HMV first-half loss narrows

Music, books and games retailer HMV Group has posted an expected narrowing of first-half losses and said it is "very well prepared" for the key Christmas trading period.

"Although our peak trading weeks lie ahead of us, we remain confident in the outlook for the group for the current financial year," said the firm.

HMV, which runs music, DVD and video games shops under its own name as well as Waterstone's bookstores, said it made a pre-tax loss of £24.9 million in the 26 weeks to October 24. That compares with analyst forecasts of a loss of £17-£26 million and a loss of £27.5 million in the same period last year.

HMV makes all its profit in the second-half, which includes Christmas trading.

Sales increased 5.6 per cent to £797 million, but sales at stores open over a year fell 2.1 per cent.

HMV said its net debt had increased £14.5 million to £88.1 million but it maintained its interim dividend at 1.8 pence.

The firm has gained market share this year, helped by the demise of rivals Woolworths and Zavvi at the end of last year.

The fall into administration of bookseller Borders UK in November has provided HMV with another opportunity to gain share.

HMV, which faces the same competition from supermarkets, online retailers and digital downloading that caused its rivals to fall, has responded by cutting costs and widening its focus. It has entered the live music and ticketing markets, is trialling digital cinemas in partnership with Curzon, is selling mobile phones through a deal with France Telecom's Orange and has purchased a 50 per cent stake in digital media firm 7digital.