EMI Group plc today (April 20) forecast a full-year rise in sales and profit on the back of strong across-the-business performances. In an unaudited trading update for the financial year ended March 3
EMI Group plc today (April 20) forecast a full-year rise in sales and profit on the back of strong across-the-business performances.
In an unaudited trading update for the financial year ended March 31, 2006, EMI said it was on track to report revenue gains in the region of 4% with group profit before tax, amortisation and exceptional items rising by around 12%.
The London-based company said its EMI Music division gained market share during the year through hits from frontline acts Coldplay, Gorillaz, Robbie Williams and the Rolling Stones, rising signings KT Tunstall, Dem Franchize Boyz and Corinne Bailey Rae and local acts in international markets, the company said in its statement to the London Stock Exchange.
The statement added that EMI Music Publishing had "another successful year" and expected to report constant currency revenue growth of about 2.5%.
In a separate note to investors, analysts from Citigroup described EMI's trading statement as "extremely strong," and admitted its downgrade on the company in March looked "poorly timed."
Stock in EMI was up more than 7% to £2.70 ($4.80) in morning trading. Analysts from UBS welcomed the trading update. "With the extra cost savings announced today, together with potential newsflow on a EMI-Warner Music merger, we would expect further momentum behind the shares," researchers from the investment bank wrote in a memo to investors.
Digital revenues during the year continued to generate rapid growth, EMI said in its statement, showing a rise of more than 150% at constant currency values to more than £110 million ($178 million). Digital music sales accounted for more than 5.5% of EMI Music's full-year revenues.
The music major has ploughed considerable investment in recent years into realizing its online ambitions. An upbeat EMI Group chairman Eric Nicoli told Midem delegates in January that EMI was "on track" to generate 25% of its revenue from the digital space by 2010.
The company also said it would restructure its business in Japan as part of its roll-out of initiatives involving most regions which are expected to generate £30 million ($53 million) in annualized cost savings. EMI said these plans are "focused on improving and re-aligning resources to ensure the organization remains flexible and progressive."
EMI Group will post its results on May 23.