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Bloomsbury bets reading revival will survive cost of living crisis

Bloomsbury Publishing reported record sales and profits as the publisher behind the Harry Potter series predicted that books would not be affected by the cost of living such as subscriptions.

The London-listed company said on Wednesday that sales in the year ended February were up 24 percent to £230.1 million, while pre-tax profits were up 28 percent to £22.2 million.

“The question on our minds was: would the pandemic wave of reading continue? We now know the answer: reading has become a re-learned habit and continues to thrive,” said CEO Nigel Newton.

He told the Financial Times that books were an “affordable luxury” that readers would likely still buy, even as inflation hit disposable income.

“We saw a little moment in April — the month Netflix warned about subscribers — when our own sales were low and we were like, ‘oh boy, here we go, the cost of living crisis,'” Newton said. “But it turned out to be a mirage, and sales skyrocketed in May.”

Newton also pointed to a higher share of digital sales in the company’s academic division.

He said more than half of the company’s sales were backlist titles that were cheaper to republish than new commissioned work. Sales of books belonging to the Harry Potter franchise grew 5 percent last year, 24 years after the first was published.

Bloomsbury stock rose 5 percent on Wednesday morning. Investec analysts said the company’s “excellent” results had come amid a year of supply chain problems related to paper and print cost inflation.

Some of Bloomsbury’s best-selling titles included this year Piranesia by Susanna Clarke and Nicole Perlroth’s This is how they tell me the world endsand hobby-driven books on topics like cooking continued to do well.

Newton said the price of books could rise in the coming months as inflation continued to weigh on production and transportation costs, adding that “we review our prices monthly”.

Bloomsbury last year bought California-based online academic publishing house ABC-CLIO, as well as Red Globe Press, which was previously owned by Springer Nature.

It also acquired London-based fiction publisher Head of Zeus, which the company says has contributed to £9 million in sales in the nine months since the deal.

Newton said the company would continue to buy smaller rivals, adding that “we are considering several acquisitions, and they are mainly academic”.

Bloomsbury said it would increase its final dividend by 24 percent to 9.40 a year.

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