HMV Group issues further profits warning

| April 5, 2011
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Music, books, DVD and games retailer, HMV, has issued its third profits warning in as many months.

It expects full-year pre-tax profits to be around A?30 million – lower than the A?38 million it estimated a month ago.

The 90-year old retailer, which also owns Waterstonea��s bookshops, in January said it was struggling to meet the terms of its lending agreements.

At the time, HMV said credit insurers were reviewing the level of cover they provide on the group.

However, this undoubtedly raises concern among investors after the withdrawal of credit insurance led to the collapse of iconic department store, Woolworths, as well as music and games retailer, Zavvi, back in 2008.

However, the company has announced it has gained an extension from its bankers for tests on loan conditions, adding that its bank lenders “continue to be supportive.”

The company continues to struggle amid tough competition from supermarkets and internet companies, such as Amazon.

The group today said trading conditions had remained “difficult” since its last profits warning at the beginning of March.

The problems have led to an 80% fall in its share price in the last year.

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