UK music and book seller HMV Group posted a bigger-than-forecast jump in annual profit and said it had seen a pick-up in recent sales, especially at its book stores after the Harry Potter launch.
'An encouraging start has been made to the new financial year in our UK businesses, following difficult trading conditions in the final quarter of last year,' said HMV Chief Executive Alan Giles.
Pre-tax profit for the year ended April 26 jumped to £96.5m sterling, compared with analyst forecasts of £94-96m, up from £80m last year. A total dividend of 4.5 pence per share will be distributed. The company also paid back £95m of debt.
Attention was focused on the current trading performance after the retailer warned in April that conditions had deteriorated in the fourth quarter.
Like-for-like sales at the UK's 193-store Waterstone's book chain leapt 7.2% in the first eight weeks of the new year thanks to a new Harry Potter book, the biggest book launch in history. Profit at the book chain, which is in the first year of a recovery programme, increased in a relatively flat book market with the help of better buying, store refits and reduced theft.
Sales at HMV shops in the UK and Ireland, which contribute about 75% of overall operating profit, were up 1.6% at the start of this year after stripping out new selling space, having been in decline late last year.
HMV, which is expanding in the UK and Japan, the world's second-largest music market, opened 21 UK stores during the year, which it said were trading ahead of expectations. It has plans for a further 15 this year and eight in Japan.
It has succeeded in taking the lion's share of the fast growing DVD market in the UK, which earns higher profit margins than music.
