J K Rowling publisher Bloomsbury will rely heavily on the prospect of one last piece of magic from the author to keep stock market bears at bay on Tuesday when it is due to unveil a dire set of results in the absence of a new Harry Potter book in 2006.

Followers say that disappointing book sales from costly authors such as David Blunkett and pop star Gary Barlow among other factors could see profits crash from £20 million to about £5m.

Anticipation of the poor figures has seen the share price tumble to new three-year lows at around 190p although that values the business at about £139m and the shares still look expensive on strictly historic grounds.

But the certainty of further record business when Harry Potter And The Deathly Hallows comes out on July 21 is set to transform prospects at a stroke of the young wizard's magic wand.

While small bookshops claim they are being priced out of the market, Amazon said that forward sales mean that the seventh and final Harry Potter book already occupies the top two slots in its bestseller charts (for hardback and paperback versions). Its first-day UK sales seem certain to top the record 2,009,574 copies achieved by Harry Potter And The Half-Blood Prince.

Bloomsbury chairman and chief executive Nigel Newton declined to put a value on likely returns from his main asset but brokers at Dresdner Kleinwort say the new book will add around £50m to group sales and anywhere between £5m and £10m to profits.

That is only a small part of the Potter industry, which has seen worldwide sales rise to above 325 million copies while the Edinburgh author is tipped to become the first billionaire writer as a result of film and other deals.

Back in 1997 Bloomsbury hedged its bets on a new author by publishing initially just 1000 copies of Harry Potter And The Philosopher's Stone but appears ready to take more substantial gambles these days as it tries to fill the void left by the ending of the series.

Last year, for example, it is believed to have set aside somewhere between £200,000 and £400,000 to secure rights to Blunkett's diaries, described as "sickeningly bad" by one reviewer and now available half-price on the net.

The group, whose successful lists include works by Joanna Trollope and Margaret Atwood as well as the Schott's Miscellany series, has also splashed out on expansion in Germany and the US and has moved into areas such as audio, films and pre-school books.

While directors are expected to claim growing success from newer ventures, even the company's own advisers at Dresdner Kleinwort concede that the group is a long way from filling Harry Potter's shoes and caution that profits could drop from a likely £17.15m in the current year to as little as £8.16m in 2008.

That could change if directors use their spare cash to engineer a transformational acquisition despite the temptations to shrink the business and boost the share price with share buy-backs or special dividends. As things stand, analysts believe the group is sitting on about £20m of cash which could rise to around £35m in 2007. Apart from disappointing book sales at Christmas, directors are expected to blame the poor 2006 figures on delays in major rights projects and other technical factors.

While Bloomsbury (and its printers at St Ives) look forward to the new Potter, some small independent bookshop owners claim they cannot afford to stock it, according to a survey carried out for The Bookseller magazine.

The last title carried a recommended price of £16.99 but Kwik Save sold some copies as an apparent loss leader at £5 and Tesco had an offer at £8.99.

While the final price is not known at this stage, Amazon believes that Harry Potter And The Deathly Hallows could be priced at £17.99 and is offering to reserve copies at an indicated price of £8.99 plus £2.75 for delivery.

WH Smith has an indicated price of £9.97 plus £2.59 for delivery.