Trading Statement

17 Jun 2005 07:02

Sanctuary Group PLC17 June 2005 17th June 2005 THE SANCTUARY GROUP PLC TRADING UPDATE FORTHCOMING INTERIM RESULTS ANNOUNCEMENT The Sanctuary Group plc ("Sanctuary" or the "Group"), the international musiccompany, will be announcing its Interim Results for the 6-month period to 31stMarch 2005 on Tuesday, 28th June 2005. At the AGM on 23rd March 2005, Executive Chairman Andy Taylor stated that: "Consistent with prior years, shareholders should expect a stronger second halfthan first half and indeed we anticipate that the disparity between the firstand second halves will be more marked than hitherto." It has become clear since that statement that Interim results are likely to showan Earnings Before Interest Tax Depreciation and Amortisation figure (EBITDA) inthe region of 40% lower than the comparative for the same period last year. Thisis largely a result of significant slippage of record releases in the Recordsdivision and therefore lower sales than were achieved in the correspondingperiod last year. Simultaneously, the Group has incurred the expected additionaloperational costs in pursuit of its international growth strategy. The Group is currently reassessing full year forecasts and will update themarket when the Interim figures are released. It is now clear that the factorshighlighted above and more challenging trading conditions in the second halfwill have a negative impact on the Group's full year figures. However, thepositive weighting of the second half is likely to mean that the percentagedecline for the full year should not be as great as at the Interim stage withreference to the previous year's figures (especially as at least some of theslippage incurred in Records is expected to be recovered). However, with thisdegree of shortfall in the first half, the market should expect that EBITDA forthe full year is likely to be substantially less than last year's EBITDA andconsequently very substantially lower than market consensus for the full year. The Board is now undertaking a thorough review of all the operating divisionswith a particular emphasis on looking at ways to improve cash generation andprofitability and reduce long-term debt levels. Further information on theprogress of this review will be made available with the announcement of theInterim results. With regard to the Group's statement made on 3rd June in response to speculationabout a potential offer for the Group, the Board has nothing to add at thisstage and will make any further announcements as and when it becomes required orrelevant to do so. A presentation to analysts on the Interim Results will be made by Sanctuary'ssenior management team at 11.00am on Tuesday 28th June at CSFB's City Office,32nd Floor, Tower 42, International Financial Centre, 25 Old Broad Street,London, EC2 1HQ. For further information, please contact: Philip RangerDirector, Corporate & Investor Relations The Sanctuary Group plc 07768 534641/ 020 7300 1323 Paul Downes Merlin 07900 244888/ 020 7653 6620 Eddy LevitenHead of Corporate Communications The Sanctuary Group 020 7300 6542 This information is provided by RNS The company news service from the London Stock Exchange