Failed Warner Music talks cost EMI £6m

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The Independent Online

EMI's failed attempt to buy Warner Music earlier this year cost the music company more than £6m, the world's third largest music group revealed yesterday.

The £6.2m exceptional charge added to restructuring costs of £33.5m in the first half for EMI. Overall, its revenue fell 4.1 per cent to £867.9m while profits before tax more than halved to £18.6m, compared with £41m last year.

EMI believes it sales this year will be boosted by strong sales of albums over the Christmas period from big-name artists Robbie Williams, Norah Jones, Joss Stone, Moby and a new collection from The Beatles, mixed by Sir George Martin, to be used in a new Cirque du Soleil show. Eric Nicoli, the chief executive, yesterday said The Beatles "mash-up" album, to be released on Monday, was "extraordinary and difficult to imagine".

The interim figures also suffered from comparison with strong sales of albums from Coldplay and Gorillaz in the first half of last year.

Mr Nicoli argued yesterday that EMI has a "bright future" as an independent company, despite the costs of its failed merger with Warner Music. It was abandoned after European courts annulled the 2004 regulatory clearance of the merger between Sony and BMG.

Patrick Yau, an analyst at Bridgewell Securities, said that the company needs three "blockbuster" albums over the Christmas period that sell around 3 million units if it is to match market expectations for the full year.

Digital sales at EMI increased nearly 80 per cent in the first half and accounted for more than 9 per cent of its total revenue. It expects to derive a quarter of its revenue from digital sales by 2010.

From January, all of EMI's CDs will also contain extra content that can be unlocked using a computer.

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