Interim Management Statement for the 18 week period from 1 April to 6 August 2007
EMI Group plc (“EMI”) is today issuing its first Interim Management Statement as required by the Disclosure Rules and Transparency Rules of the Financial Services Authority. For the first quarter of this financial year, EMI reports the following results which were in line with its expectations:
* EMI Group total revenue at constant currency declined by 5.1%, reflecting the tough market conditions experienced in the recorded music market.
* EMI Music revenue at constant currency declined by 13.4% due to the difficult market conditions and EMI’s light release schedule in the quarter when the restructuring programme was also being implemented. Digital revenues increased by 26.0%, while physical revenues declined by 19.8%.
* EMI Music Publishing revenue at constant currency increased by 11.9%. This was partly as a result of litigation settlements, although mechanical revenues are holding up well in the face of significant declines in the recorded music markets and synchronisation revenues have had a strong start to the year. Digital revenues increased by 13.2%, while physical revenues increased by 11.9%.
* The cost savings from the previously announced restructuring programmes are being delivered on budget.
During the quarter, EMI completed the acquisition of the 45% shareholding in Toshiba-EMI Limited (“TOEMI”) previously held by Toshiba Corporation for a total cash consideration of JPY 21,000m (approximately £93m) as a result of which EMI now owns 100% of TOEMI. TOEMI has been renamed EMI Music Japan.
In late May 2007, iTunes launched EMI’s DRM free products on iTunes plus. Early revenue indications for this initiative are encouraging.
It was announced on 21 May 2007 that the boards of directors of Maltby Limited (“Maltby”) and EMI had reached agreement on the terms of a recommended cash offer by Maltby to acquire the whole of the issued and to be issued share capital of EMI (the “Offer”). The Offer Document was posted to EMI Shareholders on 30 May 2007. On 1 August 2007, the board of directors of Maltby announced that the Offer had become unconditional as to acceptances and will remain open until further notice, and that the Conditions set out in paragraphs 1(b) and 1(d) of Part A of Appendix I to the Offer Document (being the conditions relating to the EC Merger Regulation and the US Hart-Scott-Rodino Antitrust Improvements Act of 1976) had already been satisfied. The Offer remains subject to the further Conditions set out in paragraphs 1(c) and 1(e) to 1(i) of Part A of Appendix I to the Offer Document.
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