Music giant HMV Ireland saw a 90% fall in profits last year

PROFITS AT HMV Ireland plunged by almost 90 per cent to €465,000 last year compared to €4.1 million the previous year.

Accounts filed for the Irish operations of the music giant for the year to the end of April 2010 show that operating profit stood at €400,000, down from €2.8 million the previous year.

The sharp drop occurred despite a 23.3 per cent increase in sales. Revenues climbed from €69.8 million in 2009 to €85.9 million last year.

However, that increase in sales may reflect the fact that HMV opened two new stores in Ireland during the period covered by the accounts.

HMV operates 16 stores in the Republic and 11 in the North. Last month HMV Group, the company that owns both HMV and bookstore chain Waterstone’s, announced plans to close 40 HMV stores in Britain and Ireland and 20 Waterstone’s stores.

An extremely poor Christmas season – traditionally the busiest period for the business – prompted the company to issue a profit warning for 2011.

To date, the company has announced the closure of nine of the 40 targeted HMV stores.

A spokesman for HMV declined to comment yesterday on whether the remaining 31 shop closures would affect the company’s operations in Ireland.

The accounts for HMV Ireland, which were signed off on October 14th, state that the business “continues to trade successfully and will continue its existing business for the foreseeable future”.

According to the 2010 accounts, HMV Ireland employed an average of 372 people during the year, 370 of whom worked in sales. This was up from 266 the previous year. Employee costs totalled €9.471 million in the year, compared to €7.348 in 2009.

While no dividend was paid in 2009, a dividend of €38 million was paid during the year.

Directors’ emoluments amounted to €159,000, down from €253,000 the previous year.

Cash at bank and at hand reduced from €11.2 million in 2009, to €1.1 million last year.

As well as seven stores in Dublin, HMV has branches in Cork, Drogheda, Dundalk, Galway, Kilkenny, Newbridge, Sligo and two stores in Limerick.

Yesterday, HMV’s share price rose the most in more than two years following reports the company’s 6 per cent shareholder, Alexander Mamut, had hired Credit Suisse to consider options on the future of the company, with some sources suggesting a break-up of the company may be considered.