Shares in UK entertainment retailer HMV soared Friday after the group forecasted a return to profit for its new financial year.
Investors shrugged off HMV's worse than expected loss for the group's financial year ending in April as it blamed a weak new release schedule in CDs and DVDs.
As of 0830 GMT, HMV stocks soared by nearly 14 percent to 4.20p, after the retailer pledged to beat analysts expectations with a pretax profit of at least £10m in 2012 to 2013, ahead of forecasts for the period which stand at a £5m loss. The company will report preliminary full-year earnings in June.
The struggling British retailer predicted a pretax loss of £16m for the 2011 to 2012 financial year, as the 17 weeks to 28 April revealed underlying sales fell 12.9 percent. It also predicted that year-end net debt will reach £168m, instead of a previous forecast of £180m, after it was recently thrown a lifeline when suppliers including Universal Music came to its rescue,
HMV, which trades from about 250 stores in Britain and Ireland and employs around 4,500, has been paring back on assets, by closing down stories, selling its Waterstones bookchain and Canadian arm, while also shifting its focus on growth markets, such as new technology products, live music and event ticketing.
Last year, the group unveiled a 51 percent rise in technology sales, in the five-week Christmas period, where about 500,000 pairs of headphones and 20,000 tablet computers were sold.
"The measures we're taking to turn the business around are starting to bear fruit," said Simon Fox, chief executive officer at HMV in January this year".