LONDON (Reuters) – Struggling music and DVD retailer HMV , which has been selling off assets in a bid to secure its future, said trading conditions were set to remain tough as it posted a 61 percent drop in annual profit.
The 90-year-old group, which has issued four profit warnings this year, said Thursday it made a profit before tax and one-off items of 28.9 million pounds in the 53 weeks to April 30, in line with its latest guidance.
After tax and non-cash impairments charges from the assets it has sold, it plunged to a loss of 121.7 million pounds.
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HMV has been struggling for years with the rise of digital downloading and cut-price competition from supermarkets.
Its (Paris: FR0010370163 – news) problems have come to a head this year with a downturn in consumer spending which has driven a string of retailers, including Focus DIY and Jane Norman, out of business, and led others such as chocolatier Thorntons (LSE: THT.L – news) to close stores.
HMV, which is trying to switch its emphasis to faster-growing markets such as new technology products, live music and event ticketing, secured its immediate future this month with a 220-million-pound refinancing deal with its banks.
It has also sold its Waterstone’s books chain and its Canadian arm to cut debts.
“We continue to operate in a challenging macro environment, and the core retail markets in which HMV trades also remain difficult,” it said.
“However, we have taken decisive action to restructure the group, and have a clear strategy for transforming HMV into a broad-based entertainment business.”
HMV shares, down 78 percent over the past year, closed at 10 pence Wednesday, valuing the firm at 48.5 million pounds.
(Reporting by Mark Potter)