Bloomsbury experience 42% drop in pre-tax profits

The global success of Fifty Shades Of Grey and other copycat erotic books hit Harry Potter publisher Bloomsbury as it lost out to rivals in the first half.

The group recorded a 42% plunge in pre-tax profits to £850,000 (€1m) in the six months to August 31 after it said it suffered in a market “dominated” by best seller Fifty Shades, which is published by a rival, while the Olympics took its toll as shoppers stayed away from the high street.

And Bloomsbury saw revenues plunge 23% to £9.3m (€11.4m) in its children’s and educational arm due to falling Harry Potter sales, with figures boosted a year earlier by the release of the final film.

But it is hoping for a second-half boost from a line-up including a Harry Potter “Hogwarts Library” box set by JK Rowling and Hugh’s Three Good Things by Hugh Fearnley-Whittingstall.

Bloomsbury also hopes to drive further e-book sales after an 80% surge in the half-year to £4.5m (€5.5m) – with ebooks now accounting for 10% of group turnover.

It said competitive promotions surrounding e-readers in the run up to Christmas should help ebook sales.

Shares dropped 5% as analysts said Bloomsbury would have to deliver a very strong second half to remain on track with full-year forecasts.

David Johnson, analyst at Northland Capital Partners, said: “The success of Fifty Shades of Grey and other genre titles has cast a long shadow over the market and publishers without such titles.”

He added: “The business is heavily second half weighted and has a strong list, but will need to perform strongly to achieve consensus pre-tax profits of £12.1m (€14.9m).”

Investec Securities analyst Steve Liechti said he believed Bloomsbury profits would “bounce back” in the final six months thanks to upcoming releases and ebook launches.