28th Sep 2005 07:08
HMV Group PLC28 September 2005 HMV Group plc Annual General Meeting and Trading Update 28 September 2005 HMV Group plc will today issue the following trading update at its annualgeneral meeting ('AGM'). Total Group sales were flat in the first 21 weeks of the financial year, whichcommenced on 1 May 2005, with like for like sales down by 4.4%. Conditions forhigh street retailing in the UK deteriorated during the period, particularly inLondon and other major city centres following the terrorist bombings in July.The sales performance of our businesses in the UK was in marked contrast to ourinternational businesses. At HMV UK & Ireland, total sales fell by 3.7% year to date, including like forlike sales down by 9.2%. Gross margin was maintained. We have a target of atleast 25 new stores for the full financial year, and have successfully opened 15new stores in the year to date, including a 6,500 square feet store at Harrodsin London, with commitments on a further 10 locations. On 5 September, HMV UKsuccessfully launched HMV Digital, a new service offering music downloads, andnew digital zones have been opened in all stores. In Waterstone's, total sales fell by 4.6%, including like for like sales down by6.4%. Gross margin continued to increase, despite the dilutive impact of HarryPotter and the Half-Blood Prince. Competition in the book retailing market iscontinuing to intensify, not least in the growth in book sales by supermarketsand online retailers. The Group has made a recommended cash offer to acquireOttakar's plc, as it believes that the enlarged group will be better positionedto respond to the competitive pressures of the retail market, and that theskills and systems of HMV Group and Waterstone's can provide customers with awider, more relevant range of books and a better shopping experience. Given the difficult high street conditions in the UK, we are aggressivelymanaging our variable costs, such that, despite increases in rents and rates, weexpect like for like costs to be approximately 2-3% below last year. In our international businesses, HMV Canada continued to perform strongly, withtotal sales at constant exchange rates up by 10.6% in the year to date,including like for like sales growth of 7.7%. HMV Asia Pacific has also made anexcellent start to the new financial year driven by an improved release scheduleand the implementation of enhanced DVD merchandising and ranging techniques inJapan. Total sales at constant exchange rates for HMV Asia Pacific grew by 10.1%in the first 21 weeks, inclusive of a like for like sales increase of 6.6%. At the AGM, David Kappler, HMV Group plc Chairman, will comment: "Conditions for high street retailing in the UK have been tough during ourfinancial year to date, and there are few signs of an improvement. Our offer forOttakar's will result in a stronger and more efficient book business, which willpresent a more attractive case for investment in the expansion of the combinedbusiness and, therefore, the UK book market. "In the meantime we are taking the right actions to reduce costs, and to ensurethat we are well positioned for the important Christmas trading period, where welook forward to new CD albums from Robbie Williams and Franz Ferdinand, 'StarWars Episode III' and' War of the Worlds' on DVD, Microsoft's Xbox 360 gamesconsole and new books from Zadie Smith, Alexander McCall Smith, Jamie Oliver andJohn Peel." Separately, the Group has also today published a reconciliation of financialinformation under International Financial Reporting Standards. The Group's next scheduled trading update will coincide with the release ofinterim results on 12 January 2006, and will cover the Christmas trading period. Sales Breakdown: Total sales growth --------------------------------------------------------------- Constant exchange rate Actual ---------------------------------------------- exchange Weeks 1 to 8 Weeks 9 to 21 Year to date rate year to growth growth growth date growth % % % %HMV UK &Ireland 1.6 (6.0) (3.7) (3.7)HMV AsiaPacific 6.4 11.8 10.1 12.0HMV Canada* 7.3 3.7 4.8 12.3--------------------------------------------------------------------------------Total HMV 3.4 (1.0) 0.4 1.6Waterstone's (1.0) (6.1) (4.6) (4.6)--------------------------------------------------------------------------------HMV Group plc 2.3 (2.2) (0.8) 0.1-------------------------------------------------------------------------------- Like for like sales growth --------------------------------------------------- Weeks 1 to 8 Weeks 9 to 21 Year to date growth growth growth % % %HMV UK &Ireland (4.0) (11.5) (9.2)HMV AsiaPacific 3.4 8.1 6.6HMV Canada 12.3 5.4 7.7--------------------------------------------------------------------------------Total HMV (0.5) (5.3) (3.8)Waterstone's (2.8) (8.0) (6.4)--------------------------------------------------------------------------------HMV Group plc (1.0) (5.9) (4.4)-------------------------------------------------------------------------------- Weeks 1 to 8 cover the period 1 May 2005 to 25 June 2005.Weeks 9 to 21 cover the period 26 June 2005 to 24 September 2005.Year to date covers the 21 weeks ended 24 September 2005. Total sales growth and like for like sales growth at constant exchange rates aretranslated at the weighted average exchange rates for the 53 weeks ended 30April 2005. Total sales growth at actual exchange rates is translated at the weightedaverage rates for the 21 weeks ended 18 September 2004 and the 26 weeks ended 25October 2003. * HMV Canada total sales growth is reduced by the inclusion in the comparativeperiod of the sales of HMV's US business, the final store of which closed inNovember 2004. Total sales for HMV Canada at constant exchange rates for the 21weeks ended 24 September 2005 increased by 10.6% (18.6% at actual exchangerates). Enquiries: Alan Giles, Chief Executive Susan GilchristNeil Bright, Finance Director William CullumPaul Barker, Head of Corporate Communications HMV Group plc Brunswick Group01628 818 355 020 7404 5959 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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