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London (pte048/07.02.2005/16:02) - Delays in releasing new albums by Coldplay and Gorillaz have caused the British record label EMI http://www.emigroup.com to issue a warning that its fiscal-year sales and pre-tax profit will be below expectations. According to the label, the release of both albums has been pushed back into the first half of next year, which begins on April 1, having originally been scheduled for release before the end of the current fiscal year. As the Wall Street Journal http://www.wsj.com reports, the London-based company's full-year sales are now expected to fall by 8-9 per cent from last year, while the group's pre-tax profit will be around 138 million pounds (approx. 200 million euros).
Last year, EMI reported revenue of 2.1 billion pounds (3.05 billion euros) and a pre-tax profit of 163 million pounds (237 million euros). "We generated good initial sales from our second-half major releases, but given recent reorder levels and the revised timing of these two major albums, we will not maintain market share for the full financial year," said Alain Levy, EMI's chairman. According to analysts, the company had previously predicted the music division's sales to be flat to 4 per cent down in 2005, while analysts' group pre-tax pre-items profit estimates were in the region of 175 million pounds (254.5 million euros). According to EMI, its music division's sales, particularly reorders, were lower than anticipated in January and this is expected to continue throughout February and March.
"How much the shares fall will depend on how much risk people see in the recent market-weakness continuing into next year," said Alex de Groote, a Chevreux analyst. "The shares have had a good run up recently so this news must be unexpected." Following the announcement, shares of EMI were down 43.75 pence (63.63 cents) at 237 pence (3.44 euros).
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