EMI Shortfall "Not As Severe"

Music giant EMI offered investors hope today that a shortfall in annual profits would not be as bad as originally feared.

EMI warned in February that profits would drop by 15 per cent to £138 million after key album releases from Coldplay and Gorillaz were delayed until spring, but said it now believes the annual figure will be closer to £141 million.

In its final update before the release of its full-year results next month, EMI said the slowdown in sales at its recorded music division was also not as severe as previously thought. EMI said it now believed sales of recorded music would be around 7.5 per cent lower after stripping out the impact of currency fluctuations in the year to March 31 - against its earlier guidance of an 8 per cent to 9 per cent decline.

The positive update failed to reverse any of the damage caused by the February profits warning which wiped 15 per cent off the value of the stock. EMI shares traded 0.5p lower at 246.75p today. Hopes that the company will be able to return its recorded music division to growth are underpinned by the scheduled release of Coldplay's new album - titled X&Y - on June 6.Music fans will be able to buy the Demon Days album by the Gorillaz even sooner as it is due to appears on store shelves on May 23.

In February, EMI said delays to both albums had caused it to lose market share over the past year despite successful releases from other artists such as Robbie Williams and The Rolling Stones.

The setbacks overshadowed a brighter assessment of the health of the global recorded music industry which has suffered from piracy and illegal downloads.

The company added at the time that its music publishing arm, which holds the rights to more than one million musical compositions, continued to perform well.