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Last Updated: Friday, 17 June, 2005, 10:16 GMT 11:16 UK
Sanctuary shares slump on warning
Morrissey at the Royal Festival Hall
Morrissey is one of the cult names in Sanctuary's stable
Sanctuary Group shares have fallen sharply after it said delayed releases and expansion costs would hit profits.

The music firm warned earnings would be 40% lower for the first six months of the financial year, compared to the 10.6m posted in same period 2004.

Sanctuary - home to Kelly Osbourne, The Charlatans and Morrissey - blamed "significant slippage" of record releases which had led to lower sales.

Shares in the firm had sunk almost 29.07% to 30.5 pence by 1000 GMT.

The group is set to release its results later this month.

The world's largest independent record label added it was now undertaking a "thorough review" of its business in order to improve cash generation and profitability, and reduce its long-term debts.

'Marked' fall

At its AGM in March, Sanctuary executive chairman Andy Taylor warned that, as in previous years, the company's performance would be better in the second half than in the first.

He also noted that "the disparity between the .... halves will be more marked than hitherto".

The group - whose operations cover music management, record and DVD production, merchandising, publishing and touring - has also been expanding its business internationally in recent years, another factor that has eaten into its profits.

A spokesman for the firm said its pace of expansion had increased in recent years since it moved into the US in 2000.

Earlier this month Sanctuary revealed it had been holding takeover talks with potential buyers.

"In response to speculation about a potential offer for the group, the board has nothing to add at this stage," the firm said.


SEE ALSO:
Sanctuary confirms 'offer' talks
03 Jun 05 |  Business
Album delays hit profits at EMI
24 May 05 |  Business
Warner Music offering falls flat
11 May 05 |  Business
Sir Elton sells management firm
01 Apr 05 |  Entertainment
For those about to rock
15 Aug 04 |  Business
Sanctuary sales hit right chord
07 Jun 04 |  Business


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