New artists, cost cuts and digital growth cheer EMI

EMI overcame an 11.4 per cent fall in sales to deliver increased profits and margins in the six months to the end of September, it announced yesterday.

EMI overcame an 11.4 per cent fall in sales to deliver increased profits and margins in the six months to the end of September, it announced yesterday.

With releases in its second half from Robbie Williams and newer artists such as Chingy and Perfect Circle, the company said turnover for October and November was well ahead of last year and that it had maintained its market share.

Other new releases include a greatest hits collection from Tina Turner and a live album from the Rolling Stones. Eric Nicoli, the EMI chairman, said: "It's important not to be smug but I think nobody imagined that with the kind of sales declines that are inevitable, given the shape of our release schedule and the currency hit, that we could deliver profit and margin improvements."

Headline sales were down from £960.3m to £851m for the half-year. However, stripping out the negative effects of a weakening dollar, turnover was down 5.4 per cent.

Ignoring currency movements, operating profit was up 8.1 per cent to £80.1m and pre-tax profits rose 9 per cent to £39.8m. Another positive development for EMI was the growth of digital music sales, which includes people downloading music files over the internet and mobile phone ringtones.

EMI said group digital sales rose fourfold. "You don't have to multiply that many times before it becomes a significant share of the total. Eventually we think digital music sales in all their forms could account for 25 per cent of the music industry," Mr Nicoli said.

Over the past two years, EMI has been shrinking its business as the music industry has been hit by a sales slump caused partly by piracy and illegal downloads but also because release schedules across the industry have been poor.

The big record companies have been refocusing their rosters on fewer artists which they believe have a chance of achieving a longer shelf-life and slashing costs.

"When you take 2,000 people out of your business you will inevitably have fixed cost reductions. But the other element is efficiency improvements. We had 2 per cent gross margin improvement in recorded music. That's managing the variable cost line more efficiently. That's where people underestimated us," Mr Nicoli said.

The company has embarked on an efficiency drive centred on its marketing spend. "This wasn't mindless cutting of the marketing budget but being more thoughtful about the way we invest and making use of better information systems and being more responsive to what's happening in the market," Mr Nicoli said. "We could have released Robbie Williams in September, not October, but to do so would have meant marketing it twice; once for the launch and then again for Christmas."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Life and Style
Suited and booted in the Lanvin show at the Paris menswear collections
fashionParis Fashion Week
News
i100
Arts and Entertainment
Kara Tointon and Jeremy Piven star in Mr Selfridge
tvActress Kara Tointon on what to expect from Series 3
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
News
An asteroid is set to pass so close to Earth it will be visible with binoculars
news
News
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project