|Sanctuary issues trade loss warning
Thursday, September 22 2005
Music management business Sanctuary shocked investors when it warned it would plunge into the red following a deepening of its trading woes.
Sanctuary, whose portfolio of artists includes Sir Elton John and Beyonce, said it was likely to generate a trading loss before exceptional items - compared with market forecasts at the start of the year for profits as high as £30 million in the 12 months to the end of September 2005.
Negative headlines following three profits warnings in the last six months had an impact on the business, particularly on its records division.
The firm, which is also the UK's largest independent record company, said it still had the support of its bankers.
Executive chairman Andy Taylor said: "I am well aware that Sanctuary has disappointed the market significantly this year and, with hindsight, it is clear we grew too fast."
He said he was focused on repairing the "short-term damage" done to what was fundamentally a "robust" business and that the group would be supporting its artists throughout. Shares were 15% lower.
Sanctuary runs a global management business for music artists with stars such as Manic Street Preachers, Nelly, Morrissey and Iron Maiden on its books. It also owns the biggest live tour booking agency outside the United States and sells official merchandise.
It has been hit by delays to releases with its Urban division featuring rap and R&B artists. It said that a cost reduction programme aimed at turning round its fortunes was still on track to achieve £7 million to £8 million of annual cost savings.
The group said there was no update on its offer position, after it said last month that it was in talks with a number of parties about a "range of possible transactions", including a possible offer for the firm.
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