The troubled music group Sanctuary warned today that it will be next year or later before it returns to the black.
This came as the company (which manages the likes of Elton and James Blunt) said it had run up an operating loss of £56.7m in the year to September 30.
This compared with £136m the previous year. Revenues dropped to £133m from £148m. The figures include £8m of refinancing and restructuring costs.
Sanctuary‘s new bosses – former British Airways chief Bob Ayling and Frank Presland, the chief executive of Elton’s management firm, acquired by Sanctuary in 2005 – have been busy revamping the group’s businesses, which range from recorded music through artist management to merchandising.
“These results highlight the difficult position that the group was in,” Presland said. “We now have a new business strategy, with the group divided into three autonomous divisions, each focused on its own profit and cash generation.
“Under this new structure, and following a significant cost-reduction programme, we believe that all three divisions will demonstrate improved performance in 2007, although it will be 2008 or later before there is a return to overall profitability.”
Sanctuary has plunged further into the red after a poor performance from the 49%-owned indie label Rough Trade.
The group is now trying to sell off the loss-making label as well as other parts of the business, but is not believed to be in talks at the moment.
It said in November that it had received a number of offers for several of its businesses and that it would consider them after its annual results.
The group has been hit by delays in album releases by loss-making Urban Records, which it bought in 2003 from Beyonce‘s father Mathew Knowles.
Ayling said, “This has been a turbulent year for Sanctuary and a very disappointing one for its shareholders, but I believe the company is in a better position now than it was when the new board was appointed in April 2006.”
The shares edged 0.25p higher to 12.25p in early trading.