Earnings: HMV Grows Online Sales, Lambasts ‘Ineffective Govt’
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HMV (LSE: HMV) profit rose 18.5 percent to £44.2 million in the year to April 2009, after 4.4 percent better sales of £1.95 billion. Online, HMV.com sales were up 16 percent and Waterstones.com up 60 percent.
Waterstones.com has an exclusive deal to deliver ebooks to Sony (NYSE: SNE) Reader - HMV declared itself “pleased” with an “encouraging” number of downloads, though no numbers are given and they were obviously from a low base. Waterstones.com lost 0.4 percent market share thanks toonline competition.
HMV.com now sells DRM-free MP3s and other content. The outfit is making good progress on a three-year plan to re-invent itself, but chairman Robert Swannell, in his statement, said: “It will not be simple to transform the business against the backdrop of rapid changes in digital technology, online channels and competition from the major supermarkets. In the absence of effective government action, we must also face up to competition from the free illegal digital market.”
—Games and tech products rose to 24 percent of sales, from 14 percent in 2007, after introducing a pre-owned buy scheme.
—Blu-ray now makes up a fifth of sales in HMV’s “visual” category.
—Music sales increased five percent - bucking the UK trend of three percent decline.
—The company saved £16 million in the year.
—It raised £24 million for future investment through a five percent equity share placing
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