to 29 February 2020 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.250300200150100500Feb–11Dec–09Feb–12Feb–13Feb–14Feb–15Feb–16 FTSE SmallCap MediaBloomsburyTotal Shareholer Return (rebased)Feb–19Feb–20Feb–18Feb–17The chart aligns to the Company’s accounting period, which was extended during the 14 months to 28 February 2011.Stock code: BMYAnnual Report and Accounts 2020GOVERNANCE10327040-Bloomsbury-AR2020 - governance.indd 10311-Jun-20 9:50:45 PM Directors’ Remuneration Report
continued
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 and ROCE) 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 (%)
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%
29 Feb
2020
1,250
0%
96%
1 Covers a period of 14 months due to the change of Accounting Reference Date.
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
years ended 28 February 2019 and 29 February 2020, 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
29 February 2020
Year ended
28 February 2019
455
29.3
93
1.6
0
0.3
702
444
27.8
96
1.5
411
2.3
683
% change
2.5%
5.5%
-3.1%
9.9%
-100%
-86.4%
2.8%
Chief Executive’s pay ratio
The table below discloses the ratio of the Chief Executive’s pay for 2019/2020, using the single total figure remuneration as
disclosed on page 97 of this section of the Annual Report to the comparable, full-time equivalent total remuneration of all UK
employees whose pay is ranked at the 25th percentile, median and 75th percentile.
Year
2020
Method1
A
25th percentile pay ratio2
44.8 : 1
Median pay ratio3
34.9 : 1
75th percentile pay ratio4
24.5 : 1
1 Method A, as set out in the Companies (Miscellaneous Reporting) Regulations 2018, was selected as this is considered the most statistically accurate and robust
methodology. The 25th percentile, median and 75th percentile UK employees were determined based on total remuneration for the year ended 29 February 2020
using the single total figure valuation methodology. The elements used to calculate total remuneration comprised of salary, pensions, bonus and benefits. The
value of Sharesave options granted in the year have been excluded when calculating total remuneration for UK employees.
2 The relevant 25th percentile values are £26,000 salary and £27,892.57 total pay and benefits.
3 The relevant median values are £31,519 salary and £35,832.66 total pay and benefits.
4 The relevant 75th percentile values are £48,000 salary and £51,024.99 total pay and benefits.
The Company believes the median pay ratio for the year ended 29 February 2020 is consistent with the pay, reward and
progression policies for the Company’s UK employees taken as a whole.
During 2019/2020, there was a nil payout for the bonus scheme and the 2017 PSP awards vested at 96%. A greater proportion
of the Chief Executive’s and senior managements’ overall remuneration is linked to performance (via the annual bonus and PSP
Awards) when compared to the wider workforce due to the nature of their roles. The Committee therefore noted that pay ratios
are likely to fluctuate in future years depending on the performance of the business and associated outcomes of incentive plans in
each year. In practice, the pay ratio for 2019/20 would be lower if the Chief Executive’s pay was determined based on the current
share price.
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GOVERNANCE
Consideration of wider workforce
During the year, the Committee was updated on workforce remuneration policies, including variable pay schemes and benefits
for employees across the Company as a whole, and took these into account when determining remuneration arrangement
for Executive Directors. The Committee continues to develop and evolve its approach to engagement with the workforce on
Executive pay. Currently information on the Executive Remuneration Policy is provided on the Company’s intranet, which is
accessible by all employees.
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 2
1 Retained profits for 2019/2020 reflect the impact of adopting IFRS 16.
2 Retained profits for 2018/2019 reflect the impact of adopting IFRS 9 and 15.
Year ended
29 February 2020
34.9
1.0
4.4
Year ended
28 February 2019
34.8
6.0
3.6
Voting at the Annual General Meeting
At the Annual General Meeting of 17 July 2019, the Annual Statement by the Chair of the Remuneration Committee and the
Annual Report on Directors’ Remuneration for the financial year ended 28 February 2019 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
46,417,877
366,082
46,783,959
1,500
Percentage
of the vote
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
57,376,766
309,752
57,686,518
14,432
Percentage
of the vote
99.5%
0.5%
100%
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Stock code: BMY
Annual Report and Accounts 2020
105
Directors’ Remuneration Report
continued
Remuneration Committee
Composition of the Committee
The Committee is comprised of three Independent Non-Executive Directors and the Chairman of the Board. The members of the
Committee during the year were:
Director
Jill Jones (Chair of the Committee)1
Steven Hall (Chair of the Committee)2
Sir Richard Lambert
John Warren
Leslie-Ann Reed
1 Jill Jones resigned as a Director of the Company on 17 July 2019.
2 Steven Hall became Chair of the Remuneration Committee on 17 July 2019.
Appointed in the year
(if applicable)
–
–
–
–
17 July 2019
Resigned in the year
(if applicable)
17 July 2019
–
–
–
–
The Committee met eight times during 2019/2020. The Committee members’ attendance can be seen on page 79 of this section
of the Annual Report. Only members of the Remuneration Committee have the right to attend Committee meetings, however the
Chief Executive and Group Finance Director may attend Committee meetings at the request of the Chair of the Committee for
specific items on the agenda. The remuneration consultants may attend where needed to provide technical support.
Role of the Committee
The terms of reference of the Committee set out its role and authority. These are reviewed annually and can be found on the
Company’s website, www.bloomsbury-ir.co.uk. In summary, the Committee’s responsibilities include:
• Determining the remuneration policy for the Chairman and Executive Directors;
• Determining the remuneration packages for the Executive Directors and Chairman within the terms of the policy;
• Monitoring the level and structure of remuneration for other members of senior management;
• Approving the design of, and determining targets for, the performance-related pay schemes operated by the Company;
• Reviewing the design of all share incentive plans for Board approval. For any such plans, the Committee shall determine whether
the awards will be made, and if so, approve the overall amount of such awards, the individual awards to Executive Directors,
Company Secretary and designated senior managers and the performance targets to be used; and
• Developing a formal policy for shareholding guidelines in employment and post-employment shareholding requirements.
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Activities of the Committee during the year
During the year, the Committee undertook a review of the
Directors’ Remuneration Policy in line with the standard
three-year renewal cycle to ensure that it continues to support
the execution of the Company’s strategy and the interest of
Shareholders. A significant proportion of the Remuneration
Committee’s time at meetings was spent on discussing the
content of the new Policy. Matters that were considered in
respect of the new Policy included:
• The consideration and approval of revised performance
metrics for the 2014 Performance Share Plan;
• In-employment and post-employment shareholding
requirements;
• Pension contributions for new Executive Director
appointments;
• Malus and clawback provisions applying to both the 2014
Performance Share Plan and the bonus scheme; and
• Shareholder communications and feedback following the
Shareholder consultation.
Other matters the Committee considered include the
following:
• The approval of increases to the Executive Directors’ salaries
and the Chairman’s fees;
• Review and approval of the Executive Directors’
remuneration packages;
• Review of the bonus plan achievement for 2018/2019;
• Review and approval of the bonus plan proposal and
objectives for 2019/2020;
• Review of workforce engagement around Executive
remuneration policies;
• Review and approval of performance targets for the 2019
PSP Award;
• Review of the Committee evaluation;
• Approval of the correction to Penny Scott-Bayfield’s 2018
PSP Award;
• Review and recommendation for approval of the Directors’
Remuneration Report for the Annual Report and Accounts
for the financial year ended 28 February 2019;
• Review of the performance outcome of the 2016 PSP Award;
and
• Review and approval of the Committee’s terms of reference.
GOVERNANCE
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.
During 2019, the Committee considered its role in respect of
determining the remuneration of senior management with
reference to the 2018 Code. After due consideration and
discussion at both the Committee and the Board level it was
decided that the Executive Directors would remain responsible
for remuneration for senior management. The Committee
believes that the Executive Directors are best placed to
assess the appropriate level of remuneration of senior
managers based on their performance and contribution to the
Company’s success and on the Executive Directors’ knowledge
of market rates of pay. The Committee will nonetheless monitor
the remuneration of senior managers closely and will continue
to be responsible for approving the granting and vesting of
share incentives.
Advisers to the Committee
In carrying out its responsibilities, the Committee was
independently advised by external advisers. During the first
half of the year, the Committee was advised by New Bridge
Street. In respect of their services to the Committee, fees
charged by New Bridge Street amounted to £43,758 (excluding
VAT). In the second half of the year, Deloitte LLP was appointed
as the Committee’s external remuneration consultants through
a competitive tender process, which took place in September
2019. Deloitte LLP is a founding member of the Remuneration
Consultants’ Group and adheres to its Code of Conduct. In
respect of their services to the Committee, fees charged by
Deloitte LLP amounted to £25,900 (excluding VAT).
During the year, separate teams within Deloitte also provided
Bloomsbury with tax advisory services. The Committee is
satisfied that the advice provided by Deloitte LLP was objective
and independent, that the provision of other services in no
way compromised their independence and that there was
no potential conflict of interest. The individual consultants
who work with the Committee do not provide advice to the
Executive Directors or act on their behalf.
The Committee received assistance from the Company
Secretary and, where specifically requested by the Committee,
the Chief Executive and Group 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.
Steven Hall
Chair of the Remuneration Committee
20 May 2020
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Section 172 Directors’ Duties Statement
The Directors of Bloomsbury – and those of all UK companies – must act in a manner which complies with a set of general duties.
These duties are detailed in the Companies Act 2006 and include, in s172, a duty to promote the success of the company, as set
out below.
Section 172 of the Companies Act 2006
A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the
company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
• The likely consequences of any decisions in the long term;
• The interests of the company’s employees;
• The need to foster the company’s business relationships with suppliers, customers and others; the impact of the company’s
operations on the community and the environment;
• The desirability of the company maintaining a reputation for high standards of business conduct; and
• The need to act fairly as between members of the company.
As part of their induction, the Directors are briefed on their duties, including their duties under s172, and are able to access
professional advice on these, either through the Company, or from an independent provider should they consider it necessary.
The Board believes that, individually and together, they have acted in the way they consider, in good faith, would promote the
success of the Company for the benefit of its members as a whole, having regard to the matters set out in s172(1)(a–f) of the
Companies Act 2006 in the decisions taken during the year ended 29 February 2020.
The Board has always had regard for the potential impact of the Group’s activities on its various stakeholders. The key stakeholders
of the Group are set out in more detail in the Strategic Report on pages 58 to 63. The Board believes that the Company can only
be successful when the interests of its stakeholders are considered and appropriately reflected in how the Company’s business
and strategy develops.
The Directors fulfil their duties partly through a governance framework that delegates day-to-day decision-making to employees
of the Company; details of this governance framework are set out in the Corporate Governance section on pages 67. In delegating
such decision-making the Board is mindful of the importance of an organisational culture which has appropriate regard for the
needs and views of its stakeholders and high ethical standards. The Board believes that balancing the interests of the Company’s
stakeholders with the Company’s commercial objectives and the desire to behave as an ethical and responsible business is
embedded in the way the Company operates, is informed by the strong social purpose which underlies the Group’s activities and
is reinforced by a robust system of controls and assurances. As set out in the Chairman’s statement on page 66 of the Corporate
Governance Report and further on page 75 of the Corporate Governance Report, the Board continues to focus on setting a
corporate culture that is aligned with the Company’s purpose, values and strategy; effective engagement with, and regard for the
concerns of, key stakeholders is an important aspect of promoting the Company’s desired culture and reinforcing its values.
The Board gathers relevant information and feedback on key stakeholder interests and concerns from information provided by
the Company’s Executive Directors, senior and functional management and through direct engagement where appropriate.
As is typical of an organisation the size of the Company, engagement with key stakeholders in respect of day-to-day business
and operational matters is ordinarily conducted by senior managers and other employees of the Company. During the course
of the year, the Board maintains its oversight of the Company’s engagement with key stakeholders by receiving reports on the
Company’s engagement mechanisms, the matters considered during engagement, and the outcomes of such engagement. The
insights which the Board gains through the Company’s engagement mechanisms form an important part of the context for the
Board’s discussions and decision-making process.
Information about how the Company engages with its key stakeholders, and how the Directors, with the support of the wider
business, consider the matters set out under s172 of the Companies Act in carrying out their duties, is set out in the Strategic
Report on pages 58 to 63.
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Bloomsbury Publishing Plc
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Notes to the Financial Statements Financial
Statements
112
Independent Auditor’s Report
120
Consolidated Income Statement
121
Consolidated Statement of Comprehensive Income
122
Consolidated Statement of Financial Position
123
Consolidated Statement of Changes in Equity
124
Consolidated Statement of Cash Flows
125
Notes to the Financial Statements
164
Company Statement of Financial Position
165
Company Statement of Changes in Equity
166
Company Statement of Cash Flows
167
Notes to the Company Financial Statements
Annual Report and Accounts 2020 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 29 February 2020
which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated
and Company Statements of Financial Position, Consolidated and Company Statements of Changes in Equity, Consolidated and
Company Statements of Cash Flows and the related notes, including the accounting policies in notes 2 and 32.
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 29
February 2020 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 4 September 2013. The period of total uninterrupted engagement is for
the seven financial years ended 29 February 2020. 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: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, 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 decreasing order of audit significance, 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.
112
www.bloomsbury.comBloomsbury Publishing Plc The risk
Our response
Going concern basis of preparation
Refer to page 85 (Audit Committee Report), notes 2 and 32 on pages 125 and 167 (accounting policies) New risk for 2020
Disclosure quality
The financial statements explain how the Directors have
formed a judgement that the use of the going concern basis is
appropriate in preparing the financial statements of the Group
and the parent Company.
That judgement is based on an evaluation of the inherent risks
to the Group’s and the parent Company’s business model
and how those risks might affect the Group’s and the parent
Company’s financial resources or ability to continue operations
over a period of at least a year from the date of approval of the
financial statements.
The risks most likely to adversely affect the Group’s and the
parent Company’s available financial resources over this period
were:
• COVID-19: The pandemic affecting the global economy
leading to significant economic uncertainty and a significant
reduction in physical retailers open for business. There is
inherent estimation uncertainty in the assumptions used in
the Group’s and the parent Company’s business model as a
result of COVID-19, including the length of the period that
the reduction in the number of retailers open for business
and the likelihood of consumers switching to alternative
methods of purchasing books; and
• Uncertainty due to the UK exiting the European Union.
The risk for our audit was whether or not those risks were such
that they amounted to a material uncertainty that may have
cast significant doubt about the ability to continue as a going
concern. Had they been such, then that fact would have been
required to have been disclosed.
Our procedures included:
Benchmarking assumptions: We challenged the
appropriateness of key assumptions in the cash flow
projections, applying our sector knowledge and experience
based on our historical knowledge of the Group and the
markets in which the subsidiaries operate, together with market
and other externally available information.
Sensitivity analysis: We considered sensitivities over the
level of available financial resources indicated by the Group’s
financial forecasts, taking account of reasonably possible (but
not unrealistic) adverse effects that could arise from these risks
individually and collectively.
Funding assessment: We examined correspondence and
supporting documentation with third party funding providers,
assessing the Group’s lending RCF arrangements and covenant
terms.
Assessing transparency: We considered the appropriateness
of relevant disclosures, including both the going concern
disclosure in the financial statements and also the commentary
elsewhere in the Annual Report on the impact of COVID-19.
Our results
We found the going concern disclosure without any material
uncertainty to be acceptable.
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to the members of Bloomsbury Publishing Plc continued
The risk
Our response
Carrying value of Goodwill (Academic and Professional) – £35.9m (2019: £35.9m)
Refer to page 85 (Audit Committee Report), note 2 on page 129 (accounting policy) and note 11 on pages 144 to 145 (financial
disclosures) Risk vs 2019 ↓
Forecast-based valuation
The Group has historically acquired a number of businesses
with a majority being integrated into the Academic and
Professional division. The recoverability of goodwill associated
with the Academic and 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.
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.
• Our sector experience: We used our sector experience
to assess the appropriateness of the discount rate for the
Academic and Professional cash generating unit, with
reference to external sources of data. We challenged the
judgements and assumptions used by the Group in its
calculation based on our knowledge of the business.
• Sensitivity analysis: We performed breakeven analysis
on the cash flows and discount rate 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 for the Academic and Professional cash generating
unit to be acceptable (2019 result: acceptable).
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www.bloomsbury.comBloomsbury Publishing Plc The risk
Our response
Sales returns liability – Group £9.2m (2019: £8.5m), parent Company £1.6m (2019: £3.4m)
Refer to page 85 (Audit Committee Report), notes 2 and 32 on pages 127 and 167 (accounting policies) and notes 19 and 41 on
pages 150 and 173 (financial disclosures) Risk vs 2019 ←→
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 liability 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. The financial statements (notes
19 and 41) disclose the sensitivity estimated for the Group and
parent Company financial statements.
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 liability to assess historical accuracy of the Group’s
liabilities.
• Tests of details: We tested the inputs used in the returns
liability calculations at 29 February 2020 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 liability to be acceptable (2019: acceptable).
The risk
Our response
Recoverability of advances – Group £24.8m (2019: £22.7m), parent Company £12.5m (2019: £10.8m)
Refer to page 85 (Audit Committee Report), notes 2 and 32 on pages 130 and 167 (accounting policies) and notes 18 and 40 on
pages 149 and 173 (financial disclosures) Risk vs 2019 ←→
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.
The advances balance is made up of a significant number
of individual advances to authors and requires the Group to
forecast future sales to assess 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.
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.
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.
Our procedures included:
• Historical comparisons: We 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.
• Assessing application: We evaluated whether the Group’s
policy was consistently applied and remained appropriate,
with regard to the relevant accounting standards.
• Our sector experience: We 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.
• Assessing transparency: We assessed the adequacy of the
Group’s disclosures concerning the degree of estimation
involved in arriving at the final unearned advance position.
Our results
We found the resulting estimate of the carrying value of
advances to be acceptable (2019: acceptable).
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The risk
Our response
Parent: Recoverability of parent Company’s investment in subsidiaries - £81.2m (2019: £83.3m)
Refer to page 85 (Audit Committee Report), note 32 on page 167 (accounting policy) and note 36 on page 171 (financial
disclosures) Risk vs 2019 ←→
Forecast-based valuation
The carrying amount of the parent Company’s investments
in subsidiaries represents 43.7% (2019: 49.4%) of the parent
Company’s total assets. Their recoverability is at risk of
misstatement and subject to significant judgement. 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.
The effect of these matters is that, as part of our risk
assessment, we determined that the carrying amount of the
parent Company’s investments in subsidiaries 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:
• Tests of detail: Compared 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.
• Benchmarking assumptions: We challenged the Group’s
assumptions by comparing to externally derived data in
relation to key inputs such as projected economic growth.
• Our sector experience: We used our sector experience to
assess the appropriateness of the discount rate for each cash
generating unit, with reference to external sources of data.
We challenged the judgements and assumptions used by
the Group in its 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.
Our results
We found the Group’s assessment of the recoverability of the
parent Company’s investment in subsidiaries to be acceptable
(2019: acceptable).
We continue to perform procedures over revenue recognised from contracts and recoverability of inventory. However, following
the implementation of IFRS 15 in 2019 we consider the ongoing risk of revenue recognition in relation to revenue recognised from
contracts to have reduced, as such we have not assessed this as one of the most significant risks in our current year audit and,
therefore, it is not separately identified as a key audit matter in our report this year. In addition, following management’s continued
focus on inventory control, we have not assessed this as one of the most significant risks in our current year audit and, therefore,
it is not separately identified as a key audit matter in our report this year. Finally, last year we reported a key audit matter in our
report in respect of the impact of uncertainties due to the UK exiting the European Union. As a result of developments since the
prior year report, including the Group’s own preparation, the relative significance of this matter on our audit work has reduced.
Accordingly, we no longer consider this a key audit matter.
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 £606,000 (2019: £595,000), determined with reference to a
benchmark of Group profit before tax of £13,229,000 (2019: £12,049,000), of which it represents 4.6% (2019: 4.9%).
Materiality for the parent Company financial statements as a whole was set at £515,000 (2019: £505,000), determined with
reference to a benchmark of the parent Company’s profit before tax of £12,217,000 (2019: £8,030,000), of which it represents 4.2%
(2019: 5.1%).
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £30,000 (2019:
£29,000), in addition to other identified misstatements that warranted reporting on qualitative grounds.
Of the Group's four (2019: four) reporting components, we subjected two (2019: two) 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 (2019: 90%), 94% of Group profit before tax (2019: 98%) and 94% of Group total assets (2019: 91%).
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 used the following component materialities, having regard to the mix of size
and risk profile of the Group across the components:
• UK £515,000 (2019: £505,000)
• USA £327,000 (2019: £267,000)
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www.bloomsbury.comBloomsbury Publishing Plc The remaining 10% (2019: 10%), of total Group revenue, 6% (2019: 2%), of Group profit before tax and 6% (2019: 9%), of total
Group assets is represented by two 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 parent
Company or the Group or to cease their operations, and as they have concluded that the parent 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 parent Company will continue in operation. We identified going concern as a key audit matter (see section 2 of this
report). Based on the work described in our response to that key audit matter, 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 the parent Company’s use of that basis for a period of at least 12 months from the date of approval of the financial
statements; or
• the related statement under the Listing Rules set out on page 74 is materially inconsistent with our audit knowledge.
We have nothing to report in these respects.
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 emerging and 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 45) that they have carried out a robust assessment of the
emerging and 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.
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to the members of Bloomsbury Publishing Plc continued
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
judgements 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 the parent 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
Cirectors’ 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
provisions of the UK Corporate Governance Code specified by the Listing Rules for our review.
We have nothing to report in these respects.
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 74, 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.
118
www.bloomsbury.comBloomsbury Publishing Plc 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.
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.
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
26 May 2020
119
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Consolidated Income Statement
For the year ended 29 February 2020
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 125 to 163 form part of these consolidated financial statements.
Year ended
29 February
2020
£’000
162,772
(74,978)
87,794
(21,373)
(52,949)
15,947
(2,475)
13,472
270
(513)
15,704
(2,475)
13,229
(2,728)
10,501
Year ended
28 February
2019
£’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
14.03p
13.84p
12.37p
12.25p
Notes
3
4
4
6
6
4
7
9
9
120
www.bloomsbury.comBloomsbury Publishing Plc Consolidated Statement of Comprehensive Income
For the year ended 29 February 2020
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
29 February
2020
£’000
10,501
Year ended
28 February
2019
£’000
9,247
856
964
(115)
741
11,242
(5)
959
10,206
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.
121
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Consolidated Statement of Financial Position
As at 29 February 2020
Assets
Goodwill
Other intangible assets
Investments
Property, plant and equipment
Right-of-use assets
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
Lease liabilities
Provisions
Total non-current liabilities
Trade and other liabilities
Lease liabilities
Current tax 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
29 February
2020
£’000
28 February
2019
£’000
Notes
11
12
13
14
15
16
18
17
18
24
16
26
21
19
26
21
22
22
22
22
22
45,030
21,630
516
1,914
13,343
2,756
1,237
86,426
27,164
84,805
31,345
143,314
229,740
185
2,347
12,945
182
15,659
61,844
1,585
328
651
64,408
80,067
149,673
942
39,388
9,507
7,778
92,058
149,673
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
The financial statements were approved by the Board of Directors and authorised for issue on 26 May 2020.
J N Newton
Director
P Scott-Bayfield
Director
122
www.bloomsbury.comBloomsbury Publishing Plc
Consolidated Statement of Changes in Equity
For the year ended 29 February 2020
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
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
Share options exercised
Deferred tax on share-based
payment transactions
Share-based payment
transactions
Total transactions with owners
of the Company
At 29 February 2020
Share
Share
capital
premium
£’000
£’000
942 39,388
–
–
Translation
reserve
£’000
7,687
–
Merger
reserve
£’000
1,803
–
Capital
redemption
reserve
£’000
22
–
Share-
based
payment
reserve
£’000
5,673
–
Own
shares
held by
EBT
£’000
Retained
earnings
Total equity
£’000
£’000
(1,043) 84,034 138,506
9,247
9,247
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
964
–
964
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
942 39,388
–
–
–
8,651
–
–
1,803
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
856
–
856
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
22
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
422
422
6,095
–
–
–
–
–
–
–
629
–
–
–
–
–
241
–
–
–
(5)
964
(5)
9,242
10,206
(5,655)
12
(27)
(5,655)
12
214
33
–
33
422
241
(4,974)
(5,637)
(802) 87,639 143,738
10,501
10,501
–
–
–
–
856
(115)
(115)
– 10,386
11,242
–
31
–
–
(6,009)
(4)
(6,009)
27
46
–
46
629
–
–
942 39,388
–
9,507
–
1,803
–
22
629
6,724
31
(5,307)
(5,967)
(771) 92,058 149,673
* The Group has applied IFRS 15 "Revenue from Contracts with Customers" and IFRS 9 "Financial Instruments" at 1 March 2018. The cumulative impact of adoption
has been recognised as a decrease to opening retained earnings as at 28 February 2018.
123
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Consolidated Statement of Cash Flows
For the year ended 29 February 2020
Year ended
29 February
2020
£’000
Year ended
28 February
2019
£’000
Notes
10,501
9,247
14
15
12
6
6
13
23
7
20
20
20
20
20
20
20
502
1,775
4,301
(270)
513
7
761
2,728
20,818
(620)
(4,385)
2,489
18,302
(1,706)
16,596
(294)
(3,137)
(310)
(1,213)
(223)
254
(4,923)
(6,009)
27
–
(1,531)
(492)
(3)
(8,008)
3,665
27,580
100
31,345
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
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Finance income
Finance costs
Share of loss of joint venture
Share-based payment charges
Tax expense
(Increase)/decrease in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) 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 rights to assets
Purchase of share in a joint venture
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
Repayment of lease liabilities
Lease liabilities interest paid
Other 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 on cash and cash equivalents
Cash and cash equivalents at end of year
124
www.bloomsbury.comBloomsbury Publishing Plc
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 183. The consolidated financial statements of the Company as at and for the year ended
29 February 2020 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 Report on pages 10 to 63. The financial position of the Group, its cash flows and liquidity position
are described in the Financial Review on pages 36 to 39. In addition, note 25 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 have a reasonable expectation that the Group has adequate resources to continue in operational existence for at
least 12 months from the date of approval of the financial statements, being the period of the detailed going concern assessment
reviewed by the Board, and therefore continue to adopt the going concern basis of accounting in preparing the annual financial
statements.
The Board has modelled a severe but plausible pessimistic downside scenario, including the impact of coronavirus. This assumes:
• Print revenues are reduced by 60%–65% for the three months of expected global coronavirus restrictions to July 2020 and
gradual recovery through to March 2021;
• Downside assumptions about extended debtor days to the end of 2021; and
• In this scenario, we extend the cost reduction measures already implemented, including salary reductions and reducing
discretionary spend including marketing and non-essential capital expenditure.
Under this severe but plausible downside scenario, the Group has sufficient liquidity to be able to manage these downside
assumptions. Details of the bank facility and its covenants are shown in note 25c.
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.
125
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL 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 29 February 2020. The table below summarises the impact of these changes to the Group:
Accounting standard
IFRS 16 Leases
Other standards
Description of change
Impact on financial statements
A description and the impact of the adoption of IFRS 16 Leases is set out in note 2w.
A number of other new standard and amendments to
standards and interpretations are effective for annual
periods beginning after 1 January 2019.
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
Other standards
A number of other new standards and amendments to
standards and interpretations are effective for annual
periods beginning after 1 January 2020 and have not
been applied in preparing these financial statements.
The Directors do not anticipate the application
of these standards and amendments will have
a material impact on the Group’s consolidated
financial statements.
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 29 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.
126
www.bloomsbury.comBloomsbury Publishing PlcNotes to the Financial Statements v. Joint ventures
Joint ventures are entities in which the Group holds an interest on a long-term basis and has rights to the net assets through
contractually agreed sharing of control. Investments in joint ventures are accounted for by the equity method and are initially
recognised at the fair value of consideration transferred.
The Group’s share of its joint venture’s post acquisition profit or losses is recognised in the income statement.
The Group’s share of its joint venture’s results is recognised as a component of operating profit as these operations form part
of the core publishing business of the Group and are an integral part of existing wholly-owned business. The cumulative post-
acquisition profit or loss is adjusted against the carrying amount of the investment. When the Group’s share of losses in a joint
venture equals or exceeds its interest in the joint venture, the Group does not recognise further losses unless the Group has
incurred obligations or made payments on behalf of the joint venture.
g) 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.
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. The provision for
anticipated future sales returns is recognised in trade and other liabilities in the statement of financial position.
ii. Digital:
• Ebook sales: Revenue from ebook 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.
127
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Accounting Policies
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.
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.
128
www.bloomsbury.comBloomsbury Publishing PlcNotes to the Financial Statements 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.
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:
Publishing relationships
Imprints
Subscriber and customer relationships — 7% to 9% per annum
Trademarks
Product and systems development
— 5% to 21% per annum
— 3% to 10% per annum
— 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
— 10% per annum
Furniture and fittings
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.
129
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Accounting Policies
l) Leases
Policy applicable from 1 March 2019
The Group assessed whether a contract contains a lease at the inception of the contract. A contract is, or contains a lease, if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group
recognises a right-of-use asset and a lease liability at the lease commencement date with respect to all lease arrangements except
for short-term leases (leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the lease
payments are recognised as an operating expense on a straight-line basis over the term of the lease.
The right-of-use asset is initially measured at cost, comprising the initial amount of the lease liability plus any initial direct costs
incurred and an estimate of costs to restore the underlying asset, less any lease incentives received. The right-of-use asset is
subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful
life of the asset or the end of the lease term. The Group applies IAS 36 to determine whether a right-of-use asset is impaired.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in
future lease payments arising from a change in an index or a rate or a change in the Group’s assessment of whether it will exercise
an extension or termination option. When the lease liability is remeasured, a corresponding adjustment is made to the right-of-use
asset.
Management uses judgement to determine the lease term where extension and termination options are available within the lease.
Policy applicable before 1 March 2019
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.
m) 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.
n) 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.
o) 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.
p) 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).
130
www.bloomsbury.comBloomsbury Publishing PlcNotes to the Financial Statements q) 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.
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.
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.
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.
131
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Accounting Policies
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 and Special Interest. 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 19.
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 in anticipation
of book returns received subsequent to the period end. The provision is recorded by sub-division, and is based on the estimated
time lag following a sale before a return is made, based on the historic returns data. The provision is 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 18, 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 on a title-by-title basis, with regard to historical net sales, expected
future net sales and taking account of the lifecycle of a book, for the difference between the carrying value and the anticipated
recoverable amount from future earnings.
132
www.bloomsbury.comBloomsbury Publishing PlcNotes to the Financial Statements iv. Inventory
The level of inventories and the inventory provision are set out in note 17 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 16
The Group has adopted IFRS 16 Leases from 1 March 2019 and applied the modified retrospective approach. Comparatives for
2019 have not been restated and there is no adjustment to equity at the date of application.
On transition the Group elected not to reassess whether a contract is, or contains, a lease, instead relying on the assessment
already made applying IAS 17 "Leases" and IFRIC 4 "Determining whether and Arrangement contains a Lease". In addition, the
Group applied the available practical expedients as follows:
• Reliance on assessment as to whether leases are onerous on 1 March 2019 with no impact identified;
• Exclude leases of low value assets and short-term leases of less than 12 months from the application of IFRS 16, with payment for
these leases continuing to be expensed directly to the income statement as operating leases;
• The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease; and
• Exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application.
The major class of lease impacted by the new standard is property leases. The lease liability has been measured at the present
value of the remaining lease payments, discounted using the incremental borrowing rate at transition. The right-of-use assets are
set to equal the lease liability adjusted for any prepaid or accrued lease payments.
The weighted average incremental borrowing rate (“IBR”) applied to the lease liabilities on 1 March 2019 was 3.3%. A single IBR
has been applied to a portfolio of leases when these have shared similar characteristics including location, duration and nature of
the leases. The approach to use an IBR to discount leases has been followed since the transition date as the interest rate implicit in
individual leases cannot be readily determined.
At 1 March 2019 transition date adoption of IFRS 16 resulted in the Group recognising right-of-use assets of £13.6 million and lease
liabilities of £14.5 million. There is a reduction of £0.3 million for prepaid rental amounts now netted against the right-of-use assets
and a reduction of £1.2 million to liabilities for deferred rent-free amounts netted against the right-of-use asset.
133
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Accounting Policies
The impact on the income statement for the year ended 29 February 2020 is as follows:
Decrease in administrative expenses
EBITDA benefit
Increase in depreciation
Operating profit benefit
Increase in finance costs
Profit before tax reduction
Year ended
29 February
2020
£’000
2,055
2,055
(1,775)
280
(492)
(212)
Prior to the adoption of IFRS 16 rental payments were charged to the income statement on a straight-line basis. Under IFRS 16
rental costs in the income statement are replaced with depreciation on the right-of-use asset and interest charges on the lease
liability. The adoption of IFRS 16 gives rise to a net £212,000 charge in the profit before tax for the year ended 29 February 2020.
At operating profit, the adoption of IFRS 16 gives a benefit of £280,000. The impact is the same for both the statutory profit before
tax and adjusted profit before tax.
There is no overall impact on the Group’s cash and cash equivalents although there is a change to the classification of cash flows
in the cash flow statement with lease payments previously categorised as net cash used in operations now being split between the
principal element (categorised in financing activities) and the interest element (categorised as interest paid in financing activities).
The impact on the cash flow statement for the year ended 29 February 2020 is as follows:
Net cash used in operating activities
Net cash used in financing activities
Pre
IFRS 16
£’000
14,573
(5,985)
Repayment of
lease liabilities
£’000
1,531
(1,531)
Interest paid
£’000
492
(492)
Post
IFRS 16
£’000
16,596
(8,008)
The lease liabilities as at 1 March 2019 can be reconciled to the operating lease commitments at 28 February 2019 as follows:
Operating lease commitments disclosed at 28 February 2019
Less commitments relating to short-term leases
Less commitments relating to low value assets
Discounted using the lease’s incremental borrowing rate
Other liabilities now recognised within lease liabilities
Lease liability recognised as at 1 March 2019
Analysed at:
Current lease liabilities
Non-current lease liabilities
1 March 2019
£’000
16,134
(23)
(7)
(2,372)
787
14,519
1,580
12,839
134
www.bloomsbury.comBloomsbury Publishing PlcNotes to the Financial Statements 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 two operating segments: Academic & Professional, and Special Interest.
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 29 February 2020
External revenue
Cost of sales
Gross profit
Marketing and distribution costs
Contribution before
administrative expenses
Administrative expenses
excluding highlighted items
Operating profit before
highlighted items/segment results
Amortisation of acquired
intangible assets
Other highlighted items
Operating profit/(loss)
Finance income
Finance costs
Profit before taxation and
highlighted items
Amortisation of acquired
intangible assets
Other highlighted items
Profit/(loss) before taxation
Taxation
Profit/(loss) for the year
Operating profit before
highlighted items/segment results
Depreciation
Amortisation of internally
generated intangibles
EBITDA before highlighted items
Children’s
Trade
£’000
59,354
(30,840)
28,514
(8,269)
Adult Trade
£’000
37,416
(19,627)
17,789
(5,619)
Consumer
£’000
96,770
(50,467)
46,303
(13,888)
Academic &
Professional1
£’000
43,123
(13,606)
29,517
(4,636)
Special
Interest1
£’000
22,879
(10,905)
11,974
(2,849)
Non-
Consumer
£’000
66,002
(24,511)
41,491
(7,485)
Unallocated
£’000
–
–
–
–
Total
£’000
162,772
(74,978)
87,794
(21,373)
20,245
12,170
32,415
24,881
9,125
34,006
(12,845)
(10,503)
(23,348)
(19,975)
(7,151)
(27,126)
7,400
1,667
9,067
4,906
1,974
6,880
–
–
7,400
–
(110)
(18)
–
1,649
–
(94)
(18)
–
9,049
–
(204)
(1,504)
–
3,402
116
(201)
(214)
–
1,760
–
(88)
(1,718)
–
5,162
116
(289)
–
–
–
–
(739)
(739)
154
(20)
66,421
(50,474)
15,947
(1,736)
(739)
13,472
270
(513)
7,290
1,573
8,863
4,821
1,886
6,707
134
15,704
–
–
7,290
–
7,290
7,400
821
360
8,581
(18)
–
1,555
–
1,555
1,667
515
(18)
–
8,845
–
8,845
9,067
1,336
210
2,392
570
10,973
(1,504)
–
3,317
–
3,317
4,906
626
1,817
7,349
(214)
–
1,672
–
1,672
1,974
315
178
2,467
(1,718)
–
4,989
–
4,989
6,880
941
1,995
9,816
–
(739)
(605)
(2,728)
(3,333)
–
–
–
–
(1,736)
(739)
13,229
(2,728)
10,501
15,947
2,277
2,565
20,789
1 The Content Services division has been moved into the Special Interest Division; digital projects moved to the Academic & Professional division.
135
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS continued
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 before
highlighted items/segment results
Amortisation of acquired
intangible assets
Other highlighted items
Operating profit/(loss)
Finance income
Finance costs
Profit before taxation and
highlighted items
Amortisation of acquired
intangible assets
Other highlighted items
Profit/(loss) before taxation
Taxation
Profit/(loss) for the year
Operating profit 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
33,454
(16,937)
16,517
(5,231)
Consumer
£’000
99,254
(49,608)
49,646
(14,270)
Academic &
Professional1
£’000
41,514
(14,813)
26,701
(4,878)
Special
Interest1
£’000
21,911
(10,501)
11,410
(2,905)
Non-
Consumer
£’000
63,425
(25,314)
38,111
(7,783)
Unallocated
£’000
–
–
–
–
Total
£’000
162,679
(74,922)
87,757
(22,053)
24,090
11,286
35,376
21,823
8,505
30,328
(14,306)
(10,395)
(24,701)
(18,780)
(7,929)
(26,709)
9,784
891
10,675
3,043
576
3,619
–
–
9,784
–
–
(18)
–
873
–
–
(18)
–
10,657
–
–
(1,482)
–
1,561
–
–
(214)
–
362
–
–
(1,696)
–
1,923
–
–
–
–
–
–
(611)
(611)
130
(50)
65,704
(51,410)
14,294
(1,714)
(611)
11,969
130
(50)
9,784
891
10,675
3,043
576
3,619
80
14,374
–
–
9,784
–
9,784
9,784
185
(18)
–
873
–
873
891
83
(18)
–
10,657
–
10,657
10,675
268
373
10,342
177
1,151
550
11,493
(1,482)
–
1,561
–
1,561
3,043
131
1,638
4,812
(214)
–
362
–
362
576
71
237
884
(1,696)
–
1,923
–
1,923
3,619
202
1,875
5,696
–
(611)
(531)
(2,802)
(3,333)
–
–
–
–
(1,714)
(611)
12,049
(2,802)
9,247
14,294
470
2,425
17,189
1 The Content Services division has been moved into the Special Interest Division; digital projects moved to the Academic & Professional division.
The reconciliation of operating profit to EBITDA, both before highlighted items, for the year ended 29 February 2020 includes the
impact of IFRS 16. The comparative year reconciliation has not been restated for IFRS 16. Note 2w explains the impact of IFRS 16
on EBITDA for the year ended 29 February 2020.
Total assets
Children’s Trade
Adult Trade
Academic & Professional
Special Interest
Unallocated
Total assets
29 February
2020
£’000
11,016
6,747
59,128
13,492
139,357
229,740
28 February
2019
£’000
9,939
7,218
58,466
14,328
117,142
207,093
Unallocated primarily represents centrally held assets including system development; property, plant and equipment; right-of-use
assets; receivables; and cash.
136
www.bloomsbury.comBloomsbury Publishing PlcNotes to the Financial Statements External revenue by destination
Destination
Year ended 29 February 2020
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 2019
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
60,724
15,352
16,782
1,320
7,435
2,827
43,716
104,440
58,407
13,248
17,802
1,463
7,317
2,722
42,552
100,959
74
40,064
1,683
–
190
404
42,341
42,415
54
43,478
1,594
–
289
431
45,792
45,846
–
–
–
11,107
–
–
11,107
11,107
–
–
–
11,586
–
–
11,586
11,586
–
–
–
–
4,799
11
4,810
4,810
–
–
–
–
4,244
44
4,288
4,288
60,798
55,416
18,465
12,427
12,424
3,242
101,974
162,772
58,461
56,726
19,396
13,049
11,850
3,197
104,218
162,679
During the year, sales to one customer exceeded 10% of Group revenue (2019: one customer). The value of these sales was
£43,405,000 (2019: £37,483,000). 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
29 February
2020
£’000
75,839
7,638
193
83,670
Year ended
28 February
2019
£’000
65,802
4,669
84
70,555
Year ended 29 February 2020
Print
Digital
Rights and services1
Total
Year ended 28 February 2019
Print
Digital
Rights and services1
Total
Children’s
Trade
£’000
52,646
3,029
3,679
59,354
Children’s
Trade
£’000
58,288
4,157
3,355
65,800
Adult
Trade
£’000
29,460
6,772
1,184
37,416
Adult
Trade
£’000
27,568
4,887
999
33,454
Consumer
£’000
82,106
9,801
4,863
96,770
Consumer
£’000
85,856
9,044
4,354
99,254
Academic &
Professional2
£’000
28,438
12,099
2,586
43,123
Academic &
Professional2
£’000
29,087
10,083
2,344
41,514
Special
Interest2
£’000
18,571
2,235
2,073
22,879
Special
Interest2
£’000
18,367
1,746
1,798
21,911
Non-
Consumer
£’000
47,009
14,334
4,659
66,002
Non-
Consumer
£’000
47,454
11,829
4,142
63,425
1 Rights and services revenue includes revenue from copyright and trademark licences, management contracts, advertising and publishing services.
2 The Content Services division has been moved into the Special Interest Division; digital projects moved to the Academic & Professional division.
Total
£’000
129,115
24,135
9,522
162,772
Total
£’000
133,310
20,873
8,496
162,679
137
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS
The below table depicts the remaining transaction price on unsatisfied or partially unsatisfied performance obligations from
contracts with customers as follows:
Year ended 29 February 2020
Print
Digital
Rights and services
Total
Year ended 28 February 2019
Print
Digital
Rights and services
Total
Deferred
income
£’000
550
2,697
16
3,263
Deferred
income
£’000
275
2,285
585
3,145
Committed
sales
£’000
4,784
1,991
1,872
8,647
Committed
sales
£’000
4,880
2,499
2,445
9,824
Total
remaining
transaction
price
£’000
5,334
4,688
1,888
11,910
Total
remaining
transaction
price
£’000
5,155
4,784
3,030
12,969
Sales
£’000
129,115
24,135
9,522
162,772
Sales
£’000
133,310
20,873
8,496
162,679
4. Operating profit
Operating profit is stated after charging the following amounts:
Purchase of goods and changes in inventories
Auditor’s remuneration (see overleaf)
Depreciation of property, plant and equipment
Highlighted items (see below)
Provision made against advances
Exchange (gain)/loss
Staff costs (excluding termination benefits)
Highlighted items
Legal and other professional fees
Coronavirus onerous costs
Restructuring costs
Other highlighted items
Amortisation of acquired intangible assets
Total highlighted items
2021
£’000
5,245
2,991
611
8,847
2020
£’000
5,155
2,650
1,089
8,894
Notes
17
14
5
Notes
12
2022
£’000
89
646
570
1,305
2021
£’000
–
587
715
1,302
Year ended
29 February
2020
£’000
43,722
331
502
2,475
5,464
(151)
34,868
Year ended
29 February
2020
£’000
461
180
98
739
1,736
2,475
2023
and later
£’000
–
1,051
707
1,758
2022
and later
£’000
–
1,547
1,226
2,773
Year ended
28 February
2019
£’000
44,293
266
470
2,325
4,997
38
34,848
Year ended
28 February
2019
£’000
223
–
388
611
1,714
2,325
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.
For the year ended 29 February 2020 legal and other professional fees of £461,000 were incurred as a result of the Group’s
acquisition of rights, primarily that of Oberon Books Limited and the joint venture; Beijing CYP & Gakken Education Development
Co., Ltd. Coronavirus onerous costs of £180,000 are irrecoverable costs crystallised in the year associated with book fairs and
conferences that have been cancelled due to the coronavirus. Restructuring costs relate to the acquisition of Oberon Books
Limited and I.B. Tauris & Co. Limited.
138
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements
For the year ended 28 February 2019 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.
Auditor’s remuneration
Amounts payable to KPMG LLP and its associates in respect of both audit and non-audit services are as follows:
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:
Salaries (including bonuses)
Social security costs
Pension costs
Share-based payment charge
Staff costs (excluding termination benefits)
Termination benefits
Total
Year ended 29 February 2020
Year ended 28 February 2019
UK
£’000
Overseas
£’000
Total
£’000
UK
£’000
Overseas
£’000
190
90
280
140
5
35
230
11
–
101
16
35
331
Total
£’000
215
16
35
266
75
11
–
86
Year ended
29 February
2020
£’000
29,653
2,952
1,502
761
34,868
220
35,088
Year ended
28 February
2019
£’000
30,116
2,912
1,322
498
34,848
613
35,461
5
35
180
Notes
24
23
4
For the year ended 29 February 2020 £16,000 (year ended 28 February 2019: £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.
Year ended
29 February
2020
£’000
593
109
702
Year ended
28 February
2019
£’000
583
100
683
Three (2019: four) 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
29 February
2020
£’000
1,967
140
2,107
Year ended
28 February
2019
£’000
2,612
132
2,744
139
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS 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.
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 on lease liabilities
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
Total taxation expense
140
Year ended
29 February
2020
£’000
3,841
224
597
4,662
Year ended
28 February
2019
£’000
4,022
209
410
4,641
Year ended
29 February
2020
£’000
Year ended
28 February
2019
£’000
Notes
24
26
24
136
118
16
270
492
18
2
1
513
55
62
13
130
–
17
1
32
50
Year ended
29 February
2020
£’000
Year ended
28 February
2019
£’000
Notes
16
2,513
(73)
462
40
2,942
14
–
(171)
(57)
(214)
2,728
1,961
(3)
301
(18)
2,241
97
–
488
(24)
561
2,802
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements
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% (2019:
19.00%). 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% (2019: 19.00%)
Effects of:
Non-deductible revenue expenditure
Movement in unrecognised temporary differences
Different rates of tax in foreign jurisdictions
Previously unprovided tax losses utilised
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
29 February 2020
Year ended
28 February 2019
£’000
13,229
%
100.0
£’000
12,049
2,514
19.0
2,289
153
47
142
(124)
(33)
(57)
2,642
86
2,728
1.1
0.4
1.1
(0.9)
(0.3)
(0.4)
20.0
0.6
20.6
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
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.
Previously unprovided tax losses utilised relate to differences from the finalisation of losses on tax returns.
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.
We are not aware of any significant unprovided exposures that are considered likely to materialise.
c) Factors affecting tax charge for future years
Factors which may affect the future tax charges includes changes in tax legislation, transfer pricing regulations and the level and
mix of profitability in different countries.
A reduction in the UK corporation tax rate from 19% to 17% (effective 1 April 2020) was substantively enacted on 6 September
2016, and the net UK deferred tax liability as at 29 February 2020 has been calculated based on this rate.
The March 2020 Budget announced that a rate of 19% would continue to apply with effect from 1 April 2020, and this change was
substantively enacted on 17 March 2020. This will increase the Group’s future current tax charge accordingly and decrease the net
deferred tax asset by £138,000.
d) Tax effects of components of other comprehensive income
Before tax
2020
£’000
Tax charge
2020
£’000
After tax
2020
£’000
Before tax
2019
£’000
Tax charge
2019
£’000
After tax
2019
£’000
Exchange difference on translating
foreign operations
Remeasurements on the defined benefit
pension scheme
Other comprehensive income
856
(138)
718
–
23
23
856
(115)
741
964
(6)
958
–
1
1
964
(5)
959
141
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS 8. Dividends
Amounts paid in the year
Prior period final 6.75p dividend per share (2019: 6.36p)
Interim 1.28p dividend per share (2019: 1.21p)
Total dividend payments in the year
Amounts arising in respect of the year
Interim 1.28p dividend per share for the year (2019: 1.21p)
Proposed final dividend per share for the year (2019: 6.75p)
Total dividend 1.28p per share for the year (2019: 7.96p)
Year ended
29 February
2020
£’000
Year ended
28 February
2019
£’000
5,051
958
6,009
958
–
958
4,749
906
5,655
906
5,051
5,957
Absent of coronavirus, Bloomsbury would have declared a final cash dividend for the year to 29 February 2020 of 6.89 pence per
share, which would have resulted in a total dividend for the year of 8.17 pence per share, up 3% on the previous year. As previously
announced, Bloomsbury has decided in view of coronavirus to prioritise cash conservation at the current time and therefore will
not be paying a cash dividend. Bloomsbury will instead, subject to Shareholder approval at the Annual General Meeting, be
making a bonus issue to Shareholders in lieu of, and with a value equivalent to, its proposed final dividend. This bonus issue will be
provided on 28 August 2020 to Shareholders on the register on the record date of 31 July 2020.
9. Earnings per share
The basic earnings per share for the year ended 29 February 2020 is calculated using a weighted average number of Ordinary
shares in issue of 74,830,714 (2019: 74,741,083) 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
29 February
2020
Number
74,830,714
1,026,939
75,857,653
Year ended
28 February
2019
Number
74,741,083
756,547
75,497,630
£’000
10,501
14.03p
13.84p
£’000
12,720
17.00p
16.77p
£’000
9,247
12.37p
12.25p
£’000
11,299
15.12p
14.97p
142
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements
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
29 February
2020
£’000
13,229
1,736
739
15,704
2,728
202
54
2,984
12,720
Year ended
28 February
2019
£’000
12,049
1,714
611
14,374
2,802
194
79
3,075
11,299
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 was paid in
the year ended 29 February 2020. 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
143
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS 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.
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 were expensed in the year ended 28 February 2019 within administrative expenses.
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
29 February
2020
£’000
28 February
2019
£’000
49,156
–
137
49,293
4,261
2
4,263
46,399
2,613
144
49,156
4,260
1
4,261
45,030
44,895
44,895
42,139
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:
29 February
2020
£’000
1,849
2,339
35,889
4,953
45,030
28 February
2019
£’000
1,788
2,265
35,889
4,953
44,895
Children’s Trade
Adult Trade
Academic & Professional
Special Interest
Total
144
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements
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 28 February 2021 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
CAGR - Revenue
Long-term growth
2020
%
11.5
11.3
10.7
11.6
2019
%
10.8
11.4
10.2
11.6
2020
%
0.8
2.6
3.0
2.0
2019
%
2.4
1.8
5.7
3.7
2020
%
2.0
2.0
2.0
2.0
2019
%
2.0
2.0
2.0
2.0
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.
Revenue growth rates
Growth rates have been calculated based on those applied to the Board-approved budget for the year ended 28 February 2021
and five-year plan. They incorporate future expectations of growth in backlist revenues and identified new revenue streams. The
compound annual growth rates (“CAGR”) noted above covers the period of the 4 years after the year ended 28 February 2021,
and is representative of the growth used in each year of the forecast, with the exception of Children’s Trade which has a range of
annual growth rates used between (7.0)% and 10.0%
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 in the middle of 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. A 2% increase in the discount rate would not give rise
to an impairment (2019: no impairment). A 8% reduction in the first year revenue growth rates would lead to an impairment of £0.2
million (2019: impairment of £2.2 million). Reducing the long-term growth rate to 0% would not give rise to an impairment (2019:
no impairment).
Management have also prepared a severe but plausible pessimistic downside scenario, including the impact of coronavirus. It
assumes a significant downside to print revenues in 2020/21 but revenues are broadly back to normal expected levels for 2021/22
and thereafter. The assumptions used are detailed further in note 2c) on going concern. Under this scenario no impairment would
arise for any of the publishing divisions.
145
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS 12. Other intangible assets
Cost
At 28 February 2018
Acquired through business
combinations
Additions
Transfers
Disposals
Exchange differences
At 28 February 2019
Additions1
Transfers
Exchange differences
At 29 February 2020
Amortisation
At 28 February 2018
Disposals
Charge for the year
Exchange differences
At 28 February 2019
Charge for the year
Exchange differences
At 29 February 2020
Net book value
At 29 February 2020
At 28 February 2019
Publishing
rights1
£’000
Subscriber
and customer
relationships
£’000
Imprints
£’000
15,941
5,790
4,396
900
70
–
–
59
16,970
866
–
56
17,892
9,092
–
1,007
36
10,135
1,010
33
11,178
2,300
–
–
–
–
8,090
–
–
–
8,090
1,585
–
358
–
1,943
377
–
2,320
–
–
–
–
11
4,407
–
–
10
4,417
2,668
–
349
4
3,021
349
5
3,375
Trademarks
£’000
Systems
development
£’000
Product
development
£’000
Assets under
construction
£’000
Total
£’000
205
–
17
–
–
5
227
31
–
4
262
6
–
6
–
12
7
–
19
6,664
10,160
270
43,426
–
895
–
(42)
9
7,526
1,277
–
10
8,813
4,107
(42)
881
5
4,951
972
8
5,931
–
1,245
427
–
9
11,841
1,085
592
10
13,528
6,083
–
1,538
6
7,627
1,586
8
9,221
–
675
(427)
–
–
518
746
(592)
–
672
–
–
–
–
–
–
–
–
3,200
2,902
–
(42)
93
49,579
4,005
–
90
53,674
23,541
(42)
4,139
51
27,689
4,301
54
32,044
6,714
6,835
5,770
6,147
1,042
1,386
243
215
2,882
2,575
4,307
4,214
672
518
21,630
21,890
1 The addition of £866,000 relates to the acquisition of Oberon Book’s publishing rights on 10 December 2019.
13. Investments
Equity securities designated as at Fair Value through Other Comprehensive Income (“FVOCI”)
Joint venture
Total
The amounts recognised in the Income Statement are as follows:
Joint venture
Total
29 February
2020
£’000
300
216
516
28 February
2019
£’000
300
–
300
29 February
2020
£’000
(7)
(7)
28 February
2019
£’000
–
–
The addition in the year is in relation to the investment in Beijing CYP & Gakken Education Development Co., Ltd joint venture.
146
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements 14. Property, plant and equipment
At 28 February 2018
Additions
Acquired through business combinations
Disposals
Exchange differences
At 28 February 2019
Additions
Disposals
Exchange differences
At 29 February 2020
Depreciation
At 28 February 2018
Charge for the year
Disposals
Exchange differences
At 28 February 2019
Charge for the year
Disposals
Exchange differences
At 29 February 2020
Net book value
At 29 February 2020
At 28 February 2019
Short leasehold
improvements
£’000
2,862
58
–
–
3
2,923
22
(20)
4
2,929
Furniture
and fittings
£’000
893
22
5
–
13
933
52
(3)
14
996
Computers and
other office
equipment
£’000
2,756
357
32
(565)
12
2,592
225
(1)
18
2,834
1,572
131
–
–
1,703
125
(18)
2
1,812
1,117
1,220
662
90
–
8
760
104
(1)
11
874
122
173
2,194
248
(564)
12
1,890
273
(1)
13
2,175
659
702
Motor
vehicles
£’000
130
–
–
(94)
(2)
34
–
–
1
35
130
1
(94)
(18)
19
–
–
–
19
16
15
The depreciation charge is included in administrative expenses.
Total
£’000
6,641
437
37
(659)
26
6,482
299
(24)
37
6,794
4,558
470
(658)
2
4,372
502
(20)
26
4,880
1,914
2,110
147
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS
15. Right-of-use assets
At 28 February 2019
Adjustment on initial application of IFRS 16 (see note 2w)
Additions
Exchange differences
At 29 February 2020
Depreciation
At 28 February 2019
Charge for the year
Exchange differences
At 29 February 2020
Net book value
At 29 February 2020
At 28 February 2019
Property
£’000
–
13,444
1,412
117
14,973
–
1,691
(4)
1,687
13,286
–
Cars
£’000
–
90
–
–
90
–
45
–
45
45
–
Equipment
£’000
–
51
–
–
51
–
39
–
39
12
–
Total
£’000
–
13,585
1,412
117
15,114
–
1,775
(4)
1,771
13,343
–
The depreciation charge is included in administrative expenses.
16. 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:
At 28 February 2018 (restated*)
Acquired through business
combinations
(Charge)/credit to the income statement
Credit to other comprehensive income
Credit to equity
Exchange differences
At 28 February 2019
Recognised on acquisition
(Charge)/credit to the income statement
Credit to other comprehensive income
Credit to equity
Exchange differences
At 29 February 2020
Property,
plant and
equipment
£’000
261
Retirement
benefit
obligation
£’000
47
Tax losses
£’000
47
Share-based
payments
£’000
29
Intangible
assets
£’000
(1,988)
626
(500)
–
–
9
182
227
(129)
–
–
(6)
274
(1)
(31)
–
–
–
229
–
(11)
–
–
–
218
–
(25)
1
–
–
23
–
19
23
–
–
65
–
67
–
33
–
129
–
107
–
46
–
282
(544)
194
–
–
–
(2,338)
(147)
202
–
–
–
(2,283)
Other
£’000
1,971
37
(266)
–
–
49
1,791
–
26
–
–
36
1,853
Total
£’000
367
118
(561)
1
33
58
16
80
214
23
46
30
409
* The Group has applied IFRS 15 "Revenue from Contracts with Customers" and IFRS 9 "Financial Instruments" at 1 March 2018.
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 temporary 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.
148
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements
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
29 February
2020
£’000
2,756
(2,347)
409
28 February
2019
£’000
2,376
(2,360)
16
29 February
2020
£’000
402
–
28 February
2019
£’000
370
–
At 29 February 2020, the Group had trading losses of £2.4 million (2019: £1.7 million) and non-trading losses of approximately
£nil (2019: £nil). 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.
17. Inventories
Work in progress
Finished goods for resale
Total
29 February
2020
£’000
4,756
22,408
27,164
28 February
2019
£’000
3,964
22,112
26,076
The cost of inventories recognised as cost of sales amounted to £35,603,000 (2019: £35,953,000). The provision and write-down of
inventories to net realisable value recognised in cost of sales amounted to £8,119,000 (2019: £8,340,000).
18. Trade and other receivables
Non-current
Prepayments and accrued income
Current
Gross trade receivables
Less: loss allowance
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
29 February
2020
£’000
28 February
2019
£’000
1,237
1,360
54,252
(1,832)
52,420
481
1,510
5,551
24,843
84,805
86,042
52,115
(2,102)
50,013
1,340
1,803
4,683
22,667
80,506
81,866
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 29 February 2020, £5,604,000 (2019: £5,434,000) 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.
149
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS 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 25. The average number of days’ credit taken for sales of books by the
Group was 118 days (2019: 112 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
Adjustment on initial application of IFRS 9
Amounts created
Amounts utilised
Amounts released
Exchange differences
At end of year
19. 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
29 February
2020
£’000
2,102
3
–
507
(516)
(263)
(1)
1,832
28 February
2019
£’000
931
217
254
759
(56)
–
(3)
2,102
29 February
2020
£’000
28 February
2019
£’000
25,419
9,163
789
3,509
19,701
3,263
61,844
61,844
22,414
8,452
812
2,695
23,126
3,145
60,644
60,644
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 (2019: £1.9 million lower/
higher).
150
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements
20. Loans and borrowings
Reconciliation of movements of liabilities to cash flows arising from financing activities:
Balance at 1 March 2019
Changes from financing cash flows
Dividend paid
Proceeds from exercise of share options
Repayment of lease liabilities
Interest paid
Total changes from financing cash flows
Other changes
Liability-related
IFRS 16 transition
Right-of-use asset additions
Foreign exchange movements
Interest expense
Total liability-related other changes
Total equity-related other changes
Balance at 29 February 2020
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
Equity
Bank overdrafts
used for cash
management
purposes
£’000
–
Lease liability
£’000
–
Share capital/
share premium
£’000
40,330
Other
reserves
£’000
15,769
–
–
(1,531)
(492)
(2,023)
14,519
1,412
130
492
16,553
–
14,530
–
–
–
(3)
(3)
–
–
–
3
3
–
–
–
–
–
–
–
–
–
–
–
–
–
40,330
–
31
–
–
31
–
–
–
–
–
1,485
17,285
Liability
Equity
Bank overdrafts
used for cash
management
purposes
£’000
–
Lease liability
£’000
–
Share capital/
share premium
£’000
40,330
Other
reserves
£’000
14,142
–
–
–
–
–
–
241
–
–
241
Retained
earnings
£’000
87,639
(6,009)
(4)
–
–
(6,013)
–
–
–
–
–
10,432
92,058
Retained
earnings
£’000
85,091
(5,655)
(27)
–
–
(5,682)
Total
£’000
143,738
(6,009)
27
(1,531)
(495)
(8,008)
14,519
1,412
130
495
16,556
11,917
164,203
Total
£’000
139,563
(5,655)
214
(201)
(34)
(5,676)
–
–
–
–
–
–
–
–
–
–
–
–
(201)
(34)
(235)
201
34
235
–
–
–
–
–
–
40,330
–
–
–
1,386
15,769
–
–
–
8,230
87,639
201
34
235
9,616
143,738
151
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS 21. Provisions
At 1 March 2019
Transferred in the year
Created in the year
Utilised in the year
Exchange difference
29 February 2020
Non-current
Current
Author
advances
£’000
–
513
153
(66)
11
611
–
611
Property
£’000
230
–
36
(43)
(1)
222
182
40
Total
£’000
230
513
189
(109)
10
833
182
651
The property provision includes amounts provided for dilapidations. The author advance provision relates a provision against
future cash outflows on published titles where the Group does not expect to fully recover the advance. The timing of cash flows for
onerous lease commitments is dependent on the terms of the leases.
22. Share capital and other reserves
Share capital
Authorised:
100,435,582 Ordinary shares of 1.25p each (2019: 100,435,582 Ordinary shares of 1.25p each)
Allotted, called up and fully paid:
75,328,570 Ordinary shares of 1.25p each (2019: 75,328,570 Ordinary shares of 1.25p each)
29 February
2020
£’000
28 February
2019
£’000
1,255
1,255
942
942
The Company has one class of Ordinary share that 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 2,128,260 (2019: 1,944,515) Ordinary shares with an aggregate nominal value of £26,603 (2019: £24,306) (see note 23).
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.
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 23) 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 481,093 shares of the Company held at 29 February 2020 (2019: 500,708) in the EBT was £1,179,000 (2019:
£1,164,000). 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 481,093 Ordinary shares of 1.25 pence being approximately 0.6% of
the issued Ordinary share capital.
152
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements
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.
23. 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
29 February
2020
£’000
629
132
761
28 February
2019
£’000
422
76
498
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 29 February 2020 of £229,000
(2019: £100,000), 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 the closing 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 a Return on Capital Employed (“ROCE”) performance condition. For details of the performance conditions
see the Directors’ Remuneration Report on pages 88 to 107. 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.
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
29 February
2020
Number
1,663,528
605,506
(499,824)
1,769,210
530,624
Year ended
29 February
2020
–
18
718
Year ended
28 February
2019
Number
2,449,685
620,417
(1,406,574)
1,663,528
–
Year ended
28 February
2019
–
17
481
153
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS The share awards granted in the year to 29 February 2020 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
230 pence
–
3 years
N/A
N/A
213–231 pence
Return on Capital Employed
230 pence
–
3 years
N/A
N/A
213–231 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
2020
Number
175,475
200,654
(1,601)
(15,478)
359,050
–
Weighted
average
exercise price
2020
Pence
138
185
142
145
164
–
Share
options
2019
Number
372,775
–
(150,303)
(46,997)
175,475
7,140
2020
137–185
19
43
Weighted
average
exercise price
2019
Pence
140
–
142
139
138
142
2019
137–142
17
17
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.
Share
options
2020
Number
105,512
(105,512)
–
–
Weighted
average
exercise price
2020
Pence
162
162
–
–
Share
options
2019
Number
234,093
(128,581)
105,512
–
2020
–
–
–
Weighted
average
exercise price
2019
Pence
160
159
162
–
2019
162
87
–
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)
154
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements 24. Retirement benefit obligations
Pension costs
The pension costs charged to the income statement of £1,518,000 (2019: £1,340,000) 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 £1,502,000 (2019: £1,322,000) represents contributions payable to these
schemes by the Group at rates specified in the rules of the schemes. At 29 February 2020, there were no prepaid contributions (28
February 2019: £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 2018 by a qualified
independent actuary.
Contributions are paid by the employer at the rate of £6,417 per month, plus expenses as and when required. Contributions
paid to the scheme during the year were £90,000 (2019: £73,000). The Directors’ best estimate of the contributions including
administration expenses to be paid for in the year ending 29 February 2020 is £92,000. 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
29 February
2020
£’000
1.70%
28 February
2018
£’000
2.70%
2.10–2.90% 2.20–3.20% 2.20–3.20%
28 February
2019
£’000
2.70%
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.
The mortality assumptions adopted at 29 February 2020 are 90% of the standard tables S2PxA, year of birth, no age rating for
males and females, projected using CMI_2018 converging to 1.50% p.a. These imply the following life expectancies:
Male retiring in 2040
Female retiring in 2040
Male retiring in 2020
Female retiring in 2020
29 February
2020
Years
24.5
26.5
22.8
24.7
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
Year ended
29 February
2020
£’000
(18)
16
(14)
(16)
28 February
2019
Years
24.7
26.7
23.0
24.9
Year ended
28 February
2019
£’000
(17)
13
(14)
(18)
155
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS A charge of £18,000 (2019: £17,000) has been included in finance costs and a credit of £16,000 (2019: £13,000) 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 – gain/(loss)
Effects of changes in the financial assumptions underlying the present value of the defined
benefit obligation – loss
Total
Year ended
29 February
2020
£’000
9
6
Year ended
28 February
2019
£’000
9
(15)
(153)
(138)
–
(6)
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
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 £25,000 (2019: £22,000).
156
29 February
2020
£’000
633
(818)
(185)
31
(154)
28 February
2019
£’000
540
(661)
(121)
21
(100)
(185)
31
(121)
21
Year ended
29 February
2020
£’000
(661)
(14)
(18)
22
(147)
(818)
Year ended
29 February
2020
£’000
540
16
9
90
(22)
633
Year ended
28 February
2019
£’000
(642)
(14)
(17)
27
(15)
(661)
Year ended
28 February
2019
£’000
472
13
9
73
(27)
540
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements
Assets
With profits
Total assets
29 February
2020
£’000
633
633
28 February
2019
£’000
540
540
28 February
2018
£’000
472
472
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.
25. 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 2019.
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 22.
Categories of financial instruments
Investments available for sale
Equity securities designated as at FVOCI (Level 3)
Joint venture
Total investments available for sale
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
Lease liabilities
Total financial liabilities measured at amortised cost
Notes
13
13
18
19
19
19
29 February
2020
£’000
28 February
2019
£’000
300
216
516
31,345
52,420
5,254
89,019
25,419
4,298
9,163
19,701
14,530
73,111
300
–
300
27,580
50,013
3,751
81,344
22,414
3,507
8,452
23,126
–
57,499
Net financial instruments
16,424
24,145
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.
157
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS
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.
(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
29 February
2020
£’000
28 February
2019
£’000
1,967
–
1,967
29,378
–
29,378
1,772
–
1,772
25,808
–
25,808
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 29 February 2020 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 (2019: 1%)
0.5% decrease in base rate of interest (2019: 0.5%)
29 February 2020
28 February 2019
Profit or loss
£’000
Equity
£’000
Profit or loss
£’000
Equity
£’000
207
(123)
–
–
(187)
(102)
–
–
158
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements
(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
29 February
2020
£’000
53,596
26,076
841
5,576
2,930
89,019
28 February
2019
£’000
46,729
25,812
1,503
4,946
2,354
81,344
29 February
2020
£’000
51,933
16,520
166
3,835
657
73,111
28 February
2019
£’000
38,589
13,304
116
4,750
740
57,499
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.
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.
29 February
2020
£’000
28 February
2019
£’000
Impact on equity
10% weakening in US dollar against pound sterling (2019: 10%)
10% strengthening in US dollar against pound sterling (2019: 10%)
10% weakening in euro against pound sterling (2019: 10%)
10% strengthening in euro against pound sterling (2019: 10%)
10% weakening in AUS dollar against pound sterling (2019: 10%)
10% strengthening in AUS dollar against pound sterling (2019: 10%)
10% weakening in INR against pound sterling (2019: 10%)
10% strengthening in INR against pound sterling (2019: 10%)
Impact on income statement
10% weakening in US dollar against pound sterling (2019: 10%)
10% strengthening in US dollar against pound sterling (2019: 10%)
10% weakening in euro against pound sterling (2019: 10%)
10% strengthening in euro against pound sterling (2019: 10%)
10% weakening in AUS dollar against pound sterling (2019: 10%)
10% strengthening in AUS dollar against pound sterling (2019: 10%)
10% weakening in INR against pound sterling (2019: 10%)
10% strengthening in INR against pound sterling (2019: 10%)
(603)
737
–
–
(158)
193
(207)
252
(266)
325
(61)
75
–
–
–
–
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 18) and cash and cash
equivalents.
(689)
842
–
–
(18)
22
(147)
179
(448)
548
(126)
154
–
–
–
–
159
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS
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 18.
The Group always measures the loss allowance for trade receivables at an amount equal to lifetime expected credit loss (“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.
At 29 February 2020, the exposure to credit risk for gross trade receivables by geographical region was as follows:
United Kingdom
North America
Australia
India
Total
29 February
2020
£’000
34,617
14,321
2,441
2,873
54,252
28 February
2019
£’000
34,634
13,130
2,071
2,280
52,115
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 93% (2019: 95%) of the
North America trade receivable balance. In the United Kingdom balances with the distributors make up 87% (2019: 85%) of the
United Kingdom trade receivable balance.
c) Liquidity risk
Currently, the Group has limited borrowing and has sufficient cash deposits to meet its debts as they fall due. However, the
Group’s exposure to liquidity risk has increased since coronavirus. The Board has modelled a severe but plausible pessimistic
downside scenario; see note 2c on going concern for further details. Under this scenario the Group is expected to have sufficient
liquidity for at least 12 months from the date of approval of the financial statements.
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 29 February 2020, the Group had no draw down
(2019: £nil) of this facility with £8.0 million of undrawn borrowing facilities (2019: £12.0 million) available.
The facility comprises a committed revolving loan facility of £8 million in the first half and an additional £4 million in the second
half, totalling £12 million, to match Bloomsbury’s cash flow cycle, and an uncommitted incremental term loan facility of up to £6
million. The facilities are subject to two covenants, being a maximum net debt to EBITDA ratio of 2.55 and a minimum interest
cover covenant of 45. Subsequent to the year end, the maturity of the facility was extended to May 2022 and the covenants were
amended to exclude IFRS 16.
The Group’s financial liabilities are trade payables, accruals and other payables as shown above. All other financial liabilities are
due within one year.
160
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements 26. Leases
The Group’s lease portfolio consists of office properties, vehicles and equipment. The Group has adopted IFRS 16 Leases at
1 March 2019 and applied the modified retrospective approach. Comparatives for 2019 have not been restated. The Group has
elected not to recognise right-of use assets and lease liabilities for short-term leases that have a lease term of 12 months or less
and leases of low value assets. The Group recognises the lease payments associated with these leases as an expense on a straight-
line basis over the lease term.
Disclosure required for IFRS 16
The amounts recognised in the income statement are as follows:
Interest on lease liabilities
Expenses relating to short-term leases
Expense relating to leases of low-value assets
Depreciation of right-of-use assets
The maturities of the Group’s lease liabilities are as follows:
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities
Lease liabilities included in the balance sheet
Current
Non-current
IAS 17 disclosure required for 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
Notes
6
15
29 February
2020
£’000
492
22
7
1,775
29 February
2020
£’000
2,068
7,978
6,941
16,987
14,530
1,585
12,945
28 February
2019
£’000
1,971
7,107
7,056
16,134
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.
27. Commitments and contingent liabilities
a) Capital commitments
Property, plant and equipment
Intangible assets
Total
29 February
2020
£’000
–
238
238
28 February
2019
£’000
–
105
105
b) Other commitments
The Group is committed to paying royalty advances to authors in subsequent financial years. At 29 February 2020, this
commitment amounted to £20,187,000 (2019: £18,581,000).
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 25c.
161
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS 28. Related party transactions
The Group has no related party transactions other than key management remuneration as disclosed in note 5.
29. Post balance sheet events
On 11 March 2020, the World Health Organisation declared the coronavirus a pandemic. Following IAS 10, this has been treated
as a non-adjusting post balance sheet event , as the significant impact on the Group’s operations, markets, staff, customers,
suppliers and other areas occurred after the year end.
On 20 March 2020 the Group acquired certain assets of Zed Books Limited (“Zed”), the London-based academic and non-fiction
publisher. The consideration was £1.75 million, of which £0.875 million was satisfied in cash on completion and the remainder to be
paid within 12 months. Zed will operate within the Academic & Professional division and is expected to contribute approximately
£0.8 million of revenue to the Group in its first year.
On 17 April 2020 the Company completed the non-pre-emptive placing of 3,766,428 Ordinary shares in the capital of the
Company, representing 5%. of the existing issued share capital, raising gross proceeds of £8.4 million.
30. Investments in subsidiary companies
The Group’s subsidiary companies at 29 February 2020 are:
Country of incorporation
Subsidiary undertakings held directly by Bloomsbury Publishing Plc:
England and Wales
A & C Black Limited
Bloomsbury India UK Limited
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
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
Oberon Books 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
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
162
Proportion of
equity capital held
Nature of business
during the year
Registered
office
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
Publishing
Dormant
Dormant
Publishing
Publishing
Publishing
Publishing
Publishing
Publishing
Publishing
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.
1.
4.
1.
1.
1.
1.
1.
1.
1.
1.
www.bloomsbury.comBloomsbury Publishing PlccontinuedNotes to the Financial Statements Country of incorporation
Proportion of
equity capital held
Nature of business
during the year
Registered
office
Subsidiary undertakings held through a subsidiary company:
Herbert Press Limited
John Wisden (Holdings) Limited
Methuen Drama Limited
Nautical Publishing Co Limited
Philip Wilson Publishers Limited
Reed’s Almanac Limited
Sheffield Academic Press Limited
T & T Clark Limited
The Athlone Press Limited
Thoemmes Limited
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
All subsidiary undertakings are included in the consolidation.
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
1.
1.
1.
1.
1.
1.
1.
5.
1.
1.
The following lists all Bloomsbury registered office addresses. Please see wholly owned subsidiary list over 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 29 February 2020, 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
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
Oberon Books Limited
The Group’s joint venture undertakings at 29 February 2020 are:
Company number
06409758
05233465
03833148
00189153
01953639
03143617
00135590
03307205
03471853
00868867
06810049
03830397
01761687
02082142
Joint venture undertakings held directly by Bloomsbury Publishing Plc:
Beijing CYP & Gakken Education Development Co., Ltd
China
50% Publishing
1.
1. Floor 5, B Block, No. 1132, Hui He South Road, Banbidian Village, Gaobeidian Township, Chaoyang District, Beijing, PRC.
Country of
incorporation
Proportion of
equity capital
held
Nature of
business
during the
year
Registered
office
163
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Company Statement of Financial Position
As at 29 February 2020
Company Number 1984336
Assets
Intangible assets
Property, plant and equipment
Right-of-use assets
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
Lease liabilities
Total non-current liabilities
Trade and other liabilities
Provisions
Lease 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
29 February
2020
£’000
28 February
2019
£’000
Notes
33
34
35
36
37
38
39
40
43
47
41
43
47
44
44
44
44
3,107
1,613
10,016
81,159
516
503
96,914
6,729
62,009
19,995
88,733
185,647
144
9,932
10,076
72,444
151
906
932
74,433
84,509
101,138
942
39,388
8,549
52,259
101,138
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
The Company financial statements were approved by the Board of Directors and authorised for issue on 26 May 2020.
J N Newton
Director
P Scott-Bayfield
Director
164
www.bloomsbury.comBloomsbury Publishing Plc
Company Statement of Changes in Equity
For the year ended 29 February 2020
At 28 February 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
Profit for the year and total
comprehensive income for the year
Transactions with owners
Dividends to equity holders of the
Company
Share options exercised
Deferred tax on share-based
payment transactions
Share-based payment transactions
Total transactions with owners
of the Company
At 29 February 2020
Share
capital
£’000
942
Share
premium
£’000
39,388
Merger
reserve
£’000
1,803
Capital
redemption
reserve
£’000
22
Share-based
payment
reserve
£’000
5,673
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
422
Retained
earnings
£’000
46,894
Total
£’000
94,722
6,324
6,324
(5,655)
12
214
33
–
(5,655)
12
214
33
422
–
942
–
39,388
–
1,803
–
22
422
6,095
(5,396)
47,822
(4,974)
96,072
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
629
10,373
10,373
(6,009)
27
(6,009)
27
46
–
46
629
–
942
–
39,388
–
1,803
–
22
629
6,724
(5,936)
52,259
(5,307)
101,138
* The Company has adopted IFRS 9 "Financial Instruments" from 1 March 2018 and applied the cumulative effect method. The cumulative impact of adoption has
been recognised as a decrease to opening retained earnings as at 28 February 2018.
165
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS
Company Statement of Cash Flows
For the year ended 29 February 2020
Cash flows from operating activities
Profit for the year
Adjustments for:
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Impairment of investments
Finance income
Finance costs
Share of loss of joint venture
Share-based payment charges
Tax expense
Increase in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) 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 rights to assets
Purchase of share in a joint venture
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
Repayment of lease liabilities
Lease liabilities interest paid
Other 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
166
Year ended
29 February
2020
£’000
Year ended
28 February
2019
£’000
Notes
10,373
6,324
295
1,051
986
3,304
(191)
559
7
314
1,802
18,500
(573)
(4,915)
1,984
14,996
(1,440)
13,556
(263)
(310)
(1,213)
(223)
(1,454)
91
(3,372)
(6,009)
27
(880)
(322)
(1)
(7,185)
2,999
16,996
19,995
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
42
42
42
42
42
42
www.bloomsbury.comBloomsbury Publishing Plc
Notes to the Company Financial Statement
Accounting Policies
31. 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 183. The Company is primarily involved in the publication of books and other related
services.
32. 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 2021, 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 £10,373,000 (2019:
£6,324,000).
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 29 February 2020. The table below summarises the impact of these changes to the Company:
Accounting standard
IFRS 16 Leases
Other standards
Description of change
A description and the impact of the adoption of IFRS 16 Leases is set out in note 32h.
A number of other new standards and amendments
to standards and interpretations are effective for
annual periods beginning after 1 January 2019.
The standards and amendments have not had
a material impact on the Group. Additional
disclosure has been provided where relevant.
Impact on financial statements
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
Other standards
Description of change
A number of other new standards and amendments
to standards and interpretations are effective for
annual periods beginning after 1 January 2020 and
have not been applied in preparing these financial
statements.
Impact on financial statements
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) 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 Company considers the trust to be substantially under its control and so aggregates the financial information of the trust
into the Company’s results. The Company records the assets and liabilities of the trust as its own. Finance costs and administrative
expenses are charged as they accrue.
167
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Notes to the Company Financial Statements
Accounting Policies
g) 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.
h) Change of accounting policy: IFRS 16
The Company has adopted IFRS 16 Leases from 1 March 2019 and applied the modified retrospective approach. Comparatives for
2019 have not been restated and there is no adjustment to equity at the date of application.
On transition the Company elected not to reassess whether a contract is, or contains, a lease, instead relying on the assessment
already made applying IAS 17 "Leases" and IFRIC 4 "Determining whether and Arrangement contains a Lease". In addition, the
Company applied the available practical expedients as follows:
• Reliance on assessment as to whether leases are onerous on 1 March 2019 with no impact identified;
• Exclude leases of low value assets and short-term leases of less than 12 months from the application of IFRS 16, with payment for
these leases continuing to be expensed directly to the income statement as operating leases;
• The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease; and
• Exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application.
The major class of lease impacted by the new standard is property leases. The lease liability has been measured at the present
value of the remaining lease payments, discounted using the incremental borrowing rate at transition. The right-of-use assets are
set to equal the lease liability adjusted for any prepaid or accrued lease payments.
The weighted average incremental borrowing rate (“IBR”) applied to the lease liabilities on 1 March 2019 was 3.0%. A single IBR
has been applied to a portfolio of leases when these have shared similar characteristics including location, duration and nature of
the leases. The approach to use an IBR to discount leases has been followed since the transition date as the interest rate implicit in
individual leases cannot be readily determined.
At 1 March 2019 transition date adoption of IFRS 16 resulted in the Company recognising right-of-use assets of £9.7 million and
lease liabilities of £10.3 million. There is a reduction of £0.3 million for prepaid rental amounts now netted against the right-of-use
assets and a reduction of £0.9 million to liabilities for deferred rent-free amounts netted against the right-of-use asset.
168
www.bloomsbury.comBloomsbury Publishing Plc The impact on the income statement for the year ended 29 February 2020 is as follows:
Decrease in administrative expenses
EBITDA benefit
Increase in depreciation
Operating profit benefit
Increase in finance costs
Profit before tax reduction
Year ended
29 February
2020
£’000
1,232
1,232
(1,051)
181
(322)
(141)
Prior to the adoption of IFRS 16 rental payments were charged to the income statement on a straight-line basis. Under IFRS 16
rental costs in the income statement are replaced with depreciation on the right-of-use asset and interest charges on the lease
liability. The adoption of IFRS 16 gives rise to a net £141,000 charge in the profit before tax for the year ended 29 February 2020.
At operating profit, the adoption of IFRS 16 gives a benefit of £181,000. The impact is the same for both the statutory profit before
tax and adjusted profit before tax.
There is no overall impact on the Company’s cash and cash equivalents although there is a change to the classification of cash
flows in the cash flow statement with lease payments previously categorised as net cash used in operations now being split
between the principal element (categorised in financing activities) and the interest element (categorised as interest paid in
financing activities). The impact on the cash flow statement for the year ended 29 February 2020 is as follows:
Net cash used in operating activities
Net cash used in financing activities
Pre IFRS 16
£’000
12,354
(5,983)
Repayment of
lease liabilities
£’000
880
(880)
Interest paid
£’000
322
(322)
Post IFRS 16
£’000
13,556
(7,185)
The lease liabilities as at 1 March 2019 can be reconciled to the operating lease commitments at 28 February 2019 as follows:
Operating lease commitments disclosed at 28 February 2019
Less commitments relating to short-term leases
Less commitments relating to low-value assets
Discounted using the lease’s incremental borrowing rate
Property leases novated from other Group companies
Other liabilities now recognised within lease liabilities
Lease liability recognised as at 1 March 2019
Analysed at:
Current lease liabilities
Non-current lease liabilities
1 March 2019
£’000
9,687
(10)
–
(1,822)
1,788
663
10,306
936
9,370
169
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Notes to the Company Financial Statements
continued
33. Intangible assets
Cost
At 28 February 2018
Additions
At 28 February 2019
Additions
At 29 February 2020
Amortisation
At 28 February 2018
Charge for the year
At 28 February 2019
Charge for the year
At 29 February 2020
Net book value
At 29 February 2020
At 28 February 2019
Publishing
rights
£’000
Systems
development
£’000
660
70
730
–
730
660
12
672
15
687
43
58
6,527
937
7,464
1,454
8,918
4,005
878
4,883
971
5,854
3,064
2,581
The amortisation charge of £986,000 (2019: £890,000) was included in administrative expenses in the year.
34. Property, plant and equipment
Cost
At 28 February 2018
Additions
At 28 February 2019
Additions
At 29 February 2020
Depreciation
At 28 February 2018
Charge for the year
At 28 February 2019
Charge for the year
At 29 February 2020
Net book value
At 29 February 2020
At 28 February 2019
Short
leasehold
improvements
£’000
Furniture
and fittings
£’000
Computers and
other office
equipment
£’000
2,664
54
2,718
20
2,738
1,473
97
1,570
104
1,674
1,064
1,148
432
21
453
49
502
355
25
380
31
411
91
73
1,600
143
1,743
194
1,937
1,151
168
1,319
160
1,479
458
424
The depreciation charge of £295,000 (2019: £290,000) was included in administrative expenses.
170
Total
£’000
7,187
1,007
8,194
1,454
9,648
4,665
890
5,555
986
6,541
3,107
2,639
Total
£’000
4,696
218
4,914
263
5,177
2,979
290
3,269
295
3,564
1,613
1,645
www.bloomsbury.comBloomsbury Publishing Plc
35. Right-of-use assets
At 28 February 2019
Adjustment on initial application of IFRS 16 (see note 32h)
Additions
At 29 February 2020
Depreciation
At 28 February 2019
Charge for the year
At 29 February 2020
Net book value
At 29 February 2020
At 28 February 2019
36. Investment in subsidiary companies
Property
£’000
–
9,523
1,412
10,935
–
970
970
9,965
–
Cars
£’000
–
90
–
90
–
45
45
45
–
Equipment
£’000
–
42
–
42
–
36
36
6
–
Cost
At 28 February 2019
Additions
At 29 February 2020
Impairment
At 28 February 2019
Charge for the year
At 29 February 2020
Net book value
At 29 February 2020
At 28 February 2019
Total
£’000
–
9,655
1,412
11,067
–
1,051
1,051
10,016
–
£’000
92,692
1,213
93,905
9,442
3,304
12,746
81,159
83,250
The addition in the year is in relation to the acquisition of Oberon Books Limited. The impairment in the year relates to the carrying
value of Bloomsbury Professional Limited.
37. Other investments
Equity securities designated as at FVOCI
Joint venture
Total
The amounts recognised in the Income Statement are as follows:
Joint venture
Total
29 February
2020
£’000
300
216
516
28 February
2019
£’000
300
–
300
Year ended
29 February
2020
£’000
(7)
(7)
Year ended
28 February
2019
£’000
–
–
The addition in the year is in relation to the investment in Beijing CYP & Gakken Education Development Co., Ltd joint venture.
171
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS
Notes to the Company Financial Statements
continued
38. 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 2018
(Charge)/credit to the income statement
Credit to equity
At 28 February 2019
(Charge)/credit to the income statement
Credit to equity
At 29 February 2020
The analysis for financial reporting purposes is as follows:
Deferred tax assets
Deferred tax liabilities
Total
Property, plant
and equipment
£’000
15
(24)
–
(9)
(22)
–
(31)
Retirement
benefit
obligation
£’000
19
(16)
–
3
31
–
34
Share-based
payments
£’000
29
67
33
129
107
46
282
Provisions
£’000
40
307
–
347
(129)
–
218
Total
£’000
103
334
33
470
(13)
46
503
29 February
2020
£’000
503
–
503
28 February
2019
£’000
470
–
470
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.
39. Inventories
Work in progress
Finished goods for resale
Total
29 February
2020
£’000
1,879
4,850
6,729
28 February
2019
£’000
1,384
4,772
6,156
The cost of inventories recognised as cost of sales amounted to £17,644,000 (2019: £16,231,000).
The provision and write down of inventories to net realisable value recognised in cost of sales amounted to £1,903,000 (2019:
£2,018,000).
172
www.bloomsbury.comBloomsbury Publishing Plc 40. Trade and other receivables
Current
Gross trade receivables
Less loss allowance
Net trade receivables
Amounts owed by Group undertakings
Other receivables
Prepayments and accrued income
Royalty advances
Total trade and other receivables
29 February
2020
£’000
28 February
2019
£’000
32,835
(1,575)
31,260
12,824
2,033
3,372
12,520
62,009
30,457
(1,736)
28,721
12,209
2,254
2,946
10,847
56,977
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 29 February 2020, £2,534,000 (2019: £3,180,000) 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 46. 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 181 days
(2019: 163 days).
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
41. 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
29 February
2020
£’000
1,736
–
401
(177)
(385)
1,575
28 February
2019
£’000
927
212
641
–
(44)
1,736
29 February
2020
£’000
28 February
2019
£’000
8,809
1,605
47,901
642
2,379
11,108
72,444
72,444
5,657
3,392
46,890
637
1,817
13,481
71,874
71,874
Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs.
If actual returns were 10% higher or lower in the year revenue would have been £0.5 million lower/higher (2019: £1 million).
173
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS
Notes to the Company Financial Statements
continued
42. Loans and borrowings
Reconciliation of movements of liabilities to cash flows arising from financing activities:
Liability
Equity
Bank overdrafts
used for cash
management
purposes
£’000
–
Share
capital/share
premium
£’000
40,330
Lease liability
£’000
–
–
–
(880)
(322)
(1,202)
10,306
1,412
322
12,040
–
10,838
–
–
–
(1)
(1)
–
–
1
1
–
–
–
–
–
–
–
–
–
–
–
–
40,330
Other
reserves
£’000s
7,920
–
–
–
–
–
–
–
–
–
629
8,549
Liability
Equity
Bank overdrafts
used for cash
management
purposes
£’000
–
Share
capital/share
premium
£’000
40,330
Lease liability
£’000
–
Other
reserves
£’000s
7,498
–
–
–
–
–
–
–
–
Retained
earnings
£’000
47,822
(6,009)
27
–
–
(5,982)
–
–
–
–
10,419
52,259
Retained
earnings
£’000
47,065
(5,655)
214
–
(5,441)
Total
£’000
96,072
(6,009)
27
(880)
(323)
(7,185)
10,306
1,412
323
12,041
11,048
111,976
Total
£’000
94,893
(5,655)
214
(1)
(5,442)
–
–
–
40,330
–
–
422
7,920
–
–
6,198
47,822
1
1
6,620
96,072
–
–
–
–
–
–
–
–
–
–
(1)
(1)
1
1
–
–
Balance at 1 March 2019
Changes from financing cash flows
Dividend paid
Proceeds from exercise of share options
Repayment of lease liability
Interest paid
Total changes from financing cash flows
Other changes
Liability-related
IFRS 16 transition
Right-of-use asset additions
Interest expense
Total liability-related other changes
Total equity-related other changes
Balance at 29 February 2020
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
174
www.bloomsbury.comBloomsbury Publishing Plc 43. Provisions
At 1 March 2019
Transferred in the year
Created in the year
Utilised in the year
At 29 February 2020
Non-current
Current
Author
advance
£’000
–
132
78
(59)
151
–
151
Property
£’000
108
–
36
–
144
144
–
Total
£’000
108
132
114
(59)
295
144
151
The property provision is in respect of dilapidations for the Bedford Square head office. The author advance provision relates a
provision against future cash outflows on published titles where the Group does not expect to fully recover the advance.
44. 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 22 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 32b.
For details of dividends see note 8.
As at 29 February 2020, the Company had distributable reserves of £52.3 million. The total external dividends relating to the year
ended 29 February 2020 amounted to £6.0 million. The Company distributable reserves support over eight times this annual
dividend.
45. 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 23.
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
£447,000 (2019: £296,000) of this amount was recharged to subsidiaries of the Company.
29 February
2020
£’000
629
132
761
28 February
2019
£’000
422
76
498
175
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Notes to the Company Financial Statements
continued
46. 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 25 to the consolidated financial statements.
Categories of financial instruments
Investments available for sale
Equity securities designated as FVOCI (Level 3)
Joint venture
Total investments available for sale
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
Lease liabilities
Total financial liabilities measured at amortised cost
29 February
2020
£’000
28 February
2019
£’000
Notes
300
216
516
19,995
12,824
31,260
2,597
66,676
8,809
1,605
11,108
3,021
47,901
10,838
83,282
37
40
40
41
41
41
47
300
–
300
16,996
12,209
28,721
1,693
59,619
5,657
3,392
13,436
2,454
46,890
–
71,829
Net financial instruments
(16,090)
(11,910)
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
29 February
2020
£’000
19,995
28 February
2019
£’000
16,996
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 (2019: 1%)
0.5% decrease in base rate of interest (2019: 0.5%)
29 February
2020
£’000
28 February
2019
£’000
142
(79)
132
(67)
176
www.bloomsbury.comBloomsbury Publishing Plc
ii. Currency risk
The Company’s exposure to foreign currency risk was as follows based on notional amounts:
GBP
USD
EURO
AUD
Total
Loan and receivables
Financial liabilities
29 February
2020
£’000
63,742
1,828
833
273
66,676
28 February
2019
£’000
54,176
3,793
1,474
176
59,619
29 February
2020
£’000
82,713
403
166
–
83,282
28 February
2019
£’000
70,758
955
116
–
71,829
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 (2019: 10%)
10% strengthening in US dollar against pound sterling (2019: 10%)
10% weakening in euro against pound sterling (2019: 10%)
10% strengthening in euro against pound sterling (2019: 10%)
10% weakening in AUS dollar against pound sterling (2019: 10%)
10% strengthening in AUS dollar against pound sterling (2019: 10%)
29 February
2020
£’000
28 February
2019
£’000
(129)
158
(61)
75
(25)
30
(258)
315
(123)
151
(16)
20
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 87% (2019: 85%) of the gross trade receivable balance.
c) Liquidity risk
Currently, the Company has limited borrowing and has sufficient cash deposits to meet its debts as they fall due. However, the
Company’s exposure to liquidity risk has increased since coronavirus. The Board has modelled a severe but plausible pessimistic
downside scenario; see note 2c on going concern for further details. Under this scenario the Group is expected to have sufficient
liquidity for at least 12 months from the date of approval of the financial statements.
The Company has an unsecured revolving credit facility with Lloyds Bank Plc. At 29 February 2020, the Group had no draw down
(2019: £nil) of this facility with £8.0 million of undrawn borrowing facilities (2019: £12.0 million) available.
The facility comprises a committed revolving loan facility of £8 million in the first half and an additional £4 million in the second
half, totalling £12 million, to match Bloomsbury’s cash flow cycle, and an uncommitted incremental term loan facility of up to £6
million. The facilities are subject to two covenants, being a maximum net debt to EBITDA ratio of 2.55 and a minimum interest
cover covenant of 45. Subsequent to the year end, the maturity of the facility was extended to May 2022 and the covenants were
amended to exclude IFRS 16.
177
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS
continued
47. Leases
The Company’s lease portfolio consists of office properties, vehicles and equipment. The Company has adopted IFRS 16 Leases at
1 March 2019 and applied the modified retrospective approach. Comparatives for 2019 have not been restated.
Disclosure required for IFRS 16
The maturities of the Group’s lease liabilities are as follows:
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities
Lease liabilities included in the balance sheet
Current
Non-current
IAS 17 disclosures for 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
29 February
2020
£’000
1,248
4,831
6,813
12,892
10,838
906
9,932
28 February
2019
£’000
953
3,288
5,446
9,687
The operating leases represent rentals payable by the Company for certain office properties, vehicles and equipment; see note 26
for further details.
48. Commitments and contingent liabilities
a) Capital commitments
Property, plant and equipment
Intangible assets
Total
29 February
2020
£’000
–
238
238
28 February
2019
£’000
–
105
105
b) Other commitments
The Company is committed to paying royalty advances in subsequent financial years. At 29 February 2020, this commitment
amounted to £12,306,000 (2019: £10,957,000).
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 46c.
The Company has guaranteed the liabilities of certain of its UK subsidiaries, being those listed in note 30, to enable them to take
the audit exemption under section 479A of the Companies Act 2006.
178
www.bloomsbury.comBloomsbury Publishing PlcNotes to the Financial Statements 49. 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
29 February
2020
£’000
9,525
9,422
(8)
91
12,824
47,901
28 February
2019
£’000
8,553
9,667
(5)
77
12,209
46,890
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.
179
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS ←
Harry Potter
Harry Potter: The
Complete Collection
(Children's Paperback)
continues to be
Bloomsbury's number
one bestseller in print for
another year.
180
www.bloomsbury.comBloomsbury Publishing Plc Additional
information
182
Five Year Financial Summary
183
Company Information
184
Legal Notice
185
Notice of the Annual General Meeting
181
Stock code: BMYAnnual Report and Accounts 2020FINANCIAL STATEMENTS Five Year Financial Summary
Revenue
Adjusted profit†
Adjusted diluted EPS‡
Dividend per share
Return on Capital Employed
Net assets
Net cash*
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
2020
£’000
162,772
15,704
16.77p
1.28p
12.2%
149,673
31,345
† 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.
Prior periods have not been restated to reflect the adoption of IFRS 15 "Revenue from Contracts with Customers" and IFRS 9
"Financial Instruments" in 2019 IFRS 16 ‘Leases’ in 2020.
182
www.bloomsbury.comBloomsbury Publishing Plc Company Information
Chairman
Executive Directors
Independent Non-Executive Directors
Company Secretary
Registered Office
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
Leslie-Ann Reed
Steven Hall
Maya Abu-Deeb
50 Bedford Square
London
WC1B 3DP
+44 (0) 20 7631 5600
Registered number
01984336 (England and Wales)
Auditor
Bankers
Stockbrokers and Financial Advisors
Registrars
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
183
Stock code: BMYAnnual Report and Accounts 2020ADDITIONAL INFORMATION Legal Notice
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 40 to 45.
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.
184
www.bloomsbury.comBloomsbury Publishing Plc 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 Tuesday 21 July 2020 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.
*ARRANGEMENTS IN LIGHT OF THE CORONAVIRUS PANDEMIC
In light of the coronavirus pandemic and the Government’s “Stay Alert Measures”, please refer to the Company Secretary’s letter
over the page which details the changes to the format of this year’s Annual General Meeting.
185
Stock code: BMYAnnual Report and Accounts 2020ADDITIONAL INFORMATION Letter to Shareholders
20 May 2020
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 Tuesday 21 July 2020 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.
Coronavirus and AGM arrangements
The Company is continuing to closely monitor the evolving situation and Government advice relating to the coronavirus pandemic.
As we publish this document, the “Stay Alert Measures” issued by the UK Government remain in place. Throughout this
document, references to the Stay Alert Measures include any equivalent public safety measures which may be introduced by the
Government after the date of this letter and Notice of Meeting.
In light of these unprecedented circumstances, the AGM this year will be run as a closed meeting. We hope that Shareholders will
understand that we are taking the following steps to protect our Shareholders, employees and the Board. At the time of writing,
legislation to allow closed AGMs to be held virtually is anticipated, and we intend to avail ourselves of this option if such legislation
is promulgated before our AGM.
Format and proceedings of the meeting
Assuming that the Stay Alert Measures remain in place at the date of the AGM, Shareholders will not be permitted to attend the
AGM in person. In order to comply with quorum requirements under the Company’s Articles of Association, two Shareholders
must be present in person or by proxy at the AGM, and the Company will make arrangements to ensure that the necessary
quorum is present.
The format of the meeting will be purely functional and will comprise only the formal business – there will be no corporate
presentation or Q&A. All other Directors of the Company and professional advisers will not attend the AGM in person.
Shareholder participation
Given the Stay Alert Measures, any Shareholders seeking to attend the AGM will be refused entry to the meeting. However,
Shareholders’ votes still matter. Shareholders are strongly encouraged to participate by submitting a proxy vote in advance of the
meeting and appointing the Chair of the Meeting as their proxy (rather than a named person who will not be permitted to attend
the meeting).
Voting by proxy
Similarly to last year, Shareholders will not receive a form of proxy for the AGM in the post. Instead, instructions can be found in
the section entitled “Explanatory Notes to the Notice” to enable Shareholders to vote electronically and how to register to do so.
To register, Shareholders will need their Investor Code, which can be found on their share certificate. Shareholders 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 Friday 17 July 2020 in order to count towards the vote. As mentioned above, Shareholders are
strongly encouraged to appoint the Chair of the Meeting as their proxy for this year’s AGM.
Shareholder questions
Shareholders are invited to submit to the Board any questions they would otherwise have asked at the AGM ahead of the meeting
by email to: AGM2020@bloomsbury.com, marked for the attention of the Company Secretary.
Communication of changes
The situation is constantly evolving, and it may become necessary to change the arrangements for this year’s AGM after the date
of this letter, in particular, if the anticipated legislation to enable closed AGMs to be held virtually comes into effect. The Company
will provide any appropriate updates in relation to the AGM via its investor relations website (www.bloomsbury-ir.com) and the
Regulatory News Service.
186
www.bloomsbury.comBloomsbury Publishing Plc Resolutions
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 17
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 and Accounts
2020 with this document. Shareholders who have not elected to receive hard copy documents can view or download the Annual
Report and Accounts 2020 and this Notice from our website at www.bloomsbury-ir.co.uk.
Recommendation
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
20 May 2020
187
Stock code: BMYAnnual Report and Accounts 2020ADDITIONAL INFORMATION 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 Tuesday 21 July 2020 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 17 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:
1. To receive the audited accounts of the Company for the year ended 29 February 2020, together with the Report of the
Directors and the report of the Auditor thereon.
2. To approve the Annual Statement by the Chair of the Remuneration Committee and the Annual Report on Directors’
Remuneration for the year ended 29 February 2020, as set out on pages 88 to 90 and 96 to 108 respectively of the Company’s
Annual Report and Accounts for the year ended 29 February 2020.
3. To approve the Directors’ Remuneration Policy as set out on pages 90 to 96 of the Company’s Annual Report and Accounts for
the year ended 29 February 2020.
4. To authorise the Directors to settle the intended final dividend for the year ended 29 February 2020 of 6.89 pence per share by
way of a bonus issue of new Ordinary Shares.
5. To re-appoint Steven Hall as a Director of the Company.
6. To re-appoint Sir Richard Lambert as a Director of the Company.
7. To re-appoint Nigel Newton as a Director of the Company.
8. To re-appoint Leslie-Ann Reed as a Director of the Company.
9. To re-appoint Penny Scott-Bayfield as a Director of the Company.
10. To re-appoint John Warren 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, 16 and 17 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 t o 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 £329,562 provided that:
i. 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
ii. 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
iii. 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.
188
www.bloomsbury.comBloomsbury Publishing Plc 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:
a. 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;
b. 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
c.
to the allotment of equity securities or sale of treasury shares (otherwise than under paragraph a. and b. above) up to a
nominal value not exceeding in aggregate £49,434;
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 £49,434; 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. the maximum number of Ordinary shares authorised to be purchased is 7,909,499 Ordinary shares being 10% of the issued
Ordinary shares of the Company at the date of the notice of this resolution;
b. the maximum price (exclusive of expenses) which may be paid for each Ordinary share is an amount equal to 105% 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;
c. 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
d. 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.
189
Stock code: BMYAnnual Report and Accounts 2020ADDITIONAL INFORMATION Notice of the Annual General Meeting
Bloomsbury Publishing Plc continued
17. THAT: the Articles of Association contained in a document produced to the meeting and signed by the Chief Executive for the
purposes of identification be approved and adopted as the New Articles of Association of the Company in substitution for, and
to the exclusion of, the existing Articles of Association.
By order of the Board
Maya Abu-Deeb
General Counsel & Group Company Secretary
Bloomsbury Publishing Plc
20 May 2020
Registered Office
50 Bedford Square
London
WC1B 3DP
190
www.bloomsbury.comBloomsbury Publishing Plc 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 17 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 29 February 2020, together with the report
of the Auditor.
Resolution 2 (ordinary resolution) – Approval of Annual Statement by the Chair 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 88 to 90 and
96 to 108 of the Annual Report and 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) – Approval of the Directors’ Remuneration Policy
The Directors’ Remuneration Policy is set out on pages 90 to 96 of the Company’s Annual Report and Accounts for the year ended
29 February 2020. The Policy must be approved by Shareholders by means of a separate resolution (in accordance with section
439A of the Companies Act 2006) at least once every three years. The current Policy was approved by Shareholders at the AGM in
2017 and is therefore due for renewal. As part of the review of the Policy, the Company consulted with a number of the Company’s
largest Shareholders and, where appropriate, their comments have been reflected.
Subject to Shareholders' approval, it is intended that the new Policy will operate from 1 March 2020 and will become formally
effective immediately after the AGM.
Resolution 4 (ordinary resolution) – Approval of the payment of the final dividend by way
of a bonus issue of shares
The Company had intended to declare a final dividend for the year ended 29 February 2020 of 6.89 pence per share. This would
have resulted in a total dividend for the year of 8.17 pence per share, up 3% on the previous year. As previously announced, the
Company has decided, in light of the coronavirus pandemic, to conserve cash at the present time and therefore will not be paying
a cash dividend.
It is now proposed, subject to Shareholder approval, that the dividend is instead settled through the issuance of new Ordinary
shares of 1.25 pence each (the “Bonus Shares”) by way of bonus issue, with a value equivalent to the proposed final dividend, (the
“Bonus Issue”) to Shareholders on Bloomsbury’s register of members as at 11.59 pm on 31 July 2020 (the “Bonus Issue Record
Time”), being the last date on which transfers will be accepted for registration to participate in the Bonus Issue.
The Bonus Shares will be issued on 28 August 2020 (the “Bonus Issue Payment Date”) with the number of Bonus Shares (if any) to
which each Shareholder on Bloomsbury’s register of members as at the Bonus Issue Record Time is entitled calculated using the
following formula:
a) the number of Ordinary shares held at the Bonus Issue Record Time multiplied by 6.89 pence; divided by
b) the average of the middle market quotations of Bloomsbury’s Ordinary shares on the Daily Official List of the London Stock
Exchange for the five consecutive dealing days commencing from and including 24 July 2020 (the “Reference Share Price”).
No fraction of a Bonus Share will be issued and the calculation of entitlements to Bonus Shares will always be rounded down to
the nearest whole Ordinary shares. Any fractional entitlements to Bonus Shares will be aggregated and Bloomsbury will procure
that the maximum whole number of resulting Bonus Shares will be allotted and sold in the market with the net proceeds of sale
(net of any commissions, expenses and applicable taxes) paid in due proportion to the relevant Shareholders (rounded down
to the nearest penny), by way of cheque or credit to the relevant CREST account. Fractional entitlements to amounts (net of any
commissions, expenses and applicable taxes) of £5 or less will not be paid to the relevant Shareholders who would otherwise be
entitled to them due to the administrative costs incurred in doing so, but will be retained for the benefit of Bloomsbury.
In Resolution 4 Shareholders are being asked to authorise the Directors to proceed with the Bonus Issue and to capitalise up to
£5,720,000 standing to the credit of Bloomsbury’s distributable profits for the purposes of applying such amounts in paying up in
full the Bonus Shares.
The Bonus Shares will be fully paid up and rank pari passu in all respects with the existing Ordinary shares of Bloomsbury and will
have the rights, and be subject to the restrictions, provided for in Bloomsbury’s Articles of Association (“Articles”).
Shareholders are advised to consult their tax advisers on their tax position in respect of any Bonus Shares and/or cash proceeds
they receive in respect of any fractional entitlements to Bonus Shares.
191
Stock code: BMYAnnual Report and Accounts 2020ADDITIONAL INFORMATION Explanatory Notes to the Resolutions
continued
Expected Timetable of Events
1.
Latest time for return of proxies for Annual General Meeting
Annual General Meeting
2.
3.
4.
5.
Ex-dividend date for the bonus issue of Ordinary Shares (the “Bonus Shares”)
Thursday 30 July 2020
Bonus Issue Record Time (and the last date on which transfers will be accepted for
registration to participate in the Bonus Issue)
Friday 31 July 2020
Bonus Issue Payment Date and admission to trading of the Bonus Shares on the
London Stock Exchange
Friday 28 August 2020
12.00 noon on Friday 17 July 2020
Tuesday 21 July 2020
6. Despatch of share certificates for Bonus Shares to shareholders holding in
certificated form (and CREST accounts of shareholders holding in uncertificated
form credited with Bonus Shares)
On or soon after 8.00 am on the Bonus
Issue Payment Date
7.
CREST accounts credited with any cash due in relation to the sale of fractional
entitlements for shareholders who hold their shares in CREST (and despatch
of cheques for any cash in relation to the sale of fractional entitlements for
shareholders who do not hold their shares in CREST)
Within 14 days after the Bonus Issue
Payment Date
Resolutions 5 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, all the
Directors will retire at the AGM and, being eligible, offer themselves for re-appointment except for Jonathan Glasspool who will
resign as a Director of the Company.
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.
Biographical details for each of the Directors may be found on pages 68 to 69 of the Annual Report and Accounts.
The Board unanimously recommends the appointment or re-appointment of each of the Directors.
Resolution 11 (ordinary resolution) – Re-appointment 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 re-appointed for a further year so that they are able to audit the Company’s report and accounts for the year ending 28
February 2021.
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
28 February 2021.
Resolution 13 (ordinary resolution) – Authority to allot Ordinary shares
This is an ordinary resolution to replace the general authority, last given at the 2019 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 26,364,999 Ordinary shares of 1.25 pence with a nominal value of £329,562, 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.
As at the date of signing the Directors’ Remuneration Report for the 2020 Annual Report and Accounts, the Directors had
beneficial holdings of Ordinary shares in the Company which, in aggregate, amounted to approximately 1.35% 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 1.48% 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.
192
www.bloomsbury.comBloomsbury Publishing Plc 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% 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
six years other than as follows: 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; shares allotted
under employee share option schemes; and, the non-pre-emptive equity placing of 3,766,428 Ordinary shares in the capital of the
Company in April 2020.
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 2019 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 7,909,499 Ordinary shares with a nominal value of £98,869, 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.
193
Stock code: BMYAnnual Report and Accounts 2020ADDITIONAL INFORMATION Explanatory Notes to the Resolutions
continued
Resolution 17 (special resolution) – New Articles of Association
The Company’s Articles of Association were last amended in 2010. The Board has taken the decision to seek approval for
the adoption of the New Articles of Association to allow it to more efficiently deal with general meetings, including AGMs, in
circumstances where physical meetings are prevented due to extreme events such as the current coronavirus crisis.
The changes provide new definitions of physical, electronic and hybrid meetings to allow maximum flexibility in the holding of
Shareholder meetings in times when gatherings of large groups are limited in scope and therefore allowing for remote attendance
and the casting of votes via virtual meetings.
As such, the New Articles are being adopted to include the ability of holding a general meeting on an electronic platform and
therefore allowing Shareholders to attend and vote remotely, and also to grant the Board the power to determine whether a
general meeting will be a physical, electronic or hybrid meeting. All differences between the proposed New Articles and existing
Articles are limited to those which are necessary to grant the power to hold meetings (wholly or partially) on electronic platforms
and permit attendance and voting (wholly or partially) on a virtual basis. The proposed New Articles include the necessary
consequential changes to the provisions dealing with how notices are given, how meetings may be postponed, how a quorum is
calculated, and how a meeting is adjourned. No other changes are being proposed to the Articles.
The Board wishes to emphasise its continued desire to hold physical meetings, including AGMs, whenever possible. As such, it
only intends to use the power being requested by the New Articles to hold a virtual meeting in extreme circumstances such as a
future outbreak of the coronavirus, or another event which means that the holding of a physical meeting may cause harm to life or
is in fact restricted/prohibited by Government measures.
A copy of the draft New Articles, setting out the proposed changes to the existing Articles, are available to view on the Company’s
website (www.bloomsbury-ir.com).
Explanatory Notes to the Notice
The following notes explain your general rights as a Shareholder and your right to attend and vote at the AGM or to appoint
someone else to vote on your behalf.
As explained in the Letter to Shareholders on page 2 of this document, due to the Stay Alert Measures issued by the
Government in response to the coronavirus pandemic, Shareholders will not be permitted to attend the AGM in person. In
order to comply with quorum requirements under the Company’s Articles of Association, attendance at the AGM will be
restricted to two Shareholders or their duly appointed proxies, and the Company will make the necessary arrangements to
ensure the necessary quorum is present. Legislation to allow closed AGMs to be held virtually is anticipated, and we intend
to avail ourselves of this option if such legislation is promulgated before our AGM. Shareholders are strongly encouraged
to appoint the Chair of the Meeting to be their proxy at the AGM, given that no other named persons will be permitted to
attend the AGM.
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 Friday 17 July 2020
will be entitled to 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 subject to the Stay Alert Measures referred to above.
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, subject to the Stay Alert Measures referred to
above. 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 Chair) 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 Friday 17 July 2020 (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 Friday 17 July 2020. 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 Friday 17
July 2020 (or 48 hours (excluding weekends and public holidays) before the time appointed for any adjournment of it).
194
www.bloomsbury.comBloomsbury Publishing Plc 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 Friday 17 July 2020 (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).
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 Friday 17 July 2020. 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, subject
to the Stay Alert Measures referred to above. 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 19 May 2020 (being the last business day prior to the date of this Notice), the
Company’s issued share capital comprised 79,094,998 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 19 May 2020 is 79,094,998.
195
Stock code: BMYAnnual Report and Accounts 2020ADDITIONAL INFORMATION Explanatory Notes to the Notice
continued
9. Questions at the AGM. If the Stay Alert Measures remain in force at the date of the AGM, Shareholders are invited to
submit to the Board any questions they would otherwise have asked at the AGM ahead of the meeting by email to:
AGM2020@bloomsbury.com, marked for the attention of the Company Secretary. Any Shareholder who would have
attended 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 mee ting 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.
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. For such time that the Stay Alert Measures continue to remain in force, the Company is unable to make
available for inspection the documents that would otherwise customarily be available at the Company’s registered
office. In the event that the Stay Alert Measures cease to have effect, 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 0371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable international rate. Lines are open between 9:00am to 5:30pm,
Monday to Friday excluding public holidays in England and Wales. 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.
196
www.bloomsbury.comBloomsbury Publishing Plc ADDITIONAL INFORMATION
1
Methuen Drama Modern Plays’ 60th Anniversary event at RADA Studios. From left to right: Dom O’Hanlon, Senior Commissioning Editor for
Plays, Kwame Kwei-Armah, Playwright, Artistic Director of the Young Vic Theatre, Mel Kenyon, Agent, Casarotto Ramsay, Kate McGrath Director,
Fuel Theatre, and James Graham, Playwright, Screenwriter.
2 Elizabeth Gilbert speaking on her Sunday Times bestseller novel, City of Girls, at the London Book Fair
3 Bloomsbury colleagues celebrate at launch event with Kiley Reid, the Sunday Times bestselling author of Such A Fun Age. From left to right: Glen
Holmes, Jasmine Horsey, Kiley Reid, Greg Heinemann and Alexis Kirschbaum
4 Maisie Hill, author of Period Power with other guest speakers at the Alternatively Healthy Magazine event. From left to right: Maisie Hill, Megan
Rose Lane, beauty and lifestyle influencer, Angelique Panagos, nutritionist, and Becki Rabin, founder of Alternatively Healthy Magazine
5 Richard Norton-Taylor at the double book launch for the publication of his book, The State of Secrecy, and for Geoff Andrews’ Agent Moliere
6
Bloomsbury Institute collaborates with London Horror Festival on the art of constructing dread in the Horror genre and writing scary stories. From
left to right, Joe Willis, horror writer/producer and co-producer of London Horror Festival, Sasha Wilson, artistic director of Out of the Forest
Theatre and author of plays, Laura Purcell, author of gothic horror novels for Raven Books and Carrie Thompson, one half of Hermetic Arts and
writer of horror plays
7 Literary legend Isabel Allende speaking to writer Rosianna Halse Rojas about her new novel, The Long Petal of the Sea. Bloomsbury played host
to an exclusive live stream interview in conjunction with the UNHCR
8 Award-winning BBC radio producer and broadcaster, Kavita Puri, author of Partition Voices, discussing her book with novelist, Nikita Lalwani, at a
Bloomsbury Institute event at the London Library
9 Alexandra Pringle speaking to writer, art historian and filmmaker Nana Oforiatta Ayim at a Bloomsbury Lunches Live event about her book, The
God Child
10 Alison Hennessey speaking to Laura Purcell at a Bloomsbury Lunches Live event on her title, Bone China
11 Illustrator Jim Kay signing copies of Harry Potter and the Goblet of Fire, the illustrated edition at Bloomsbury’s offices
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27040 11 June 2020 9:44 pm Proof 227040 11 June 2020 9:44 pm Proof 2Bloomsbury Publishing Plc50 Bedford Square, London, WC1B 3DP+44 (0)20 7631 5600www.bloomsbury.com www.bloomsbury-ir.co.ukBloomsbury Publishing Plc Annual Report and Accounts for the year ended 29 February 2020Stock code: BMY123645789101127040-Bloomsbury-AR2020 - strategic.indd 311-Jun-20 9:49:39 PM