Bloomsbury Regulatory News (BMY)

Bloomsbury Publishing Plc

Acquisition of law publishing assets

Bloomsbury Publishing Plc ("Bloomsbury") is pleased to announce that it has today signed a sale and purchase agreement for Bloomsbury to acquire from RELX (UK) Limited ("RELX") certain LexisNexis and Jordan family law publishing assets of RELX and Jordan Publishing Limited as a pre-condition of the Competition and Markets Authority ("CMA") approval of the purchase of the Jordan publishing business by RELX.

Bloomsbury has agreed to acquire certain LexisNexis and Jordan family law publishing assets ("the Acquisition") for up to a maximum consideration of £1.4m minus deferred income which is to be determined following completion. The consideration will be satisfied in cash from existing cash resources and payable in two equal instalments, the first on completion and the second six months later. Completion of the Acquisition is conditional on the CMA approval of RELX's acquisition of the Jordan publishing business, a ruling on which is expected in January 2016. The full benefit of the Acquisition would therefore be felt in the financial year 2016/17 and annually thereafter.

Bloomsbury is acquiring the publishing rights to six highly regarded family law titles including Duckworth's Matrimonial Property & Finance and Hershman and McFarlane: Children Law and Practice. The titles are sold in a practical loose-leaf format and are available in an online digital format.

The acquisition is consistent with Bloomsbury's strategy to increase its proportion of non-consumer revenues to 50%. Non-consumer revenues are more predictable and have lower related costs of sale with higher margins and are less reliant on retail bookshop sales. The titles also offer the further benefit of subscription annuities.

The gross profit, before marketing, distribution and administrative costs, attributable to the assets being acquired in the twelve months to 31 March 2015 was £0.8m on revenues of £1.1 million. The book value of gross assets being acquired is negligible.

While making this announcement we are also updating the market on current trading. In broad terms this is good with the success of The Silk Roads by Peter Frankopan, John Le Carre by Adam Sisman, Tom's Table: My Favourite Everyday Recipes by Tom Kerridge and sales of digital knowledge hubs to institutions. December trading in the UK and Australia is good so far. Sales in the Children's division are good led by Sarah J Maas and the Illustrated Harry Potter and the Philosopher's Stone by J.K. Rowling with the artist Jim Kay. Sales of this £30 book in some countries around the world have exceeded our expectations. Current printings including co-editions total 1.2 million books. This is the first of seven such titles which will appear annually for the next six years.

We will begin to have visibility of post-Christmas returns and post-Christmas ebook sales over the next 12 weeks. The results for the financial year ending 29/2/16 will be dependent on these and the completion of deals under negotiation, as in previous years.

As indicated in our Interim Statement in October, the contracts for Bloomsbury to provide Qatar Foundation (QF) with publishing services reach the end of their term this month and have been under discussion. The original objective of the Qatar Foundation relationship was to achieve knowledge transfer to QF to enable it to have its own self-sufficient publishing company. We are now handing over to the strong local team we developed having completed this mission. QF now has the tools, knowledge and experience to take the reins and run its own publishing house. It has published more than 200 titles in Arabic and English, winning awards and having bestselling titles over its first seven years.

Bloomsbury is using the knowledge developed with QF to offer similar publishing services to foreign language publishers in the dominant English language markets. This is an area of Bloomsbury's activities that we plan to grow.

Other significant opportunities continue to be offered to Bloomsbury to acquire publishing assets. These strengthen our positions in subject areas which we have built up by our 25 acquisitions and will further develop our portfolio towards a balance between consumer and non-consumer publishing- particularly with academic, professional, specialist and pure digital assets.

The preliminary results for the full year ending 29th February 2016 will be announced on 19th May 2016.

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