LONDON (CelebrityAccess MediaWire) — The highly publicized troubles of music giant Sanctuary Group are still far from over, the company has admitted, as it continues to pay the price for a costly acquisition spree.
Shares in the world’s biggest independent music company tumbled over 30% last Friday, after the newly appointed management team at the company warned that trading at Sanctuary’s records division would be worse than previously thought, according to The Guardian.
Sanctuary said the poorer records performance meant it would post a loss for the full year, as it is still dealing with delay-related losses with its Urban Records business.
Temporary CEO Frank Presland, who stepped in when the new board recently removed Andy Taylor from the post, told the paper, “It is disappointing to have to bring this news to the market. But, what I’ve seen having been chief executive for just under a month, is a business that can prosper if it faces up to the new realities.
The company is predicting a loss before interest, tax, depreciation and amortisation for the group of somewhere between £17- to £22-million in the year to September 30th.
Last year was described as the company’s worst-ever performance, claiming a loss of £143 million, largely due to problems with its newly acquired Urban Records division.
Many analysts have blamed Sanctuary’s troubles on the company’s overly-ambitious acquisition spree, including the 2003 purchase of Music World Entertainment, which performed well below expectations for Sanctuary.
The company attempted to resolve its financial woes earlier in the year with a £110 million share placing. Since then, the new management have been trying to slash costs and get rid of various struggling parts of the group, including some studios and Urban Records. The company announced this week that the disposal of various non-core assets was likely to take longer to complete than previously expected and more restructuring will be needed. –by CelebrityAccess Staff Writers