[TypicalGirls] Rough Trade for sale?
joly at dti.net
Wed Nov 29 22:32:59 EST 2006
Sanctuary shares plummet
Fiona Walsh, business editor
Thursday November 23, 2006
Shares in Sanctuary crashed more than 25% this afternoon - from
9.75p to 7.25p - as the troubled music group warned of losses at
Rough Trade Records and said it may need to take extra
provisions of between £15m and £18m this year.
But chief executive Frank Presland also said Sanctuary has
received a number of approaches for parts of its business and,
once its latest results have been reported, "expects to be in a
position to consider these strategic proposals".
Sanctuary had hoped the business would break even in the year
ended September 2006.
But Mr Presland said today the business is now expected to make
pre-tax losses of £2.8m for the year.
Although Sanctuary owns only a 49% stake in Rough Trade, it will
take all of the loss in its resuts.
In addition, Mr Presland said "a number of issues" have come to
its attention in the recorded product division and could lead to
further provisions of between £15m and £18m.
Mr Presland said it was "disappointing that Sanctuary's recovery
is obscured by further historic accounting issues".
But, he added: "The identification of those issues serves to
emphasise the determination of the new management team to
improve the financial reporting of the group.
"Considerable progress has been made in dealing with the
outstanding legacy issues.
"We are seeing the first signs of success from our efforts to
put the business on a proper footing and I am confident that we
will continue to make progress in the current financial year."
Earlier this month Sanctuary was hit by the departure of its co-
founder, Rod Smallwood, who left to run his own business and
took one of the label's prime act, Iron Maiden, with him.
Co-founder Andy Taylor was forced out in March after accounting
errors were discovered at the group, whose artists include Elton
John and James Blunt.
Sanctuary is more crock than rock
Friday November 24, 2006
Sanctuary's new bosses - former British Airways chief Robert
Ayling and Frank Presland, the former chief executive of Sir
Elton John's management company, have also uncovered "a number
of issues" that will result in provisions of up to £18m. This
relates to advances given to artists in the belief that they
would be returned as income. That future income was then booked
as an asset, which it now appears is worthless as the company is
writing off 100% of the advances made.
This is the latest in a back catalogue of bad financial news
stretching back two years that centred on huge debts, mounting
losses and a cash crisis. It axed staff, was forced into a
rescue rights issue and share restructuring and parted company
with its founder and chairman, the cigar-chomping Andy Taylor,
when accounting issues emerged.
Yesterday's latest double whammy left the shares rocking and
rolling at just 6.75p, down 3p on the day. The scale of their
collapse is on a par with the demise of Sanctuary band The
Strokes. Adjusted for the rights issue, Sanctuary's shares were
trading at some £35 each five years ago. As recently as May 2005
they stood at £17
Sanctuary has flagged that it is mulling the sale of
underperforming businesses. Its 49 per cent stake in Rough Trade
appears certain to be sold off and further asset sales could
lead to a full break-up of the embattled group.
However, the fiercely independent artist manager, music label
and publisher has already rejected advances from rival Mama just
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