Show Hide image

HMV Group's struggles continue as sales fall below £1bn

The music, games and film retailer posts pre-tax loss of £38.6m in the 12 months ending in April.

Rocked by competition from MP3 downloads, the HMV Group has reported a loss of £80.4m for the full year ended 28 April 2012. The British entertainment retail chain, which operates 252 stores, saw revenues fall by 20.8 per cent to £873.1m (2011: £1.1bn). It posted a pre-tax loss of £38.6m, compared with the previous year's flat figure. Operating loss was £15m (2011: operating profit of £9.8m).

HMV Retail’s total sales declined by more than a fifth (20.8 per cent at statutory exchange rates), including a like-for-like sales decline of 12.1 per cent.

Core UK entertainment markets declined in value over the period, with physical music down 19 per cent, DVDs down 13 per cent and games down 17 per cent.

HMV Live sales, meanwhile, totalled £50.1m, with an operating profit of £1.8m.

Simon Fox, chief executive of HMV Group, said:

The last year has been a difficult and challenging one for HMV and, as expected, this is reflected in our annual results. However, we are confident that the actions we have taken will enable us to significantly improve cash generation and make profits of at least £10m in the year ahead.

Although we have clearly been through a turbulent period, our financial position is now stable thanks to the support of our suppliers, banks and colleagues, and I am confident, as I hand over the reins to Trevor Moore, that HMV has a secure future under his leadership.

HMV's new CEO, Trevor Moore, and group finance director, Ian Kenyon, will take charge on 3 September.

Photo: Getty Images
Show Hide image

David Cameron’s starter homes: poor policy, but good politics

David Cameron's electoral coalition of buy-to-let retirees and dual-earner couples remains intact: for now.

The only working age demographic to do better under the Coalition was dual-earner couples – without children. They were the main beneficiaries of the threshold raise – which may “take the poorest out of tax” in theory but in practice hands a sizeable tax cut to peope earning above average. They will reap the fruits of the government’s Help to Buy ISAs. And, not having children, they were insulated from cuts to child tax credits, reductions in public services, and the rising cost of childcare. (Childcare costs now mean a couple on average income, working full-time, find that the extra earnings from both remaining in work are wiped out by the costs of care)

And they were a vital part of the Conservatives’ electoral coalition. Voters who lived in new housing estates on the edges of seats like Amber Valley and throughout the Midlands overwhelmingly backed the Conservatives.

That’s the political backdrop to David Cameron’s announcement later today to change planning to unlock new housing units – what the government dubs “Starter Homes”. The government will redefine “affordable housing”  to up to £250,000 outside of London and £450,000 and under within it, while reducing the ability of councils to insist on certain types of buildings. He’ll describe it as part of the drive to make the next ten years “the turnaround decade”: years in which people will feel more in control of their lives, more affluent, and more successful.

The end result: a proliferation of one and two bedroom flats and homes, available to the highly-paid: and to that vital component of Cameron’s coalition: the dual-earner, childless couple, particularly in the Midlands, where the housing market is not yet in a state of crisis. (And it's not bad for that other pillar of the Conservative majority: well-heeled pensioners using buy-to-let as a pension plan.)

The policy may well be junk-rated but the politics has a triple A rating: along with affluent retirees, if the Conservatives can keep those dual-earner couples in the Tory column, they will remain in office for the forseeable future.

Just one problem, really: what happens if they decide they want room for kids? Cameron’s “turnaround decade” might end up in entirely the wrong sort of turnaround for Conservative prospects.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.