EMI blame album delays for profits fall

Music giant EMI today blamed delays in releasing new albums by Coldplay and Gorillaz for falling profits and market share.

Investors and music fans had expected the albums to hit store shelves during the year to March 31, but were frustrated as the bands fine-tuned the material before sanctioning their release.

The Demon Days offering from Gorillaz – led by Blur frontman Damon Albarn - went on sale on Monday while Coldplay will unveil their long-awaited X&Y album to the public on June 6.

Both are expected to be blockbusters and investors hope they will be able to recover the 7.4% drop in sales at EMI Music over the past year, when lower than expected demand from shops for past releases by the group’s artists also hit it.

EMI said today that pre-tax profits fell 13.1% to £141.9m (€206.2) – in line with guidance given to the market in April – as its share of the music market dropped from 13.5% at the start of the financial year to 12.9% by the end of it.

This was despite EMI releasing the sixth best-selling album of 2004 with Robbie Williams’ Greatest Hits becoming a chart-topper in 18 countries and shifting more than six million copies.

Other successes cited by the group included teenage soulstress Joss Stone whose latest album Mind, Body & Soul sold 2.8 million units and ongoing demand for earlier releases by Norah Jones.

Digital sales now account for 2.5% of group revenues as the boom in MP3 players such as iPods continues and more consumers download tunes online legally.

EMI chairman Eric Nicoli said the trading environment remained challenging even though the global recorded music market fell only 1% during the year compared with the 5.6% decline of 12 months earlier.

This slowing rate of decline owed much to the development of the digital music market and Mr Nicoli said it was confident this “will drive the industry forward at attractive growth rates in the coming years”.

Analysts at Barclays took a more cautious view: “Digital should support group sales and margins over the next few years, although at this stage it is difficult to quantify by how much and whether the growth will be able to totally offset the decline in physical sales.”

The breakdown of today’s figures show turnover at EMI Music Publishing, which has the rights to more than one million musical compositions, was 4.9% higher during the year.

Across the group, turnover fell by 5.1% to £1.94bn (€2.82bn).