U.K.-based specialist retailer HMV Group says it expects its annual profits to reach the top end of market forecasts and its debt to be lower than previous estimates.

U.K.-based specialist retailer HMV Group says it expects its annual profits to reach the top end of market forecasts and its debt to be lower than previous estimates.

In a trading update for the 52 weeks ended April 24, 2004, the retailer says its positive outlook is underpinned by strong sales in its main British businesses.

HMV says strong trading had continued since Christmas, albeit against weaker comparatives for last year. The group also notes its cash generation had been stronger than anticipated and it would end the year with borrowings "materially better" than market expectations.

Meanwhile, HMV plans to open about 30 new stores in the new financial year, a similar expansion as last year. It also confirms it is shuttering three U.S. stores by the end of the calendar year to concentrate in North America on its Canadian business.

HMV stock was up slightly at 226.5p in early afternoon trading on Thursday.