EMI hits new high with girl power
Sunday 25 May 1997
The music company, hived off last summer from Thorn-EMI, is on Tuesday expected to post annual profits of pounds 380m, up from about pounds 367m last year.
And the Spice Girls - whose debut album sold about 9 million copies in the UK and around 2 million in the US - deserve most of the credit. Girl power will help offset the adverse impact of the strong pound as EMI generates about 75 per cent of sales from outside the UK. "It's easily EMI's best- selling band," said Jason Crisp, an analyst with Societe Generale Strauss Turnbull.
Moreover, because the Spice Girls' album was their first effort, it is likely EMI will scoop a bigger chunk of the profits than from veteran acts with more clout.
"Selling 10 million Spice Girls albums is infinitely more profitable than selling 10 million Beatles discs," said Ivor Jones, analyst at Salomon Brothers.
EMI may not receive such big royalties from the Spice Girls' second album, due out later this year in time for the release of their movie.
Following the August split of Thorn-EMI, EMI Group includes the Virgin and Capitol record labels - with artists such as Janet Jackson, the Artist Formerly Known as Prince, and the Beatles - along with the HMV music store chain and Dillons bookstores.
EMI said in February it expected new albums by Blur and Jon Secada to bolster its release schedule in the final three months of the fiscal year.
"The third quarter was a bit disappointing, but the fourth quarter should have been much better," said Richard Harwood, an analyst with Collins Stewart.
The company will also reap gains from its music publishing business, which makes up about 25 per cent of annual profit.
EMI is the world's largest music publisher, with rights to music by artists including Nirvana, the Pet Shop Boys and Take That.
"If you look at the Billboard Top 200 and look at how many records EMI has, it's fairly weak in the US. If you look at it by publishing, it does practically every other title," said Mr Crisp.
Analysts say they expect the strength of the pound to cut profits. In February, EMI said the pound could reduce full-year profits by as much as pounds 25m.
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