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."

PROMOTED VIDEO
News
ebooksNow available in paperback
Arts and Entertainment
Damien Hirst
artCoalition's anti-culture policy and cuts in local authority spending to blame, says academic
Arts and Entertainment
tv
News
i100
Arts and Entertainment
Kirk Cameron is begging his Facebook fans to give him positive reviews
film
Arts and Entertainment
Jason goes on a special mission for the queen
tvReview: Everyone loves a CGI Cyclops and the BBC's Saturday night charmer is getting epic
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

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin