Sanctuary Reports Annual Growth

Morrissey set boosted revenues.

Sanctuary Group today (Jan. 27) reported increased full-year revenues, which the British independent attributes to investment in its core artist management, recorded music and merchandising activities.

For the year ended Sept. 30, 2004, earnings before interest, taxes, depreciation and amortization grew to £24.8 million ($46.7 million) from £22.8 million ($42.9 million) in the previous year, excluding discontinued activities.

Revenues swelled 45.7% to £220.9 million ($416 million), thanks in part to the success of Morrissey's first album for the company, "You Are the Quarry," which Sanctuary says has sold almost 1 million copies worldwide. Recorded music product accounted for £127.3 million ($239.7 million) in revenues, up from £78 million ($146.8 million) in the previous year. EBITDA from recorded music rose to £18.9 million ($35.5 million) from £16.6 million ($31.2 million).

"Not only is Morrissey's album a terrific part of our results, but it is a terrific vindication of our 360 degree model, because we're his manager, his record company, his merchandiser and his agency," Sanctuary Group CEO Merck Mercuriadis tells Sanctuary also arranged a sell-out tour for the former Smiths frontman.

The London-based firm's artist-services division accounted for sales of £87.7 million ($165 million), up from £63.8 million ($120 million) in 2003, with EBITDA rising to £8.2 million ($15.4 million) from £4.7 million ($8.8 million).

The management, live agency and merchandising units each achieved strong results, says Sanctuary. Although music publishing recorded a small operating loss, Mercuriadis is optimistic that the signing earlier this week of Axl Rose will help turn that business around.

Two days ago, Sanctuary warned investors on a £2.1 million ($3.9 million) loss at its book-publishing unit and said it would make an £11 million ($20.7 million) provision in connection with the 2003 sale of its TV business, Cloud 9.

Looking ahead, Sanctuary is preparing a new album by Robert Plant -- who is also a management client -- for an April/May release.