Chrysalis to set up new record company

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CHRYSALIS GROUP, which made a pounds 10m profit selling its record company to Thorn EMI, is to invest around pounds 2m a year in setting up a rival record company, writes Jason Nisse. It will be headed by Steve Lewis, who recently left Virgin Records, which was bought by Thorn EMI for pounds 560m earlier this year.

Chris Wright, Chrysalis's chairman, said the group was expanding in the areas of music and television but these ventures were only just starting to make profits.

The group made an operating loss of pounds 4.79m in the year to 31 August, compared with a loss of pounds 1.84m in the previous year. Most of this came from the fruit machines business, which lost an estimated pounds 3m.

The profit from the record business sale meant pre-tax profits were pounds 5.63m, compared with a loss of pounds 9.33m, and earnings per share were 26.0p against a loss of 30.1p.

The group is currently scoring a success with its televising of Italian football and is hoping to bring US IndyCar racing to British screens after securing a deal with Nigel Mansell, the world champion. The shares rose 5p to 75p.