POPULAR TOOLS

Good publishing revenues give hope to EMI

Mon Nov 23 2009, 08:41 AM UTC

Revenues from EMI's publishing division were up 14.6% for the financial year ending March 2009, according to new figures published by the major label. EMI claims ongoing discussions between owner Terra Firma and the label's lender mean it is "not appropriate to publish an annual review". However, the limited figures, coupled with full-year details for its recorded music division, show that EMI's overall group revenue rose 7.4% year-on-year, while earnings before tax and interest were up by more than 80%.

The news comes a week after Terra Firma reportedly wrote down its investment in EMI by a huge 90% after Citigroup refused to write off GBP1bn (USD1.7bn) of EMI’s GBP2.6bn (USD4.4bn) loan. Terra Firma chief Guy Hands was reportedly hoping to reach this agreement in return for pumping an extra GBP1bn (USD1.7bn) into the label. But reports suggest Citigroup felt the terms of the refinancing were too generous towards Terra Firma.

According to EMI's latest figures, the publishing arm of the business made GBP468m (USD777m) in sales during the financial year 2009, compared with GBP409m (USD679m) for the year earlier. The publishing group's earnings before interest, taxes, depreciation and amortization (EBITDA) rose 19.5% over the same period, coming in at GBP135m (USD224m).

Combined with revenues and EBITDA profits from EMI's recorded music business, which were first announced in May, EMI's overall group revenue rose 7.4% to GBP1.56bn (USD2.59bn) for the year ending March 31. EBITDA jumped a massive 81.3% over the year. A breakdown for these figures and details of the group's net income are yet to be published. However, combined with EMI's massive cost-cutting exercise, brought in following Terra Firma's takeover in 2007, the figures hint at a possible turnaround for the beleaguered major.

In May, EMI attributed a 217% EBITDA increase at its recorded music division, for the year ending March 31, to a "GBP48m (USD79.8m) year-on-year reduction in the cost of returns" and "strong cost management". It claimed it was on target to deliver its planned GBP200m (USD332m) in cost reductions. The financial year ending March 2010 will also see the added benefits of the Beatles Rock Band video game and profits from the reissue of the Beatles back catalogue.

EMI was not available to comment at the time of going to press.