HMV, the UK’s leading music retailer, reported yesterday a 25 per cent jump in pre-tax profits. The company told investors its recovery is on track after the first year of its three-year turnaround plan.
Strong video game sales helped pre-tax profits soar to £56.6m, up from £45.2m in 2007. Games and technology sales rose 7 per cent, helped by the popularity of gamer favourites such as Grand Theft Auto and the Nintendo Wii. The sector now accounts for 21 per cent of HMV’s UK and Ireland sales.
The positive results come as a relief to investors after the previous year’s 70 per cent slide in profits.
The three-year plan, which was implemented in March 2007, was launched with hopes to revitalise instore business amid a declining market for hard-copy music.
Retailers have faced a challenging climate as more consumers turn to supermarkets and Internet vendors for purchases. The first year has proved successful, with sales climbing from £1.68bn to £1.87bn.
“I remain confident that we are building a better and stronger business that can prosper in a rapidly changing market,” chief executive Simon Fox said.