Record-breaking sales of Harry Potter and the Half-Blood Prince ensured publisher Bloomsbury broke the £20 million barrier for annual profits.

The group increased its surplus by 23.6 per cent to £20.1 million as it set out plans for more launches resulting from the series over the next few years, including box sets, a paperback version of the Half-Blood Prince and the seventh and final title by JK Rowling.

A release date for the last book in the Harry Potter series has yet to be scheduled.

Bloomsbury described the midnight launch of the most recent Harry Potter novel as a "triumph of logistical planning" and said it ensured revenues from its children's division increased by 70 per cent to £69 million in 2005.

Further strong sales are expected this year following the release of the paperback version in June, while there will be further benefits stemming from the screening of the next Harry Potter film, which is due in July 2007.

The cloth-bound gift edition of the seven books is also likely to become a major collector's item, Bloomsbury said.

The company added: "We therefore envisage at least five more years of a variety of Harry Potter launches before it changes gear into the significant backlist life that awaits it.

"It will probably constitute one of the most significant backlists in modern publishing history."

Among other titles, Bloomsbury benefited from the paperback releases of The Two of Us by Sheila Hancock and Jonathan Strange & Mr Norrell by Susanna Clarke.

The London-based publisher also revealed plans to expand its music, TV, film and sport books to help drive organic growth, allocating £15 million for future investment.

Bloomsbury also said that it will publish a book of selected political speeches from Chancellor Gordon Brown in September.

Turnover rose 29 per cent to £109.1 million from £84.4 million, while the pretax profit figure of £20.1 million was towards the bottom end of analysts expectations which were in the £20-20.5 million range.

Chairman Nigel Newton said: "We achieved much in 2005, building our book list, expanding the number of our authors and improving the performance of our international operations.

"2006 has got off to a good start, in line with the board's expectations and with a number of bestsellers on both sides of the Atlantic."

The board recommended a final dividend of 3.0 pence per share, hiking the total dividend for the year by 20 per cent to 3.6p per share.

Bloomsbury said it had assembled its strongest ever list of new books scheduled for 2006 from authors including Joanna Trollope, A. C. Grayling, William Boyd, former Home Secretary David Blunkett, and Margaret Atwood.

Meanwhile the firm yesterday moved into the digital era, launching its first 24 digital downloads.

"It's a very exciting initiative because although its not a big area now, it will be in the future," Mr Newton said.