Remastered Beatles royalties aid Chrysalis

By Esther Bintliff  Financial Times  12/17/10

Published: December 17 2010 02:24 | Last updated: December 17 2010 02:24

Royalties from the release of remastered Beatles albums helped lift full-year revenues at Chrysalis, the UK music publisher that is due to be acquired by BMG, its German rival.

Chrysalis 2010 results – year to September 30
Sales Pre-tax profit Earnings per share Dividend
£69.8m (loss of £3.66m) (loss of 6.04p)
↑ 11% (loss of £3.84m) (loss of 5.74p)

However, in its last full year as an independent publisher, Chrysalis remained in the red due to amortisation and restructuring costs.

Last month, BMG, the fast-growing joint venture between Bertelsmann, the German media company, and KKR, the US private equity group, said it planned to buy Chrysalis for £107m ($167m).

Chrysalis said it would publish its recommendation to shareholders to approve the cash offer “shortly”.

“Since the announcement on November 26 that Chrysalis is to be acquired by BMG, I have been filled with conflicting emotions,” said Chris Wright, founder and chairman of Chrysalis. “But, above all, it is with great excitement that Chrysalis will form part of BMG’s vision.”

In the year to September 30, group revenue rose 11 per cent to £69.8m, up from £62.9m in 2009.

The rise was mainly due to Chrysalis’ £11m acquisition of First State Media in April, which generated revenue of £5.3m, and a 28 per cent rise in non-publishing revenue to £4.1m, thanks to strong sales of the digitally remastered Beatles studio albums. Chrysalis owns George Martin’s producer royalties for The Beatles catalogue.

Consolidated net publisher’s share – an industry measure of revenues that represents the royalties a publisher receives after payments to artists and writers – rose 24.6 per cent to £16.7m, from £13.4m in 2009.

Chrysalis Music’s top earners in its publishing business included Blondie and David Bowie, as well as the catalogue of US singer-songwriter Richard Marx, which the company acquired in June 2009.

Adjusted operating profit was £5.3m, up from £3.3m in 2009. However, exceptional costs of £5m – including £2.4m relating to the acquisition of First State Media and £1.5m in amortisation costs – brought statutory operating profit to £305,000.

After net finance costs of £3.9m, Chrysalis recorded a pre-tax loss of £3.7m, narrowed from the £3.8m deficit in 2009.

Net debt rose from £15.8m to £20.4m.

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