High US volume boosts Polygram

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The Independent Online
SUCCESS in the tough US market helped lift Polygram's interim net profits by 16 per cent to 171m guilders ( pounds 54.8m) from 147m guilders a year earlier. Artists including Def Leppard and Billy Ray Cyrus boosted interim sales in North America by 46 per cent to 663m guilders in the half year from 454m guilders last year.

Worldwide sales rose by 10 per cent to 2.98bn guilders from 2.71bn in the first half of last year. Outside North America, sales of Lionel Richie's Back to Front album topped one million, exceeding expectations. Elton John's The One also passed the one million mark by the end of June while 1991 hits including U2's Achtung Baby and Tears for Fears' Greatest Hits have each sold another million copies this year.

Classical bestsellers included Placido Domingo, Jessye Norman, Luciano Pavarotti and Dame Kiri Te Kanawa. The best- selling video in the first half of the year was Decca's Three Tenors, recorded in 1990.

The Olympics have played their part in Polygram's fortunes, with Polydor releasing the games anthem, Sir Andrew Lloyd Webber's 'Amigos Para Siempre'. Sir Andrew's Really Useful Holdings, in which Polygram has a 30 per cent stake, performed strongly in the first six months.

The London-based Polygram, in which Philips of the Netherlands has an 80 per cent stake, is quoted on the New York and Amsterdam stock exchanges. Earnings per share in the six months to 30 June rose to 1.01 guilders from 0.86 guilders at the same stage last year.

Polygram has been expanding rapidly into the film business, which it said should account for 25 per cent of turnover within five years. Earlier this week the company said it would pay dollars 35m ( pounds 18.5m) for a 51 per cent stake in Interscope, a Hollywood film production company. The deal, the latest in a series of forays by Polygram into the film world, will be used to set up a global production and distribution business.

A spokeswoman for Polygram said: 'The prime focus now is to find and develop new talent, whether that is in music, film or theatre. In entertainment that is as important as acquisitions.'

Alain Levy, the president and chief executive officer of Polygram, said that while there is little sign of an end to economic recession worldwide, 1992 would be another year of progress. He said that investment in compact disc manufacturing had resulted in improved margins and would help the company keep its competitive edge.

Planned new releases include Sir George Solti in celebration of his 80th birthday as well as albums from Bon Jovi, Suzanne Vega and Cathy Dennis.

The company is also expecting a boost from the new Digital Compact Cassette system, which Philips is launching in October to take advantage of the pre-Christmas rush. DCC will provide the same sound clarity as compact disc but will also be able to play existing cassettes.