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HMV profit up 18 per cent

HMV met forecasts with an 18 per cent rise in year profit and said its plan to transform the business into a broad-based entertainment brand is making progress.

The music, games and DVD group, which runs over 400 stores under its own name as well as 314 Waterstone's bookstores, made an underlying pretax profit of £74.2m for the year to 24 April.

HMV faces the same competition from supermarkets, online retailers and digital downloading that caused rivals Woolworths, Zavvi and Borders UK to fall during the recession.

It has responded by cutting costs and widening its focus, targeting earnings growth by increasing sales of new products in music, visual and games and raising its presence in live music and ticketing.

Group sales rose 3.1 per cent to £2.02bn. However, sales at HMV UK and Ireland stores open over a year were down 2.4 per cent, while like-for-like sales at Waterstone's fell 6.2 per cent.