HMV cuts dividend as losses widen

 
City A.M. Reporter
Music, DVD, games and books retailer HMV posted a worse than expected widening in first-half losses, blaming a sharp fall in sales on weak entertainment markets.

The group said it was cutting its dividend and cautioned that despite more encouraging trading at the beginning of its second half, the start to Christmas trading had been undermined by the severe weather of the last two weeks.

"The outcome of our full financial year will be largely determined by the next four weeks of the key Christmas trading period, which together with the final four months of our financial year, account for 60 percent of our full year sales," said the firm.

The group, which trades from over 730 HMV, Fopp and Waterstone's stores, made an underlying pretax loss of £41.3m for the six months to 23 October.

That compares with analysts' consensus forecast of a loss of £38-39m, according to a company poll, and a loss of £24.9m in the same period last year.

HMV traditionally makes all its profit in its second-half, which includes the crucial Christmas trading period.

Sales fell 6 percent to £749.5m, with sales at stores open over a year down 11.5 per cent.

The firm, which ended the period with net debt of £151.6m, said it had reviewed its dividend policy and halved the interim payout to 0.9 pence