Britain's biggest music, video and book retailer HMV Group whose shares have slumped over 20% since they floated less than two months ago, has reported strong annual profits growth.
Sales of DVDs and computer games, which account for 25% of group sales, are driving growth at the retailer. The stock was floated at 192 pence sterling on May 9 and firmed 2% to 149p after the results.
Operating profits before exceptionals grew 36.9% to £105.6 million sterling for the year ended April 27. Music accounts for 49% of group sales and some investors have been put off because the industry is under threat from compact disc piracy and free downloadable music from the Internet.
The retailer is part owned by music group EMI and venture capital firm Advent.
HMV said in its maiden results that its share of the UK music market had grown to 25.1%, up from 23.7% the previous year. The chain of 325 HMV stores stretches across nine countries including Japan, the world's second largest music market behind the US, and Ireland.
The retailer will spend £60 million this year adding 25 new stores and also revamping its Waterstone's bookstores. Waterstone's 197 stores contribute 26% of group sales.
HMV said it had made a strong start to the new financial year with good trading in May and total like-for-like sales growth of 6.4%, though it did not sustain that performance through June as consumers focused instead on soccer's World Cup.
