- Long-term supply agreement reached with Amazon
- Confident in meeting full year expectations
- Bloomsbury shares up 43% over the past year
Shares in Bloomsbury (BMY) were up over 2% to 670p in early morning trading as the publishing group said it had reached a new long-term supply agreement with Amazon (AMZN:NASDAQ).
The company also reaffirmed confidence in meeting consensus market expectations for the year ending 28 February.
The board believes these to be full year revenue of £334 million and pre-tax profit and highlighted items of £39.6 million. Further details will be provided when the company publishes its preliminary results.
The publishing group is famous for the hugely successful Harry Potter series by J.K. Rowling and ‘romantasy’ author Sarah J. Maas.
Other recent successes include Hugh Fearnley-Whittingstall’s How to Eat 30 Plants a Week, which shot to number one in the Sunday Times bestseller list, Georgina Hayden’s Greekish; and Poppy O’Toole’s Poppy Cooks: The Actually Delicious Air Fryer Cookbook.
EXPERT VIEW
Russ Mould investment director at AJ Bell said: ‘Bloomsbury getting into a fight with the world’s biggest bookseller over contract terms was a risky move and one that could have backfired dramatically. Refusing to let Amazon sell its titles could have resulted in a decline in earnings, given how so many people buy their reading material from this retail giant.
‘A spat had emerged at the eleventh hour ahead of a contract expiring at midnight on 23 January, meaning that if the two didn’t come to an agreement, Bloomsbury’s print titles would have disappeared from the retail platform in the UK, Europe and Australia and on Kindle worldwide. Those titles included big hits from blockbuster authors Sarah J Maas and JK Rowling which continue to sell in their droves.
‘The fact Bloomsbury felt capable of going head-to-head with Amazon just goes to show the strong position it now commands in the publishing world. It certainly sends a message to other retailers that Bloomsbury is not a pushover.
‘It appears that a compromise was reached overnight as Bloomsbury now says a new deal has been signed, albeit not disclosing any details.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Martin Gamble) own shares in AJ Bell.
