MINISTRY of Sound, the iconic dance record label and nightclub co-founded and chaired by ex-City worker James Palumbo, doubled its pre-tax profits last year after reaching nearly £40m turnover for its core business, accounts show.
The company, which is made up of a record label, bar, publishing and clothing arms, said turnover for the 12 months ending December 2011 was £38.2m, with some £25m of this coming from its records. Healthy profits from its Ministry of Sound Licensing arm, the part of the business that licenses the brand around the world, helped more than double the business’s bottom line for 2011, clearing a £3.45m pre-tax profit.
The firm, which was set up as a nightclub near Elephant and Castle in 1991, continued its shift towards digital downloaded music in 2011, boosting digital music revenues by 28 per cent and improving overall gross margins on recorded music from 26.3 per cent to 30.4 per cent. Gross revenues for Ministry of Sound Group, which is separate from the licensing arm, fell due to the trend away from physical CD sales, which traditionally generate lower margins but higher income for labels. The firm’s nightclub operation also reported a 4.6 per cent rise in attendances last year offset by a two per cent rise in operating costs due to higher DJ fees. Accounts show clubbers spent an average of £26.90 on a night out at the nightclub, which was down two per cent on the year before.