HMV swings to loss after sales plummet
HMV Group has reported a £122m loss for the year to April, hit by declining sales at its entertainment stores.
The ailing music and entertainment retailer, which has issued several profit warnings in the past year, says that total group sales fell 7.4% in the 53 weeks to 30 April, while like-for-like sales were down 11%.
HMV posted a total group loss, after tax and charges related to the sale of Waterstone’s and its Canadian business, of almost £122m, a reverse from the £49.2m profit registered a year earlier.
Pre-tax profit before tax and exceptional items was £18.8m, down from £68.9m in 2010.
Net debt grew from £67.6m in 2010 to £170.7m in the period.
The company, which is trying to move away from being just an entertainment retailer, says live music venture HMV Live, having completed its first full year of ownership, offered a glimmer of hope, reporting “strong” trading in its venue business, and continued progression on venue expansion. The outlook for 2011 was “encouraging”, it adds.
HMV Live had sales of £46.9m in the 53 weeks up to the 30 April, up from £8.1m a year earlier.
Going forward, HMV’s focus will be on driving cash and continuing to reduce costs across its business.
As the firm has previously stated, it plans to reinvigorate its stores, bolstering its range of portable digital products and increase its digital, live music and ticketing activity.
CEO Simon Fox says in a statement, “We now have a very clear focus and strategy to drive cash generation and cost reduction, reinvigorate the customer offer and further diversify the Group into the growth areas of live, ticketing and digital.”
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