20th Dec 2006 07:00
HMV Group PLC20 December 2006 20 December 2006 Trading update HMV Group plc is today updating the market on its trading performance for the 12weeks to 16 December 2006. The actions that have been taken to improve the performance of HMV UK areworking effectively. Significant market share gains have been made in music, DVDand games since the national launch of simplified, lower pricing on 6 September.Sales in hmv.co.uk have accelerated by more than 200% compared to last year andour share of the online market continues to grow rapidly. However, the music and DVD markets have deteriorated since the Group's AGMtrading update on 28 September. The value of the UK music market, includingdigital downloading, declined by 14% during October and November and the DVDmarket also declined in value. Within these very difficult conditions, HMV UKand Ireland's like for like sales for the 12 weeks increased by 0.6% and grossmargin is expected to be in line with market expectations. In Waterstone's, excellent progress has been made with the integration ofOttakar's and we remain firmly on track to achieve the synergy benefitspreviously stated. Good progress has also been made online by waterstones.comfollowing its launch on 28 September. However, continuing promotional activityin the book market has impacted Waterstone's market share. Like for like salesfor the 12-week period declined 3.7% and gross margin is expected to be in linewith market expectations. In the Group's international businesses, market share also increased in bothmusic and DVD during the 12-week period. However, due to weak entertainmentmarket conditions, like for like sales declined by 3.8% in HMV Asia and by 3.4%in HMV Canada. For the Group as a whole like for like sales are down 1.3% forthe period. Outlook The outcome of the peak trading period will be determined over the remaining twoweeks, including the final weekend for shopping prior to Christmas. However,current market conditions lead us to conclude that our product markets willremain difficult during the balance of the financial year, and we now expectfull year profits to be towards the bottom of the range of market expectations. Simon Fox, Chief Executive, commented: "We are seeing very positive and tangible results from the strategic actionsimplemented during the course of this year, including strong market share gainsin entertainment, rapidly growing online businesses and the delivery of synergybenefits from the acquisition of Ottakar's. "We recognise that we face very tough and rapidly-changing markets and have towork hard to offset this. However, I am confident that the strength of ourleading brands, the rapid growth of our multi-channel offer combined with oureffective operating systems gives us a real competitive advantage and a platformon which to build." Enquiries: Simon Fox, Chief Executive Susan GilchristNeil Bright, Finance Director David YellandPaul Barker, Head of Corporate Communications Eilis MurphyHMV Group plc Brunswick Group01628 818 300 020 7404 5959 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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