Regulatory announcements

1. 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 who may control discoverability.

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. Academic & Professional digital products, rights and services.

2. Rights
and services

Dependence on 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.

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.

Senior managers are responsible for ensuring strong performance by Bloomsbury of its obligations and strong customer care.

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 reduce volatility.

3. Financial
valuations

Judgemental
valuation of assets
and provisions

Significant assets and provisions in the balance sheet depend on judgemental assumptions, e.g. goodwill, advances, intangible rights, inventory and returns provisions.

Consistent and evidence-based approach to assumptions.

Board approval of key assumptions.

Rigorous audit of valuations.

4. 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.

Cybersecurity

Unauthorised access could be made to Bloomsbury's systems to perpetrate a fraud or cause damage.

Clear responsibility for systems, increasing use of the cloud, monitoring security risks, internal control reviews of the systems and up-to-date anti-virus software are amongst the measures in place.

5. Growth
of digital

Digital development

Unforeseen hold-ups may delay development of new online content services and revenue for the services may not grow in line with our stretching targets.

Develop high-quality online content services in markets we understand well.

Standardise the digital delivery platform to simplify and speed up the development and implementation of new online content services.

Development of the
digital book market

Consumer e-book prices may not hold up in the longer term. Possible emergence of not yet known reading technology.

Continue to supply books in all formats through multiple digital delivery systems aligned with the demands of readers.

Ensure the Group is positioned to take advantage of e-book and audio 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.

Rise of alternative
book supply
arrangements

US readers may license books from retailers for a limited period at a lower cost to buying books, with no revenues or royalty paid to the publisher.

Develop digital platforms to deliver, on a subscription basis, the content that readers demand.

6. Title
acquisition

High advances
sought by agents

Agents seek high advances for some authors.

Publish more special interest trade books.

World rights not
acquired

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.

7. Reputation

Product and service
quality

Errors in books and digital content.

Careful selection and rigorous review of titles by broad teams of experienced publishers, and planning of the title pipeline to focus on publishing strengths.

Rigorous production procedures and planning of titles and digital resource content.

Information security

Being hacked and theft of intellectual property, e.g. key illustrations before publication.

Security awareness in teams and additional security measures to protect high value assets and data.

Investor confidence

City confidence undermined by events outside of Bloomsbury's control, e.g. collapse of a retailer.

Diversify the portfolio of products and services to reduce dependencies on individual customers, sales channels and markets.

8. IP and
copyright

Erosion of copyright

Erosion of traditional copyrights.

Erosion of territorial copyrights as a result of global internet retailing.

Open access.

Continue policy of support for copyright and intellectual property rights as a fundamental facet of publishing.

Continue to police infringements of the Group's territorial copyrights and take appropriate action to enforce such rights.

Develop digital services that deliver mixed open access and proprietary content in the form that customers demand and will continue to pay for.

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.

9. Overseas
operations

Overseas offices

Growing offices in the US, India and Australia may increase the operational risks and demands on management.

One Global Bloomsbury structure of global publishing divisions supported by Group functions provides an effective internal control framework and oversight of the overseas offices. Keep under review the management resources deployed within this structure as the business evolves.

10. Volatility
of paper
material costs

Increased production
costs

A contracting print market and increases to the costs of paper around the world due to various factors including increased regulation may result in higher production costs for the Group. See also below for the potential impact of Brexit on the costs of paper materials.

Provision for production variances are factored into the Group's budget at the beginning of each fiscal year.

The Group's contracts with its printers typically fix prices for printing work for a period of time, and include provisions to control the extent to which increases in the costs of paper may be passed on to the Group.

11. Brexit

Impact on the cost of
paper materials

Falls in the value of sterling may result in increased production costs due to increases in the costs of paper sourced by the

Group's printers.

The Group's contracts with its printers typically fix prices for printing work for a period of time, and include provisions to control the extent to which increases in the costs of paper may be passed on to the Group. Production costs are paid by the Group in a mix of local and foreign currencies and falls in sterling will not impact on all production costs

Impact on supply
chains and ensuring
delays in delivering
product to market

Disruptions to the supply chain may impact on sales if the delivery of product is delayed. Logistics costs may increase as a result of measures taken to counter delays and as a result of increased complexities surrounding the movement of goods across the UK/EU border.

Measures to mitigate the risk of disruption to supply chains include building in additional time to production schedules and placing orders for additional paper supplies with Bloomsbury's printers.