The Moz Street Journal: Bad News at Sanctuary

  • Thread starter Theo van Gogh Martyrs Brigade
  • Start date
T

Theo van Gogh Martyrs Brigade

Guest
http://business.timesonline.co.uk/article/0,,8209-1658912,00.html

Record delays spark new profit alert at Sanctuary
By Dan Sabbagh, Media Editor

SANCTUARY, the music group, unveiled its second profit warning in six months after admitting that delayed releases — including a cancelled album from The Strokes — would leave interim profits 40 per cent below last year’s levels.

The warning knocked 30 per cent from the shares and prompted City analysts to reduce their forecasts for half-year underlying profits from £10.5 million to £6.5 million at the record label and artist management group.

The company blamed “significant slippage of record releases” in the half to March 31, although executives refused to name those responsible, arguing that they had a responsibility to protect the artists involved.

One release that was definitely lost was a live album from American rockers The Strokes, which had been due just before Christmas. Julian Casablancas, the lead singer, is thought to have dropped the project because the quality of the mastered version was not good enough.

Last year record sales generated £18.9 million of profits, three quarters of the group total, and 57 per cent of turnover. Sanctuary recording artists include The Libertines as well as the more established Morrissey and Robert Plant.

The consequences of the profit warning are so serious that the British company, founded by the managers of Iron Maiden, the heavy metal band, could lose its independence. Sanctuary has had to abandon its own acquisition strategy, as the share price has collapsed while predators have begun circling.

Earlier this month Sanctuary admitted that it was in “preliminary talks” that could lead to “an offer or further business opportunity” with more than one party, one of whom has been tentatively identified as the newly floated Warner Music Group. In the immediate aftermath of the profit warning, the talks were still continuing, although the group’s equity value dropped from £160 million to £110 million.

Sanctuary also said that it was engaged in a “thorough review” of all its operating activities, and would update investors at its interim results in ten days’ time. The review is code for a cost-cutting exercise, necessary because the company had over-expanded.

In January the company issued its first profits warning after five years as a quoted company because it was forced to make an £11.4 million write-off related to the sale of its TV production business, Cloud 9. It took comfort that, at that point, its core music business was relatively unaffected.

Sanctuary is also in dispute with Morrissey, the former Smiths frontman, who has been unhappy that the company said, wrongly, that he would be playing at the Isle of Wight festival. Morrissey says he wants to sign with a new label.

Even good news, such as the £16 million signing in April of Sir Elton John to a five-year management contract, now has a downside. To fund that deal, Sanctuary placed 30 million shares at 40½p. Yesterday the stock closed at 29¾p, down 13¼p on the day, and investors who signed up have lost a quarter of their investment.

==========================

http://business.scotsman.com/latest.cfm?id=4703560

Fri 17 Jun 2005
10:45am (UK)
Sanctuary Plunges on Profits Warning

By David Winning, PA City Staff

Entertainment group Sanctuary lost a third of its value today after it blamed delays to record releases for a probable 40% fall in earnings.

Sanctuary, whose portfolio of artists includes Morrissey and Iron Maiden, was forced to rush out a profits warning less than a fortnight before it was due to unveil its results for the six months to March 31.

Investors reacted angrily to the news with Sanctuary shares plummeting 29% amid fears that the profits warning might scare off a potential bidder for the company.

Sanctuary revealed a fortnight ago that it was in the early stages of takeover talks, with rumours swirling around the City that music giant EMI was behind the approach.

Investec analyst Malcolm Morgan warned: “We do not believe that investors should count on a rescue bid for the entire company.”

Sanctuary runs the largest global management business for music artists with a star roster including Beyonce, Morrissey, Manic Street Preachers, Fleetwood Mac, Nelly and Iron Maiden.

In addition to its record division, the firm owns the world’s biggest live tour booking agency outside the United States and sells official merchandise.

Sanctuary said today that earnings before interest, tax, depreciation and amortisation were set to be 40% lower than a year ago caused by the “significant slippage of record releases” and additional costs from its international expansion.

It was now reviewing its forecasts for the full year although it hoped the sales decline would start to soften as some of the delayed albums hit music stores.

Executive chairman Andy Taylor said annual earnings were likely to be well behind last year and “consequently very substantially lower than market consensus”.

He said: “The board is now undertaking a thorough review of all the operating divisions with a particular emphasis on looking at ways to improve cash generation and profitability and reduce long-term debt levels.”

According to stockbroker Baird, the brave decision would involve Sanctuary selling its records business to concentrate on artist management.

Baird said: “The combination of worsening cash flow and a rising net debt position also begins to raise other question marks, which is going to add to overall nervousness.

“The potential bid situation will now become quite confused. On the one hand this warning could act as a catalyst, but on the other it will push away those who were looking to keep the group together.”

The profits warning from Sanctuary comes in the same year that EMI shares were sent spinning by delays to the latest offerings by Coldplay and Gorillaz.

Sanctuary said in January that annual pre-tax profits of £16.1 million were lower than the £17 million reported a year earlier, reflecting write-offs totalling £2.1 million in its music book publishing arm.

===================================

More: http://news.google.com/news?hl=en&ned=us&ie=ISO-8859-1&ncl=http://business.timesonline.co.uk/article/0,,8209-1658912,00.html
 
T

Terry Wogan

Guest
WEll, we can assume then that Morrissey is still signed to Sanctuary then?
Is he trying to break contract I wonder?
The plot thickens...
 
L

Lon

Guest
> http://business.timesonline.co.uk/article/0,,8209-1658912,00.html Record
> delays spark new profit alert at Sanctuary
> By Dan Sabbagh, Media Editor

> SANCTUARY, the music group, unveiled its second profit warning in six
> months after admitting that delayed releases — including a cancelled album
> from The Strokes — would leave interim profits 40 per cent below last
> year’s levels.

> The warning knocked 30 per cent from the shares and prompted City analysts
> to reduce their forecasts for half-year underlying profits from £10.5
> million to £6.5 million at the record label and artist management group.

> The company blamed “significant slippage of record releases” in the half
> to March 31, although executives refused to name those responsible,
> arguing that they had a responsibility to protect the artists involved.

> One release that was definitely lost was a live album from American
> rockers The Strokes, which had been due just before Christmas. Julian
> Casablancas, the lead singer, is thought to have dropped the project
> because the quality of the mastered version was not good enough.

> Last year record sales generated £18.9 million of profits, three quarters
> of the group total, and 57 per cent of turnover. Sanctuary recording
> artists include The Libertines as well as the more established Morrissey
> and Robert Plant.

> The consequences of the profit warning are so serious that the British
> company, founded by the managers of Iron Maiden, the heavy metal band,
> could lose its independence. Sanctuary has had to abandon its own
> acquisition strategy, as the share price has collapsed while predators
> have begun circling.

> Earlier this month Sanctuary admitted that it was in “preliminary talks”
> that could lead to “an offer or further business opportunity” with more
> than one party, one of whom has been tentatively identified as the newly
> floated Warner Music Group. In the immediate aftermath of the profit
> warning, the talks were still continuing, although the group’s equity
> value dropped from £160 million to £110 million.

> Sanctuary also said that it was engaged in a “thorough review” of all its
> operating activities, and would update investors at its interim results in
> ten days’ time. The review is code for a cost-cutting exercise, necessary
> because the company had over-expanded.

> In January the company issued its first profits warning after five years
> as a quoted company because it was forced to make an £11.4 million
> write-off related to the sale of its TV production business, Cloud 9. It
> took comfort that, at that point, its core music business was relatively
> unaffected.

> Sanctuary is also in dispute with Morrissey, the former Smiths frontman,
> who has been unhappy that the company said, wrongly, that he would be
> playing at the Isle of Wight festival. Morrissey says he wants to sign
> with a new label.

> Even good news, such as the £16 million signing in April of Sir Elton John
> to a five-year management contract, now has a downside. To fund that deal,
> Sanctuary placed 30 million shares at 40½p. Yesterday the stock closed at
> 29¾p, down 13¼p on the day, and investors who signed up have lost a
> quarter of their investment.

> ==========================

> http://business.scotsman.com/latest.cfm?id=4703560 Fri 17 Jun 2005
> 10:45am (UK)
> Sanctuary Plunges on Profits Warning

> By David Winning, PA City Staff

> Entertainment group Sanctuary lost a third of its value today after it
> blamed delays to record releases for a probable 40% fall in earnings.

> Sanctuary, whose portfolio of artists includes Morrissey and Iron Maiden,
> was forced to rush out a profits warning less than a fortnight before it
> was due to unveil its results for the six months to March 31.

> Investors reacted angrily to the news with Sanctuary shares plummeting 29%
> amid fears that the profits warning might scare off a potential bidder for
> the company.

> Sanctuary revealed a fortnight ago that it was in the early stages of
> takeover talks, with rumours swirling around the City that music giant EMI
> was behind the approach.

> Investec analyst Malcolm Morgan warned: “We do not believe that investors
> should count on a rescue bid for the entire company.”

> Sanctuary runs the largest global management business for music artists
> with a star roster including Beyonce, Morrissey, Manic Street Preachers,
> Fleetwood Mac, Nelly and Iron Maiden.

> In addition to its record division, the firm owns the world’s biggest live
> tour booking agency outside the United States and sells official
> merchandise.

> Sanctuary said today that earnings before interest, tax, depreciation and
> amortisation were set to be 40% lower than a year ago caused by the
> “significant slippage of record releases” and additional costs from its
> international expansion.

> It was now reviewing its forecasts for the full year although it hoped the
> sales decline would start to soften as some of the delayed albums hit
> music stores.

> Executive chairman Andy Taylor said annual earnings were likely to be well
> behind last year and “consequently very substantially lower than market
> consensus”.

> He said: “The board is now undertaking a thorough review of all the
> operating divisions with a particular emphasis on looking at ways to
> improve cash generation and profitability and reduce long-term debt
> levels.”

> According to stockbroker Baird, the brave decision would involve Sanctuary
> selling its records business to concentrate on artist management.

> Baird said: “The combination of worsening cash flow and a rising net debt
> position also begins to raise other question marks, which is going to add
> to overall nervousness.

> “The potential bid situation will now become quite confused. On the one
> hand this warning could act as a catalyst, but on the other it will push
> away those who were looking to keep the group together.”

> The profits warning from Sanctuary comes in the same year that EMI shares
> were sent spinning by delays to the latest offerings by Coldplay and
> Gorillaz.

> Sanctuary said in January that annual pre-tax profits of £16.1 million
> were lower than the £17 million reported a year earlier, reflecting
> write-offs totalling £2.1 million in its music book publishing arm.

> ===================================

> More:
> http://news.google.com/news?hl=en&ned=us&ie=ISO-8859-1&ncl=http://business.timesonline.co.uk/article/0,,8209-1658912,00.html

you know, I'm gonna stick my finger down my throat on this...the music industry used to be above all this...my GOD!
 
S

suzanne

Guest
record companies were not created in a way to operate on quarterly profits because they don't exactly produce products like household cleaners that have a steady demand. the occasional release of big name artists are supposed to be their main income while many of the smaller artists benefit from the money as the label doesn't really make any money from artists they are trying to break in.

a lot of Sanctuary's income from last year was morrissey-related. now, they have to wait for some other big name on their roster to make some cash.

> http://business.timesonline.co.uk/article/0,,8209-1658912,00.html Record
> delays spark new profit alert at Sanctuary
> By Dan Sabbagh, Media Editor

> SANCTUARY, the music group, unveiled its second profit warning in six
> months after admitting that delayed releases — including a cancelled album
> from The Strokes — would leave interim profits 40 per cent below last
> year’s levels.

> The warning knocked 30 per cent from the shares and prompted City analysts
> to reduce their forecasts for half-year underlying profits from £10.5
> million to £6.5 million at the record label and artist management group.

> The company blamed “significant slippage of record releases” in the half
> to March 31, although executives refused to name those responsible,
> arguing that they had a responsibility to protect the artists involved.

> One release that was definitely lost was a live album from American
> rockers The Strokes, which had been due just before Christmas. Julian
> Casablancas, the lead singer, is thought to have dropped the project
> because the quality of the mastered version was not good enough.

> Last year record sales generated £18.9 million of profits, three quarters
> of the group total, and 57 per cent of turnover. Sanctuary recording
> artists include The Libertines as well as the more established Morrissey
> and Robert Plant.

> The consequences of the profit warning are so serious that the British
> company, founded by the managers of Iron Maiden, the heavy metal band,
> could lose its independence. Sanctuary has had to abandon its own
> acquisition strategy, as the share price has collapsed while predators
> have begun circling.

> Earlier this month Sanctuary admitted that it was in “preliminary talks”
> that could lead to “an offer or further business opportunity” with more
> than one party, one of whom has been tentatively identified as the newly
> floated Warner Music Group. In the immediate aftermath of the profit
> warning, the talks were still continuing, although the group’s equity
> value dropped from £160 million to £110 million.

> Sanctuary also said that it was engaged in a “thorough review” of all its
> operating activities, and would update investors at its interim results in
> ten days’ time. The review is code for a cost-cutting exercise, necessary
> because the company had over-expanded.

> In January the company issued its first profits warning after five years
> as a quoted company because it was forced to make an £11.4 million
> write-off related to the sale of its TV production business, Cloud 9. It
> took comfort that, at that point, its core music business was relatively
> unaffected.

> Sanctuary is also in dispute with Morrissey, the former Smiths frontman,
> who has been unhappy that the company said, wrongly, that he would be
> playing at the Isle of Wight festival. Morrissey says he wants to sign
> with a new label.

> Even good news, such as the £16 million signing in April of Sir Elton John
> to a five-year management contract, now has a downside. To fund that deal,
> Sanctuary placed 30 million shares at 40½p. Yesterday the stock closed at
> 29¾p, down 13¼p on the day, and investors who signed up have lost a
> quarter of their investment.

> ==========================

> http://business.scotsman.com/latest.cfm?id=4703560 Fri 17 Jun 2005
> 10:45am (UK)
> Sanctuary Plunges on Profits Warning

> By David Winning, PA City Staff

> Entertainment group Sanctuary lost a third of its value today after it
> blamed delays to record releases for a probable 40% fall in earnings.

> Sanctuary, whose portfolio of artists includes Morrissey and Iron Maiden,
> was forced to rush out a profits warning less than a fortnight before it
> was due to unveil its results for the six months to March 31.

> Investors reacted angrily to the news with Sanctuary shares plummeting 29%
> amid fears that the profits warning might scare off a potential bidder for
> the company.

> Sanctuary revealed a fortnight ago that it was in the early stages of
> takeover talks, with rumours swirling around the City that music giant EMI
> was behind the approach.

> Investec analyst Malcolm Morgan warned: “We do not believe that investors
> should count on a rescue bid for the entire company.”

> Sanctuary runs the largest global management business for music artists
> with a star roster including Beyonce, Morrissey, Manic Street Preachers,
> Fleetwood Mac, Nelly and Iron Maiden.

> In addition to its record division, the firm owns the world’s biggest live
> tour booking agency outside the United States and sells official
> merchandise.

> Sanctuary said today that earnings before interest, tax, depreciation and
> amortisation were set to be 40% lower than a year ago caused by the
> “significant slippage of record releases” and additional costs from its
> international expansion.

> It was now reviewing its forecasts for the full year although it hoped the
> sales decline would start to soften as some of the delayed albums hit
> music stores.

> Executive chairman Andy Taylor said annual earnings were likely to be well
> behind last year and “consequently very substantially lower than market
> consensus”.

> He said: “The board is now undertaking a thorough review of all the
> operating divisions with a particular emphasis on looking at ways to
> improve cash generation and profitability and reduce long-term debt
> levels.”

> According to stockbroker Baird, the brave decision would involve Sanctuary
> selling its records business to concentrate on artist management.

> Baird said: “The combination of worsening cash flow and a rising net debt
> position also begins to raise other question marks, which is going to add
> to overall nervousness.

> “The potential bid situation will now become quite confused. On the one
> hand this warning could act as a catalyst, but on the other it will push
> away those who were looking to keep the group together.”

> The profits warning from Sanctuary comes in the same year that EMI shares
> were sent spinning by delays to the latest offerings by Coldplay and
> Gorillaz.

> Sanctuary said in January that annual pre-tax profits of £16.1 million
> were lower than the £17 million reported a year earlier, reflecting
> write-offs totalling £2.1 million in its music book publishing arm.

> ===================================

> More:
> http://news.google.com/news?hl=en&ned=us&ie=ISO-8859-1&ncl=http://business.timesonline.co.uk/article/0,,8209-1658912,00.html
 
L

Lon

Guest
> WEll, we can assume then that Morrissey is still signed to Sanctuary then?
> Is he trying to break contract I wonder?
> The plot thickens...

OK, i'm in Houston on 04/05Jun and open the FT and there's a huge photo of Moz in the FT! Crazy...and story goes on about him and Sanctuary. I nearly fainted from the heat anyway, much less this.
 
S

Seriously Flawed not right in the head

Guest
The worldwideweb has put paid to the greedy b's of the music industry.
 
S

Seriously Flawed not right in the head

Guest
Re: The worldwideweb has put paid to the greedy b's of the music industry.

Why pay for some of the shit they put out when you can share the privilege of one person buying the shit.
 
J

jp

Guest
That mention is good press for Moz at least.

> http://business.timesonline.co.uk/article/0,,8209-1658912,00.html Record
> delays spark new profit alert at Sanctuary
> By Dan Sabbagh, Media Editor

> SANCTUARY, the music group, unveiled its second profit warning in six
> months after admitting that delayed releases — including a cancelled album
> from The Strokes — would leave interim profits 40 per cent below last
> year’s levels.

> The warning knocked 30 per cent from the shares and prompted City analysts
> to reduce their forecasts for half-year underlying profits from £10.5
> million to £6.5 million at the record label and artist management group.

> The company blamed “significant slippage of record releases” in the half
> to March 31, although executives refused to name those responsible,
> arguing that they had a responsibility to protect the artists involved.

> One release that was definitely lost was a live album from American
> rockers The Strokes, which had been due just before Christmas. Julian
> Casablancas, the lead singer, is thought to have dropped the project
> because the quality of the mastered version was not good enough.

> Last year record sales generated £18.9 million of profits, three quarters
> of the group total, and 57 per cent of turnover. Sanctuary recording
> artists include The Libertines as well as the more established Morrissey
> and Robert Plant.

> The consequences of the profit warning are so serious that the British
> company, founded by the managers of Iron Maiden, the heavy metal band,
> could lose its independence. Sanctuary has had to abandon its own
> acquisition strategy, as the share price has collapsed while predators
> have begun circling.

> Earlier this month Sanctuary admitted that it was in “preliminary talks”
> that could lead to “an offer or further business opportunity” with more
> than one party, one of whom has been tentatively identified as the newly
> floated Warner Music Group. In the immediate aftermath of the profit
> warning, the talks were still continuing, although the group’s equity
> value dropped from £160 million to £110 million.

> Sanctuary also said that it was engaged in a “thorough review” of all its
> operating activities, and would update investors at its interim results in
> ten days’ time. The review is code for a cost-cutting exercise, necessary
> because the company had over-expanded.

> In January the company issued its first profits warning after five years
> as a quoted company because it was forced to make an £11.4 million
> write-off related to the sale of its TV production business, Cloud 9. It
> took comfort that, at that point, its core music business was relatively
> unaffected.

> Sanctuary is also in dispute with Morrissey, the former Smiths frontman,
> who has been unhappy that the company said, wrongly, that he would be
> playing at the Isle of Wight festival. Morrissey says he wants to sign
> with a new label.

> Even good news, such as the £16 million signing in April of Sir Elton John
> to a five-year management contract, now has a downside. To fund that deal,
> Sanctuary placed 30 million shares at 40½p. Yesterday the stock closed at
> 29¾p, down 13¼p on the day, and investors who signed up have lost a
> quarter of their investment.

> ==========================

> http://business.scotsman.com/latest.cfm?id=4703560 Fri 17 Jun 2005
> 10:45am (UK)
> Sanctuary Plunges on Profits Warning

> By David Winning, PA City Staff

> Entertainment group Sanctuary lost a third of its value today after it
> blamed delays to record releases for a probable 40% fall in earnings.

> Sanctuary, whose portfolio of artists includes Morrissey and Iron Maiden,
> was forced to rush out a profits warning less than a fortnight before it
> was due to unveil its results for the six months to March 31.

> Investors reacted angrily to the news with Sanctuary shares plummeting 29%
> amid fears that the profits warning might scare off a potential bidder for
> the company.

> Sanctuary revealed a fortnight ago that it was in the early stages of
> takeover talks, with rumours swirling around the City that music giant EMI
> was behind the approach.

> Investec analyst Malcolm Morgan warned: “We do not believe that investors
> should count on a rescue bid for the entire company.”

> Sanctuary runs the largest global management business for music artists
> with a star roster including Beyonce, Morrissey, Manic Street Preachers,
> Fleetwood Mac, Nelly and Iron Maiden.

> In addition to its record division, the firm owns the world’s biggest live
> tour booking agency outside the United States and sells official
> merchandise.

> Sanctuary said today that earnings before interest, tax, depreciation and
> amortisation were set to be 40% lower than a year ago caused by the
> “significant slippage of record releases” and additional costs from its
> international expansion.

> It was now reviewing its forecasts for the full year although it hoped the
> sales decline would start to soften as some of the delayed albums hit
> music stores.

> Executive chairman Andy Taylor said annual earnings were likely to be well
> behind last year and “consequently very substantially lower than market
> consensus”.

> He said: “The board is now undertaking a thorough review of all the
> operating divisions with a particular emphasis on looking at ways to
> improve cash generation and profitability and reduce long-term debt
> levels.”

> According to stockbroker Baird, the brave decision would involve Sanctuary
> selling its records business to concentrate on artist management.

> Baird said: “The combination of worsening cash flow and a rising net debt
> position also begins to raise other question marks, which is going to add
> to overall nervousness.

> “The potential bid situation will now become quite confused. On the one
> hand this warning could act as a catalyst, but on the other it will push
> away those who were looking to keep the group together.”

> The profits warning from Sanctuary comes in the same year that EMI shares
> were sent spinning by delays to the latest offerings by Coldplay and
> Gorillaz.

> Sanctuary said in January that annual pre-tax profits of £16.1 million
> were lower than the £17 million reported a year earlier, reflecting
> write-offs totalling £2.1 million in its music book publishing arm.

> ===================================

> More:
> http://news.google.com/news?hl=en&ned=us&ie=ISO-8859-1&ncl=http://business.timesonline.co.uk/article/0,,8209-1658912,00.html
 
L

Lon

Guest
> That mention is good press for Moz at least.
well, hmmm... I never got to see The Strokes...was about 3 ppl behind the limit...me & my lawyer..had to go to another venue instead...anyway, about Moz...press is better than no press I guess...
 
J

jp

Guest
i guess my point was after that whole iow he said they said mess, this makes moz look like the more credible of the two parties to the general public.

> well, hmmm... I never got to see The Strokes...was about 3 ppl behind the
> limit...me & my lawyer..had to go to another venue instead...anyway,
> about Moz...press is better than no press I guess...
 
S

Suswa

Guest
> record companies were not created in a way to operate on quarterly profits
> because they don't exactly produce products like household cleaners that
> have a steady demand. the occasional release of big name artists are
> supposed to be their main income while many of the smaller artists benefit
> from the money as the label doesn't really make any money from artists
> they are trying to break in.

> a lot of Sanctuary's income from last year was morrissey-related. now,
> they have to wait for some other big name on their roster to make some
> cash.

Smart business observation Suzanne!
 
T

Theo van Gogh Martyrs Brigade

Guest
> record companies were not created in a way to operate on quarterly profits
> because they don't exactly produce products like household cleaners that
> have a steady demand. the occasional release of big name artists are
> supposed to be their main income while many of the smaller artists benefit
> from the money as the label doesn't really make any money from artists
> they are trying to break in.

> a lot of Sanctuary's income from last year was morrissey-related. now,
> they have to wait for some other big name on their roster to make some
> cash.

Excellent and insightful observations, Suzanne!
 
L

Lon

Guest
> Excellent and insightful observations, Suzanne!

Suzanne is smart
 
Top Bottom