HMV on up as Fox stays on

Aug 11 2009 by Peter McCusker, The Journal

HMV’s highly rated boss gave investors a boost after reports said he had ruled himself out of the race to run broadcaster ITV.

Simon Fox was regarded as a front-runner for the job but apparently told the HMV board that it was too soon to leave because he is just over two years into a three-year turnaround programme.

Shares responded to the news by rallying 4% to 120.5p, although this included the additional boost caused by a broker upgrade from HSBC. Lifting its target price to 160p from 129p, HSBC said the autumn release schedule of games and music looked positive for the company, despite continued tough markets.

In light of competition from online music downloads, Mr Fox has increased HMV’s focus on video games, which now account for almost a quarter of sales. A revamped website has also enjoyed a strong sales increase, while the group has rolled out its purehmv loyalty card in the last year.

Mr Fox’s decision is thought to leave the way clear at ITV for rival candidates Pascal Cagni, the head of Apple Europe, and Tony Ball, the former chief executive of satellite broadcaster BSkyB. Michael Grade, who joined ITV in November 2006, is due to step down from his role as executive chairman at the end of a series of regulatory reviews on the sector.