Thorn EMI explores avenues in multimedia: Group may expand CD-ROM business and move into publishing

THORN EMI, the music, rental and HMV retailing group, is exploring a move into book publishing and an expansion of its interest in CD-ROMs to bolster its position in the multimedia marketplace.

Simon Duffy, group finance director, said yesterday that Thorn had examined several avenues of expansion - such as the management of copyright, where because of its success with EMI Music, it felt it held a competitive advantage.

'We looked at films and software but if we were to move, it would be more likely to be in book publishing. Music and book publishing require similar skills in picking artists and authors, editing, handling advances and royalties and managing physical distribution.'

Many EMI artists want to put out music videos on CD-ROM, he said, and EMI will this year release products by the Beach Boys and the Rolling Stones. Music also plays a part in educational CD-ROMs, and Thorn would want to work with the software companies concerned.

Thorn recently established collaborative investments in music television channels and digital cable radio in Europe and the US, partly to protect its music from copyright piracy, which is reckoned to cost the music industry dollars 2bn a year.

Thorn reported a rise in pre-tax profits from pounds 273.5m to pounds 326.5m for the year to March after a fall in exceptional charges from pounds 51.9m to pounds 17.7m. The final dividend is increased by 8.7 per cent to 25p making a total of 34p against 32p.

Thorn is focusing its efforts on the core businesses of EMI Music, Thorn Group rental and HMV music retailing, which increased operating profits by 21.5 per cent to pounds 382.4m and lifted margins from 9.8 per cent to 10.4 per cent.

But group operating profits rose by less than 1 per cent to pounds 382.5m because of a pounds 13.1m slump into losses of pounds 11.6m at Thorn security and electronics and the loss of profits from businesses sold, including Thorn Lighting and a majority stake in Thames Television.

Divestments last year raised pounds 192.3m, and analysts speculated that the sale of Thorn's security and electronics businesses could raise up to pounds 130m.

EMI Music lifted operating profits by 25 per cent to pounds 246.1m on a 17 per cent sales increase to pounds 1.76bn, including a pounds 90m contribution from Virgin, bought for pounds 560m in March 1992.

Thorn Group rental increased profits to pounds 130.2m as margins improved slightly from 8.3 per cent to 8.6 per cent, while HMV more than doubled profits to pounds 6.1m on sales of pounds 404m.

Sir Colin Southgate, chairman, said: 'These results underscore our belief in the considerable potential of these businesses.'

(Photograph omitted)