Regulatory announcements
Annual Financial Report
24 June 2016
Bloomsbury Publishing Plc confirms that the following documents have been sent to shareholders and, pursuant to Listing Rule 9.6.1, have been submitted to the National Storage Mechanism and will be available for inspection at http://www.hemscott.com/nsm.do:
- Company's Annual Report and Accounts for the year ended 29 February 2016
- Notice of the 2016 Annual General Meeting
- Form of Proxy
The Annual Report and Accounts and Notice of the AGM can be found on the Company's website at www.bloomsbury-ir.co.uk .
In accordance with Disclosure and Transparency Rule 6.3.5, a responsibility statement, a description of the principal risks and uncertainties and details of related party transactions are set out below in full unedited text extracted from the Annual Report and Accounts for the period ended 29 February 2016. The text below should be read in conjunction with the Company's final results for the period ended 29 February 2016 which were announced in unedited full text on 19 May 2016.
Enquiries:
Michael Daykin
Group Company Secretary
Bloomsbury Publishing Plc
Telephone +44(0)20 7631 5627
DIRECTORS' RESPONSIBILITIES STATEMENT
(From page 47 to 48 of the Directors' Report of the Annual Report and Accounts for the year ended 29 February 2016)
The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare Group and parent Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with IFRSs as adopted by the EU and applicable law and have elected to prepare the parent Company financial statements on the same basis.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of their profit or loss for that period. In preparing each of the Group and parent Company financial statements, the Directors are required to:
a) select suitable accounting policies and then apply them consistently;
b) make judgements and estimates that are reasonable and prudent;
c) state whether they have been prepared in accordance with IFRSs as adopted by the EU; and
d) prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the parent Company will continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website, www.bloomsbury-ir.co.uk. Legislation in the
UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The Board confirms that, in the opinion of the Board, the Annual Report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Group's position and performance, business model and strategy.
The Board confirms that to the best of its knowledge:
a) the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
b) the Directors' Report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
PRINCIPAL RISKS AND UNCERTAINTIES
From pages 34 to 35 of the Risk Factors of the Company's Annual Report and Accounts for the year ended 29 February 2016)
The table below provides a description of risk factors that management considers relevant to the Group's business. Other factors besides those listed could also affect the Group.
During the financial year ended 29 February 2016 the principal risks have not changed substantially.
| Key area | Risk | Description | Mitigation |
| Market | Volatility of consumer book sales | Sales of books to the consumer market can be seasonal and volatile | Develop special interest, academic and professional publishing where revenues are less volatile Develop other revenue streams, including from rights and services, increasing the scope to enter annually renewing agreements |
| Increased dependence on internet retailing | Readers might not discover, and so buy, Bloomsbury's print and e-books sold through internet retailers | Grow expert marketing teams skilled in internet sales Engage with multiple internet retailers Increase focus on developing other marketing opportunities and other revenue streams, e.g. A&P digital products, rights and services Grow e-book sales |
|
| Rights and services | Volatility of timing of closing rights and services deals | The timing for completing high margin rights and services deals can depend on the performance by multiple parties including the main customer | Increase the number of rights and services deals to reduce the dependency on individual deals |
| Generating new/non-renewal of subscription and services agreements | The pipeline of new products and agreements might be uneven | Senior managers are responsible for ensuring strong performance by Bloomsbury of its obligations and strong customer care | |
| A customer or partner might not renew larger agreements that generate significant ongoing income | Increase the portfolio of products and agreements to grow income and reduce the dependency on individual agreements | ||
| Entrepreneurial risk | A deal may require upfront staff time and costs but fail to close resulting in lost investment | Similar to ordinary publishing risks: increase the portfolio of deals to leverage economies of scale and absorb volatility | |
| Move to digital | Development of the digital book market | Consumer e-book prices may not hold up in the longer term | Continue to supply books in all formats through multiple digital delivery systems aligned with the demands of readers |
| Possible emergence of not yet known reading technology, e.g. involving subscription services for consumer books | Ensure the Group is positioned to take advantage of e-book (or any new format) growth in international markets Use social media and other digital marketing to encourage direct sales to consumers Develop non-consumer offering where revenues are less volatile and there is a direct relationship with the customers |
||
| Information and technology systems | Productivity of IT systems and data | Continuing to improve staff efficiency depends on the IT systems and data keeping pace with the needs of the business | Board level representation on steering IT strategy, implementation and IT operations |
| Financial reporting | Valuation of assets and provisions | Significant assets and provisions in the balance sheet depend on assumptions over the value, e.g. goodwill, advances, intangible rights and inventory, returns provisions | Prudent approach to assumptions. Board approval of key assumptions. Rigorous audit of valuations |
| Title acquisition | High advances sought by agents. World rights not acquired | Agents seek high advances for some authors | Publish more special interest trade books, e.g. Academic & Professional |
| Agents prefer to split territorial rights for English language publishing between US and UK | Focus acquisition on titles where world English rights are available Concentrate on academic publishing where world rights are the norm | ||
| IP and copyright | Erosion of copyright | Erosion of copyright through government or other action | Continue policy of support for copyright and intellectual property rights as a fundamental facet of publishing |
| Piracy | Piracy of titles in print or digital form | Adopt robust anti-piracy policies Ensure good digital rights management protection of e-books and digital formats Participate in key industry anti-piracy initiatives | |
| Overseas operations | Overseas offices | Growing offices in the US, Australia and India | One Global Bloomsbury structure of global publishing divisions supported by Group functions provides an effective internal control framework and oversight of the overseas offices |
RELATED PART TRANSACTIONS
(From the Notes to the Consolidated and Company Financial Statements for the year ended 29 February 2016)
(Extract from Note 26)
27. Related party transactions
The Group has no related party transactions other than key management remuneration as disclosed in note 5.
(Extract from Note 5)
The Group considers key management personnel as defined under IAS 24 'Related Party Disclosures' to be the Executive Directors of the Company and those directors of the global divisions, major geographic regions and departments who are actively involved in strategic decision making.
Full details concerning Directors' remuneration are set out in the Directors' Remuneration Report on pages 58 to 74. The total remuneration of the Directors was £1,508,000 (2015: £1,489,000)
Total emoluments for Executive Directors and other key management personnel were:
| Year ended 29 February 2016 £'000 |
Year ended 28 February 2015 £'000 |
|
| Short-term employee benefits | 2,887 | 2,859 |
| Post-employment benefits | 266 | 183 |
| Share-based payment charges | 472 | 490 |
| Total | 3,625 | 3,532 |
(Extract from Note 44)
47. Related Parties
Trading transactions
During the year the Company entered into the following transactions and had the following balances with its subsidiaries:
| 28February 2016 £'000 |
28February 2015 £'000 |
|
| Saleofgoodstosubsidiaries | 4,200 | 3,907 |
| Managementrecharges | 7,642 | 8,974 |
| Commissionpayabletosubsidiaries | 1 | - |
| Financeincomefromsubsidiaries | 68 | 51 |
| Amountsowedbysubsidiariesatyearend | 17,952 | 22,717 |
| Amountsowedtosubsidiariesatyearend | 30,547 | 34,488 |
All amounts outstanding are unsecured and will be settled in cash. No provisions have been made for doubtful debts in respect of the amounts owed by subsidiaries.
Key management remuneration is disclosed in note 5.
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