In an IMS today, Bloomsbury said the UK the consumer economy is the toughest it has been for decades. Additionally a change in ownership of Waterstones means challenging times for consumer books on the High Street - Waterstones have strictly rationed orders during recent months. In the US, the Borders bankruptcy and subsequent sale looms over the industry and in Australia it is a similar story with the RED group, which owns Angus & Robertson. These factors mean that trade revenues, although boosted by growing e-book sales in the UK and US, remain soft.

In the Adult division, sales reflect current retail weakness - in particular in Germany, which had a strong comparator year with Eat, Pray, Love hitting the best seller list there last year. However, A.C. Grayling's The Good Book: A Secular Bible was published to huge acclaim on both sides of the Atlantic in April, reaching number five on Amazon.com in the U.S., following major national publicity and a U.S. publicity tour by A.C. Grayling. Chelsea Handler's My Horizontal Life continued its amazing run on the New York Times bestseller list, where it has remained for 138 straight weeks, approaching three consecutive years. Last week it was announced that Mao's Great Famine by Frank Dikötter has won the Samuel Johnson Prize for Non-fiction. The Bookseller commented that "the win means Bloomsbury has taken the prize three times-all in the last five years-and accordingly becomes the most successful publisher in the event's history." In the US, Amazon has reported that e-book sales have now surpassed print sales.

In the Children's & Educational division, the launch by JK Rowling of Pottermore.com has led to a resurgence of excitement in the Harry Potter books just prior to the release of the film of Harry Potter and The Deathly Hallows Part 2, this month. This has resulted in good stock orders coming from all retailers giving a boost to our children's backlist sales. Bloomsbury will receive a share of the revenues from the sale of e -books from Pottermore.com, which will commence later this year.

Bloomsbury Information operates a diversified high margin portfolio of management services and content creation and exploitation. Since the year end we have recruited an experienced Business Development Director to further crystallize opportunities in this area. As in past years, a number of prospective deals are in negotiation with third parties in this area and the outcome for the year is therefore dependent on completing these and the level of business to business demand generally for the rest of the year. The provision of management services to the Qatar Foundation has progressed well in this period. Particular successes of Bloomsbury Qatar Foundation Publishing ("BQFP") included How To Avoid Being Killed in a Warzone by Rosie Garthwaite, commissioned by BQFP and licensed throughout the Bloomsbury Group for worldwide publication in English and German. Over 60 titles will be published in Arabic and English by BQFP during the year.

Bloomsbury Professional was awarded 2011 Supplier of the Year by the British and Irish Librarians' Association. This is the first time a publisher has won the award. Bloomsbury continues to exploit the opportunities available due to the digital revolution in publishing; the new Irish Law and Tax Online service launched in June, our first digital service aimed at the legal and tax profession. In the autumn, the division will launch its UK Tax Online service. Bloomsbury Professional and PricewaterhouseCoopers announces today a new and dynamic international relationship under which Bloomsbury will publish PricewaterhouseCoopers' flagship financial reporting guidance, including the PwC Manual of Accounting. This marks a major step towards Bloomsbury Professional's aim of becoming the publisher of choice for professionals in accountancy and tax.

Difficult prevailing retail conditions mean we remain cautious about current trading. The Bloomsbury team continue to be active and innovative, and with eight months still to come in our financial year, a number of digital and strategic initiatives are in progress.

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