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In Haruki Murakami’s novel Norwegian Wood, the character Nagasawa dislikes books that everyone else is reading because “you can only think what everyone else is thinking”. Publishers don’t worry about that.
Take Bloomsbury, a publisher that has thrived on the frenzies that certain authors provoke. The UK group — home to the Harry Potter series — has in recent years been propelled to new heights by the works of Sarah J Maas — the “romantasy” author popular with TikTok users.
Videos of fans narrating new releases on social media have engendered robust demand — and not just for Bloomsbury’s books. Its shares, up more than 160 per cent over five years, hit a peak in October, nine months after the release of Maas’s most recent novel Crescent City: House of Flame and Shadow. The company said last week that it ended its fiscal year ahead of analysts’ revenue and profit expectations.
Yet Murakami’s character is right that too much focus on a select group of titles or authors has its dangers. On S&P Capital IQ numbers, the market is not expecting revenues in its current financial year to be much higher than the record £342.7mn hit in 2023/24. Since October, the stock has slipped by about a fifth, although it is still almost 30 per cent higher than it was at the beginning of 2024.
Like most consumer stocks, Bloomsbury is vulnerable to fears of stalling economic growth. On top of that, book sales are continuing to return to their pre-pandemic norms, having enjoyed a lockdown surge.
But big authors add an extra lumpiness, and a challenge for Bloomsbury founder Nigel Newton, who signed JK Rowling when no other publisher would. There is no clarity yet on when Maas, contracted to deliver a further six titles, will next publish. Bloomsbury, for its part, insists that success in its consumer division — accounting for roughly three-quarters of sales and profit — has been broadly based across its portfolio.
Newton is at least trying to pen his own destiny. Last year the company bought US academic publisher Rowman & Littlefield for $83mn — small change to most but Bloomsbury’s biggest ever acquisition — to bolster its scholarly and professional division. That may look odd at a time when higher education institutions in the UK and US are under budgetary pressures. But Bloomsbury believes that will prove temporary as global student numbers continue to grow, and has beefed up its digital academic publishing capabilities.
Bloomsbury now trades at 16.5 times forward earnings on FactSet numbers, behind its five-year average. Newton would no doubt like the market to focus on more than a couple of main characters on its author roster. For now, that’s the stuff of romantasy. Everyone else, investors included, just wants to know when the next Maas novel will land.
nathalie.thomas@ft.com
