LONDON — The value of EMI stock rose to a 12-month high of £2.77 ($4.93) Thursday, as the music company tipped investors to expect its first full year of growth in five years, driven by digital music sales.
Although it would not reveal exact figures, EMI Group released a trading update for the financial year ended March 31, which claimed its recorded music and music publishing divisions had outperformed rivals in the past year.
The company notched up $53.4 million in annual savings, delighting shareholders and analysts. EMI revenues rose by close to 4% and its profit before tax by about 12% for the financial year.
Using EMI’s results from the year ended March 2005, when revenues were $3.45 billion and profit before tax totaled $163.4 million, those improvements should see the group filing returns of approximately $3.6 billion in revenues and $183 million profit before tax.
Revenues from the sale of digital music files doubled to more than $196 million during the financial year, boosting revenues at the record division, EMI Music, by 2%.
Digital music now accounts for more than 5.5% of EMI Music’s revenues, with star international earners for the year including Coldplay, Gorillaz, Robbie Williams and the Rolling Stones.
The company released 19 albums that sold more than 1 million copies; Coldplay, selling in excess of 9 million albums, was the company’s most successful act.
Local success was driven by artists like Radja (Indonesia), Raphael (France), RBD (Mexico) and emerging talent such as Atlanta’s Dem Franchize Boyz and the U.K.’s KT Tunstall.
EMI Music Publishing also had a stellar year and expects to report revenue growth of 2.5%, with digital proceeds in that division totaling 4.5% of its business.
Cost cuts continue, however, and the company said it is focusing on reorganizing its Japanese recording business.
EMI wants to divert more funds in that territory to A&R and marketing to drive increases in market share and profits. Japan is second to the U.S. in terms of music sales.
Total savings since the company began cutting back in 2002 amount to more than $267 million.
Full EMI Group results will be released May 23.