EMI Warns on Profits, Music Boss Goes
Britain's EMI Group said on Friday annual profits would fall short of expectations due to a weak Christmas at its music business, and announced the departure of the division's head and a plan to slash costs.
"EMI Music's second-half performance to date, in terms of revenues and profits, has been below prior expectations," the world's third-biggest music group said in a trading update.
"This has resulted from weak market conditions, particularly over the Christmas period, and lower-than-expected sales from EMI Music's portfolio of second-half releases to date."
EMI, home to artists including Robbie Williams and Coldplay, rejected a bid approach in December which a source familiar with the situation told Reuters was from private equity group Permira, and has been locked in a takeover battle with rival Warner Music on and off for the past six years.
EMI said on Friday that Alain Levy, chairman and chief executive of EMI Music since October 2001, and David Munns, vice chairman of EMI Music, were leaving with immediate effect.
Eric Nicoli, who has been executive chairman of EMI Group since July 1999, becomes group chief executive officer and will take direct responsibility for managing EMI Music.
EMI also announced plans to make 110 million pounds of annual cost savings, with over half that amount to be delivered in the year ending March 31, 2008 and the full amount in the following financial year.
The savings, including an unspecified number of job cuts, will cost no more than 150 million pounds to deliver, EMI said.
EMI shares closed at 264-1/2 pence on Thursday, valuing the business at about 2.1 billion pounds.