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Date: Wednesday 09 Jul 2008

LONDON (ShareCast) - Entertainment products distributor and former bid target Air Music & Media rallied to its best in over three weeks after reporting a big hike in revenue and an increase in underlying profit.

The firm added it has made a good start to the new financial year despite difficult trading conditions in the retail sector in general, and is optimistic about its half year results.

Profit before tax and exceptional items for the year to 31 March rose to £5.7m from £5.4m in 2007. Including a goodwill impairment charge of £12.4m, up from £2.2m last year when £1.7m of other one-offs were added, the group posted a loss of £6.7m versus a profit of £1.5m last time.

Revenue from continuing operations leapt 31.5% to £80.9m, with sales at the distribution business up almost a half to £72.4m as supermarkets sold more DVDs.

The wholesale business fared badly though. Sales dropped 36% to £8.2m as competition from supermarkets continued to hurt specialist music and film retailers.

“I am delighted to report a set of results that demonstrate the growth and sustained underlying profitability of the group,” said non-executive chairman Peter Cowgill.

“Our distribution business strengthened its market position in the UK commencing supply to several new customers this year and, against a challenging market backdrop, I look forward to continuing with the progress achieved to date.”

Last month, the company said talks begun in February regarding a possible bid for the firm had ended.

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