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HMV says it will return to profit after confirming losses

By | Published on Friday 10 August 2012


HMV said it expected to return to profit next year after posting a £38.6 million pre-tax loss for the last financial year. And the City seemed convinced initially, with the group’s share price zooming up, for a short time, before sliding back down again. Perhaps investors got to the end of the report and realised the ‘gadgets are cool, right?’ strategy is still at the core of the flagging retailer’s revival plan.

HMV bosses might point out that tech sales were up 51% in the run up to Christmas last year, and that that department now accounts for 11% of the firm’s sales, though as Seymour Pierce analyst Kate Calvert told the Financial Times: “[HMV’s] markets are under structural pressures, with the move online and the supermarkets’ aggressive pricing. The move into technology has helped them but does not differentiate them. It’s not going to drive new footfall”.

But back to the rosy predictions of future growth, and outgoing CEO Simon Fox told investors yesterday: “We are confident that the actions we have taken will enable us to significantly improve cash generation and make profits of at least £10m in the year ahead”.

HMV, of course, has recently sold off various units in order to reduce debts, forcing the firm to refocus its energies on its high street business, despite mainstream high street entertainment retail arguably being in terminal decline.

The next unit expected to be sold is the rest of the MAMA Group live music division, the sale of MAMA’s biggest venue – the Hammersmith Apollo – to an AEG/Eventim JV having been completed this week when regulator approval was confirmed in both the UK and Germany (Eventim is a German company).