Oil rally lifts FTSE above 7,100 and Bloomsbury provides dividend bounty after book boom

“The FTSE 100 built on yesterday’s strong performance to trade solidly higher on Wednesday morning, lifted by rising oil prices which boosted the big energy firms on the index, BP and Shell,” says Danni Hewson, Financial Analyst at AJ Bell.

“An upbeat assessment of demand from producers’ cartel OPEC and the waning prospect of a big increase in Iranian supply have helped support a rally in crude prices. Something which could make the market a little nervous if it is sustained given investors’ current preoccupation with inflation risks.

“Positive US manufacturing figures overnight offered the latest insight into the pace of the recovery across the pond and jobs figures on Friday may give further indication of whether the world’s largest economy is gently simmering or at risk of boiling over.

“Budget airline Wizz Air laid bare the predicament facing the airlines in stark terms as it reported a big annual loss, saying there would be further losses in the current financial year without an ‘accelerated and permanent’ lifting of restrictions. This could prove a forlorn hope as governments look to contend with the threat posed by Covid variants.”

Bloomsbury

“Books have proved an enduring medium for centuries despite continually being written off and the reading boom created as people sought escapism in the pandemic shows no sign of wearing off judging by Bloomsbury’s record results.

“The publisher of the Harry Potter titles is maintaining its magic touch as it guides for the current financial year to be ahead of expectations, the second upgrade in a matter of months, and sprinkles a slice of sorcery over the numbers with a generous special dividend.

“Bloomsbury faced a painful transition following its mid-noughties peak at the height of Pottermania but it is no longer a one-hit wonder with a diverse list of bestsellers in its portfolio.

“While bookshops have been closed for long spells during lockdown, consumers have been used to buying online or purchasing titles for e-readers.

“Releasing content in a digital format allows Bloomsbury to generate revenue from a ‘backlist’ of previously published books at very limited additional cost, benefiting margin performance.

“Bloomsbury has been prioritising its academic and professional publishing arm as part of its growth strategy and a focus on digital resources served it well during the pandemic.

“Even with returning lots of cash to shareholders, Bloomsbury has plenty of money in the bank and this may raise questions over the prospect of acquisitions to boost its footprint and take advantage of a buoyant market.”

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