UNIVERSAL MUSIC Ireland increased pretax profits by 35 per cent to €6.2 million in 2008, despite seeing revenues fall by almost 8 per cent to €19.4 million.
Documents recently filed at the Companies Office show that the increase in profits was due largely to a reduction in the cost of sales from €12.2 million in 2007 to €8.9 million last year.
Managing director Mark Crossingham said he was “very pleased” with the performance for 2008 and that trading in 2009 was also good thanks to strong sales from Lady GaGa, U2, Imelda May and others.
Mr Crossingham said that, while digital distribution costs were cheaper, the company had benefited from a favourable euro/sterling exchange rate as it sources its product from the British subsidiary of Universal.
The directors’ report notes that “despite a fall in turnover, the company maintained its leading market share in the Irish music market in 2008 and is well positioned to protect future profitability due to the generation of new income streams and continued increases in digital revenues”.
Mr Crossingham said Apple’s iTunes service accounted for the bulk of online sales but “there is a lot of new parties coming online and we are working with them all”.
A subsidiary of Dutch-registered Universal Music Trading, its ultimate parent is French telecoms and media company Vivendi. A dividend of €4.2 million was paid during the year but the accounts note the directors intend to pay the entire profit of the year in dividends.
Top selling artists for Universal Music Group globally last year were the Mama Miaoriginal soundtrack, Welsh soul singer Duffy, tabloid favourite Amy Winehouse and urban artists Rihanna and Lil Wayne who, between them, sold 20.6 million albums.
The top 10 sellers for Universal in Ireland last year also included Take That, the Killers, Snow Patrol, Christy Hennessy and Abba Gold, according to Mr Crossingham.
“We are still investing heavily in artists; this business is all about hits and great artists,” said Mr Crossingham.
Revenues at Universal Music Ireland comprised €14.7 million from the sale of CDs and digital music, €4.2 million from royalties and licence fees, and €500,000 from distribution fees.
The number of employees reduced from 19 to 17 over the course of the year although employment costs, including wages, social welfare costs and pension contributions, increased from €1.5 million to €1.6 million.
The three directors of the company, Mr Crossingham, Cathy McMorrow and Peter Duncan Thompson, shared pay and pension contributions of €708,000.
