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PolyGram's Profit Up 25%

March 06, 1992|ALAN CITRON | TIMES STAFF WRITER

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 hold from buy, 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."

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