Struggling British music, books and games retailer HMV has issued its third profit warning in three months amid tough trading conditions in its markets.
The 90-year-old company, which trades from about 700 stores in seven countries, said today that it now expected a year to end-April profit before tax and exceptional items of around £30m sterling.
Just last month it had forecast a profit of 'moderately below £45m'. That alert had followed one in January.
'Since the group's last update on March 1 2011, trading conditions have remained difficult,' HMV said in a statement.
But it added that its bank lenders 'continue to be supportive.' It said its lenders had agreed to move the measurement period for all relevant financial covenant tests from the 12 months ending April 30 2011 to the 12 months ending July 2 2011.
HMV had previously warned it did not expect to meet the terms of its bank lending rules if they were tested in April.
HMV Group, which is closing 60 stores over the next 12 months and shedding jobs, aims to cut costs by another £10m a year. It saw sales plunge 13.6% in the UK and Ireland over Christmas and has since been hit by supplier troubles as firms struggle to gain credit insurance due to fears over HMV's trading.
HMV recently confirmed it was 'exploring strategic options' for both Waterstone's and HMV Canada but said no discussions were taking place about an offer for the whole group. Potential buyers for Waterstone's are rumoured to include founder Tim Waterstone and Russian billionaire investor Alexander Mamut.
Other potential bidders reportedly hovering around HMV Group include retail restructuring specialist Hilco, which has owned Allied Carpets, Habitat and MK One.
HMV has faced increasing competition from online retailers and supermarkets in its core CD and DVD markets in recent years. The group has been broadening its product mix as part of a fightback, branching into new areas such as technology and entertainment-related product sales.
