Bloomsbury Publishing Plc (BMY) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to the Bloomsbury Publishing Preliminary results for the financial year ending 28th of February 2022 investor presentation. [Operator Instructions] This meeting is being recorded. [Operator Instructions] Before we begin, we would like to submit the following poll. And if you would be so kind as to give out your attention, we would be most grateful and I'd now like to hand over to Penny Scott-Bayfield, CFO; and Nigel Newton, CEO from Bloomsbury Publishing Plc.

Good afternoon, and welcome to everybody. Well, we're delighted to see you, and thank you for attending this group call where Penny and I will present to the record results that Bloomsbury has delivered in the year ending the 28th of February of this year. So as you can see on the first slide, we had our highest ever sales and profit. And I'm particularly keen on that third bullet point, that revenue was up 41% over a 2-year period, nearly half. So that is astonishing growth and we've been real beneficiaries of the combination of a long-term strategy of academic and general publishing, which has really delivered together with the upside benefits of the lockdown, where it forced many people to reassess what was important and how they spent their time and to decide that reading was one of the things that gave them pleasure. And many people haven't read too much since they were students or children but the lack of competing activity in the lockdowns brought them back to books and then people were reminded how great books were when they were a bigger part of their lives. And the evidence of the period post the opening up of society this year is that the surge in reading is continuing. So that's really good news. And for Bloomsbury, if you see the next point, the industry grew 5% to our 24%. And so we're very proud of having had the right titles that have hit the button for many of our readers. In this period, we've also made 3 significant acquisitions. I can take you to the next slide, please. So our growth we just talked about, but I'd like to guide you to the third bullet there to show that it was kind of an across-the-board phenomenon at Bloomsbury with the General Books division that we [ brought ] consumer up 25% and the non-consumer, which includes academic, professional and special interest similarly up 23%. The most exciting news for the management this year was that we hit the target fixed 5 years ago for the Bloomsbury Digital Resource division. We announced this in RNS, the stock exchange that we would get to GBP 15 million of sales and GBP 5 million of profits by the year ending February 2022. So a long range projection that we use to justify the investments and the losses that we would make in the short term in pursuit of that. I'm thrilled to tell you that we sailed past those targets of GBP 18.6 million and GBP 6.8 million, respectively. And as the shift to digital learning occurs and society generally and around the world, but aided by the lockdowns, meaning students didn't even physically attend their universities for a period that certainly increased the importance that university vice chancellors and presidents were attaching to their budgets for spending on digital resources, and we were the beneficiaries and we'll tell you more about the 3 acquisitions, ABC-CLIO, Red Globe Press and Head of Zeus who are contributing as planned. Penny?

Thanks, Nigel. So good afternoon, everyone. So 3 points to highlight on this slide. First of all, the revenue growth to 24% revenue growth year-on-year. And of that 15% was organic so throughout a real theme of these numbers is the strength of the organic growth as well as how successful the acquisitions have been. And the second point is a 40% increase in pretax profit, well ahead of expectations and we upgraded twice during the year. And then thirdly, the 21% increase in our full year dividend, which I hope was welcomed to you and certainly has been a factor that underpins our healthy share price. As some of you may well know, we have significant income funds holding it and that keeps with that. So then moving on to a little bit more detail by division. As Nigel mentioned, we saw very strong performance across both halves of the business, both the consumer and the non-consumer side. So starting with Consumer, 25% revenue growth there, of which 18% was organic and 25% profit growth, of which 24% was organic so you can see that we're delivering excellent growth and it's very profitable. On the non-consumer side, 23% increase year-on-year, of which 10% was organic and a 68% increase in the profit of which 40% was organic. So just to highlight again, because I'm not sure there will be another time in my career. I'm talking about 25% and a 68% profit growth across our 2 divisions year-on-year. It's been a phenomenal performance. Then underpinning this is the fact that it's the work that we've been doing to improve our profitability as well. And so you can see here the non-consumer margins, as many of you know that we've invested heavily in non-consumer over the years. This has been a key part of our strategy. And that increase -- that margin has increased from 6% to 11% since 2018, '19, and that's really been underpinned by our strategic shift into Bloomsbury Digital Resources and selling directly to consume -- to our customers within that digital space. The consumer margin has stayed extremely healthy, and we've managed to increase that by percentage point to 12%. And you can see, as I mentioned, increasing the non-consumer profit has been a key strategic goal for us, and you can really see how well we're delivering on that goal. So moving on to the revenue by subdivision. So this is breaking down our consumer and non-consumer performance in more detail for you. So highlighting that within consumer, we had very strong growth across both adult and children's publishing. We'll come into a bit more detail about how we've achieved that later. And also within academic and professional, you can see 34% growth year-on-year, of which 17% was organic. And again, we'll come onto a bit more detail about how strongly and how we've delivered that. So then moving on to revenue by channel, and this is something that we've been even more focused on than we were since the beginning of the pandemic because -- with different pressures on different areas. The other thing you can see here, this slide really demonstrates just how strong the growth has been in every single channel that's not limited to one channel or focused [indiscernible] towards one or the other. So you can see print up 22%, and that's on top of last year's 8% growth. And this has been really underpinned by a real recovery in the academic side of the business, where during the pandemic, while academic institutions very much pivoted towards our digital offering, and we saw tremendous growth there. They always stop buying print products, but that's really recovered ahead of where we were expecting that too. So very pleased in that while maintaining the consumer very strong demand footprint, as Nigel mentioned earlier. E-books continued their very strong growth so as a reminder, our e-book growth last year was 64%, and we've delivered another 24% growth on top of that. That's been across both consumer and non-consumer, Audio, albeit relatively small at the moment, but 54% growth there. That's on top of 31% growth last year. And Audio is a channel that we're very much seeing growing again now that consumers are particularly being able to do more of the activities that lend themselves to Audio. So particularly traveling, commuting, more time exercising, more time in environments where you can't read an either physical or an e-book. And BDR, we will talk about much more about 50% growth, just emphasizing that, that's again 50% growth and completely smashing our targets there. And that's actually just slightly ahead, even ahead of the growth that we saw last year. So I think that really points to the resilience and the strength of our products there. So moving on to our strong balance sheet. And I think when we talk about strength and resilience of Bloomsbury, it's very much underpinned by our very strong balance sheet. And you can see here updating you, first of all, the net cash, GBP 41 million against GBP 54.5 million last year. And just as a reminder, how we use some of that cash from last year. There's GBP 8 million special dividend, and we made the 3 acquisitions that are set out on the top right-hand corner of that side. So you can see underlying that we are highly cash generative. And in fact, our cash generation has increased from 142% last year to 194% this year. So we remain very cash generative. Secondly, to point out that our goodwill has increased off the back of the 3 acquisitions that will come on to and then just to highlight on the working capital, as we talked about at the last year and the interim, many of you are on the same call, we've continued our strategy of using some of our cash to increase our stock to prioritize availability. And what that means is because we're cash positive, we've been able to print higher and print earlier to mitigate some of the supply chain challenges that have been in place really since March '20 and continue. So that means that we've been able to make sure that the stock -- print stock is available wherever anyone needs to -- wants to sell it. And therefore, we've been able to fulfill the demand when that's been there and that's been a really key competitive advantage for us. Moving on into the cash flow, and this sets out the key movements in cash during the year, as I mentioned, very profitable and very cash generative against [indiscernible] out through the final and special dividend last year, just under GBP 27 million on the acquisitions, but a net positive movement in working capital because of the way we're managing it. And you can see there on the right-hand side, we've continued to invest heavily organically. So that's an advances to our authors and also, you can see the significant, nearly 40% increase in our royalty payments, and that's we're delighted to be able to do that. So that 40% more is going out to our authors, something that they find increasingly pleasing off the back of the excellent sales that we've delivered for them. So handing back to Nigel to set out how we use our cash to generate further growth.

Thank you very much, indeed, Penny. So in the 2 tablets, you see there, we set out the priorities on the left and the actual performance against the priorities on the right. So the 3 company acquisitions, the expenditure of GBP 1 million in the year concerned versus GBP 1.1 million year before on the Bloomsbury Digital Resources division. And on the new content front, new books by our authors, we spent GBP 12.6 million on author advances, up from GBP 11.1 million as we gained more and more big opportunities. And the balance sheet, we ended with GBP 41 million of cash. And on the dividend, the final dividend is 9.40p, up 24%. On the next slide, I'll give you a quick run through those acquisitions. So ABC-CLIO is a Santa Barbara, California-based publisher of academic textbooks and digital resources aimed at The U.S. high school market and The U.S. college market in particular. We paid a reasonable price for it, 1.5x turnover. You could easily pay 2x turnover for a good, solid backlisting academic publisher and we picked up 3 great digital resources for our division. Red Globe Press also publish academic textbooks in subjects like business and study skills. That was a particularly good purchase at 0.3x turnover, where again, that could be 2.0x, not 0.3x for this quality of turnover. And again, we picked up some new digital resources. And finally, Head of Zeus is something completely different. That is a general publisher, not an academic one with a number of books that hit The Sunday Times bestseller list. And they've given us quite a range of important new authors like the historian, Dan Jones, and the culture secretary, Nadine Dorries who's the author of a number of successful, collectively millions copies sold of her Saga novels often set in Liverpool early in the last century to the new sensation, Elodie Harper who is actually at ITV news or ITN and she has written 2 so far out of a trilogy of 3 novels about female empowerment in ancient Pompeii, terrific page-turning stuff. And the big price we hope will also be a Trilogy called The Three-Body Problem by the Chinese-based science fiction, author, Liu Cixin whose book has been taken up by Netflix in the most expensive production they have ever made in their history, being produced promisingly by the producers of HBO's Game of Thrones, D.B. Weiss and David Benioff. And so we hope that we will have in book sales terms the new Game of Thrones on our hands because they were very successful books as well as the great TV series you're familiar with. So it's being filled right now this summer and we'll wait and see what happens. So those are the acquisitions. We're looking at acquisitions the whole time, brokers bring them to us. If we go on the next page, I hope that will warm the hearts of all the growth funds present on this call of our outstanding record really over 25 years now of dividends growth. So -- and we aim to cover in excess of 2 zones. And if we may switch now from that lovely upward picture to the academic and professional division please, Penny.

Thank you, Nigel. So it's been a great year for our academic and professional business. So highlighting here, first of all, it was 34% revenue growth. Secondly, within that, the BDR revenue growth of 50% that I mentioned earlier, that's not a statistic we're going to target -- or stop sharing with you for obvious reasons. And a reminder that we beat that target that was set 6 years ago of generating incremental GBP 15 million of revenue and GBP 5 million of profit. So we've actually delivered GBP 18.6 million of revenue and GBP 6.8 million of profit. So we're enormously proud of that achievement. And within that BDR revenue growth, 37% of that was organic. So we've actually beaten our target on the organic growth. And then just to come back to the profit for the overall division, so 111% increase in the profit for this division from GBP 4.3 million last year to GBP 9.1 million this year. So overall, great performance. Moving on to look at BDR in a little bit more detail. So you can see here, we have 3 areas of focus that we've highlighted here. So selling more of our established products. And you can see here, we've talked about the contribution remaining over 80% on our highest contribution platform. The renewal rate for our customers above 90%. We're keeping that around 90%. And we've increased the content on one of our key platforms. We've reduced the collection by 16%. There are over 15,000 titles available on that platform. With acquisitions, that's a core part of our strategy here. Nigel has mentioned ABC-CLIO. We've got 32 new digital platforms with that and 3 new digital platforms that we've got with Red Globe Press. And we've also strengthened further our video contact with a very small acquisition, but that's over 2,000 videos that we're adding those to our Visual Arts' areas. And fourthly, on the new products. So we continue to release new and enhancing products. That's products that we can enhance and upsell what we're already doing. And one of the key ones this year was Drama Online platform, which is one of our flagship and key verticals. We've added the Theatre Communications Group, which is a U.S. organization who have absolutely seminal video works of U.S. plays, and that's been a really key thing for us to add to the platform. And then on the right-hand side, you can see the graph of how we've grown both the revenue and the profitability of this division. And then just highlighting above that 42% growth in subscription revenues because we're all very keen on digital direct-to-consumer recurring subscription revenues. It's a very key part of why we went into this area. So looking at this slide, which sets out some of the key KPIs for BDR. So first of all, more customers. So an 18% increase in the number of academic customers year-on-year. And so this ranges from people, from institution to one -- just one product to people who are taking our [ task ] suite of products. And secondly, the strong demand continues. So you can see the pipeline is what we're talking about with the trials in this bottom left-hand tablet. And you can see the pandemic huge influence on that last year with 2,200 institutions trialing products. And you can see that piece has come off slightly, but still 910 institutions trialing this year. And that's nearly double the rate that we were seeing pre-pandemic. So there are a few areas that we are saying that there has been a permanent structural shift. This as we anticipated when we invested in this 7 years ago -- 6, 7 years ago, is absolutely 1 of them. And that's really underpinned by the level of demand that continues. There is no execution that is going back to having a couple of copies of a print textbook in their library instead of having digital access available for all their students wherever they are and whatever their access requirements are. It's a really fundamental point to part of what institutions, how they teach and how students learn. So what's next for BDR. We smashed through our 6-year target. What are we going to do next? So first of all, just a reminder, as we announced at the interim back in October, we set ourselves a new tough target. So that's to achieve 50% organic growth and the acquisitions will be on top of this. and a 30% margin. Secondly, a reminder about the scale of the opportunity. So we believe that there are about 5,000 institutions that would take 1 or more of our products. So these are institutions teaching in English of the subject areas we cover. Currently, 2,300 are customers. So that really just in a nutshell, sets out the scale of the continuing opportunity here. And thirdly, as Nigel has mentioned, the acquisitions. So accelerating ABC-CLIO, there are new products there and one of the interesting things about that acquisition has been that they've delivered great growth in the past, and that's all been selling entirely within the states. So we're already with our international sales team selling their products internationally. So that's of the wins with that acquisition. That's one of the easiest and it's great to see that demand coming through. So leveraging the sales and marketing and as well as the infrastructure that we've built there. So coming on to the smaller part of the non-consumer business, which is special interest. As a reminder, these are niche community-based subject areas, including which we've illustrated Nautical, Wisden and some other yearbooks. Osprey Games, which focuses on various different award-winning games and a big strand of nature and sustainability. And we've seen modest revenue growth this year, and we've broken even. And I think are we happy with breaking even? No, we work very hard, and we want to generate more profit out of every single area of our business. This area of the business has had a higher proportion of print than other areas. And we are working on maximizing the opportunities with digital here to generate a more profitable sales mix. So Nigel, if I can hand back to you to take us through the adult side consumer.

Absolutely. Well, it was a very exciting month sorry, year, I should say, for the Adult Trade division, which is on Page 19. So we won the Noble prize in literature with Abdulrazak Gurnah's life work of about 10 novels published by Bloomsbury. We won a Pulitzer Prize in The United States for Chasing Me to My Grave. We've won the Dylan Thomas Prize for No One is Talking About This. So it was really -- and in the previous period, we've won the women's prize for Piranesi by Susanna Clarke. So it doesn't get better than that. So it all helps drive revenue up 26% in the division. And on the right there, you can see the list of the best sellers, and I should particularly mention The Song of Achilles by Madeline Miller, a 10-year-old book that became a sensation in lockdown on BookTok, the new division of Tiktok, and also The Priority of the Orange Tree by Samantha Shannon, a fantasy also we published for many years who had one of our books just completely take off in this period beyond the previous ones. And we look forward to her next titles. And so if we could move over to children's please on the next slide, you'll see they have an even more sensational year with profit growth of 52% to GBP 15.8 million and what drove that. So Harry Potter, of course, Friday is the 25th anniversary of Harry Potter. And in anticipation of that, I was interviewed on the Today Programme just before 9 o'clock this morning and a number of other kind of media things that I've been asked to do on this great moment, 25 years later when Harry Potter is still the sixth best-selling book in the U.K. in spite of its longevity. And we have a new illustrated title coming in the autumn. Our sales sensation in the year was Sarah J. Maas' sales grew, as you can see there, by 86%. This young adult novelist has transitioned to being an adult novelist in terms of the genre in which she writes and it's been a very big success with House of Sky and Breath and that was just before the period end ended in the middle of February and 3 more titles under contract. If we go to the next slide. We set out there -- our long-term growth strategy goals. And in each of the 3 tablets covering non-consumer, consumer and international expansion, we set out the goal -- the long-term goal, and we set out the delivery against that goal in the 12 months that we're reporting on here. And as I've covered most of these points, I'm not going to go through them, except to say that in the third tablet of international expansion, we are very pleased that our overseas revenue is now 66% of group revenue and 78% of academic revenue. So whilst life -- it's more complicated daily in our -- the macro level in our domestic market of the U.K. We are not completely tied to its vicissitudes in our publishing, which is very, very international, harnessing the great power of the English language worldwide, which as a commentator at the Queen's Jubilee recently said Britain's 2 secret weapons are the queen and the English language. And he was definitely right about both those points. The English language in particular is now used as a piece of software for 2 people who may speak completely different languages to use English as their language in common or sort of software of communication and that in turn supports an interest in reading English language books all over the world to increase proficiency in the use of English, but also the enjoyment in the original of the many great books coming out of the U.K. and the U.S.A. If I guide you to the next slide, ESG, very important at Bloomsbury as in society generally at the moment. And if you look down at the bottom of the left hand tablet, you'll see that we won 2 of the 3 major diversity inclusion awards in our industry, which we're very proud of because we were starting from probably being behind, and we put great management focus on this. We're also shortlisted for another diversity award and the Company of the Year award at the Master Investor awards next Thursday, a week from tomorrow so fingers crossed that we have strong competition. Then in the right-hand [ bullet ], sustainability, that is very tough because the great deal of the carbon emissions that result from the book publishing process coming from third parties, namely printers and shipping and trucking companies. So not immediately win our gift. So we have to work through these third parties with pressure and cajoling as well as putting our own immediate house in order, which we are working most dedicatedly to do. So we've committed to a 46% reduction in Scope 1 and 2 emissions by 2030, in line with a 1.5-degree pathway. And we've committed to a 20% reduction in Scope 3 emissions by 2035 in line with a 2-degree pathway. And on the right hand of the slide, a quote, just reminding you that though having a social purpose has become important to all companies, I think, at the moment, it's built into our basic activity in book publishing because books have always inspired, educated and informed and by -- in fiction, in particular, showing us our common humanity have contributed to people understanding each other better by knowing more about each other. On the next slide, we've got a terrific list at the moment since the period end. And many of these are by long-standing, bestselling Bloomsbury authors. So it isn't a speculation how they'll do. We know they have large leaderships already. So that adds on top of our confidence deriving from our actual performance in the first quarter of March to May which is on track, in line with management expectations, knowing that we have these strong books to feed into this robust market and that increases our confidence. So on the final slide, 24, summary and outlook. We're confident we have the right strategy, we're not having to reconsider our approach to the market. In fact, we're doubling down on what we're doing already. I mentioned the second bullet point about trading being on track and the resilient demand that we're seeing and the fact that having made one tough Bloomsbury Digital Resources target, we've now set ourselves a further one of a further 50% organic growth with a 30% margin to achieve in the next 5 years. And then if I may take you to the post-script slide, it is about anthology, which we just released called Bloomsbury 35 in which we take one novel a year from our Adult Trade Fiction list and take one chapter from that model and extracted it into this collection of 35 such chapters by our greatest fiction writers, Margaret Atwood, Khaled Hosseini, Kamila Shamsie and others. So I recommend this to you all. It even has a forward by me and by our 3 editors in chief over the 35-year period of the adult list. So this doesn't cover our children's list or academic list, but it [indiscernible] the soul of the machine, if you like.

Thank you, Nigel. And now we're going to play you a short video about Bloomsbury 35 to give you more of a flavor of it as well as reminders on the achievements over the last 35 years. [Presentation]

It's great. Nigel, Penny, thank you very much indeed for your presentation this afternoon. I'll now bring back up your cameras. [Operator Instructions] Penny, if I may ask you to open up that Q&A tab, and you'll see you had a number of pre-submitted questions along with a number of questions submitted by investors through today's call, and thank you to all of those that have engaged this afternoon. And maybe, Penny, if I may, just ask you to read out the questions and give response where it's appropriate to do so, and I'll pick up from you at the end.

Thanks, Mark. And so -- and thank you, everyone, for submitting some really, really interesting and well-researched questions. One of the ones that's come up several times is about inflation and the inflationary impact on our business, which I think was mentioned in the last column from the [ FT ] last week. So if I talk to the cost side of that and then I'll hand over to Nigel to talk about the pricing opportunity for us. So on the cost side, the sort of 3 key areas of the cost that we're talking about. The first is wages. And we've -- as we publicly announced, first of all, we brought in a group bonus scheme 2 years ago. So -- which has paid out in full this year. So we see that as an industry-leading and a very attractive thing for our staff. And the second of all is we've brought in -- we've done a 5% increase in our staff wages this year, and that was implemented from March. So that's on the wages side. In terms of our input costs, freight remains a high cost, but it has been high since beginning of April 2020. We're seeing some signs of improvement there. But realistically, we don't know when that will be. So that's certainly not a new cost. And in terms of printing, we've seen quite restricted capacity within the industry. But again, that's been very much an ongoing thing. So that's not new for us as energy prices increased and have been increasing. That has some impact on the print costs, and we'll work through that by having long-term contracts with our printers and a very close, a mutually beneficial relationship. So it's not to say that there is no impact on us at all, but that is setting out how we're dealing with those costs. So Nigel, if I can hand over to you for the pricing opportunity for us.

Absolutely. Well, if we have, say, 70,000 titles that we've published and have current, we have 70,000 opportunities to increase the price of titles as they sell out and reprint and with forthcoming titles that are responsible for a large part of our annual revenues that which will come out, say, in the autumn before Christmas. We have the chance to review what our competitors are doing about facing the inflation crisis and of putting those up where there is a case for doing so because our own direct costs of printing and transporting those books has itself happened. And it's worth saying that books are cheap, GBP 6.99 for a paper back, GBP 15.99 for a hard back. So there isn't a huge price sensitivity if you have to put them up a pound and you're not likely to kill the golden goose. And moreover, the sort of amount you would need to put a book up to cover inflation in manufactured costs that might be around 50p but because books tend to move in 1-pound brackets. It means you can even be the net beneficiary of an inflation induced price increase. Thank you.

Thank you, Nigel. The next question I want to -- which again has come up a couple of times, is about -- is sort of consumer confidence, I think particularly in the U.K. and The U.S. and why we -- are our feelings about that. And again, Nigel, if I can hand back to you to answer that.

About consumer confidence, do you say that. Yes. I think remembering Bloomsbury's experience of the recessionary times of the early '90s. Sales did seem to carry on and the general wisdom was that books were considered an affordable luxury at a time when people were making [indiscernible] really assist their household finances of higher ticket items like [indiscernible]. So we hope with whatever is heading down the line at our economy, that, that books will once again be regarded as an affordable luxury. And indeed, I think there was a big national belt tightening in April with reports of Netflix subscriptions being canceled and telephone plans being revised downwards. And so it's already going on and books are continuing to sell at lockdown levels, which is great news.

Thank you, Nigel. And the next question was about our audio strategy. And Nigel, do you want to speak to this as well because we've -- as someone has very steeply pointed out, we have recruited a new Director of Audio. We're investing there as well. Nigel, would you talk to how the market has been going and what was the substantial...

The market has been going terrifically well. And I think what we've learned is that, to a large extent, audio purchases are incremental rather than substitutional or cannibalizing, if you like. Because they simply enable people to fit books into parts of their lives where they couldn't before because you can't read a book while you're bicycling, but you can listen to a book and so on through many activities. So I think they've increased the overall market. And again, in many instances, had a good pandemic where people were listening to books while they cooked or ate a meal or whatever. So as Penny has alluded, we are expanding the division. I'm just listening to a Bloomsbury audio book at the moment in the car, Meg Rosoff's new novel and it's terrific stuff, a great way to spend 1.5 hours of your driving to and fro wherever. Thank you.

Thank you, Nigel. And the next question was about acquisitions. So how we see the market, are the -- what sort of opportunities are there -- out there? Are there lower valuations? Or what are we seeing in terms of valuations? And Nigel, should I pick this, I think...

Penny, if you pick up the valuation question please?

Yes. So I think in terms of acquisitions, we've increased the size of our in-house team who are dedicated to looking at acquisitions because we're very ambitious. We're very cash generative, and we want to use part of that for organic growth and part of that for acquisitions. So we've made 3 significant acquisitions this year. What we're seeing is most of the industry has done that's had a very good couple of years. So we're not seeing any signs of distressed sales. The valuations have remained pretty punchy in some cases, and we're very pleased with the prices that we've been able to negotiate on the acquisitions we've made. We'll continue to be sensible about those. We're not in the business of paying very high multiples for digital assets. So we'll continue our strategy, which has been particularly successful around playing small multiples and then being able to really leverage the digital opportunity because of our own strengths. So it will be interesting to see how the next couple of years pan out. But certainly, the experience over the last couple of years is that the market is very healthy in our space, but we continue to look very strongly. The next question is about our consumer business, is that luck or strategy that we've been able to deliver those results. And Nigel, I don't know if you want to take that?

Napoleon, as you know, asked to his generals not were they good but were they lucky? So yes, I think it is luck. But I think that our generals are lucky because like we really do what most of you do, which is we run a portfolio. So the key to profitable publishing list is to have the successes outweigh the failures because failures there are. And if you want a tour of our warehouse, you'll see a monument to our failures in some -- in the bulk storage area. But if you're not having those failures, which are the opposite of the luck you asked about, then you're not at the cutting edge and taking the appropriate level of risks to find the really sensational successes that we have found at Bloomsbury over a 35-year period. So I think we've got the right strategy. We do take risks, but we also hedge them, 2 ways. Firstly, across the portfolio of our output as a whole. We have the academic division producing steady, dependable, high margins, dependable because you can buy mailing list of all the lecturers in archeology and tell them about your book. It's much harder with general books. And secondly, because we've really, I think, had an above-average hit rate and just picking the right books and almost every trend over the last 2 years emerged more generally in society. We had a book or several books about ranging from the summer of 2020 when everyone was very focused on The Black Lives Matter Movement after the death -- murder of George Floyd, and we had a 6-year-old book, Why I'm No Longer Talking to White People About Race, which shot back all these years later to #1 in the bestseller list and stayed there for 13 weeks as it explained to people what we had got wrong. Secondly, the big cookery boom in the pandemic locked up at home, the Dishoom cookbook and indeed Paul Hollywood's baking books. We're soaring to the top of this. And then the desire for escapism through fiction, both for adults and children. We had all the right books at the time like Polly Samson's and Isabelle Holland's. And then in spirituality and meditation and religion, these are all strong areas at Bloomsbury, and we have books that enable people to consider the universe. So those are just some of the areas. And finally, on the academic side, we -- you could call this luck as well, and I suppose it was, but it was bad luck in some ways, the pandemic enforcing the universities to close down, did drive students and the researchers to needing online digital academic resources much more. Penny?

Thank you, Nigel. And then we've got time for a couple of more questions, which I'll address. So thank you very much. I'm sorry, we haven't been able to cover all the good questions that have come through. So Nigel's point about academic institutions pivoting towards digital products leads us into some question which has come up a number of times about our BDR targets -- on new BDR targets. And one of the question is about the margin going forward. So I'll point about -- we've really benefited from the mix this year, which is why the margin is at 37%. What we're doing with our target is saying that we are intending -- our goal is to keep that margin -- is to keep a 30% margin overall. So obviously, on the more mature products, that's great. We have a high margin as we change the mix, as we're bringing more partners in, as we're licensing more content and so on. That changes the mix. So we have a mix change in everything. But you can see from the rest of our business that delivering 30% is a very, very attractive favorable point. The other point is on the top line growth. And of course, we've benefited from -- as we set out in these numbers very much, especially in the first year, but equally, this year, this fundamental shift at pace of academic institutions in many cases going from no digital resources whatsoever. We're very limited to needing them across all the subjects they teach. So do we expect? We're not saying that we expect that pace necessarily to continue from the market. So to deliver 50% organic growth, we need to really be driving it ourselves and we're very confident we can do that, but that is a tough target we've set ourselves. And so coming on to the last question, which was about the dividend, are the plans for another special dividend. To be clear, as many of you will remember, last year, we paid out a special dividend, and that was really reflecting the equity raise that we did in April 2020 as a defensive move to make sure we have the cash flow to continue pace that we want to grow out and invest in. In the end, as things worked out, we were the great beneficiaries and we didn't need that too effectively. That was out saying that here's that [ back ] to our shareholders. But our underlying point is we want to continue with our normal dividend but with the growth in line with our earnings growth and with the coverage we've set out 2 times. So that, I hope, gives you a sort of clear steer on that for the future. So with that, I will hand back to Mark.

That's great, Penny, Nigel. Thank you very much. And for every question you seem to answer, there was another 1 or 2 that popped in. So thank you to everybody for your questions this afternoon. And of course, we'll make this available post today's meeting as well to the company. Nigel, Penny, I know investor feedback is important to you both, and I will shortly redirect investors to provide you with their thoughts and expectations. But before doing so, I wondered if I may, Nigel, just ask you for a few closing comments to wrap up, after which I'll redirect investors.

Well, thank you very much indeed. It has been the best of times and the worst of times in the last 2 years, the worst of times because so many millions of people have died of this horrible virus. But the best of this because it has brought the value of reading in people's lives into sharp focus for them, and it has made what we've been doing at Bloomsbury for 35 years since we raised Venture Capital back in September 1986 and [ floated ] in 1994 has made it much easier because we're pushing at more of an open door. And we've been very lucky because that success is generating further success as we're able to use the cash from that to expand the company. We're hiring 100 new people at the moment. We're the [ past masters of not letting success sink us ] and we didn't overspend when we had GBP 100 million from Harry Potter in the early 2000s. We took 20 years investing that in buying 35 mainly academic publishers, so we will be careful with your money. But we are growing, and we're growing all over the world and growing, in particular, in the biggest English language market, which is The United States. So in these respects, it has also been the best of times, and we are professionalizing the company with great people from our best and most skillful competitors bringing in their industry knowledge to Bloomsbury. So we're at a fine crossroads for yet further expansion. And thank you all very much for attending this afternoon.

That's great, Nigel, Penny. Thank you once again for updating investors this afternoon. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the company can really better understand your views and expectations. This will only take a few moments to complete but I'm sure will be highly valued by the company. On behalf of the management team of Bloomsbury Publishing Plc, I would like to thank you for attending today's presentation. And that concludes today's session. I may wish you all a very pleasant afternoon.