Blockbusters from Coldplay, Gorillaz and the Rolling Stones plus ongoing growth in digital revenues underpinned a “successful” first half set of results at EMI, the London-based major music company said today (Nov. 16).
“We bucked the trend, essentially, with great music,” EMI Group chairman Eric Nicoli said in an interview streamed on the listed company’s corporate Web site.
On the strength of today’s results and a raft of frontline releases in the second period, Nicoli said the British group is confident on its full-year prospects. “It’s too early to know how Christmas will go but we have very strong release schedules in both our recorded music business and our publishing business and we feel confident that, in the full year as a whole, we will make good progress,” he commented.
Nicoli said the company is looking for continuing bumper sales of Robbie Williams’ Billboard European Top 100 Albums chart-topper “Intensive Care.” The company says the album has shipped about 3.5 million units since it streeted internationally in late October. EMI’s second-half line-up includes album releases from Kate Bush, Depeche Mode, Massive Attack and Beastie Boys.
In the six months to Sept. 30, group profit from operations rose by 12.6% to £86.7 million ($150 million). At the same time, EMI Group saw sales improve to £924.6 million ($1.6 billion), up 5.8% compared to the same period last year. Stock in EMI closed up 4.63% to 226p on Wednesday.
In a research note, investment bank Numis Securities said EMI’s first half “looks strong and the company looks on track to meet its full-year targets.”
The results were boosted by sales of “X&Y” and “Demon Days,” the delayed hits from Coldplay and Gorillaz, respectively. EMI’s stock tumbled in February when the company warned investors that the pair of records would drop in the first half of the 2005 financial year.
“EMI Music’s sales grew by any measure and, had we released the Coldplay and Gorillaz albums on the original timing, in the last quarter of the last fiscal year, we still would have seen constant currency sales growth in the first half,” explains Nicoli.
EMI also said its expenditure on building a digital music infrastructure was beginning to pay off. Digital revenues accounted for some 5.8% of the total group revenue pie in the first half — or £44.6 million ($77 million). In the same period last year, digital sales generated only 2.1% of group revenues.
“We have always recognized that digital will, to some extent, cannibalize against physical but we firmly believe that digital growth will outstrip physical decline in due course,” Nicoli adds.
Nicoli would not be drawn into ongoing rumors of a tie-up between EMI and Warner Music. “It is not a new idea, the speculation is ever-present and I have never seen much merit in fuelling that speculation,” he said. “EMI is sharply focused on creating value for its shareholders and I think we are making good progress in that regard.”
