(CelebrityAccess MediaWire) — Stock in Sanctuary Group continued its downward trend on Wednesday, after the British independent firm reported its third profit warning since June.
The firm issued a statement to the London Stock Exchange, saying that full-year losses would be below the lowest end of market expectations.
The group said it was “likely” to generate a loss at the level of earnings before interest, tax, depreciation and amortisation and before exceptional items including restructuring costs and provisions, according to Billboard.
Group CEO Andy Taylor openly admitted that the company’s bullish expansion strategy was to blame for the outlook, in the short-term at least.
“I am well aware that Sanctuary has disappointed the market significantly this year and, with hindsight, it is clear we grew too fast,” he said in a statement, according to the magazine.
In yesterday’s morning trading, the company’s share price was down 16.5%.
Sanctuary said it was on target to achieve $12.6 million to $14.4 million of annual cost saving to be implemented by the year-end and intended to make additional cost savings.
Sources at Sanctuary are confident that the company is close to turning the corner and returning to financial health.
“We feel like we are getting a fresh start. Next year definitely won’t be so bad,” a source told Billboard.
The company also asserts that it continues to have the support of its bankers, a factor which bodes well according to analysts.
“The fact that the banks aren’t foreclosing on them and that they will continue to have the banks’ support is very positive,” Patrick Yau, an analyst with Bridgewell Securities told the magazine. “The downside is that this year will be dreadful (financially). They are going to be hit by declining revenues and declining margins. But they feel that they will bounce back quickly.”
While talks on a buyout of Sanctuary collapsed in August when Warner Brothers pulled out, the company’s loss-making books publishing division was sold off recently to Music Sales Group.
In yesterday’s statement, Sanctuary said it is continuing discussions over the sale of a number of unidentified non-core businesses.
“I am totally focused on repairing the short-term damage to what is fundamentally a robust business,” said Taylor in the statement. “The board and I are determined to steer a company that has an extremely strong roster of artists back to a profitable trading position and back to sustainable long term growth.” –by CelebrityAccess Staff Writers