PolyGram, the London-based entertainment giant that is carving out a bigger presence in Hollywood, on Thursday reported a 20% jump in net sales and profit growth of 25% for 1991.
Strong growth in Germany and the Far East pushed sales to $3.7 billion, up from $3.1 billion in 1990. Net income rose to $261 million from $211 million. In North America, where the company lost $25 million in 1990, it reported a profit of $6 million last year. Results for the fourth quarter were not released.
Chairman Alain Levy, in a telephone interview from London, said the company anticipates continued growth in 1992 with the release of records by top-selling acts such as Def Leppard and possibly Bon Jovi, even though the worldwide economic climate remains uncertain.
"We are starting to feel the recession in continental Europe, which is a major market for us," Levy said. "But we also have a great 1992 release schedule."
PolyGram is 80% owned by Philips Electronics of the Netherlands. Its U.S. record labels include Mercury, A&M and Polydor. North America accounts for only 18% of the company's overall record business, but Levy said he is committed to improving the firm's market share.
PolyGram also is making inroads in the film business, which made up only 1% of its sales last year.
Last fall, PolyGram announced plans to invest $200 million in movies over the next four years. The plan came under criticism in a recent report from influential securities analyst Lisbeth R. Barron of S. G. Warburg & Co. in New York. Barron lowered her recommendation on PolyGram to \o7 hold \f7 from \o7 buy, \f7 arguing that film costs will drain overall profits.
But Levy said PolyGram is confident of its slow-growth strategy, which calls for the company to release six films this year through its five wholly or partially owned movie companies: Propaganda Films, Working Title, A&M Films, Manifesto and Palace.
"It's a very good time to be in the movie business," Levy said. "If you look at the numbers long term . . . the movie business will grow a lot more rapidly than the music business."