Bloomsbury Publishing Plc (BMY) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Bloomsbury Publishing Interim Results Investor presentation. [Operator Instructions] I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. And I'm sure the company will be grateful for your engagement on that poll. And I'd now like to hand over to Penny Scott-Bayfield, CFO; and Nigel Newton, CEO of Bloomsbury Publishing. Good afternoon.

Good afternoon and a very warm welcome to you, and thank you for coming to our interim results presentation today. If I can refer you now to our PowerPoint, you'll see on the front cover of an proclamation of the great news that a long-standing Bloomsbury author, Abdulrazak Gurnah, won the highest prize there is in the whole world in literature about 3 weeks ago. And his books, some 10 novels, we published over 2 decades are selling like hotcakes. It's been a great season for Bloomsbury in terms of external recognition. Susanna Clarke, who we've again published for 20 or so years, won the women's prize, which used to be known as the Orange Prize for her new novel, Piranesi about 6 weeks ago. And again, that has gone back into the best soloist in the U.S. and the UK and elsewhere. And also, we were terribly excited to have 1 of the 6 shortlisted authors for the Booker Prize last night. Sadly, we were not the winner. It does have a very worthy winner, but the publicity achieved for our book by Patricia Lockwood was fantastic, 45 minutes of prime time television were devoted by the BBC TV news channel last night. And there was much video footage and interview with our author Patricia Lockwood as well as the other authors. So it's been a good run for Bloomsbury. If you see on Slide 2 there, what we've done with Abdulrazak Gurnah's novel since the win with a sticker proclaiming the Nobel Prize. And this is now selling terrifically well. So let's take a look at those interim results. They are the highest in the Bloomsbury 35-year history for a first half of any year, and certainly our highest since we floated on the London Stock Exchange in June 1994. As you can see, sales were up 29%, which is absolutely amazing. Our whole industry, you may have gathered, has been an inadvertent winner in the pandemic as people have had more time to read while they've worked from home. And have found escapism, entertainment, information and education in books. So how lucky are we. And on top of -- if that industry growth might be in the region of 10%, you can see our 29%. We've grown even more. Profits are also up by GBP 8.9 million, which is remarkable in the first half. This has been based on best sellers. It's been based on backlist books. We've had some real issues to contend with. The famous supply chain crisis that's affecting everyone is affecting us. And we've managed to react, I think, pretty nimbly to that by shifting printing from a country such as America where there is undercapacity to a country such as the U.K. where there is adequate capacity. But that doesn't mean we're not still dealing with delays on shipping due to the shortage of containers and shortage of space on ships and ports such as one in China being shut for COVID reasons. And shortages of paper pulp and shortages of labor as certain employers let go of the workers. But in spite of that, we're doing really well, and we've factored that into our expectations, which you'll see from the final points on this page we are confident of achieving. And here on the next slide is our growth story. We got to over GBP 100 million for the first time in the first half and to GBP 12.9 million of interim period profits. What is particularly exciting about this news is that it's equally from our Consumer and our Non-Consumer divisions. So that means we're doing well at selling to the public through high streets and main street retailers and online retailers. And on the other hand, we're selling well to university libraries with our Academic division. So that's absolutely fantastic. The great shining line lies among all of that activity has been the performance of the Bloomsbury Digital Resources decision. That's the real sizzle in Bloomsbury's product mix, the digital resources that we sell by subscription. If you like a kind of B2B basis to institutions such as university and college libraries. And they then make them available to students enrolled in their university. And so these are closed rather than open websites, only available to subscribers or purchasers. And that's been a big part of the strategic thrust of Bloomsbury in the last 6 years where we're meeting our goals in that area. And finally, we made a couple of great acquisitions, and we'll talk more to you about them in this presentation.

Well, good afternoon, everyone. And so moving on to financial highlights. There's 3 things I'd like to call out on this slide. First of all, as Nigel has already mentioned, 29% growth in our top line. Second of all, the improvement in the margin. So you can see that we've more than doubled our margin against the first half of last year. And thirdly, coming down to the 210% increase in the EPS to really delivering on every financial metric. Looking -- taking a closer look at the results between the publishing divisions. So here, as Nigel has already mentioned, you can see that we've had very strong growth in both the Consumer and Non-Consumer divisions, growth of 29% and 27%, respectively. But also at the bottom of the slide, you can see that doubling of the margin has happened on both sides of the business as well. So our Consumer margins increased from 5.6% to 3.3% (sic) [ 13.3% ]. And our Non-Consumer margin has over doubled from 4.9% to 12.2%. And this slide highlights again the progress we've made on the margin. So we initially went into the non-consumer space over 10 years ago, and that was on the basis that we could achieve much stronger margins. Now actually, we've been able to deliver very well on our Consumer margins as well, but this shows the progress on both divisions just in the last 2.5 years. Looking in a little bit more detail about where that revenue growth has come from. So within Adult, you can see 27% growth in adult. And that's very strong on the back of some really strong growth in the first half last year. And equally, within Children's, our revenue up 31% against the strong first half last year. We'll come on to talk more about where this has come from later on in the presentation. And within Academic & Professional, you can see 32% growth there. And even in Special Interest, our smallest division, we grew by 18%. So a very strong set of results all around. Coming on to look at revenue by channel. And this has been -- this has always been a very important focus for us. We're actually completely platform-agnostic. But I think it's been very interesting to see the way that this has developed since the start of the pandemic. And as you can see here, Print remains very strong. So that's demand continuing very strong on the consumer side. But also a very strong recovery in Print academic books. So they're almost at pre-pandemic levels now. ebooks, 17% growth on top of a very strong first half last year, where a lot of consumers transitioned to ebooks in response to supply chain challenges last year and bookshops closing. And also, we're very pleased with our Audio growth. We're starting from a smaller number, but we see huge potential here, and it's very encouraging to see that partly reflecting consumer behavior. But also reflecting a better deal that we now have with audible and that's putting all content in here. And of course, our shining star, the 44% growth in BDR, which we'll talk about more later. So moving on to our strong balance sheet. This is for those of you who followed Bloomsbury in the past, you know that this is a very, very important part of what we do, the strengths of our backup here. And there's 2 things I'd like to call out from this slide. First of all, you can see from the bottom of the slide, our cash remains very strong at just shy of GBP 44 million, and that's in with where we were last year, having paid out GBP 8 million of special dividend but also made 2 acquisitions in the first half of this year. So that gives you some idea of the scale of cash that we're generating through our underlying trading. And the second point is within our working capital. Our working capital has stayed pretty flat year-on-year. But within that, what we've done, in sharp contrast to our focus over the last 6, 7 years, where we've been working incredibly hard to maintain stock levels and actually significantly reduce them. We've actually taken a strategic decision to increase our stock. And so this time, our organic stock is up by 37% from where it was in the first half of last year. And that's really reflecting what Nigel was saying earlier about in order to mitigate supply chain challenges, what we're doing is printing much, much earlier, and we're printing longer. And by longer, we mean more copies in the first print run. Normally, we would be quite tight about it with good print and then as to the -- and then reflect demand. Now we're -- certainly our titles where we're confident about the demand, we're printing very early to really maximize the availability of our key titles. So if you move on to just giving you a little bit more detail on the cash flow. You can see here how we've generated that cash and that's really come off the trading, and then we've used that to invest just under GBP 9 million in acquisitions and just over GBP 14 million of dividends. And for those of you who are shareholders, you'll be well aware that that's including the final dividend from last year and also the GBP 8 million special dividend also paid in August. So I'm going to pass back to Nigel to talk through what -- how we use our cash.

Well, we've got 3 main focuses. The first is buying other publishing companies. We've made about 30 acquisitions in the last 20 years. And we've primarily been looking for niche companies that fill gaps in our own portfolio. And in particular, that provide content for digital exploitation. So you've heard that we've made 2 so far this year, and the pipeline is full as we consider other ones. The second use is in expanding the Bloomsbury Digital Resources division as we gain more and more momentum with university librarians worldwide, and turn people who've been a customer of one digital resource, such as, say, Drama Online, which they might -- if they made an outright purchase, they might have spent GBP 100,000 with us for that. And we will then try to get them to buy Bloomsbury fashion central online or Bloomsbury theology online and so on. So that's an area we're investing in our expansion. And thirdly, new content, which really means bigger books by bigger authors as we sign up the front list of our future programs. Of course, the cash is giving us a strong balance sheet and giving us good dividend cover -- good cash cover on the dividends. So in H1, we saw many good things happen, and ended the period as you can see at the bottom of that box with GBP 43.7 million in the bank and with many opportunities facing us. And also we increased the interim dividend. So what were those acquisitions? The Red Globe Press is a high-level academic publisher of textbooks and monographs in fields like psychology and study skills. And they have -- we paid a very good price, from our point of view, about 0.3x turnover. And academic publishers can trade at 2x turnover, for example, so significantly less than that. Moreover, we gained 3 digital products from them that we've started into our BDR division, and the integration of that is going well. Secondly, we acquired at the other end of the subject area spectrum Head of Zeus, which is a general consumer publisher in particularly 6 genres areas from crime fiction to science fiction to historical fiction and 3 other areas. And that is going very well, too. They produced a couple of best sellers for the Bloomsbury Group since the acquisition at the beginning of June.

So this is one of our favorite slides showing the dividend growth and how long we've been delivering a progressive dividend for. And so here, just our latest aspect of that is the 5% growth from the interim dividend this year. So moving into a bit more detail on the operational performance of the divisions. So starting with Academic & Professional. We've talked about the revenue growth, 32%. I mentioned earlier that, that's come from both the digital side and the print side. So our Print sales increased by 34%, and that's almost a complete recovery to pre-pandemic levels, and that's better than we thought it was going to be at this stage. Within digital, both BDR and ebooks are steaming ahead and that very much reflects the market move, which we anticipated to digital learning resources. Now on the right-hand side of the slide, you can see that BDR, we created a very ambitious goal of within 6 years, getting from a standing start to GBP 15 million of revenue and GBP 5 million profit. This is the year of that delivery, and we're confident we're on track to deliver that. Gross margin, and I have already mentioned, the 44% revenue growth. And in actual -- in absolute terms, that means the profit has increased by GBP 1.6 million to GBP 2.8 million in this first half. So that's now really delivering a very significant contribution to the overall group bottom line. And just the icing on the cake was that we were the well-deserved winners of the Academic Publisher of the Year in 2021. So delving a bit more into Bloomsbury Digital Resources. Our strategy here is we get -- is to build on our growth through 4 different areas. First of all, our established products. So these are mature and highly in-demand products where we want to sell more of them. Second of all is with acquisitions. So Red Globe Press is a great example of that, where we're enhancing our content, we're leveraging the power of the infrastructure and the platforms, and the sales teams that we've built with huge -- with we think significant opportunities there. There's also plug and play on the content we acquire. So when we buy print publishers, we can immediately digitize that content. So we're paying print multiples for those acquisitions, but we get the digital upside. Thirdly is partnerships. So we're in the enviable position of having built such strong products and infrastructure that people come to us to digitize their content. And that includes Taylor & Francis, who as you're all aware of, were part of Informa, I think the fact that part of such a powerful and effective group are choosing us to partner with, I think, is a very -- is a great testament to the quality of what we've built. Human Kinetics, our white labeling content for a very large U.S. publisher. And again, they can see what we've done. It makes more sense for them to come and pay us to white label it than to build it for themselves. And that's an area we wouldn't be in, but it's a great product for us to offer and new partnerships already achieved. And then, of course, finally, new products. That's where we're using our own IP to develop new products that we can then upsell to existing and new customers. So what does that mean? So in terms of some of the key KPIs that we look at and share, 44% revenue growth, that's only just under what we achieved in the first half last year when you can imagine the scale of pivoting to products. that we have was enormous. We've seen a 56% increase in the number of academic customers year-on-year, and we've seen still very strong demand coming through. Our market-leading verticals, just as a reminder, we choose to be dominant in subjects that makes -- we want to be the #1 in these subjects, and we really want to create a position where it's actually hard to teach these subjects without having our products. And that's what we're able to do in these 5 key areas. We're expanding those both vertically, and we're looking to increase the breadths of our proposition. So what's next? We're nearly there on our first 5-year target. Looking ahead to the next 5 years, we want to achieve 50% organic growth. And to be very clear, any future acquisitions will be in addition to this. This is the organic growth we can achieve from where we are now. We want to achieve a 30% margin on that organic revenue. And so you've seen from earlier that 30% compares very favorably to what we can achieve in other areas of the business. And to share with you the size of the market. So we believe there are about 5,000 academic institutions that teach in one or more of the areas, subject areas we offer. And we're currently in just around about 2,100 of those customers, and that's people -- that's institutions buy one or more of our products. So you can see there's a very significant headroom in this market for us. Then moving on to special interest. This is very specific publishing areas where we aim to be -- again, we want to be at very close links with those communities. And what's been very pleasing about this is that this division was most hard hit by the closure of off-line retailers last year, and many other divisions that either went digital or went straight online. So we've been very pleased to see this great 18% growth period-on-period for here. But we're also even more pleased to see the profitability improvement, and that's come partly from the revenue growth, but also from the work, the very hard work we've done behind the scenes to include the structure, the efficiency and the margins operated here. So a much more targeted and focused publishing strategy, which is really paying off. So if I can now pass it back now to Nigel to take us through Consumer.

So we've had an absolutely fantastic period in the Consumer division. And as you can see with sales up 27%. So what's driven this? Well, some of the bestsellers have included Piranesi, a novel by Susanna Clarke who wrote Jonathan Strange & Mr Norrell some years ago, that became a very successful television series. We've had the Nobel Prize winner and the big bump in sales, although actually that follows the period end on the 31st of August. But we've had, indeed, our book mentioned at the bottom left there, No One is Talking About This by Patricia Lockwood, our booker shortlist book was set to be the highest-selling book of all the shortlist titles, which we were very proud of up until last night, the winner will overtake it from today. And we've also seen the success mirrored in the U.S.A. where again Piranesi, which we also published over there made it to the New York Times as well as, as did Samantha Shannon's new book. And of course, our a great old favorite Tom Kerridge. And The Song of Achilles, which you see illustrated in the far right of the slide, is the real phenomenon here because it was taken up by TikTok and became a so-called BookTok sensation as hundreds of mainly young readers around the world recorded 15-second videos of their emotional response to reading this great novel about the story of Achilles and Patroclus. And this is a 10-year-old Bloomsbury's book, and it's just roared back to life because of TikTok. And we've seen the paper back addition of it. And a new heart cover, we opportunistically released as a 10th anniversary edition of The Song of Achilles appearing simultaneously in The Times and Sunday Times best syllabus in the last few months and very much ongoing. So on the next slide, we take a look at the even more successful Children's division where the revenues were up 31%, very much powered by the love in lockdown of families reading authors already familiar to them, such as J.K. Rowling and Sarah J. Mass, both of which have had stellar periods. It's -- I cannot convey enough the importance of Sarah J. Mass as well as J.K. Rowling to our great performance with that 130% increase of Sarah Mass sales. So the highlights of ESG are another matter, we're showing equal focus by the management. So in this week of COP26, I am pleased to tell you that we have committed to a 46% reduction in our Scope 1 and Scope 2 emissions by 2030, which you all know is 40 years sooner than India has committed. And if I move on to the social highlights, if that's the right word for it. We've launched a Diversity, Equity and Inclusion Action plan, as I'm sure many of the organizations have. And we are seeing early fruits of that with a good increase in the representation of diverse employees ahead of national representation levels in Bloomsbury's workforce, which we're very pleased about. And finally, on governance. We have spend, as I'm sure you will have a great deal of our attention in the last 18 months on the safety and well-being of our employees. We've had some sad and tragic occurrences. But on the whole, we've managed to support everyone in working from home. The offices did reopen on October 18, and I will be interested to see how long until we get plan B that apparently we're officially not getting that. And then in the far right, we make the most important point of all really about ESG, which is that in book publishing, it's not just an add-on, it is actually the core of what we do because books inform, educate and inspire our people. And in the case of fiction show them their shared humanity, all of which is in itself a social good. And indeed, specifically on the area of the environment, we publish many of the books, which have had a big impact on global thinking about the future of the environment from Mary Robinson, the former President of Ireland's campaigning book, Climate Justice, to going back many years to one of the original catalysts of all of this Al Gore's book, An Inconvenient Truth. Next slide, please. So what is our long-term growth strategy? In each of our main areas, in Non-Consumer, we particularly focused on the growth of the BDR division with the high quality of earnings that come about, in particular, through the part of that business, which is based on annual subscriptions from university libraries to these digital services greatly contributing, I think, to the re-rating of Bloomsbury. On the Consumer side, you'll see that we have a terrific momentum at the moment, and are acting as a magnet to many literary agents to bring their clients to Bloomsbury. So that's going really well. And as is our international expansion, which is growing what we've got in America, where we have about 108 people working in Manhattan to Australia and to India as well as well as the open markets. And on the next slide, we talk about our employee engagement. This has been a critical area for us, as I'm sure all companies, particularly in the last 18 months. And the way we're dealing with it now is by having employee voice meetings with every single one of our 900 employees worldwide where they sit down once a year in groups of 12 with a member of our 7 strong Executive Committee. And attended by occasionally members of our main Plc Board. And we ask people what would make Bloomsbury a better company to work in. And we get lots of helpful answers, some of which we're in a position to act on immediately. And then in terms of sustainability, I've given you an idea of our targets. So I'll move on now to the next slide. What we need for a good H2, which we're 2 months into with Bloomsbury's unusual financial year end of February. We need our books that sell. And I'm pleased to tell you that a number of these H2 releases are selling very well, including After Lives by Abdulrazak Gurnah, the Nobel Prize winner, where I share a good fortune, we had released the paperback edition weeks before the Nobel Prize announcement. Within Nobel, unlike, say, a booker, you have no idea that your author is being considered. So you and the author find out at the same time as the public find out. And then you have to play catch up by issuing new additions and doing reprints, as you saw at the beginning. Piranesi, you see on the left and a range of other books, including a new illustrated Harry Potter: A Magical Year with a quote from the text of the 7 novels relevant to each day or if you like, birthday of the year. So finally, what is the summary of all this? I think it's not all a fashion, the pan, because much of what has worked for us in the last 18 months, in the last 6 months, in particular, that we're reporting on to you here today has been the result of long-term strategy. Such as the expansion into digital resources, which is looking very smart at the moment as universities have accelerated their pivots to teaching online and using digital resources. The second thing to say is that it is our belief that the demands that we are experiencing the surge in is resilient and will continue. Why do we think that? Because one of the circumstances, one of the catalysts that gave rise to the surge in reading was people working from home. And that will continue, even a happy day without COVID. There has been, as you all know, and I'm sure some of you are part of it, a revolution in the workplace. And our workers want to work 2 days a week in the office. And we will grasp that because we have learned that if anything, we work more effectively from home with our desk-type jobs. So that's just good luck about the processes of publishing. But what it means is that everybody who's working 2 or 3 days a week at home long into the future, will still have whatever the circumstances are that may have triggered them to read more books than they had previously, including perhaps an hour liberated at either end of the day from not commuting on those days. Yes, we are suffering from a supply chain crisis with difficulties with getting printing slots, getting shipping slots, getting paper pulp, but we have responded to all of those agilely. And at this stage, feel in control of the whole thing to the extent that we believe that even with those knocks, we can be confidence, especially with this strong first half under our belts of achieving results in line with market expectations. So that is our presentation.

That's great. Nigel. Thank you very much. And indeed, to Penny for updating investors this afternoon. [Operator Instructions] Despite Penny and Nigel will take a few moments to review those questions submitted already. I'd like to remind you a recording of this presentation, along with a copy of the slides and the published Q&A can be accessed via your Investor Meet company dashboard. And we'll notify via e-mail and now ready for your review. I'd also like to remind you that your feedback is important to the company. And immediately after this presentation is ended, we'll redirect to in order that you can provide the company with your thoughts and expectations. Penny, if I may hand back to you, obviously, investors did pre-submit to a couple of questions along with our number throughout today's presentation. If I could ask you just to read out the questions and response where it's appropriate.

Yes. Thanks, Mark, and thank you all for joining us this afternoon. So the first question I'm going to hand to Nigel and this is one of our pre-submitted questions. And that's with the challenge of meeting demand in the face of supply chain challenges, is there an opportunity to encourage greater take-up of digital books? And would this be economically more attractive than sales of print books?

Well, thank you for that question. Yes, in some respects, if our business became entirely about ebooks, we might benefit in a margin sense. But that isn't going to happen. People are still clearly very hooked on books as physical objects. And in a sense, we don't channel our energy into preferring one format over the other. We're platform agnostic and make roughly not quite the same amount of money from selling a unit of either. So it is absolutely the case as your question implies that it averts the supply chain crisis. But the crisis isn't so bad that we're not in a position to get physical books to customers. We are -- it's just taking us more work so it's the task.

Thanks, Nigel. The second question is about BDR, which I'll answer. BDR is performing very well. Would further investment drive faster growth rather other constraints, content, people, et cetera? And thank you, and yes, we're incredibly pleased with our BDR performance equally, that's getting us to where we set out to be. So as you've seen, it's a priority for our investments in terms of cash and capital deployment. And that's both in terms of CapEx, you've seen about GBP 0.5 million a year. But also from an operational perspective, making sure that the infrastructure is there, and that's both from an IT and people perspective. So we are -- and so we don't -- we're not putting any constraints on that internally. We're pushing it as far as we can. So whatever we need to make it continue growing at the pace that we want, we're putting into it. That's making sure we've got the right infrastructure. It's not about necessarily throwing more bodies at it. It's making sure that our processes are really good, and the whole thing really works together. So the next question I'm going to hand over to Nigel, and this is the one from Simon, and it's what is the impact of the early Christmas orders on the H2 revenues, i.e., how much has been pulled forward into H1? And do we expect H2 this year to be at least as good as last year. And that's from [ Simon Van Den ]. So Nigel?

Well, thanks very much, Simon. And the answer is that we are unable to identify the exact amount of the orders that were brought forward. It is, again, an industry-wide phenomenon, it's commented on widely in the bookseller and book branch or to trade journals by all publishers. So all we know is that, if you like, the online retailers are fully stocked for Christmas and so are the print retailers. So there is a risk that one or the other of them will end up with too much, and we will have higher returns in the second half. So to answer the second part of your question, do we expect H2 to be as good as the H2 last year? I can only guide you to the sort of the combination of the consensus of analysts keeping the forecast -- their forecasts for where we'll be exactly where they are, and not adding H2 of last year on to the H1 actual this year. And that's because we're being mindful of the potential damage to us of these potential higher returns and of the risk of not being able to reprint a best seller because there's no paper pulp. So it's not our position that we're saying these things will knock us sideways because we've done a lot to anticipate it. But with many months to go still in this financial year, it would be a brave person who said the supply chain crisis isn't going to get worse, it might. And we've allowed for that. So our position is that we're confident of meeting the 12-month market expectations.

Thanks, Nigel. And then another one for you from Michael. How competitive is the process of buying publishing businesses? And how long from identifying the target does it take to sign a deal and integrate them? That's a nice big question for you, Nigel.

Okay. Thank you. Well, the answer is that it takes probably about 4 months, 4 to 6 months depending on the complexity of what's involved in the due diligence for the whole process from first contact to consummation of a deal. How competitive is this? Well, in some cases, it's very competitive. And if you like, the more general target publisher's output is the wider the pool is of people who might be acquirers of it. Some very niche content. We have rapidly concluded that we're the only bidder for. And in that case, we make sure we don't pump up the first offer that we make because that might well be the only offer.

Thank you, Nigel. And then the next question, a series of questions from Vivek. I know we will answer some of these. And so you've asked a very good question about historically earnings and cash flow being second half weighted. And as the Non-Consumer part of the business grows, how will the seasonality evolve? So yes, the Consumer business has tended to be more second half weighted. As you've seen over our last 6 months, you've seen we're seeing very different trading patterns coming through. So I think it will be a brave person at this point who would forecast how these are going to settle down into our new normal. And part of the attraction in Non-Consumer is that it's less Christmas dependent. Equally with Academic, it is quite strongly weighted towards the beginning of the academic year in the autumn. So that would lend itself to -- that remains quite second half weighted, particularly in terms of print. But with digital and digital resources, we see fairly steady sales throughout the year. So that's an appealing part of it. So I think that gives you some idea of the sort of nuances behind it. You've asked about the pull-forward effect and we've talked about that. And then your question, and I'll pass this back to Nigel. Could we talk a bit about the value proposition of also using Bloomsbury as a publisher rather than directly publishing -- directly and self-publishing via Amazon, necessary risk for that? So what makes Bloomsbury a much better choice for an author versus self-publishing or alternative publishers? So why are we special, Nigel?

My advice would be if you have the choice, publish with Bloomsbury. But of course, getting published by Bloomsbury is very difficult because we have a huge number of submissions. But why is it better? Well, firstly, Amazon offer -- let me not name them. Self-publishing operations offer quite high standing percentages of the total revenue from the sales of those self-published books to the author, but it must be borne in mind that these are of a much lower retail price that they put on it. So it's a bigger percentage of a smaller number. Secondly, their interest is in selling through their own channels. So whereas for us, an online retailer is a minority customer, albeit a very big one. And the majority of our sales are to other outlets around the world, other online outlets and print book shops, wholesalers, library suppliers. So the market is always going to be bigger if it's that kind of book. But there are many books that are very well published by Amazon and others. And if you don't have the alternative of a traditional publisher. And there are also authors who swear by being self-published themselves, and they enjoy the control of doing that. So that's fine. It's a total market, and there's room for all of us.

Thank you, Nigel. And then from [ Shigav ], I'm sorry if I've got the -- I'm reading them as they come up here. Is there a minimum cash level we want to keep on the balance sheet? Yes, there is, but it's significantly lower than our cash balance at the moment. So what we see this is a significant war chest for future acquisitions. And then I think just coming -- scrolling down here. We've been asked about what are -- where is our focus in terms of future acquisitions as a digital print? So Nigel, back to you for that.

Is it digital print?

Well, I suppose where is our focus on future acquisitions? It's a broader question, isn't it?

Yes. Yes, I see. Okay. So our focus is on supporting the subject areas that were already in academic to try to make ourselves -- to make our proposition particularly in digital resource collections that works in those areas more unassailable. So for example, we published the standard work on family law, Hershman and McLane or is it McFarlane? And so if you're a solicitor, you have to subscribe to Bloomsbury Professional Online in order to gain access to this unique content, which is overseen by no less then the President of the Family Division in the Courts of Justice. So that's the kind of acquisition we like where it generates must-have as opposed to nice-to-have content for us in various niches. And of course, much of what we acquire is print content, and we then convert it for the first time into digital content, and that gives us an immediate surge in the value of what we've acquired. But as you've seen from the acquisition of Head of Zeus, we are also open-minded about considering acquisitions in the consumer area as well as the academic area and almost for similar reasons that Head of Zeus has given us niche content in general areas like science fiction. We hope we'll have a big win with that because one of their SF trilogies by a Chinese author, Cixin Liu, called The Three-Body Problem is in production with Netflix at the moment, the largest investment they've ever made in production of anything. And they wrote in the producers of Game of Thrones from HBO to make this science fiction series. So if we're lucky, it will be as useful as the television series of Game of Thrones was in driving sales of the print and e-book additions of the books on which the series was based.

Thanks very much, Nigel. And then we're just going back to BDR, responding to a couple of questions from apps. And first of all, thank you for saying what a good set of results we've had. And you're asking if we should model BDR fixed costs rising in line with revenues, and would they start to stabilize? Absolutely, we've made the bulk of our CapEx investments, and we expect that to -- we expect CapEx to continue at the sort of GBP 0.5 million rate half that we've seen in line with this first half and in line with the last 18 months or so. In terms of -- I mean, we've given clear margin guidance about where we expect that to come -- overall to come in, in terms of the mix of fixed and variable costs and how that breaks down. So I hope that gives you a flavor for how that will come through. We've got time for just one more question before I hand back to Nigel for his closing remarks. So I'm going to go to my favorite question, again, from [ Shigav ], which is what books are you both reading at the moment? Nigel, over to you.

Goodness gracious. Well, I am reading -- is it here? No. I am reading The Four Streets by Nadine Dorries. Nadine Dorries is Head of Zeus' top selling author. You may remember that 6 weeks ago, she was appointed Culture Secretary and is the Head of DCMS, and I'm meeting her in a few weeks' time. And I thought I better read her books. And I'm thoroughly enjoying this book set in the docks of Liverpool, and the trials and tribulations of the family lives of the -- empowers the admirable doctors who were mainly immigrants from Ireland. So that's my current reading. What about you, Penny? Are you reading some financial reports?

I'm very pleased to say that I don't read financial reports all the time. And I've just finished one of our U.S. young adult authors called Kalynn Bayron, who does amazing books reinventing classic fairy tales. So I just finished her book, This Poison Heart, which is terrific as an adult, really great and interesting. And I'm glad to start one of the Abdulrazak's backlist, the book called Paradise, which I'm really looking forward to. He wrote so beautifully. So those have been my recommendations. And Nigel, do you want to give us some closing remarks, and then we'll hand back to Mark.

Yes. Well, first of all, it's very good to see all of you, not that I can, and good to see you online in apps after our recent e-mail exchange. And I think I'd just like to say that Bloomsbury seems to be firing on all cylinders at the moment. And we're having our fair share of luck, if that's the right word for us in terms of books, which have won prizes, and other things that have stimulated sales well beyond those which we've assumed when we acquired these books. And that our team of 900 now around the world have responded nimbly to the overnight shift that we had as I'm sure you did in March 2020 to working from home. And that I'm feeling the strategy is the right one. We haven't really commented on that, but what is unique about our strategy is our -- being both an academic publisher and a general publisher. Practically, nobody else does that. They are all either academic like Oxford University Press, Cambridge University Press and so on or they are 100% general publishers as Penguin Random has shut. HarperCollins are -- I'm sure they have a few specialist visions, but they're -- the point of them is consumer readers. So we've combined them, and we find about 5 of the 7 departments that you need to produce either book are the same. It's only marketing and editorial that are different. And we've put all this together with a uniquely, I would suggest, balanced portfolio. So when one is up, the other happens to be down. They complement each other. And even within those areas, we like you, our portfolio managers seeking to have our ratio of winners to exceed the other kind. And Knock on Wood, that seems to be going pretty well at the moment. So thank you all very much for coming and all the very best.

Nigel, Penny, thank you very much and perfect timing as we come up to the hour. Could I please ask investors not to close the session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. It's going to take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Bloomsbury Publishing, we'd like to thank you for attending today's presentation. That now concludes today's session. Good afternoon to you all, and thank you once again.