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Last Updated: Friday, 12 January 2007, 14:16 GMT
EMI shares fall as executive goes
Magic Numbers performing in London last year
The Magic Numbers were among EMI acts to release albums in 2006
EMI Group has issued a profit warning and will cut jobs, including top posts, to try and boost its profitability.

The firm said weak sales of major acts would contribute to a fall in revenues of as much as 10% this year.

Alain Levy, chief executive of EMI Music, its recorded music business, is stepping down with immediate effect.

In afternoon trade, shares in EMI were down 6.5% at 247.25 pence, after the firm also revealed its sales had fallen in the run up to Christmas.

'Challenging time'

EMI said it was facing a "challenging" trading environment and would cut "central overheads" but would not elaborate on how many jobs would go at the business.

EMI ARTISTS
Lily Allen, The Beatles, Blur, Kate Bush, Coldplay, Goldfrapp, Iron Maiden, Kylie Minogue, Magic Numbers, Radiohead, Robbie Williams

The music market struggled last year, with retailer HMV recently reporting overall sales down by 13% in the run-up to Christmas.

EMI, whose artists include Robbie Williams and The Beatles, said market conditions continued to be "weak".

"EMI will realign its investment priorities and focus its resources in areas where it is positioned to make the best and most certain returns," the firm said in a statement.

Restructuring costs

Following Frenchman Mr Levy's departure, EMI chairman Eric Nicoli is to fill his role and will also take on a new role as chief executive of the group as a whole.

David Munns, vice-chairman of EMI Music, is also to leave immediately.

The restructuring will lead to one-off costs of 150m but the firm hopes to save 110m a year from 2008-9 onwards.

The scale of the downturn is pretty gobsmacking

EMI abandoned a 1.35bn bid for Warner Music last year and has since been approached by an unnamed private equity firm about a bid.

EMI broke off talks with the suitor, reported to be Permira, saying its proposals did not reflect the value of the business.

One analyst said EMI had had a poor year in terms of new releases but that did not mean its problems could not be solved.

"One year's poor result does not mean that EMI Recorded Music is rotten and worthless," said Simon Wallis at Collins Stewart.

"It is more a poor reflection on management's ability to set an appropriate cost base for their business and manage their release schedule."


SEE ALSO
EMI to increase presence in Japan
14 Dec 06 |  Business
EMI pins hopes on latest releases
15 Nov 06 |  Business
EMI shelves 1.35bn Warner merger
27 Jul 06 |  Business
EMI signs new music chief
15 Oct 01 |  Business

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