Mergers: Still like a Virgin at Thorn EMI: The record company's free-wheeling ethos has survived and thrived. Roger Trapp reports

KEN BERRY could be forgiven for feeling pleased with himself. A little over a year after his company was bought by Thorn EMI, the head of Virgin Records is - for now at least - confounding his critics.

The former independent made an impressive contribution to EMI Music's last financial year, recording profits of pounds 53m in 10 months out of a total operating profit for the division of pounds 197m. It has also got off to a good start this year.

With the final piece of the momentous pounds 560m deal due to take place tomorrow - the acquisition of Virgin's UK record- distribution business - the company that once formed a key part of Richard Branson's empire has plenty to celebrate. For a start, the latest record from old-stagers UB40 went straight to the top of the UK album charts.

Closer to Mr Berry's heart, though, is the performance of the much-vaunted (and saucily covered) Janet Jackson album. He himself signed the pounds 27m deal that brought Michael's kid sister to the label in 1991 - and which many thought would break it. On the back of one single and a heavy marketing effort, the record has sold more than 4 million copies around the world in a matter of weeks. This is more than half the total achieved by her previous biggest seller after seven singles.

While the lack of a bass player and thus a new record means the jury is still out on his other big signing - the ageing Rolling Stones and much of their back catalogue for around pounds 20m - he is anxious to correct any perception that the deals were made to prepare the company for sale.

'When we made them, we didn't know the company would be sold. We thought we would have to carry them as a private company,' he said.

Some who doubted the wisdom of EMI's purchase of Virgin acknowledge what has been achieved since June last year - while keeping an open mind on the future. 'They have done better than I expected,' said Societe Generale analyst Jason Crisp, who put out a 'sell' note on Thorn EMI shares last October. 'But they are going to have to sustain that.'

With the maturing of the CD market and other factors likely to produce slower growth than the business has enjoyed recently, this could prove difficult.

For now, everyone seems surprised at how rapidly the EMI 'suits version of the record business' and the Virgin 'tennis shoes and blue jeans' approach have learned to live together. Jim Fifield, EMI's worldwide music supremo, said this has largely been due to getting the 'horrible part of the acquisition' - the lay-offs and the cuts in the artists' roster - over with quickly.

It was not all plain sailing. Mr Fifield admitted that the combined operation had 'stubbed our toe' through the delayed introduction of a new distribution system. And there were other pressures involved in transferring the manufacturing side to EMI plants.

Mr Berry also accepts that many people who had spent most if not all their working lives at Virgin were scared about what would happen. But he said employees were able to come to terms with the events reasonably quickly.

He even downplays the importance of the departures of Simon Draper, widely regarded as the heart and soul of the record side at Virgin, and Mr Branson. It was always intended that Mr Berry - one of the quiet people in the industry and, because of his interest in the financial side (and sober appearance), assumed to be an accountant - would run the business once sold, he said.

But these were not the only senior people to go. Among the 80-odd departures were the heads of A&R, publishing and the international division.

Mr Berry made enough money from Virgin's short-lived stock market flotation and the EMI deal to join the exodus and never have to work again. But he stayed, he insists, because there is still nothing he would rather do. As a deal-maker, he felt his priority was to ensure that the free-wheeling Virgin way of doing things did not become subsumed within the Thorn EMI conglomerate. He said he simply told Mr Fifield that there was no point in 'buying Virgin to make it a clone of EMI' - and Mr Fifield agreed.

The EMI Music chief pointed out that he tries to maintain 'some degree of autonomy' with all of the labels in the company's fold, including the more recently acquired Christian music label, Sparrow.

As Mr Berry says, this is more likely to remain the case when all is going smoothly. For now, he is 'glad it seems to be paying off rather well'.

(Photograph omitted)