UK Markets close in 3 hrs 18 mins

Struggling HMV Confirms Big Annual Loss

(c) Sky News 2012

The debt-laden entertainment retailer HMV has confirmed an annual loss of £16.2m as sales tumble amid a tough economy and stiff competition.

Like-for-like sales fell 12.1% in the year to April 28 - despite the company's efforts to kickstart till receipts by branching out from CDs (SNP: ^CDSY - news) and DVDs into technology such as Google (NasdaqGS: GOOG - news) 's Nexus (Xetra: 522090 - news) tablet.

With the addition of exceptional items, including operating and finance costs, the pre-tax loss is deepened to £38.6m.

However, HMV says it retained a strong market share in music, films and games and it expected to return to profit in its current financial year.

It is predicting a profit before tax of £10m for 2012/13 - just days after its chief executive Simon Fox quit - followed 96 hours later by finance director David Wolffe.

They are being replaced by new CEO Trevor Moore - the former boss of Jessops (Berlin: JS4.BE - news) - and Ian Kenyon from September 3.

In a statement Mr Fox said: "The last year has been a difficult and challenging one for HMV and, as expected, this is reflected in our annual results.

"However, we are confident that the actions we have taken will enable us to significantly improve cash generation and make profits of at least £10m in the year ahead."

He added: "Although we have clearly been through a turbulent period, our financial position is now stable thanks to the support of our suppliers, banks and colleagues, and I am confident, as I hand over the reins to Trevor Moore, that HMV has a secure future under his leadership."

The results follow a tough year for HMV as the retailer's share price has plummeted and it has had to sell off parts of the business to generate more cash.

In June HMV sold its live music venues, including the Hammersmith Apollo, for £32m.

Last year also saw the £53m sale of the firm's book chain, Waterstones.