Universal Music UK has reported its 2019 results and issued guidance on the impact of Covid-19 on this year’s performance.
According to financial results, Universal Music Operations increased revenues for the calendar year 2019 by 11.8% to £434.1 million. The growth in turnover was down to higher demand for streaming services and the release schedule.
At the major run by CEO/chairman David Joseph, revenues from the UK accounted for 64.5% of the total, followed by the US (14.8%) and Europe (13.1%).
Losses widened from £8.8m in 2018 to £22.2m last year, largely down to a write-off on an inter-company balance sheet, which impacted the result by £12.2m. The move to King’s Cross during 2018 contributed an additional £10m of expenditure last year.
Gross profit margin decreased from 32% to 29.7% as a result of an increase in manufacturing costs as well as one-off factors.
Universal Music UK also addressed the impact of the coronavirus on this year’s performance.
“In particular, the lockdown and social distancing measures introduced by the government directly impact sales of physical product and certain ancillary revenue streams such as broadcast and live income,” said the strategic report.
“However, the directors consider that the company is well placed to deal with these challenges due to its growing digital and direct-to-customer revenue streams, driven by the depth of its artist roster and extensive back catalogue of repertoire. These revenue streams are expected to be resilient to the impacts of Covid-19.”
Universal said there would also be cost savings in marketing, travel, tickets and entertainment.
The board is incredibly proud of the resilience, teamwork and creativity that our teams have shown in adapting to the new circumstances
Universal Music UK
Universal is assisting staff and artists during the pandemic, including interest-free royalty advances and fee waivers for acts with the major.
“We are also providing our artists with tools and platforms to reach fans and generate income when touring and other live appearances are not possible,” stated the company.
“Covid-19 has of course had a huge impact on Universal Music employees, who are now all working from home whilst our headquarters are closed due to the lockdown restrictions. The board is incredibly proud of the resilience, teamwork and creativity that our teams have shown in adapting to the new circumstances.”
In its financial report, Universal Music UK underlined its work on neurodiversity in the workplace.
On Brexit, Universal’s directors said the major has put in place scenario planning to ensure the company could continue to operate in the event the UK government does not secure a trade deal with the EU.
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