HMV predicts profit next year, shares rocket

There are signs of hope for struggling high street entertainment chain HMV as it looks to capitalise on the demise of its rival Game.

Its latest trading update reveals HMV expects to make a loss of around £16m in the full year to April 28, with like-for-like sales down 12.4% in the last 17 weeks of the reporting period.

That's not good, but with Game having collapsed earlier this year and a "changed" relationship with key music and film suppliers HMV predicts profits before tax for the next full year of £10m against an analyst consensus of a loss of £5m.

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This prediction had boosted the share price 10.8% by 11:16.

The firm's Chief Executive, Simon Fox, said: "The last year has been a difficult and challenging one for HMV and this will be reflected in our annual results. However we are confident that the actions we have taken will enable us to significantly improve our profit and cash generation in the year ahead."

BS