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No sanctuary for troubled music group
Friday, January 26 2007 |
The troubled music group Sanctuary warned on January 26, 2007 that it will be next year or later before it returns to the black.
The warning came as the <>company, which is Morrissey's record label and manages Sir Elton John and James Blunt, said it had run up an operating loss of £56.7m in the year to September 30, 2006.
This compared with £136m the previous year. Revenues dropped to £133m from £148m. The figures include £8m of refinancing and restructuring costs.
Sanctuary's new bosses - former British Airways chief Bob Ayling and Frank Presland, the chief executive of Sir Elton John's management company, acquired by Sanctuary in 2005 - have been busy revamping the group's businesses, which range from recorded music through artist management to merchandising.
"These results highlight the difficult position that the group was in," Mr Presland said. "We now have a new business strategy, with the group divided into three autonomous divisions, each focused on its own profit and cash generation.
"Under this new structure, and following a significant cost-reduction programme, we believe that all three divisions will demonstrate improved performance in 2007, although it will be 2008 or later before there is a return to overall profitability."
Sanctuary has plunged further into the red after a poor performance from the 49%-owned indie label Rough Trade. The group is now trying to sell off the loss-making label as well as other parts of the business, but is not believed to be in talks at the moment.
It said in November 2006 that it had received a number of offers for several of its businesses and that it would consider them after its annual results.
Last year Sanctuary rebuffed a takeover approach from the rock management company behind the Kaiser Chiefs after issuing a string of profit warnings and launching a £110m rescue refinancing in the spring. The group has been hit by delays in album releases by loss-making Urban Records, which it bought in 2003 from Beyonce's father Mathew Knowles.
Mr Ayling said today: "This has been a turbulent year for Sanctuary and a very disappointing one for its shareholders, but I believe the company is in a better position now than it was when the new board was appointed in April 2006."
The shares edged 0.25p higher to 12.25p in early trading.
Sanctuary sounds another discordant note Friday, November 3 2006 at 16:25:12 Mercuriadis splits with Elton Wednesday, November 1 2006 at 08:02:53 Sanctuary set to rebuff rival Tuesday, July 25 2006 at 09:07:57 Sanctuary hits low note Saturday, June 24 2006 at 12:03:57 Presland new Sanctuary chief executive Saturday, May 27 2006 at 19:53:12 Sanctuary outlines rescue plans Tuesday, January 31 2006 at 04:48:22 Sanctuary to raise up to 130 million pounds Monday, December 5 2005 at 12:14:57 Sanctuary warns of 'serious loss of capital' ahead of accounting review Sunday, October 30 2005 at 08:20:35 Sanctuary cuts a quarter of staff Monday, October 10 2005 at 15:40:01 Sanctuary issues trade loss warning Thursday, September 22 2005 at 06:35:01 Elton Sells Management Company in £16million Deal Saturday, April 2 2005 at 01:09:37
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