Harry Potter publisher Bloomsbury plunges 10pc as publisher remains 'cautious' on trading

The warning came in a trading update for the four months to June 30, as the book seller reinforced its academic and professional division with the purchase of US publisher Continuum for £20.1m in cash.

Shares fell as low as 119p at lunchtime, before recovering to 121p by 2.15pm - representing a 8.3pc fall.

Despite the growing success of the e-book; Bloomsbury cautioned that sales remain soft across the UK and US.

Continuum - based in New York - generates 60pc of its revenue outside the UK and the deal looks to save £1m when the companies are combined.

Nigel Newton, chief executive, said: “The acquisition of Continuum is a transformational step in the delivery of a long held strategic objective to grow our academic publishing.”

He described how academic revenues provide more predictable revenues with higher profit margins, all adding more stability to the company’s results, the acquisition will move Bloomsbury closer to its aim of generating half its revenues from academic titles.

One of the best selling titles in the Continuum stable is titled “Getting the Buggers to Behave” by Sue Cowley, selling hundreds of thousands of copies every year to desperate teachers worldwide.

Bloomsbury closed down 8pc, or 10p, to 122p

Oliver Gadsby, chief executive of Continuum, added: “I am delighted that Continuum is finding a new home with Bloomsbury, a company we all admire.”

Malcolm Morgan, analyst with broker Peel Hunt, said: “I’m always delighted to see Bloomsbury investing some of their cash given the low rates of return, and Continuum seems to be a very sensible strategic asset for them.”