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"There is a clear opportunity ahead for EMI as a whole to develop a structure and approach that recognizes the realities of the music environment, and that truly delivers success for the creative talent that the company is privileged to represent."
—-Roger Faxon, EMI Group CEO

EMI BULLISH ON FUTURE AFTER SUCCESSFUL YEAR

Maltby Capital Ltd. Cites Operating Performance and Creative Success as Rumors Continue to Swirl
While Guy Hands continues to try to keep EMI Group afloat, the company just released a year-end report that boasts “significant improvement in operating performance…following a year of creative success."

The report from Maltby Capital Limited, EMI’s parent company, cites EBITDA up 14% to £334 million (5.5% at constant currency), with operating cash flow up 55% to £250 million and revenues up to £1.65 billion. Operating pre-tax profit reaches £121 million, after restructuring costs, compared to last year’s £7 million, while net loss has been reduced by two-thirds to £512 million.

The news comes amid several reports this morning, one indicating Terra Firma’s Hands wants to return to the negotiating table with Citigroup over its looming debt repayment (see related Rumor Mill item here). The U.K. private equity group has previously sued the bank for misleading it that there were other possible suitors for EMI at the time of the acquisition. The case is scheduled to be heard in N.Y. starting in October.

This morning’s Wall Street Journal reported, though, EMI “remains in danger of breaching banking covenants on the loans as early as next year despite the total GBP87.5 million equity cures, or cash injections, Terra Firma has committed to make for the periods ending June 30, Sept. 30 and Dec. 31 this year.”

The Maltby Capital report is upbeat about the results, citing the “significant restructuring” of the business “combined with a number of notable commercial and creative successes,” among them Capitol Nashville’s Lady Antebellum, the year’s best-seller.

A copy of the full review is available on the EMI Group website here..

Maltby Capital Chairman Stephen Alexander insisted: “This report shows the very real operational progress that EMI has made in the past three years, in the face of the serious challenges faced by the music industry and the wider economy.

“The year was characterized by creative and commercial achievement in both divisions. EMI Music had particular success with the release of the remastered Beatles catalogue, which has sold more than 13 million albums to date, as well as strong sales from newer artists such as Katy Perry and Lady Antebellum. EMI Music Publishing has again been named publisher of the year in both the U.S. and the UK, and the business is creating valuable new revenue streams on behalf of its unmatched roster of writers.”

Newly named EMI Group CEO Roger Faxon added: “There is a clear opportunity ahead for EMI as a whole to develop a structure and approach that recognizes the realities of the music environment, and that truly delivers success for the creative talent that the company is privileged to represent. The operating performance we delivered in the year under review gives us a strong platform, and I’m looking forward to working with our great staff and artists to develop the business further. Now, does anyone have a couple beeeeellion pounds we can borrow until 2011?”



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