Sales and profits at entertainment retailer HMV Group fell sharply during the six months to October 29, the firm’s latest financial results show.
Shares in the company, which is found in a number of retail portfolios including Andy Brough’s Schroder UK Mid 250 fund, fell by up to 9.56% after the results were published.
HMV Group’s sales over the half-year amounted to £364.9m, falling from the £442.7m reported for the same period in 2010. Like-for-like sales, which strip out store closures, were down 11.6%.
The group also posted a loss before tax of £36.4m, increasing from the £27.4m loss seen in 2012. Its underlying debt has increased from £151.6m in the same period of 2010 to £163.7m.
According to the latest data available to Morningstar, small positions in the company are held by Brough’s £1.3 billion Schroder UK Mid 250 fund, Deryck Noble-Nesbitt’s £16.4m Close Special Situations fund, Andrew Green’s £180.1m GAM UK Diversified fund and James Henderson’s £287.6m Henderson UK Equity Income fund.
Simon Fox, chief executive of HMV Group, says: “This has been a challenging start to the year. However, we have taken decisive action to restructure the business and are now seeing the benefits of this, particularly in our technology products business.”
HMV suggests that its refitting programme, part of its effort to refocus business towards products such as MP3 players, media tablets, speakerdocks and headphones, is helping it to sell more electronic goods.
The group has refitted 144 of its 249 stores with an extended technology range of portable digital products. At these outlets, like-for-like technology sales are up 44% with sales of headphones, speakerdocks and tablets jumping 147%.
In its trading update for the seven weeks to December 17, the firm also reveals that like-for-like sales were down 13.2%. However, this period does not include the crucial weekend before Christmas, which is likely to offer a boost to December’s figures.
Earlier this year, the company agreed a revised, two-year £220m credit facility with its bank. It also sold the Waterstone’s book chain for £53m and HMV Canada for £2m.
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