EMI, the world’s biggest music label, which also happens to be up to its eyeballs in debt, has shocked the business world by announcing a profit of £121 million for the year ending March 2010.
While a lot of financial alchemy was used to arrive at this figure (after restructuring charges but before impairment charges on goodwill and intangible assets), it’s a vast improvement on the previous year’s paltry £7 million profit. The results also saw the beleaguered label increasing revenue from £1.56 billion to £1.65 billion.
While Guy Hands, boss of the private equity firm Terra Firma which owns EMI, will be rubbing his hands in glee, it doesn’t get around the fact that the firm is still almost £2 billion in debt with lenders looking to foreclose on it next year. The £121 million doesn’t even cover the interest payments on the massive debts it is saddled with.
