HMV upbeat on recent sales :: Namibia Internet Gateway cc ::

Articles: HMV upbeat on recent sales

Posted by admin on Wednesday, June 30, 2004 - 12:40 AM

Music and book retailer HMV Group has reported a 22 percent rise in annual pre-tax profit and says it is encouraged by recent sales trends and is considering share buy-backs.
The group, which owns HMV and Waterstone's, said on Wednesday pre-tax profit was 117.6 million pounds for the year to April 24 compared with analysts' estimates of between 114 and 117 million. Turnover rose 5 percent to 1.79 billion pounds, led by fast growth of DVD sales, one of HMV's more profitable products. HMV is the country's biggest music retailer while Waterstone's, bought in 1998, is jostling for the top slot in the book market. Strong cash generation cut year-end net debt to 57.8 million pounds and the group said it would decide in the next few months how to best use its future cash. "The options under consideration include strategic investments in the emerging market for digital downloading and a programme of on-market share buybacks," the company said. "The group expects to comment further in the next few months." HMV HMV.L said it was determined to become "a major force" in legal digital downloading but will select its investments with considerable care. Meanwhile, the dividend was hiked 29 percent to 5.8 pence a share, above most analysts expectations. Sales for the eight weeks to June 19 were up 3.9 percent including like-for-like growth of 1.4 percent which compared with 1.8 percent growth for the year just ended. HMV said it was encouraged by recent sales. "We look forward with confidence to the important autumn and Christmas trading periods," said Chief Executive Alan Giles. The company makes about 90 percent of its profits in the second half of its financial year. It is growing sales thanks to its huge range of stock which differentiates it from cut-price competition from supermarkets on top sellers. About 40 percent of HMV's music sales are top titles. The shares closed at 238p on Tuesday having risen 42 percent in the last six months but the stock still trades on a prospective earnings multiple below the sector average and rival WH Smith SMWH.L . HMV shares floated in May 2002 at 192p.

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