HMV pins hope on returning to profit next year

 
Kasmira Jefford
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HMV yesterday said it was confident its focus on technology and the support of its suppliers and banks would help it return to profit this year despite posting steep losses for 2012.

The embattled music entertainment chain confirmed a loss before tax and exceptional items of £16.2m, compared with the same amount of profit last year, and in line with figures it had forecast in May.

Shares, which rose in early morning trading, closed down 1.37 per cent despite the group saying it expected to make a profit before tax of at least £10m for 2013 .

“The last year has been a difficult and challenging one for HMV and, as expected, this is reflected in our annual results”, said Simon Fox, HMV’s outgoing chief executive. He will be replaced by former Jessops boss Trevor Moore in September.

“However, we are confident that the actions we have taken will enable us to significantly improve cash generation and make profits of at least £10 million in the year ahead”.

Despite attempts to shift its focus away from CDs and DVDs to popular entertainment technology gadgets, sales fell 19.7 per cent to £923.2m, or 12.1 per cent on a like-for-like basis.

HMV expects sales of recorded music to fall by about 20 per cent in the next 12 months as consumers download more music and films online.

It said it still in discussions over the sale of its Live music arm, after selling the Hammersmith Apollo in May.