Harry Potter Bloomsbury publisher warns against physical book sales

Bloomsbury Publishing has warned that sales of physical books could drop as much as 65% if government restrictions on the movement of people continue until the summer.

The company behind Harry potter exposed the possible blow to print sales – which account for around four-fifths of its revenue – in the “serious but plausible” worst-case scenario, which assumes the lockdowns are still widespread in July.

“It’s a total disaster to have just about 100% of our retail customers shut down,” Managing Director Nigel Newton said on Wednesday. In India, the company said there had been “no sales with a fairly difficult foreclosure” while the drop in demand was also severe in the UK, its largest market, as bookstores remained closed.

But Mr Newton added that the company’s experience in China, which both implemented and lifted restrictions earlier than in other countries, had been reassuring.

“[The Chinese lockdown] hits us hard enough. It is an important customer of our Harry potter college boxes and books in particular, but when they relaxed the restrictions in March, we saw all of those orders come through, ”he said. “Fortunately, we now have this business, but later in the year. ”

His comments came as Bloomsbury released its results for the year through February. Pre-tax profit rose 10% to £ 13million on revenue which was flat at £ 163million, despite the coronavirus hurting Chinese sales in the first part of the year . The company had net cash reserves of £ 31million at the end of February.

Revenue fell 3% and physical book sales fell 13% in the two months ending in late April. Peel Hunt analysts said the numbers were “better. . . than we feared, ”arguing that they pointed to the resistance of physical books as people bought them online.

Bloomsbury shares, which have fallen about a fifth since February, rose 1.5% in morning trading.

Like many other media companies, Bloomsbury has seen an increase in demand for its digital products. With many institutions, including the University of Cambridge, intending to hold online conferences until 2021, the group expects a boom in demand for academic documents accessible online.

In April, its branch providing online educational resources and libraries of content on topics such as theater and fashion received more than 4,000 test requests, up from 1,000 for the whole of the previous year. “This request will stay with us,” Newton said. “People will get used to [studying online]”.

The company previously announced that it would offer, instead of a cash dividend, an issue of free shares worth 6.89 per year, up 3% from the previous year. A management bonus was not paid because “the performance was in line with the expectations of the board”.

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