Bloomsbury Publishing Stock

Good morning, and welcome to all analysts here in this room and to shareholders and potential shareholders watching the webcast, and we welcome all of you. I'm Nigel Newton. I'm Executive Chairman, and I'm joined by Keith Underwood, Chief Financial and Operating Officer of Bloomsbury Publishing.

Have we got the next slide up? Yes. Excellent. Our strategy of diversification has created a portfolio of portfolios, much as you all do in your own portfolios of companies you invest in, balancing the vicissitudes of one area of publishing against the other. We've created a resilient model for long-term success, and we're pleased to report revenue of GBP 151.6 million and adjusted profit of GBP 16.8 million with a margin of 11.1% and the dividend up 5%. We have a strong consumer front list of new titles this year with growth heavily weighted to the second half. We are very excited and fortunate to have 2 new Sarah J. Maas novels, the first of which is being launched next week and the second in January.

The Academic & Professional division has seen good underlying growth in all territories in both print and digital formats, excluding AI income. We are confident in delivering record profits in line with profit expectations for our financial year 2026/27. We have a strong balance sheet with net cash of GBP 22.8 million, which brings capital allocation to the fore.

The dividend slide, always my favorite. As the chart shows, Bloomsbury has delivered 31 years of consistent dividend growth since flotation in 1994. In the first half of '26-'27, this continues with a 5% dividend increase, which reflects both the achievements of the financial year and our confidence that the company is well positioned for further growth.

So let's recap on the investment case. For Bloomsbury, this is one of really strong shareholder returns derived from a diversified portfolio across Academic and Consumer Publishing, across print and digital formats and from an increasingly international audience. As Nigel mentioned earlier, this diversification has created a more resilient model for long-term success. Last year, in FY '26, the Academic & Professional division had strong profits doubling to GBP 25 million, which mitigated lower profits in the Consumer division. This year, with Academic & Professional returning to a more normalized run rate, we're set to deliver record results driven by an exceptional performance in the Consumer division. That is the portfolio of portfolios in action.

So in terms of the financial highlights for the first half of this year, revenue GBP 151.6 million and adjusted profit of GBP 16.8 million with a margin of 11.1%, taking EPS to 16.67p. Our net cash position is really strong at GBP 22.8 million, and the dividend is up 5%, continuing that fantastic track record of unbroken dividend growth.

If we just look at the divisional analysis now. As expected, revenue and profit from the Consumer division is slightly lighter in the first half of the year, but the Consumer division is expected to really drive forward in the second half in a year that is very second half weighted, as we've always said. Sales in October and September were really encouraging and very strong.

The Academic & Professional division delivered really good growth of 6% on an underlying basis, that excluding AI within the numbers as well, delivered growth in all territories and in all formats. You can see there print sales, for example, increasing by over 30%, showing strong demand for what is a really resilient format. The intellectual property value and quality of our academic list has enabled us to continue our nonexclusive AI licensing agreement into this financial year, although, as we have always said, it's to a lesser quantum this year, leading to a reduced margin.

So consumer best sellers. Well, in Romantasy, Sarah J. Maas is launching not 1 but 2 novels in her -- the most popular of her 3 series, A Court of Thorns and Roses, known as ACOTAR. And the first is A Court of Splintered Harmony next week and then A Court of Forgotten Melody in January. In addition, J.K. Rowling's Harry Potter series is already benefiting from the new Harry Potter TV streaming series starting on Christmas Day itself, no less on HBO Max. And I predict a takeover of all families to be gathered around the television and certainly look to each of you in this room and on this webcast to be part of what is going to be a really great moment as a new generation of readers is brought to Harry Potter.

So the second half is a wonder. So far in it, we've seen Gillian Anderson's successor volume to her Want called More in the bestseller list in September. And Stephen Graham was an instant bestseller with Letters to Our Sons.

Moving on to the Academic & Professional division. It's had a very good start to the first half of this year. Revenue growth of around about 6% to GBP 48.8 million and profits of GBP 6.8 million. As I said, good underlying growth in all territories and in all formats, excluding AI.

Just more specifically, we have expanded, as I mentioned before, our business in Asia by opening up the Singapore office as a hub to further capitalize on the projected growth in student numbers in that region. And the team in this area is now really developing new propositions. We've got a new Asia studies digital resource to bolster the BDR platform. We're establishing key relationships with new institutions and following a range of successful meetings at the Beijing International Book Fair. We are advancing publishing partnerships with several major publishing houses in China.

Moving to the balance sheet. As you can see, it remains very strong. Total net assets for the year up at GBP 213 million. And within working capital, we've actively managed down our finished stock balances year-on-year and are continuing to drive operational efficiency. Our net cash position, as you can see, has improved from GBP 2.4 million last year to GBP 22.8 million this year, driven by the profit drop-through, but also working capital improvements, which I referenced. Consistent with the prior years, this cash balance decreases in Q4 -- or in Q3 rather, before increasing again in Q4 ahead of the royalty run in March.

So just taking that cash bridge, this just shows the movement from the end of last financial year through to the 6 months to the end of August. Closing net cash balance of GBP 22.8 million. And as we've said before, capital allocation priorities remain focused on internal growth initiatives to drive organic growth, debt reduction, which you can see we already did in the first half of this year and also bolt-on acquisitions to deliver against our future growth strategies.

So summary and outlook. The Bloomsbury portfolio of portfolios, as you have seen, has created a resilient and successful model. We have entered the second half with a strong net cash position and have had an outstanding start underpinning our confidence. We have a strong publishing list for the year ahead with exciting releases in major franchises such as Harry Potter and Sarah J. Maas. As such, the Board has confidence in delivering record profit in this financial year '26-'27, in line with expectations.

And now, we would like to invite a question, Alastair.

Three questions, please. Firstly, you noted some sales processes beginning in sort of the area of special interest. Just give us a bit of color on whether there are more of those to come and the kind of broader aspirations for the kind of improving contribution to profits as a result.

Secondly, just give us an update on your M&A pipeline, sort of key areas of focus, levels of activity in the pipeline. And then lastly, can you just talk a little bit more about sort of the underlying trends you're seeing in the market for Academic & Professional in terms of customer budgets on a like-for-like basis, customer numbers, new subject areas and the like?

Customer budgets?

Customer numbers.

Numbers. And there was a third thing? No. Okay. Well, Keith, perhaps you could take the special interest and M&A question, and I'll take the underlying trends.

Yes. So as we announced last time around, we talked about the vertical structure, which gives people a great deal of control and visibility over their bottom lines. Kathleen Farrar, who's running our Consumer division in the U.K., has special interest now under that division. We are looking at all ways in which we can drive margin down -- drive margin up in the consumer area as well. And that includes looking at all divisions to make sure they're operating as effectively as we can. You will see that we've previously announced sale processes for Who's Who within that area, and also the Games division. Those are progressing at the moment. And we will continue to look at areas within the Consumer division as well in order to drive margin within that particular area of the business.

And M&A?

M&A pipeline. Look, given the cash balances that we've got, we've laid out our capital allocation priorities. M&A is a part of that. We continue to actively look at bolt-on opportunities that can continue to drive top line growth and margin growth consistent with the way that Bloomsbury has done it before. We got a very good history as a business of being able to spot good opportunities and integrate them in a way that drives synergies across the operating business. We are actively looking at opportunities at the moment, and we'll be able to say more about that in due course.

Underlying trends in Academic. So underlying growth is good in our Academic division in all territories. And I think what we've seen is perhaps a recovery from some of the knocks taken by political interference, if you like, in the normal running of the academic marketplace, particularly in the U.S. and the U.K. So I think there's been a recovery there, and we remain confident in the budgets. And the numbers is another story. They're really going off the Richter scale in terms of growth in Asia in particular. And that's, of course, why we've started this base in Singapore in January, which is off to a terrific start. So we believe we've adopted the right strategy there, and we'll see how we get on.

Will Larwood from Berenberg. Three from me, please. Firstly, just in terms of the Harry Potter HBO series. I was just wondering if you could share any color in terms of orders from supermarkets, preorders, just general feeling around that ahead of the HBO release.

And secondly, in terms of some benefit from AI licensing deals in H1 and expect it to continue into H2. What about sort of your conversations with other frontier models? How are those progressing? And then finally, just in terms of the Anthropic settlement, can you provide if there's been any change to your expectations for that?

Thanks very much. I'll take HBO, and Keith, AI and Anthropic, kindly. So the preorders are good. And the challenge for us has been to get the series back into the supermarkets who backed Harry Potter so strongly when the original Warner Bros. films started coming out around 2000. And we've succeeded. So the pump is primed. We have significant orders in the U.K. from the major supermarkets. We've doubled down on that by seeking marketing from them to go with it. And I reviewed a list of the individual supermarkets plans, some are planning [ tannoy ] messages to drive people to the Harry Potter section.

So what's exciting about this release versus the films 27 years ago is it's the first time we've done a tie-in jacket. And so possibly, we showed on the screen earlier, but we have a very cool jacket image of Harry wearing his Quidditch coat shot from behind and it says 8 Potter, and it's very powerful. So I think they're going to fly off the shelves to a new generation of readers. There are something like 700,000 new 8-year-olds in Britain every year, and it's a long time since the books came out. So I think one of the joys of television is driving people to certain books. And of course, they won't just read this book. The experience of the film release was that they would read the one and then the next and the next. And we saw them cascade through the bestseller list because they were already backlist titles by then. So it does feel as though HBO have -- will take over Christmas Day itself. And so we'll watch the space.

I just answered your question in respect of the U.K. But if you imagine our international sales team who were very active at the Frankfurt Book Fair 2 years ago, replicating that performance in pretty much every major market in the world. And to remind you, we do have the English language rights in Harry Potter in every country in the world except the United States. We have Canada and the traditional Commonwealth countries will make up a big chunk of the markets, Australia, New Zealand, South Africa, Canada. But the many other countries where reading a 500-page novel in a foreign language like English isn't a terrifying prospect to 8-year-olds, we will also succeed. Of course, unlike when the first ones came out, these are available in translation now as well, which will mitigate the market. But I think it's going to be very big. AI?

I'll take the AI. Well, as we said, the quality of our academic list is such that we were able to take the original value that we got in FY '26 and see that roll forward into FY '27, which is great. That value is included, obviously, in the first half numbers that we've just announced, and we're expecting further value to come through in the second half of the year and also to continue from that partnership into FY '28 as well. We've always said that, that would be at a lower quantum than we were able to generate in FY '26. That's still our expectation.

But what we're also now starting to have is conversations with other parties as well, particularly in the specialist cases as well that you've got within the Academic & Professional arena, both in terms of training deals, which was our first deal that we did, but also increasingly in respect of specialist RA deals that we're looking to strike as well. So that's encouraging.

You asked about the Anthropic settlement. We are working through at the moment the disputes process with the settlement administrator. That is a relatively lengthy process. We're working through it at the moment. We still remain -- I mean, I'm not going to prejudge the outcome of the settlement process, but we still expect to receive double-digit million settlement as a result of that.

Melanie from Peel Hunt. I've got two, please. First one is, can you talk about how you're thinking about the level of marketing for Sarah J. Maas releases upcoming in the second half?

The second one is Asia for Academic has been going really well. So now it's proven the concept. Do you plan to invest harder in that region?

I might help myself to both of those. The level of marketing for Sarah J. Maas is, as you would imagine, very high. And it's not just us, it's the retailers themselves. If you're a retailer, you're searching for this year's big product, and many of them have concluded it's going to be Sarah J. Maas. And so there are huge internal promotions happening. To give you an example, Target were planning to create a kind of Sarah J. Maas boutique within their shops in the U.S.A., of which there are many with the new book A Court of Splintered Harmony as the hook and the centerpiece, but with a range of other merchandise relating to that universe.

And then in other places, more traditional forms of marketing such as pallet sales where they just slap down a huge pallet at the end of an aisle and the books are there. And that seems to induce increased buying. So there is all manners, some shops have produced special things they will give away of their own initiation and funding if you buy the new book from them instead of their competitor next door. So there are 2 kinds of marketing happening, our own marketing, which is considerable and very social media oriented. And then there's the marketing of almost every major retailer on earth. This may well turn out to be the biggest selling book of the year. Certainly, that was the case with Sarah's previous launch. So we'll see.

Asia, so yes, it's early days. We don't want to overcook this. So our plans are ambitious, but our execution is only about 9 months old at this stage. As we mentioned earlier, we're creating an Asia studies, academic digital resource within BDR. We have an assiduous editorial team finding very interesting material that hasn't been digitized by anyone else for such a product. And I think knowing what I know, I think that will turn what we're creating into a must-have product for most universities in the world and not just a nice-to-have product. We have our eye, of course, on China, which is such a huge academic market now. And we have various plans in the pipeline.

Alex Pollen from Berenberg. Some on cash, Keith, if that's all right. Just to reiterate that the -- any settlement from Anthropic from as far as you're concerned is not included in any consensus forecast at the moment. Any anecdotal examples around the working capital improvements as well, please? Anything -- any more detail you can give around whether that is some of the changes you put in place since you've come in, et cetera, that have led to that sort of improvement? And then on capital allocation, whether the high levels of cash or likely high levels of expected cash are changing any thoughts around that at all? And then totally unrelated, one on audio and just a general update on how you're seeing the audio market.

Well, I'm glad he was looking at you when he asked most of those questions, Keith.

Let me just address them in that case. So yes, for the consensus cash forecast, Anthropic settlement is not built into those numbers. In terms of the working capital improvements we've got, these are just a series of improvements that are being made. I mean we call out and one of the things I would probably call out specifically is just in relation to stock, finished stock. You will have seen that, that is down considerably in terms of year-on-year. We've obviously got a slight buildup in the half year as we're stocking to sell some major titles. But if you look at it half year to half year, very significantly down due to a series of improvements that we put in place around print run order management, disciplines in terms of sign-off and that, and also starting to use AI in terms of predicting print runs and trying to sort of drive intelligence through the use of that type of technology.

So it's a series of improvements that the team are working on across the board. And I think they are starting to yield real results. And you can see that from some of the cash drop-through that we've got in terms of the operating profits that we've delivered. So I am pleased with that. There is more to be done, and we're continuing to look at the efficiency with which we can drive cash drop-through, but it's an encouraging start, I would suggest. Audio...

Audio, what a wonderfully growing market. That is, as you know, with the addition of Spotify with their [ Maicy ] membership worldwide in the audiobook area in November a year ago. And so we've seen huge growth coming just from that quarter alone. But there are quite a handful of other customers buying audio editions from us, Apple among them. And so we see nothing but growth coming from that market.

Are there any other questions? Don't be shy. Go for it.

So I just want to ask, are you seeing any boost in Sarah J. Maas' backlist selling in the past few months ahead of the upcoming release?

Yes, absolutely. I think we've seen one of the books go back into the New York Times, Tamsin's nodding encouragingly, in the #10 position in the New York Times bestseller list right now this week. And so that is, of course, a reflection of the beating of the drum in people's anticipation of it.

And then one thing, of course, that happens with a book like this is you're having to control an embargo worldwide so that retailers aren't putting the book out early for sale as they begin to arrive in the distribution system. And that creates a lot of excitement, mainly of the negative variety, but it's still excitement and anticipation. So yes, of course, there will be many readers who aren't up to speed with the ACOTAR series, and this is the moment that will push them over the top into becoming readers and reading their way through the series. And so Sarah had 16 novels under the belt, and now there's about to be 18. So it is wonderful because often literary phenomena are restricted to 1, 2, 3, 4 backlist books and to have 18 as we will do is very exciting.

Alastair is feeling encouraged.

Let's keep going about Sarah. Hard obviously to sort of speak on her behalf, but sort of what do you think her appetite is to keep being an author, keep writing the new novels? I mean all this excitement coming, is she signing a movie deal anytime soon?

You're absolutely right, that no publisher ever speaks on behalf of their author and their IP is their business. But she's certainly shown great appetite in producing not 1 but 2 books in a row. So I'll leave that fact for you as the measure of it all. I don't think since the days of Charles Dickens and novels being serialized in magazines that I ever seen 2 installments of the story come out so quickly, and we're very fortunate for that. And as for the rest, you'll have to watch this space and gaze into your crystal ball.

And the same, there have been no new announcements at all. And so I have no information to impart other than that one day, these novels will make the most stunning films that will absolutely clear up. So we need excitement for the future. We can't be having everything all at once.

Okay. Well, thank you all very much indeed for coming and for hearing the story of our -- we believe our record year to the end of February. But we still have to deliver a lot of that. So watch this space.

Thank you.

Good morning, everyone, and a very warm welcome to this live session here at Hudson Sandler and Charterhouse Square in London and also to all of our viewers online of the London Stock Exchange video. I'm very pleased to greet you.

I'm Nigel Newton, Founder and Chief Executive of Bloomsbury, and I am joined by Keith Underwood, Chief Financial and Operating Officer, recently appointed by us.

So if I can move on to the first slide, please, of highlights. We make the point that our portfolio of portfolios has been a resilient model through consumer and academic publishing. This makes us very rare, if not unique, in our industry and is the basis of the good numbers that we're able to report to you today because like our shareholders on the public markets, we are not dependent on one type of revenue stream. We're exposed to both the consumer on the high street and the main street and at the same time, to the huge institutional buying power of tens of billions of dollars worldwide in academic libraries. Profits are up 7% to GBP 44.9 million, and that is great because it's been the basis of the dividend being up 5%. We shall point out on a slide some of you are familiar with the 31-year unbroken track record of Bloomsbury dividend growth. We have an AI licensing agreement that we announced in July that I'm very pleased to tell you is ongoing in financial year '26-'27. Completely separately from that, we announced in December a partnership with Google on a number of tools that are being implemented throughout Bloomsbury to all 1,250 of our colleagues. We are creating the Bloomsbury brain that will ultimately read in its secured off from the Internet walled garden, a database of every word that we've ever published that we can utilize in so many different ways to make future decisions based on the evidence of the past, what to publish, how much to pay for books, how many copies to print the books and many other things.

We have streamlined and simplified our operating structure, which will have an effect on our financial performance and a good one. You have 2 choices really in a business of a matrix structure or a vertical structure. And though the matrix has served us very well, we've moved from the one to the other with all kinds of changes in how we sell. For example, in America, we sold through a third party, MacMillan Publishing Services. We've now recruited a dynamic team of our own key account managers selling direct for the first time to our very big customers over there. This new structure will benefit us enormously.

As you will see, we have a very strong consumer front list in the year ahead, including remarkably not 1, but 2 new Sarah J. Maas novels. The Board has strong confidence in delivering a record profit in line with recently upgraded expectations for the year '26-'27. And the Board is strengthened with the appointment not only of Keith Underwood, but of my colleague, Jenny Ridout, who is the Managing Director of Bloomsbury Academic and Professional, now including with responsibility for sales, marketing and publicity in the new structure, following the footsteps of previous leaders of Bloomsbury Academic being on the plc Board, Richard Charkin and later Jonathan Glasspool. We also have a third appointment as a Non-executive Director, Chris Blatchford, a very brilliant man with considerable expertise as a Chief Technology Officer. He had -- was at 800 data scientists reporting to him at our academic competitor, Elsevier within RELX, and presently holds this high office for Kingfisher plc. And we are very pleased indeed to have his expertise, which is granular and tactical as well as strategic at a time when the world is becoming increasingly digital and Bloomsbury want to be at the forefront of all change that will benefit us. You didn't have long to wait for that -- it looks like an urban landscape of skyscrapers leading to this big jump in the dividend just announced. Next slide, please.

Well, good morning, everyone. I am really pleased to be here and delighted to be presenting robust results for Bloomsbury and a really, really strong outlook. Bloomsbury's investment case is one of strong shareholder returns, as you can see from the earlier slide, derived from a diversified portfolio across Academic and Consumer publishing, across print and digital and from an increasingly international footprint. Organic growth has been supplemented by 34 carefully selected and skillfully integrated acquisitions with the most recent one being the GBP 65 million acquisition of Rowman & Littlefield, which was conducted in May 2024.

In terms of the highlights, we're reporting robust results. FY '26 profit is GBP 44.9 million. That's a margin of 13.8%, which is up 210 basis points from 11.7% in the previous year. And as we'll come on to show, that growth has been driven by digital sales within our Academic and Professional business. As expected, total revenue is down year-on-year given the strong comparative that we had in the Consumer division in the prior year. EPS is up 8% to 44.57p, and we've continued, as Nigel said, our outstanding track record of unbroken dividend growth.

We have a strong balance sheet, as you can see. Total net assets are broadly flat at GBP 216 million. And within working capital, we've worked really hard to basically reduce our finished stock balances by over 20% to GBP 35 million, and we've continued to drive operational efficiencies from new distribution partners. Our net cash position has improved from GBP 17 million to GBP 29 million, and that consists of cash of GBP 44 million and a net debt or a debt balance of GBP 15 million. And this slide just bridges that cash flow movement. The closing net cash balance of GBP 29 million, well, that will draw down, as you've seen in previous years, that will draw down in the first half of the year and then build up in the second half, particularly given the second half weighting of our consumer list. And our capital allocation priorities are very much focused on internal investment to drive organic growth, debt reduction, dividends and where appropriate, bolt-on acquisitions.

Consumer. The Consumer division had, as you recall, an extremely strong comparative, but achieved revenue growth -- sorry, revenue of GBP 218 million and a profit of GBP 20.5 million with a margin of 9%. On the next slide, you can see the great diversification of our consumer portfolio continuing to shine through with a real breadth of critical and commercial success across many different genres. In Romantasy, Sarah J. Maas returned to the bestseller list in 2025 with the release of the paperback of the House of Flame and Shadow and her fans are thrilled that she is now releasing 2 books in the A Court of Thorns and Roses series in the year ahead. In the U.S., Renée Watson won the Newbery Medal for the New York Times Best Seller, All the Blues in the Sky. J.K. Rowling's Harry Potter series remains in the top 10. The TV serialization of Harry Potter will be launched at Christmas, helping to introduce the series to a whole new generation of children over the coming years. In non-fiction, Gillian Anderson's Want in paperback was in the top 10 on the Sunday Times bestseller list for 22 weeks, including 9 weeks in the #1 spot. In Children's, our best-selling author, Katherine Rundell announced a long-term film deal with Walt Disney Studios, which will significantly boost her already best-selling creature -- Impossible Creatures series, the next volume of which is due out in August. We have also had continued success in fantasy from Samantha Shannon, and in cookery from Poppy O'Toole, both of whom have new books coming in this year or two.

Down to Academic and Professional. Academic and Professional had a strong year with revenues of GBP 108 million and profits doubling to GBP 25 million. Growth was driven, as you can see, by digital sales, which included the AI licensing deal, which was announced earlier in the year. Print revenues during the year were stable. And year-on-year, all revenue streams, that's print, digital and other increased in the second half. And I'm very pleased to say that in the financial year-to-date, we've seen really good growth in all territories.

As I say, Academic & Professional has benefited from the AI licensing agreement, and we are pleased to say that this is ongoing into '26, '27 as more authors opt in and more titles are added to that framework deal. The integration of Rowman & Littlefield is now substantially complete and significant progress is being made on digitalizing the high-quality portfolio that we were able to bring in as a result of that deal. We've also expanded our business in Asia, opening a base in Singapore to further capitalize on the growth in the student population in the region, building upon the success of our established offices in Australia and also in India.

So the upcoming year has an array of potential best sellers, as you can see behind me, from our incredibly strong, stable, our portfolio, if you like, of great general authors from Sarah Maas, Gillian Anderson, Samantha Shannon, Katherine Rundell, J.K. Rowling, Peter Frankopan, An Patchett, Louise Kennedy, Dan Jones, Hugh Fearnley-Whittingstall, and Poppy O'Toole. In addition, Stephen Graham, who you know the great actor in the series of Adolescence has compiled a book of letters called Letters to Our Sons, which we feel privileged to be publishing.

Looking to our innovative publishing of the Harry Potter series, we are publishing Pocket Potters with a book per character and the next of the illustrated editions quite separately, which is nicely timed to benefit from the huge opportunity of the HBO series launching at Christmas.

Moving to the next slide of summary and outlook. You can see that the Bloomsbury portfolio of portfolios strategy has created a resilient and successful business model. The major reorganization of our company, which we announced in April is already providing greater agility, and we will be in great shape to harness growth opportunities. We have, as you have seen, a strong publishing list for the year ahead with exciting major releases and in particular, what we call there the 2 major events of the new Sarah Maas titles and of the new movies in the HBO TV series.

In addition, there are further TV releases to come. Netflix are making a second series of the 3 Body Problem, the Trilogy, which did so well for us a couple of years ago and our wonderful late author, Anthony Bourdain, Netflix have made a very powerful series about Tony as a young man when he's deciding what to do with his life and falls into cookery where he rises to the eminence that he did and that he was able to write up in Kitchen Confidential that was a complete worldwide bestseller. So the film to look out for in the summer is called Tony.

Putting all of these factors together, the Board has strong confidence in delivering a record profit in this new financial year 2026-2027, in line with recently upgraded expectations.

[Presentation]

Well, thank you very much. Do you have any questions?

Will Larwood from Berenberg. Firstly, just on the AI licensing, obviously, benefit in '27 from additional authors opting in. I was just wondering if you could quantify how many authors have sort of opted in, how much -- give us an indication of how much further runway there is for AI licensing deal? And then secondly, on academic, you talked about it sort of getting back to growth. Just wondering if you could share some more information, any more color on what you mean exactly by back to growth market conditions versus the go-to-market strategy that you put in place? And then finally, just in terms of the Harry Potter HBO series, obviously, you got Pocket Potters coming out and the illustrated sixth book. What else you are doing in terms of the strategy around pre-release? Are you looking at resleeving the books, et cetera?

I'll take the first and the third, if I remember them and Keith, you can kindly take the middle. So what was the first question?

About further runway in academic wise.

So it was a wonderful exercise contacting all of our academic authors to see if they wish to be part of this or not, some of whom we haven't been in contact with for a long time. And so even some new books eventuated from that. We haven't identified the number. It's still ongoing. But we've been very pleased. And I think that if you imagine if you were given a choice whether to have your life work, trained on by AI, you might find your view changed almost month by month, and academics are no exception as we all get to grips with the extraordinary power and benefits of AI as well as the much publicized fears and potential negative aspects of it. The one thing that is absolutely clear is that the better trained the AI models are, the better the answers that the whole world is going to receive will be. Now there's a reason why AI companies have focused on academic content, one of which is that most academic monographs and other works are peer reviewed by up to 5 or 6 leading academics in that field. So this is really gold standard information that they're training on. Second question.

I take the second. So in terms of the growth in A&P revenues, I think when -- in the first half presentations, when I think I was the other side of the table, actually, we ended up reporting on the challenges in the first half of the year. Second half of the year, we've seen, as we reported good growth, good growth across all territories, across all formats, which has been particularly encouraging. And that growth has continued into the opening part of this year, where we've again seen growth in all territories. So really encouraging that from our existing customer base and also from new customers with big deals coming in. So that's -- I mean, we're early on in the financial year, but certainly very encouraging. And in terms of the year itself, we also saw year-on-year growth in BDR as well during the year. So yes, encouraging signs, but it's obviously early in the year.

You can do the third as a bonus.

Remind me, Will, number 3.

Strategy around HBO release of Harry Potter for Christmas, just sort of what else...

Okay. So we'll have to wait and see exactly what we're going to do. So that's a work in progress. But suffice it to say that when the Warner Bros. films came out starting from about 2000, Bloomsbury really capitalized on that moment and opened up the market from what, I think, then would have been called ABC1 market to a C2D3 market reaching literally hundreds of thousands of new customers who were new to the series, only alerted to it really by the movies rather than the books and largely reached through supermarkets and mass merchandising retailers. By far, our largest customer when the movies came out was Tesco. And if you're doing things right, Tesco should be your largest customer for any product. So watch this space. Alistair?

Three from me. Keith, obviously, it's sort of quite early in your tenure, but any sort of initial reflections on sort of what surprised you for better or worse, if anything at all? Secondly, obviously, we've touched on the HBO sort of series around Harry Potter. But with Sarah J. Maas, I think she mentioned, I think, midway through the podcast, she just managed to get all of her TV and movie rights back. Anything you're sort of hearing on the grapevine on when they might get used? And then lastly, just to sort of expand on the topic of AI licensing. Any more talks with other providers that you might be in? And any sort of learnings from the first deal that might be useful as and when you go through that process?

Well, I won't take the first question about Keith's first impressions.

Yes, happy to take that, actually. I mean, look, it's been a really eventful start, really energizing start. I joined the business seeing that growth trajectory that you've all seen and that you've all benefited from and just really energized to join a business that's got that sort of mindset, that ability to really develop, nurture new talent and then bring that to market. That's what I wanted to join for. I also saw huge potential within the business as well. And I think on being on the inside of that, that's been absolutely reaffirmed in what we've been able to do and the plans we've been able to set forth for the future years. I mean, really quickly on, we've been able to move at pace with the restructure within the business. That's -- as we've reported, that's going to increase the agility of the business. It's going to increase accountability as we move to a vertical structure. And really, it's going to improve financial performance going forward. So I would say from my side, that's a good first step and a good start. I'm also really excited about the tech deployment as well that we can do within the business. Nigel mentioned the Bloomsbury brain. I think that's hugely interesting in terms of what that can do for our ability to drive semantic search across our titles, bringing that out for internal promotional opportunities, but also driving external demand across our customer base. I think that's a real opportunity. Internally as well, the way in which we can deploy are, I mean, obvious use case in terms of sales demand forecasting, guidance notes in terms of cost management and also stock management and print runs as well. I mean the use cases are really obvious, very clear and high value. So that potential just is massively energizing. It's also -- I mean, I observe it from the outside and have now been nearly 4 months in. It's a great management team, and we move at pace to capture opportunities. So I'm delighted to be a part of the team.

And we're thrilled to have Keith with us, and he was instrumental in our restructure only months into his arrival. Alastair, your second question was about HBO film rights.

[Audio Gap] I think she talked about having right back...

There is no news to report, and it's her news to report, and she'll do so when she's ready. But suffice it to say that when she does, I think it will be the most extraordinarily successful streaming series of that one can possibly imagine other than Harry Potter.

And your third question was about AI licensing. Well, we are in contact with all of the LLMs that you've heard of. And I think it would be true to say that they've got their acts together in varying degrees. And of course, many of them have no interest in licensing content whatsoever. Why pay for what you can steal. So Bloomsbury were very much part of the campaign by the Publishers Association and the Society of Authors at the London Book Fair called Don't Steal this Book to encourage the U.K. government to not create a so-called commercial research exception that would have been a backdoor for LLMs to get content legally without paying for it.

Fortunately, at the moment, what they're doing is illegal. You will all be aware of the $1.5 billion settlement in the Anthropic versus Bartz case in the San Francisco Northern District Court, which is just going through the final stage of validation, assuming that all goes according to plan, $1.5 billion will be divided among many authors, publishers and of course, the lawyers. Bloomsbury will be a substantial beneficiary and that is something that we haven't taken into account in anything that we've said because you don't do you until it's happened. But that is the first of -- or not the first, but it's one of many cases. The American Association of Publishers announced further law cases only 2 weeks ago against other household names in the LLM area. So I think it's -- I think it will become increasingly clear that licensing content is cheaper for LLMs than stealing it. And we are only dealing with people who are good faith actors. And moreover, once you have a contract, you have guardrails in place to safeguard the amount of your content that can be used, which isn't very much and the citations that are required and a whole host of things that lead to the kind of organized marketplace that perhaps we saw some time ago when the Napster moment was ended and then paid for streaming became the force that it is now with Spotify and many other players. So we hope for increased order in the AI training market. That's a fourth question.

[Audio Gap]

Not at the moment. No. And nor is there much interest in that. I would be interested to know that the take-up in other publishers who've done it. And I believe I mentioned earlier the benefits of academic content with their peer-reviewed gold status is considerable.

Just to add that, Alistair, if I may as well. I mean, having done a series of these deals at other organizations and coming in observing the partnership that's been set up with the provider. I mean it's an impressive partnership. The breadth of it as well is really impressive. And yes, I'm optimistic more.

[Audio Gap] Secondly, just on Asia. Can you give an update in terms of where you are with that and any green shoots -- early green shoots? And then just a final one. Can you help us understand -- I mean, the first Sarah J Maas book is coming out in October. So how early do you see the demand in the preorders in terms of size and magnitude?

So in terms of the authors opting in was your first question and how that works. So authors opt in generally. What we've got though is the way in which the framework deal works is it's on a title-by-title batch basis. You asked about Asia. Really early days at the moment in terms of Asia. We're seeing good cut through in terms of the market. A lot of interesting conversations ongoing, particularly in the Academic & Professional market as well where the teams are growing well. It's an area of real opportunity for us as I look at the market growth. I mean we've already talked about the huge explosion in terms of student numbers, that area we want to move into. And actually, in terms of Academic & Professional more generally, we're looking at building out the content proposition, building out the format base and the territorial footprint as well. And certainly, the Singapore base provides us with a really good opportunity to do that. Sara J. Maas preorders, Nigel, did you want to take that?

Extraordinary. They're very high. Virtually, if we start with America, which is our biggest market, virtually every major retailer, including non-book outlets that sell some books, mass merchandise retailers see this as one of the biggest products that they will sell this holiday season in the case of the first book in October and then following rapidly on in January. So if preorders are -- there are 2 kinds of preorders actually. There are those placed by customers direct with retailers, people ordering, getting in their early order of the new books on, say, the Barnes & Noble website or whatever it may be, those are higher than we've ever seen before. But secondly, there's the orders of the retailers themselves. And we have all of those in now or not all of them, but almost all of them because we need them to fix the very considerable print runs that we will have for these books. And I can say that I've never seen quite such robust support from the entire retail base in America as we are seeing with these 2 books. In addition, the same thing is being replicated quite spectacularly in English language markets all over the world. So I think it's going to be extraordinary.

Can I just follow up on the first question? On the AI deal, if it's book by book, then in theory, for future releases, can we assume there could be a benefit flowing after FY '27 into '28 because...

You should definitely assume that. So there's nothing for us to confirm to you evidentially. But the permission that we sought from our authors was for their full body of work. We didn't -- we neither named a specific title by them if they had more than one title and nor did we name a specific LLM. It's just was an invitation to participate in AI licensing. So you're absolutely right in asking that because every year, we have a big front list of academic titles coming out. And so I think you can look to this as a revenue stream for years to come.

Good. Have I missed any? And by the way, there are 10 things to know about Bloomsbury. I'm sure that subliminally, you've absorbed all of them. So it remains only for me to thank you all very much for coming to thank you for your questions and to also thank our online viewers for their presence today. And thank you all very much.

Thank you.

Good morning, and a very warm welcome to the Bloomsbury Interim Results. We're particularly pleased to see so many analysts and on the live stream to see shareholders and potential shareholders. So a very warm welcome to you all.

I'm Nigel Newton, Chief Executive of Bloomsbury. And on my right is Penny Scott-Bayfield, Chief Financial Officer of Bloomsbury; and Tamsin Garrity, Head of Investor Relations. We're delighted to present to you now our results for the period, the rather interesting Bloomsbury months of March through to the end of August.

So you can see on Slide 2, our strategy of diversification has created a portfolio of portfolios. That is our mantra at Bloomsbury, much as our shareholders, the fund managers do in their own portfolios in an effort to balance the vicissitudes of one area against another. And we believe we've created a resilient business model for long-term success.

We're pleased to report revenue of GBP 160 million in the 6 months, profit of GBP 24 million with a strong and improved margin of 15%. We've signed our first non-exclusive AI licensing agreement with potential for more on the one hand and on the other, we have major bestsellers from our consumer division, including Gillian Anderson, who dominates the charts in the second half and has been #1 in paperback for 9 weeks now.

It is of enormous economic significance that our best-selling author, Katherine Rundell has secured a long-term film deal with Walt Disney Studios for her brilliant Impossible Creatures series. We demonstrate our confidence in the future by increasing the dividend by 5% and stating that we expect to deliver full year results ahead of expectations.

Now on the next slide, Bloomsbury's investment case. Let's consider that for a minute. We built a portfolio, which has the benefit of being diversified across academic and consumer publishing digitally and internationally for resilient success. That is rare in our industry.

Now on the next slide, dividend. Look at that marvelous upward swing. We have a strong dividend record, which any plc would be proud of. This continues with a 5% interim dividend increase and expectation of the same for the full year, which reflects both the achievements of this financial year and our confidence that the company is well positioned for further development.

And now may I hand the mic over to Penny for the financial highlights. Penny?

Thank you. So good morning, everyone. Starting with our key financial highlights. First of all, the revenue of GBP 160 million, which you can see against the last 2 years. Our pretax profit was, as Nigel mentioned, a 15% margin, so that's delivering pretax profit of GBP 24 million. Our diluted EPS of 22.98p, benefiting from that lower effective tax rate, net cash of GBP 2.4 million, which we'll come on to expand in a minute.

And as Nigel has mentioned, the dividend per share of 4.08p at the interim, a 5% increase, continuing our track record there. So moving on to our strong balance sheet. So net cash, GBP 2.4 million, that's net of our current GBP 20 million loan. Some of you will remember, we took out a GBP 37.5 million loan to help fund our acquisition of Rowman & Littlefield in May '24.

We've used our good cash position and generation to pay a further $10 million of that -- $10 million of that early, and that's on top of the $7.5 million that we paid down at the end of the previous financial year. Then we -- our working capital, you can see the increase there. That's mainly around timing of our debtors, but you will see that impact coming through in the cash flow as well.

Overall, as you can see, we remain our strong balance sheet, which really underpins our opportunities for the future. So moving on to our cash flow. 3 points I'd like to highlight here. First of all, you can see that trading strength delivering the GBP 24 million of profit in this first half.

You can see the GBP 9.4 million going out to dividends, rewarding our shareholders who remain front and center of everything we do. And then you can see the impact of the increased working capital coming through in that first half. We also highlight the advances paid in the period. If you think of that as our pipeline of future consumer titles. So you can see that remains strong and royalty payments were always -- that's the one payment I'm always extremely happy to make.

That's benefiting our [ aoses, ] you can see how they're really sharing in our success. So coming on now a deeper dive into our Academic and Professional division, which, as you know, this is -- we're presenting it on its own for the first time.

So you can see here, first of all, the revenue up 20% in the first half. And as Nigel has mentioned and we'll talk more about, that's benefited from our first non-exclusive AI licensing agreement. And you can see that has benefited both the revenue and the profit in this first half.

We're very pleased to say the integration of Rowman & Littlefield, as many of you know, we fully integrate all of our acquisitions, and that's substantially complete. And I know we're sort of referencing it almost as a -- taking as read that we've done so well on that, but integrating an acquisition that's 4x by a factor of 4, the largest acquisition we've done, I think, is a real testament to our operational effectiveness.

And of course, that allows us to really start benefiting from and leveraging their great content. So we'll come on to more about that shortly. And then as we've highlighted over the last 2 years, we're seeing continued budgetary pressure on the U.K. and U.S. institutions in the academic market.

But to finish on a more positive note, the expansion in Asia. So we've talked a bit about the opportunities for growth we see here as we see geopolitical pressure in the U.K. and the U.S. markets, there's huge opportunities in those Asian markets, and we've referenced that before, but just highlighting again, we're continuing with our plans to open that office by the end of the year and really tap into those opportunities in that region.

So moving on to the Academic division's P&L. So you can see here, we split out the 3 key types of income here. You can see the digital sales included BDR and the AI licensing within here. You can see that great growth both on last year and the year before. You can see actually the surprising resilience of print sales in a market that's really strategically shifting to digital.

And you can see that's some resilience in there, but also the impact of the R&L acquisition. We brought on this incredible quality content. And then looking at the margin strength, which Nigel mentioned, you can see 24% for this period versus the mid-teens, 16% that we've seen in the 2 previous halves. So we've generally guided to a mid-teens margin, but you can see the potential for upside there.

So on to AI licensing. I'm incredibly excited about the potential, which AI holds for Bloomsbury, both on the sales side in licensing, but also on the streamlining of work processes. So we've signed our first agreement in the period. As we've stressed, we can do as many of these as we like, and we are in contact with all of the major LLMs that you're aware of.

So watch this place. And it's very important for those LLMs to be trained on the highest quality content, which is what we think the many tens of thousands of titles in the academic area that we've built up represent as an opportunity to these tech companies.

We've also engaged with our authors inviting them to opt in. If they don't opt in, then their work won't be trained upon as a result of our deal anyway. It could be due to piracy, but we wish to follow the wishes of our authors, and that's very important and not all our competitors have chosen to do that.

Now most importantly, when you have a contract with an AI company, you have the guardrails that you want in place, and that's very important. And I think the large amount of litigation, such as the settlement for, I think it was $1.5 billion, which is eye-watering with Anthropic is encouraging other people to enter into agreements with publishers rather than inhabit the Wild West that they were before.

So that is the way the landscape looks at the moment and further potential opportunities are in discussion at the moment.

So updating on Digital Resources, which, as you know, is our digital products specifically created for the academic market. So here, revenue of GBP 13.6 million, slightly impacted by the adverse -- or getting the weaker U.S. dollar. So we were up in constant currency.

Just we wanted to really highlight the resilience of this. We've talked before about how when people get BDR products, they hang on to them. They become a really core part of the teaching and learning and evidenced here by subscriptions being at 50% and renewals rate we're maintaining at 90%. So that really speaks to the resilience.

And then as I mentioned earlier, really starting to leverage the great quality content that we bought from -- in a print perspective from our R&L. So we're continuing to expand our products and the opportunity of R&L digitizing. So we've got over 6,000 of R&L titles digitized, and that's enabling us to enhance, including the enhancing the BDR collections title count, which is an important part of being able to grow that.

So the greater diversification of our consumer publishing portfolio continues to shine through with a real breadth of critical and commercial success across multiple genres, as you can see in the slide behind me.

In nonfiction, Gillian Anderson's Want has been in the top 10 for 15 weeks, including 9 in the #1 spot. And the good news is there will be a sequel to that book to come. In Children's, I've alluded to Katherine Rundell remarkable deal apparently agreed personally with the President of Disney, Bob Iger, so we can be confident it will receive good treatment.

In addition, the Warner HBO Max series of Harry Potter has started filming last month at Leavesden. And if you just consider the number of books, 7 and consider the growing word count as they move through the series, I think we can expect approaching, well, dozens and dozens of different episodes. This will run and run.

And we certainly found when the original movies came out from 2000 with the Philosopher's Stone that the books were propelled back into the bestseller list by people who've seen the film, a mass market audience who wanted to understand what was really going on.

And there are 800,000 new 8-year-olds in Britain alone every year, let alone the entire -- perhaps some of you are responsible for some of those, let alone the many other countries around the world where we publish the work in the English language, which is really everywhere except the United States.

So the series, no release date has been announced by HBO Max yet, but we conjecture that it will be in early 2027, helping to introduce the series to more children.

So coming on to the consumer P&L. So first of all, the total revenue of GBP 113 million. I think reminding everyone, as you know, versus a very strong comp last year, but you can see that's still up 13% on 2 years ago. So you can see that underlying strength.

When we're looking against a more normalized year of more normalized period of 2 years ago, you can see the resilience of both print and digital. And I think within digital, really highlighting the audio that we'll come on to next is really -- we talk about our portfolio of portfolios and how we can monetize content. And hopefully, this morning, we're sharing with you some of the new ways in which we're doing that, but the expanding ways in which we're doing that.

So with this deeper dive into audio, one of the key things is that we've been able to increase the market, and that's -- we're not going to take all the credit for that. Spotify had quite a big influence there. So as you remember -- some of you remember, we entered into a non-exclusive deal with Spotify as well, and we've really seen the market expand.

So that's a wider market, and that's reaching new audiences, which we're seeing almost on a daily basis. And as that's happening, we're also increasing our scale. So you can see 1,500 titles. We really prioritize the titles which we think will do best in audio and the scale of the new titles that we're bringing on to those platforms on an almost daily basis.

We've highlighted some of the narrators. I think that Katherine Rundell's, the Impossible Creatures Sam West. That's a particularly great example of a really super combination, which is doing really well. And this is award-winning content. So in any market, what we have to keep doing, which we do so well is to produce incredibly high content, and that really gets the audience reach.

So look at that extraordinary list. These are our current best-selling and some our upcoming titles still to go this autumn. This year has an array of titles from, as you've seen, Samantha Shannon, Katherine Rundell, J.K. Rowling and Poppy O’Toole. In Academic and Professional, we're very excited by the launch of the Marvel Age of Comics series.

You wouldn't have guessed that would come from our academic division, but it does, and it's been embraced by Marvel putting them further in the history books. So looking to our innovative publishing of Harry Potter, we have the Pocket Potter series launching with one book per character aimed probably at a younger audience than the books themselves.

But there is such awareness that these books are grabbed by children, and it's nicely timed to benefit from the huge opportunity of the HBO series.

Now moving on. We launched our Bloomsbury 2030 vision last year, as many of you will remember and you were there. And we've already achieved much of the operational change that we sought to.

Looking at our growth, our strategic expansion in Singapore to capitalize on those huge numbers predicted by the World Bank of an increased student attendance, particularly in Asia, is happening, and we will be live and running between now and Christmas.

Looking at our portfolio, the integration of Rowman & Littlefield is substantially complete. That has been a fantastic acquisition. And turning to our people. We continue to be able to attract the key talent in publishing that we wish to. And starting with our new Chief Finance Officer, Keith, please raise your hand and say hi.

[indiscernible] meeting probably in due course.

He still works for the Guardian, but he's come to say hello, and Keith will join on the 2nd of February. So a very warm welcome to you, Keith. On the next slide, the Bloomsbury flywheel keeps on spinning in its virtuous circle of investment in content, driving demand and generating cash to fund further investment.

Finally, the Board expects to deliver full year profit ahead of expectations. So on this slide, you will see a moment when Bloomsbury was voted Publisher of the Year at a ceremony in May, which was a good moment to see the achievements of my 1,250 colleagues worldwide recognized.

So we're now at the exciting bit where we solicit questions from you. Fiona, your hand shot up like Apollo rocket.

Thank you. It's Fiona [indiscernible] First of all, can you give us more background on the structure of the Singapore market? I mean, is there a group of target universities and are there incumbents? And how are you planning to tackle it?

That's the first one. The second one is on the AI deals. What sort of proportion of the authors did decide to opt in? And do they get a benefit from so doing? And the third one, because we have to have 3 is the rule.

It's really not for the rest of you.

It's just on whether there's any improvement in the music in the academic in the U.S., particularly.

Great. Sure. Well, including the name Singapore in our expansion may be deceptive because it isn't about Singapore. That's just a base. It's about China, Taiwan, India, the whole region because that is where new universities are being founded and new budgets are being created to buy the sort of digital resources that we publish.

So Singapore, as many of you know, is a great and stable base in which to have your sort of your legal entity, but it's not only about Singapore. On your AI and authors question, that's happening. This is all real-time stuff. So what I can tell you is given that it's pretty hard to get people to sign anything, it goes into the 2 boring pile next.

We are very impressed by the number of authors who've signed. And there are many more to come, and we're making ourselves available for individual conversations with authors because AI is the big beast in the room and not everybody understands it.

And I think it's changing, if not week by week, certainly by month, month by month as probably all of us start to use AI even more and realize that our future will depend upon having high-quality information in there. Is there a financial incentive? Absolutely.

So we've announced an academic level royalty that they will receive from any income that we achieve. And so the permission, the opt-in that we sought is to all AI activity. We're not doing it on a deal-by-deal basis. And the academic market, it has to be great.

It is the chief area of investment for most governments in most countries in the world. Yes, it's taken a short-term hit because of new political policies, and we would rather that, that were not the case. But it is and it's the new reality, and we're all operating well within it.

And we've made very clear at this meeting and in the previous couple that the significant growth won't be in the old world. It will be in the new world. And we're good at the new world. So watch this space. Alastair?

Alastair Reid from Investec. I'll do 2 with multiple parts. Firstly, we obviously touched on some movie rights. We've seen Fox and HarperCollins signing a sort of reciprocal first look agreement. Is that something you might consider and be interested in?

And then secondly, if you can comment at all on your AI agreement, is there any recurring element to that in the future? And did you receive a cash payment for that in the first half?

Terrific. Movie rights. We've had a first look agreement in the past. We had one with the brilliant Creative Artists Agency in Hollywood. But we found that it didn't really move the dial because anything that's so clearly crying out to be made a movie like Impossible Creatures, it's going to happen regardless of that.

Secondly, the sort of books from Bloomsbury's very large annual output that movie studios are going to be interested in will typically be represented by a literary agent and agents always retain the film rights. So it's very unlikely that any first look agreement is actually going to have the right to deliver that deal. The Katherine Rundell Disney was very much done by her agent, but enthusiastically cheered on by Bloomsbury.

AI agreements. Well, I personally regard the income as recurring. It's not recurring in the sense of getting a royalty every 6 months like a book contract, but we have new contacts the whole time that will be the subject of the AI deals of the future. That's point one.

Point two is, does anybody know how many LLMs there are in the world? Well, that includes me. But let's say there are 20. So we've just done one deal and all these people are hungry. So they will recur Alastair in the sense that I see a flow of them for many years to come, and there will be new LLMs.

So I think this is the new -- big new business area for publishing. What is the -- there's the tech world, which is so multifarious. But what is the middle letter of LLM. It's language, and that's -- our product is the language recorded on the page, the written word.

And if you ask ChatGPT a question, you get the answer in language. So we are the root of all of the riches that will flow from AI. AI, we waited about 2 years before we did our first AI agreement because we wanted the market to really establish itself and the mistakes to be made and people to discover that guardrails are a good idea.

What we did notice in those 2 years is that all of those agreements were confidential. And that is because they are in an extremely competitive world themselves, and they don't want to flag to their competitors what they're paying, how much they're paying, who they're paying it to, when they're paying.

So I can answer nothing on that. The only way I could be totally transparent would be to do no AI deals, and then I would have no questions to answer. That was one of the questions I didn't answer.

Yes. And no, we didn't.

Okay. There you got an answer. Penny is much nicer than me.

Will Larwood from Berenberg. Just a couple from me. Firstly, it relates to the AI deal. Is it just purely related to backlist titles? Or is it -- will it include an element of frontlist? And then secondly, just if you could remind us on Asia and then sort of the potential ramp-up of that business into next year, that would be great.

Okay. You can prepare on Asia. And so the -- all AI deals are title specific. You don't say you can have like a first look option, the rights to future books that we may publish in that area. So in a sense, they're all backlist, but it would include the very recent publications that we have.

Now of course, we've done our deal on our academic list, which is way over 100,000 titles. I'm not saying that's what's in the deal. I'm saying that's the total universe that's available to be chosen from.

But we also have a general side, and it isn't really the mood of the world to be putting one's consumer books on the whole into these deals, but it may be in the future. So we've got a lot of gas in the tank, I think, for the frontlist of the future, if you like, in the whole trade side.

Yes. So just to share some stats with you. So the World Bank projection of 380 million global higher education students by 2030. So that's up 73% over a 9-year period. And the forecast is for yes, for 60% of those to be in Asia. So you can see that expansion.

We're used to the U.S. market being by far the biggest. That's why we've expanded there organically and through acquisition, but there is huge growth predicted there. And already, there's very specific things happening. So Singapore released their rules for international students, making it more attractive for international students, which has been one of the challenges in both the U.S. and U.K. markets.

But that's more attractive for international students now and for longer-term engagement, which is good. South Korea is doing a study career 300,000 initiative, specifically to attract 300,000 students. So you can see the sort of scale of stuff that's going on there.

And India, where we obviously have had a base for the last 10 years, we're focusing our academic sales efforts there. And we're already seeing foreign universities, U.S. institutions coming into the Indian market, establishing campus approvals, which again helps with the visa side of it.

And the U.S. restrictions, visa restrictions are forcing Asian students to go to different markets. So those are just a few of the KPIs that are driving what's happening in that market.

Fantastic, Penny. Thank you, and then you.

Just a very quick one on AI and Penny, on the margin point, just to reiterate, there's no change in guidance of the academic margin...

No, that mid-teens something like.

Okay, fine. And then on audio, I mean, you already have key deals in place with Amazon, Spotify, et cetera. It seems like one of the most exciting parts of growth for the business. Is there anything else in terms of those sort of deals or anything else you can do to accelerate the growth within that part of the business even further?

Well, yes, there is. Thank you, which is to get more and more of our titles recorded because we do have this huge backlist. We've been lucky to generate cash and to have been able to make some 35 acquisitions. And our strategy in each case has been to get hold of that IP. Initially in academic publishing, we were after it for digital resources where we've done so well and where there's still considerable future potential with what we've got already.

But of course, we have the audio rights too, and that is even seeping into the academic area. If you think about podcasts, many of them are about fairly cerebral subjects. So yes, there is much more we can get off the shelf in our own shop as well as publishing books in audio more imaginatively where appropriate with multiple voices and dramatizations rather than just straight readings.

And there are all kinds of different levels of audio. The huge change for Bloomsbury was to switch a bit over a year ago from an exclusive contract with one supplier of audio books to a non-exclusive deal with them. And so we have many deals now.

Spotify is way the most exciting because they're very ambitious and it's all there for free. You just slide along at the top of your Spotify bar and there are books and you can listen to them as it were for free if you're already one of Spotify's millions of music customers.

The fact that people start out as a music customer means that they're a different demographic to the competitive demographic. And that's quite good because if you look at the Bloomsbury list, it's quite youthful in many places, the Sara Mass audience is largely a youthful one.

So the developments in audio are all going in our direction. And I find it very exciting because it means that a book which you used to need to sit down to read, you can now read while you're driving or at the gym or standing up or running.

So it's inserting books into the interest dices of your life, which had previously been book free, I hope.

My questions around Asia have been asked. But just as a follow-up on the audio side of things. Can you remind us about how the rights work in that area? So if you have the audiobook rights to a title, is that across multiple territories or in specific territory? Because is there an opportunity to gain more consumer traction in North America, for example, some of the titles or should we think about it in that way?

Well, the gold standard is, of course, to have America and to have all rights. So we do where we can. And some of our books have been huge audio sellers in America. So that's what we're seeking.

But the strict answer to your question is that we have the audio rights in precisely the same countries as the book rights and the sort of minimalist book contract would be for the U.K. and Commonwealth territories with an add-on of open markets shared with a separate U.S. publisher should there be one, often in the continents of Europe and in Asia and Africa.

But to a large extent, we have the audio rights everywhere, except in those cases where we don't have American or possibly Canadian rights.

It's Jessica Pok from Peel Hunt. A couple of questions from me, please. The first is on audio. I mean, I'm assuming digital formats higher margins. But do you need to put marketing behind your new releases for audio?

And then the second one is R&L mostly integrated now. How are you thinking about M&A? And in this kind of environment for academic, are you finding more deals around at better valuations, but some color on the marketplace will be good.

And then just a final one, just to make sure I understand this properly. On the AI deal, is there a length to the contract as in is there -- the content can be used for 3 years and you get a certain payment? And is it taking aside new deals, is it a matter of you get the bump up and then a couple of years, another massive bump up assuming that no more offers opt in if you see what I mean?

You can think about AI while I answer audio. So yes, the beauty of a launch is that the publicity that we seek for a new book is platform agnostic. So when we're getting a huge interview for an author, when Katherine Rundell is writing a big piece in the Sunday Times as she did a few days ago, it's effectively promoting all formats of their work.

So that's why we like these launches. They're benefiting the e-book. They're benefiting the audio book. They're benefiting the print book. all at once. So mostly, it doesn't involve separate marketing. That's why it's cost effective for us.

But yes, of course, we do put available as an audio book, and we just remind people of what probably has already become a piece of learned consumer behavior. Then you asked about the integration of Rowman & Littlefield.

Sort of more future M&A, what are we thinking about that area.

Yes. So we are a destination of choice of people who have a company to sell. So we're looking at probably not everything, but we're looking at almost everything where it's the idea of the other side to approach buyers. And the market is still -- the deal flow is still good.

We're being measured in what we're leaping at because at $83 million, Rowman & Littlefield consumed a fair chunk of our cash, and there's much we can do post integration to exploit that and particularly in the form of Bloomsbury Digital Resources containing titles.

So we continue to look at everything, but wish to spend within our means as we digest the jewels. Do you digest jewels, digest what we bought already. AI?

Yes. So we -- when we said real confidentiality, we -- I'm afraid we just can't share that information.

James Musker at Singers. First on Rowman & Littlefield and the integration into BDR, 6,000 books out of 40,000. Is that a lot of progression done? Or is there still a lot to go there? What's the level where the deal made sense and you really see the benefits from it?

And then in terms of the AI deals within confidentiality, what is it that determines the price of a deal? Is that the size of the LLM? Is it just the number of titles? Is it the use case? And what are the negotiations focused on that?

It's a bit -- may I leave you, R&L. On AI pricing, well, that's a great question, and that's what I asked myself when we ventured into this space, how are we going to gauge this. So it's a bit like selling your car. There is kind of a market price that has been normalized in some circles.

I mean there are actually lots of different ways of selling AI, but some of them are on a per title basis. So that's one answer. The second answer is what the buyer is prepared to pay. And the third answer is how good are you at negotiating from that base.

And so we took the negotiation part of that very seriously because it was hugely important when you multiply up by the number of titles. So I hope that answers your question. We did our best.

And on R&L, as with any list, there is maybe more economic value from certain titles. So actually, 6,000, we very much focus on the ones that would generate the most benefit. Of course, we can get benefit from all of them. But I think it's important to notice, first of all, R&L's trading of the business as is.

Then we've got the -- then we're starting to really get the benefit from the digital side of, which we announced when we was a really key part of buying it. But then also those R&L titles have been very much part of the AI deal we've done. So it's actually -- and that wasn't something we factored in when we did the deal. So it's really over delivering from our perspective.

That's a really good point. AI is so new that we did not factor that in, this really quite recent deal. So it's tremendous upside. And that's why that phrase content is king continues to be true that if you've got the content, you're ready for any new technological or other societal developments that will come along. And that's the strength of what we have at Bloomsbury.

Any other questions? Well, thank you all very much. You've been a lovely audience. You've been a lovely online audience as well. I'm just going to close by saying 10 things to know about Bloomsbury. So up to who knows 100 Harry Potter episodes now started filming at Leavesden.

Disney commissioning multiple movies about Katherine Rundell's Impossible creatures. Three, an AI deal done, not just talked about or promised, but done with further deals to come, Want by Gillian Anderson, #1 bestseller. You can't get higher, #1. Keith Underwood to move from Guardian Media to Bloomsbury as CFO. He didn't have to come, but he chose to come.

And then next, #7, 6 Bloomsbury Digital Resources finding new academic research library customers in the East 7 Bloomsbury Singapore to open soon to harness the explosion in student numbers in Asia. 8 major signings on the consumer business, including Stephen Graham, he of Adolescence.

The series in a remarkable book about fathers writing letters to their sons in an age where boys are said to be a kind of last generation, and this will address that and I think attract a huge amount of publicity. 9 Bloomsbury voted Publisher of the Year, not some other publisher, Bloomsbury.

And finally, high staff engagement worldwide in our companies in the Great Place to Work survey. Thank you very much.