EMI shares dip as albums delayed

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The Independent Online

EMI dealt a blow to music fans and investors today after it said albums by two of its major bands would not be released until April at the earliest.

EMI dealt a blow to music fans and investors today after it said albums by two of its major bands would not be released until April at the earliest.

The music giant said the latest offerings by Coldplay and Gorillaz would miss expectations for being on sale in the financial year to the end of March.

EMI added that re-orders - the demand from shops for its previously released titles - had been lower than expected in January, leaving forecasts for annual sales from its music division between 8 per cent and 9 per cent lower than a year earlier.

The company also told investors it would not maintain market share for the year and that annual profits for the group would be in the region of £138 million, down on City expectations and the £163.4 million of last time.

The blow to investor confidence sent shares down 15 per cent to 240p.

EMI did not provide a reason for the delays with the two album releases, but added they were now scheduled for the six-month period to September.

Alain Levy, chairman and chief executive of the EMI Music division, said major releases in the last few months had been successful, but pointed out that creating and marketing of new products was "not an exact science and cannot always coincide with our reporting periods".

He added: "Whilst this rescheduling and recent softness is disappointing, it does not change my views of the improving health of the global recorded music industry."

The company said its music publishing arm, which holds the rights to more than one million musical compositions, continued to perform well.

EMI said it expected the trend for sales, particularly in re-orders, to remain weak during February and March.

In November, EMI offered some hope that it was winning the war against piracy after sales of downloaded music surged six-fold over the summer.

It also unveiled profits of £36.9 million in the six months to September 30, up 9 per cent on a year earlier at constant exchange rates.

The improvement in profitability was driven by a reduction in its number of artists, the merger of record labels and the outsourcing of manufacturing operations in the US and Europe.

EMI added today that savings from the restructuring are running ahead of schedule. It is now expecting to deliver £35 million of improvements in this financial year - £10 million more than first thought.

The remaining £15 million of savings will be realised in the next financial year.

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