A rise in streaming and strong release schedule helped grow revenues at Universal Music U.K. to just over £344 million ($458 million) in 2017, up 8.8 percent on the previous year, according to the company’s latest financial report.
Product sales contributed over £188 million ($250 million) to that total, while royalties generated £155 million ($206 million). As to be expected, domestic sales made up the vast majority of its annual revenues (£242 million), but there were also significant gains in Europe (£39 million, up 32 percent year-on-year), the United States (£41 million, up 30 percent) and the rest of the world (£22 million, up 30 percent).
As a result, gross profit climbed from £95 million to £107 million for the year ending Dec. 31, 2017, led by big-selling releases from Michael Ball and Alfie Boe, Take That and Sam Smith, whose sophomore set The Thrill Of It All has sold over 3.5 million copies worldwide to date, according to UMG. Those releases helped Universal grow its share of the U.K. albums market to over 35 percent in 2017, landing seven of the year’s 20 biggest-selling albums.
Despite those gains, a £41 million deficit in “interest payable and similar charges” meant that the London-based company -- which includes the labels Virgin EMI, Island Records U.K., Capitol Records U.K., Polydor and Decca -- posted an overall loss of just over £16 million after tax, compared to £13.7 million the previous year.
Its total comprehensive loss for 2017, factoring in “re-measurement of defined pension scheme,” was listed as £27 million.
The year-end accounts, which were filed to Companies House, also reveal that Universal Music U.K. spent nearly £15.7 million acquiring controlling stakes in the labels All Around The World, RG2016 Ltd (aka Strange Music), Stiff Records and ZTT in 2017.
Contractual commitments for artist advances totaled just under £35 million (£9.4 million of which relates to the following financial year) with £380,000 spent in charitable donations.
Meanwhile, directors pay totaled £5.4 million (down from £7 million in 2016), with the highest paid director earning £4.1 million excluding pension contributions (down from £5.8 million). Looking ahead, the board of directors said in the filing that they consider the “outlook for future years is positive as the expectation is for continued growth in demand for streaming services.”