Sanctuary may sell off some units

Morrissey is one of the cult names in Sanctuary's stable

Struggling UK music group Sanctuary is looking to sell some of its businesses as tries to return to profitability.

Sanctuary made the announcement as it revealed its annual loss had halved to £57m ($112m) in the 12 months to 30 September, from £136m a year earlier.

However, after a "turbulent year", its revenues fell to £133.2m from £148.1m.

Sanctuary said it was considering selling a stake in Rough Trade Records, as well as cutting costs, in order to return to profitability by 2008.

'Moving ahead'

Sanctuary, the world's largest music management business and the UK's largest independent record label, got itself into financial difficulty after a failed move into the urban music sector in the US.

Sanctuary now operates three autonomous internal divisions - recorded product, merchandising and artist services or management.

"Following the successful re-financing in March 2006, the focus of our efforts has been on preparing the business to move ahead," said chief executive Frank Presland.

"A substantial start has been made on this task, although much more remains to be done," he added.

"The emphasis now is on profitability, but not, at this stage, growth across all divisions."