Boosey tunes up for growth

Despite being one of the best-known names in music publishing, Boosey & Hawkes had been largely neglected by City institutions until quite recently. That has changed as the group's unblemished profit record has become established. Profits have grown steadily since Richard Holland climbed aboard as chief executive seven years ago, rising from pounds 2.46m in 1989 to pounds 6.17m in 1995 after last year's 21 per cent increase reported yesterday. Since the beginning of 1995, the shares have outperformed the rest of the stock market by 68 per cent, after a further 43p rise yesterday to a new peak of 698p.

The price was spurred last year when the European Union harmonised copyright periods to 70 years. That decision, ratified by Parliament in December, extended copyrights in the UK and some other European countries by 20 years and gave a new lease of life to copyrights controlled by Boosey. Long-dead composers such as Rachmaninoff, Delius and Elgar will come back under the company's wing.

Boosey can take more than pounds 1,000 a night from a well attended opera at Covent Garden at which one of its pieces is used, quite apart from recording rights and sheet music sales. The group managed to squeeze juicy margins of 21 per cent out of the publishing business last year. This year should benefit from further margin expansion, although earnings will be held back by reorganisation at Bote & Bock, the German music publisher acquired earlier this year.

Most of the growth last year came from Boosey's instruments business, which saw underlying profits jump 14 per cent to pounds 4.18m. Concentration on margins and additional funds from the Lottery directed at brass bands in the UK boosted the business, but in the long term the excitement is likely to come from the rapidly growing Far Eastern market and expanding market share in the US. Victory in Boosey's long-running $200m claim against Walt Disney would transform the group, but the case remains bogged down in the US legal system for now. Profits of more than pounds 7m this year would put the shares on a heady forward multiple of over 30 and with US publisher Carl Fischer in effect sitting on over 50 per cent, they are hard to get hold of. A firm hold none the less.

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