Investment turns round Sanctuary.(News)

Heavy investment in "core businesses" such as the management sector helped Sanctuary recover from the first profits warning in its history to post full-year revenues up 45% to 220.9m [pounds sterling].

Although Sanctuary caught the City by surprise last week, when its auditors uncovered a 2.1m [pounds sterling] loss at the book publishing division, the group's pre-tax profits for the 12 months ended September 30 2004 were only slightly down at 16.1m [pounds sterling] (17.0m [pounds sterling]).

Over the financial year, the group poured 24m [pounds sterling] into bolstering its management businesses, signings and publishing catalogues. Executive chairman Andy Taylor says the move was designed to "build up areas of our business that we felt were below critical mass, in particular artist management".

The acquisition of Tony Davis' management group saw artists such as Nelly join the group and the act immediately delivered a US number one album to the two-year-old Sanctuary urban division. Recently installed group CEO Merck Mercuriadis says that, with another four Top 20 US singles from the urban division, he is delighted with the results.

"I'm very happy to achieve what we have done in such a short period and now have acts like Jadakiss and D-12," he says.

Slipknot, Russell Watson, The Datsuns and The Departure also came under the group's management umbrella during the period and the division now boasts more than 130 acts. The strategy of beefing representation paid off in both turnover and profit increases, with the artist management and live side of the company ...