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Thorn EMI Profit Jumps 27% on Spinoff Expectations

June 12, 1996|CHUCK PHILIPS | TIMES STAFF WRITER

As the London-based music and furniture conglomerate prepares to split itself in two, Thorn EMI reported Tuesday that profits rose 27% from $650 million in 1994 to $827 million for the year ending March 31.

The firm's music division, home to the Virgin, Capitol and EMI record labels, is expected to be spun off in August after Thorn's annual shareholders meeting. There has been widespread speculation in the record business that Walt Disney Co. is interested in acquiring EMI Music.

In a telephone interview from London, Thorn EMI Chairman Sir Colin Southgate denied that EMI is on the auction block.

"I've had no conversations about selling the company with anybody," Southgate said Tuesday. "No one has even approached me. All we're doing is getting on with the business of running our business. And based on these results, we can safely claim that we are running it quite successfully, thank you."

EMI's record division, which releases music by such artists as Janet Jackson, the Geto Boys and the Beatles, posted a pretax profit last year of about $558 million, up about 23% from $452 million in 1994.

Out of the six major record conglomerates, EMI Music ranks third in international sales and fifth in the United States.

"One area we all know we could improve is our North American position," Southgate said. "We'd like to move up from fifth and I believe we've made some steps in the right direction. On the international front, the results show we have tremendous strength."

In August, Thorn EMI shareholders will receive one Thorn share for each Thorn EMI share under the terms of the spinoff.

After the proposed breakup, the EMI Group will include the Virgin, EMI and Capitol record labels as well as the HMV music store and Dillons book chains.

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