Chrysalis hopeful of better second half

Chrysalis today said a string of upcoming releases from artists David Gray, Gnarls Barkley and Feeder would help offset a “weak” first half for the music group.

Chrysalis today said a string of upcoming releases from artists David Gray, Gnarls Barkley and Feeder would help offset a “weak” first half for the music group.

The firm, which recently sold its Heart and Galaxy radio business for €237m, said albums due out in the New Year, such as David Gray’s Greatest Hits, should keep profits on track to meet full-year forecasts.

Chrysalis’ upbeat outlook came as the group reported a near-trebling of pre-tax losses in the year to August 31, at €8.37m against €3.21m the previous year.

The group said it had been “a year of immense change” following the sale of its radio arm, which is due to complete in December.

A raft of management changes has left the group with a new board line-up, now headed by former Chrysalis Music head Jeremy Lascelles, who recently took over as group chief executive from Richard Huntingford.

Chrysalis Music delivered an “encouraging set of results”, with underlying earnings up 28% to €4.32m, according to the group.

But it said its wholesale entertainment distribution business Lasgo Chrysalis suffered a tough year as demand for CDs continued to wane.

It added it would continue to “carefully monitor” the division’s performance in light of the ongoing tough trading conditions for retail entertainment products.

Chrysalis has been at the centre of bid rumours after offloading its radio business and in August, founder and chairman Chris Wright was reported to have hired advisers to review options for his 26% stake in the firm.

The group has come under pressure amid the rise in popularity of digital downloading and declining sales of physical formats, such as CDs.

Illegal download piracy has also hit the entire industry hard, with fellow music group EMI also reporting hefty losses in its latest annual results.

However, music publishing is enjoying better fortunes, as music firms are able to make profits from royalties on back catalogues.

Chrysalis said the earnings lift in the Chrysalis Music division was largely thanks to strong results from music publishing.

Its top 10 royalty earners in the last financial year included OutKast, Blondie and David Bowie, said Chrysalis.

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