HMV shares fall in London trad­ing

The Pak Banker - - Company& -

LONDON: HMV Group Plc, the mu­sic and DVD re­tailer that owns Water­stone's book­stores, fell the most ever in London trad­ing af­ter say­ing hol­i­day sales are be­ing ham­pered by se­vere win­ter weather and cut­ting its div­i­dend by 50 per­cent.

Snow and freez­ing tem­per­a­tures have "un­der­mined" busi­ness in the last two weeks as Bri­tons have put off shop­ping trips, the Maiden­head, Eng­land­based com­pany said to­day in a state­ment. HMV also said its first-half loss widened due to weaker de­mand in U.K. and Ir­ish stores. The shares de­clined 17 per­cent, the steep­est in­tra­day drop since a May 2002 ini­tial pub­lic of­fer­ing. An­a­lysts at In­vestec Se­cu­ri­ties and Sey­mour Pierce said full-year profit es­ti­mates are likely to be re­duced. The ear­li­est wide­spread snow­fall in the U.K. since 1993 has "dra­mat­i­cally un­der­mined" re­tail sales, the Bri­tish Re­tail Con­sor­tium said this week. "If cus­tomers can't get onto the high street of Bri­tain it's go­ing to af­fect ev­ery­one, in­clud­ing our­selves," HMV Chief Ex­ec­u­tive Of­fi­cer Simon Fox said on a call with re­porters to­day.

HMV said it re­viewed its div­i­dend pol­icy "in light of the con­tin­u­ing weak en­ter­tain­ment mar­kets, the un­cer­tain con­sumer out­look and the con­se­quent im­pact on the earn­ings pro­file of the group." The first-half pay­out will be re­duced to 0.9 pence a share from 1.8 pence a year ear­lier. HMV shares dropped 7.25 pence to 36.5 pence in London, the low­est clos­ing price since the IPO. The stock has fallen 60 per­cent this year and trades on a mul­ti­ple of 3.4 times es­ti­mated earn­ings, ac­cord­ing to data com­piled by Bloomberg. The re­tailer is adding loy­alty cards and diver­si­fy­ing into live mu­sic venues and fes­ti­vals to boost sales as com­pe­ti­tion in­creases from su­per­mar­kets and on­line re­tail­ers. Ac­cord­ing to Ver­dict Re­search se­nior re­tail an­a­lyst Matt Piner, HMV needs to off­set de­clin­ing sales by ex­ploit­ing its "strong brand name" in en­ter­tain­ment. -Bloomberg

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.