£1bn loss as EMI devalues its acts

MUSIC group EMI yesterday posted a £1.03 billion operating loss for the year to end-March after writing down the value of its artists and catalogue, and said it risked breaking its banking covenants.

The group, owned by Guy Hands' private equity outfit Terra Firma, said the loss included an impairment charge of about 1bn as well as restructuring costs.

It said the rapid decline in sales of CDs and uncertainty about the value of digital and online music markets had caused it to review the value of its music catalogues.

EMI recorded a net loss of 1.6bn, against 412 million a year earlier, on revenue of 1.57bn.

EMI, whose acts include Robbie Williams and Coldplay, said there would likely be a significant shortfall when banking covenants were tested on 31 March and was therefore in discussions with shareholders on additional funding.

The accounts, posted by holding company Maltby Capital, revealed pre-tax losses of 1.75bn.