Bloomsbury in £20m deal for US publisher

Harry Potter publisher Bloomsbury continued its shift away from the volatile "retail" market today with a £20 million deal to buy academic specialist Continuum.

At the moment, two-thirds of Bloomsbury's business is the adult and children's fiction sold in Waterstone's and the like - the company is seeking a 50-50 split between that and the world of academia.

Those books have lower print runs but offer more predictable outcomes, something Bloomsbury thinks is vital now the Harry Potter phenomena is coming to an end.

Bloomsbury is paying for Continuum - whose authors include the Pope and the Archbishop of Canterbury - out of cash, taking its cash pile down to around £9 million.

It says the UK trade is "the toughest it has been for decades". Since Waterstone's was sold by HMV it has "strictly rationed orders" according to Bloomsbury.

The company says the Continuum deal will boost earnings this year and may provide cost savings of £1 million.

Bloomsbury chief executive Nigel Newton claimed the takeover is a "transformational" step.

Numis says in a note to clients: "We are supportive of Bloomsbury's ongoing strategy of increasing the proportion of academic and professional revenues compared to trade revenues although remain concerned about continued retail pressure."

The shares slipped 1.58p to 130.42p. That leaves the company valued at £96.3 million.