Britain's HMV Group Plc has seen an unprecedented surge in demand for Michael Jackson's music following the singer's death on Thursday, the retailer said, as it met forecasts with a 12% rise in profit.

Chief executive Simon Fox said the group saw an 80-fold jump in sales of Jackson's material on Friday from the day before, and that the week-on-week increase had been larger than following the deaths of Elvis Presley in 1977 and John Lennon in 1980.

However, the surge in demand, which has seen Jackson's "Number Ones" album rocket to the top of the charts, is unlikely to affect HMV's full-year performance, Fox said on Tuesday.

"Whether it's just a short burst, or how sustained it will be, we just don't know at this stage," he told reporters. "I don't think it will have a material affect on the business."

HMV, which runs music, DVD and video games shops under its own name as well as Waterstone's bookstores, made profit before tax and one-off items of £63 million pounds ($104 million) in the year ended April 25, just ahead of analysts' median forecast of £62 million in a Reuters Estimates poll.

Sales from continuing operations rose 4.4% to £1.96 billion [$3.3 billion] as the 88-year-old firm took market share following the demise of smaller rivals Zavvi and Woolworths and benefited from strong sales of gaming and technology products.

The full-year dividend was kept at 7.4 pence [12.3 pence] a share.

KBC Peel Hunt analyst John Stevenson believes HMV could get an 11.5% sales boost this year -- "perhaps more" -- following the collapse of rivals, and that this should outweigh structural concerns about the decline of its core CDs market and growing competition from the Internet and supermarkets.

"We believe the shares have been oversold on longer-term concerns, while HMV is set to dominate through its 'last man standing' advantage on the High Street," he said.

HMV has responded to its long-term competitive challenges by cutting costs and widening its focus. It has entered the live music and ticketing markets, is trialling digital cinemas in partnership with Curzon and selling mobile phones in a deal with France Telecom's Orange.

Questions? Comments? Let us know: @billboardbiz

Print