New role for Rausing in Granta restructure
Granta proprietor and publi...
Philip Gwyn Jones leaves Granta
Philip Gwyn Jones, executiv...
Macmillan Education in ELT partnership with Knewton
Macmillan Education has ann...
EC urged to act over e-book 'ecosystems'
Booksellers from across Eur...
Customers should have free choice over e-book buying, says EIBF
There is no convincing tech...
HMV makes a profit from Waterstone's, as losses deepen
19.12.11 | Benedicte Page
The HMV Group made a profit of £11.5m from the sale of book chain Waterstone's, but the fillip did not prevent the CD and DVD retailer sinking further into the mire with operating losses for the six months to end-October up 25% to £30.4m after sales fell 18%.
Total sales were £364.9m, down 17.6% on 2010 (£442.7m). Like for like sales for the first half were down 11.6%, compared with a 15.5% drop in 2010. HMV sold Waterstone's to Alexander Mamut for £53m in June, and also sold HMV Canada at the same time. The trading loss from these two businesses in the two months before they were sold was £10.2m, leading to a loss from discontinued operations of £4.6m. HMV also booked a £9.3m exceptional loss for restructuring and refinancing, leading to a net loss of £50.1m.
The company, which has issued four group profit warnings this year, said the board was confident that the group would have "adequate resources to continue in operation for the foreseeable future". But it added: "the economic environment and trading circumstances create material uncertainties which may cast significant doubt on the group's ability to continue as a going concern in the future", saying the directors were in "regular and constructive discussions" with the group's banks.
Chief executive Simon Fox said: "This has been a challenging start to the year. However, we have taken decisive action to restructure the business and are now seeing the benefits of this, particularly in our technology products business. Like all consumer-facing companies we are facing tough trading conditions but we continue to press forward during this period."
Nick Hood, head of external affairs for financial health monitoring business Company Watch, said the announcement was "extremely worrying" for staff, suppliers, lenders and shareholders. "If the outlook for HMV wasn't so gloomy, we'd expect announcements like this to come out after the vital Christmas trading period," he commented.