HMV profits fall more than 70%

Posted June 28, 200718 yr

HMV profits fall more than 70%

28 June 2007 - 12:11:12

Source: Music Week

Profits at HMV Group plummeted by more than 70% last year, but there are signs of a revival with the retailer enjoying increased sales in the first few weeks of the current financial year.

For the 52 weeks ended April 28, 2007, the company reported sales of £1.89bn - a 3.8% increase on the previous year.

However, in like-for-like sales, the numbers were down 3.5%, with new store openings accounting for the difference.

Those sales resulted in profit before tax of £21.6m, a fall of 73% on last year’s £80.2m. However, those returns were not unexpected, as the company had given the stock market two profits warnings earlier this.

On a brighter note, HMV has enjoyed an eventful first eight weeks of the new financial year, as its new strategic plan kicks in. “The turnaround plan we announced in March is progressing well and we are on track,” says Group CEO Simon Fox. “The benefits of our actions are beginning to come through and are reflected in the good start we have made to our new financial year."

During those first two months, like-for-like sales across HMV’s stores have increased 3.8%, including an 8.8% increase in the flagship UK & Ireland market.

Despite the poor results, investors seemed to be encouraged by the healthy start top the new financial year, with the company’s mid-day stock price only marginally decreasing, down 1p to 121p per share.

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HMV to sell DRM-free digital downloads

28 June 2007 - 12:31:56

Source: Music Week

HMV is to begin selling DRM-free digital music through hmv.co.uk, in a bid to revitalise its flagging download service.

From September 2007, the retailer will join the likes of iTunes and 7digital in selling the EMI catalogue without restrictions. HMV will sell MP3s in 328kbps quality - marginally higher than both 7digital and iTunes - in addition to its existing 3m track catalogue of WMA files.

The range will also include non-DRM product supplied by independent music labels. HMV says it expects that the total number of non-DRM tracks available as MP3 downloads will grow over the coming months, as it reaches agreements with additional labels.

HMV e-commerce director Gideon Lask says, "We're excited to be making MP3 downloads available through HMV, as this is consistent with our ethos of giving our customers the widest possible access to music, however and whenever they wish to enjoy it.

"Music fans increasingly expect versatility and interoperability in the way they consume music, and we feel the time is right to acknowledge and act on this expectation."