HMV profit up 25 per cent

British music and books retailer HMV Group plc met raised forecasts with a 25 per cent rise in annual profit yesterday and said current trading was in line with its expectations amid a challenging economic outlook.

HMV, which owns bookseller Waterstone's as well as music shops under its own name, said profit before tax and one-off items was £56.6 million in the year ended April 26, boosted by strong demand for computer and video games.

The firm said in May that underlying profit would be towards the top end of analysts' expectations, which at that point ranged from £48 million to €58 million.

A poll of 16 analysts by Reuters Estimates gave an average forecast of £56.7 million.

"Whilst we are mindful of the challenging economic outlook, the current financial year has started in line with our expectations," chief executive officer Simon Fox said in a statement.

Sales from continuing operations rose 11.3 per cent to £1.87 billion, including a like-for-like rise of 7.3 per cent.

HMV proposed a dividend of 7.4 pence a share, unchanged from the year before.