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HMV profits down 61%
By CMU Editorial | Published on Thursday 30 June 2011
So, HMV’s profits for the last financial year were down 61% to £28.9 million.
Given the struggling entertainment retailer has issued four profit warnings in the last year, that can’t really come as a surprise to anyone, though today’s year-end financial statement will spark another round of “they’re doomed people, doomed I say” reporting I am sure. Although in profit, if you take off tax and non-cash impairments – and it’s a sunny Thursday morning, I don’t see why we shouldn’t – the group made a loss of £121.7 million.
That HMV has had a tricky year is no secret of course, as efforts by top man Simon Fox to reinvent the 90 year old firm were hindered by disappointing high street revenues making it difficult for the company to meet the terms of covenants linked to substantial bank loans, mainly run up by Fox’s diversification strategy. But the firm has successfully sold its Waterstones and Canadian retail chains, raising some quick cash and reducing liabilities, and has negotiated albeit costly new bank loan terms, giving Fox two years to turn things round.
The group’s statement alongside the latest financials went a bit like this: “We continue to operate in a challenging macro environment, and the core retail markets in which HMV trades also remain difficult. However, we have taken decisive action to restructure the group, and have a clear strategy for transforming HMV into a broad-based entertainment business”.
