HMV predicts return to profit
HMV has announced that it expects to post an annual pre-tax loss of £16 million for the 2011/12 year but predicts a return to profitability in the following year.
The struggling entertainment retailer blamed a very weak January and a poor new release schedule for its CDs and DVDs for the bigger than expected loss for the year ending 28 April.
Total sales declined by 18.3% in the year while like-for-like sales fell 11.7%. In the final 17 weeks of the year like-for-like sales dropped by 12.9%.
The company said it is "confident that it will return to profitability" and anticipates reporting a pre-tax profit of £10 million for its next financial year due to the "disruption" to rival GAME and the "changed nature" of its relationship with its suppliers.
HMV said that the strategic review of its 'Live' business was "ongoing".
Commenting on the results, chief executive Simon Fox said: "The last year has been a difficult and challenging one for HMV and this will be reflected in our annual results. However we are confident that the actions we have taken will enable us to significantly improve our profit and cash generation in the year ahead."
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