One year in, HMV reaps benefits of recovery plan

HMV has announced that its turnaround plan is ahead of expectations, announcing a set of market-beating results. Reporting on continuing operations for the year ended April 26th, the group saw total sales growth of 11.3% including a like-for-like sales increase of 7.3%.
HMV out-performed the Waterstone’s division, with like-for-like sales at the DVD and music retailer up 11.4% compared to a 3.3% rise at the bookstore chain. Profit before tax and exceptional items for the group was up 25.2% to £56.6 million and net debt was “virtually eliminated” in the period, coming in at £0.2 million. These results exclude HMV Japan, which was disposed of during the year for £70.6 million.
The company also saw strong market share performance across all product categories in the year, with games and technology growing rapidly and now comprising 21% of all HMV UK & Ireland sales, up from 14% in 2007. A successful trial of the company’s next-generation HMV store formats will see a further roll out in 2008/09.
In a statement, chief executive Simon Fox said: “One year into our transformation plan, group profits are up by 25% and we are ahead of where we expected to be. We still have much to do, and whilst we are mindful of the challenging economic outlook, the current financial year has started in line with our expectations and I remain confident that we are building a better and stronger business that can prosper in a rapidly-changing market”.
The board also announced that non-executive chairman Carl Symon would be standing down in September after nearly three years.
Commenting, Mr Symon said: “As the foundations are firmly in place, it is an ideal time for me to pursue new interests”.