Bloomsbury Publishing said today sales reflect current retail weakness, with the launch of Pottermore.com boosting children's backlist sales.
The company also announced that it has today completed the acquisition of Continuum for a total cash consideration of £20.1m from Nova/Paul Investments Capital and management shareholders.
Bloomsbury has been looking for a transformational acquisition to act as the cornerstone of its Academic & Professional division. Continuum now provides the cornerstone of an enlarged division with critical mass and a solid base for organic growth going forward.
Continuum, which is based in New York and London, is an international academic and professional publisher with a small trade list. It has world class academic lists, some of which date back over 170 years and include a number of the most distinguished international authors in the humanities and social sciences, including Karl Barth, Martin Heidegger, Pope Benedict XVI, Archbishop of Canterbury Rowan Williams, Chief Rabbi Jonathan Sacks and Alain Badiou. Earlier this year, Continuum was awarded Independent Publishers' Group Publisher of the Year 2011 and Academic & Professional Publisher of the Year.
Continuum is forecasting EBITA of £0.6m for the year ended 30th June 2011 on turnover of £10.7m. Bloomsbury has identified potential cost synergies in excess of £1m in the first full year of combined operation. In the year ended 30th June 2010 Continuum reported a loss before taxation of £1.2m (after charging an interest charge of £1m payable to its private equity majority shareholders, Nova/Paul Investments Capital, which will not be ongoing). Turnover in the year was £10.6m of which 42% was sourced from the US. Gross assets at year end were £14.4m (including £5.7m of intangible assets). Continuum had cash of £0.9m at the time of acquisition.
The consideration was paid in cash on completion from Bloomsbury's own cash reserves; Bloomsbury had £29.3m of cash at end-June. The acquisition is expected to be earnings enhancing in the year to end-February 2012, with a forecast contribution to Bloomsbury's EBITA in excess of £0.5m, replacing interest receivable of approximately £0.1m over that period.
Nigel Newton, CEO of Bloomsbury commented:
"The acquisition of Continuum is a transformational step in the delivery of a long held strategic objective to grow our academic publishing. It is complementary to, and will substantially enhance, our Academic business, in particular giving it significantly more power in the US, helping to expand our increasing global market. Our growing proportion of academic and professional revenues will increase profit margins and give our results more stability. Our strategic direction towards academic and professional publishing is vindicated by the market place of 2011."
Oliver Gadsby, CEO of Continuum commented:
"Continuum has a leading position in academic publishing, with a thriving backlist, a huge number of authors who are leading authorities in their field, a vibrant digital story, and - above all - an excellent team in London and New York. I am delighted that Continuum is finding a new home with Bloomsbury, a company we all admire. I am confident that the lists and teams of the two companies will make a powerful combination, capable of playing a major role in the academic publishing landscape in the years ahead."