Its a lot harder this year to find companys that fit growth criteria and are relatively cheap, I feel I have found that combination with Sanctuary Group a music company with three main Divisions which comprise of the following.

Developers of intellectual property rights (IPR) in the fields of music, television and entertainment

Its recorded music catalogues now contain over 150 000 tracks, making it the world's largest independent owner of music IPR. Recent successes include Kiss, Spiritualized, The Strokes, Alison Moyet, The Libertines, The Dubliners, Small Faces and Hall & Oates across over 20 labels including Rough Trade, Trojan, Sanctuary Records and Fantastic Plastic. It is the UK's largest independent record company and is achieving dramatic growth in sales of recorded music in the US.

Artist Services division

Manages over 50 acts including Jane's Addiction, Iron Maiden, Manic Street Preachers, Guns N' Roses, Jimmy Page, Robert Plant, The Who and Super Furry Animals, as well as some of the world's top producers including Bob Ezrin,Kevin Shirley and Chris Neil. Bravado, a major international visual rights licensing company has clients ranging from Eminem, Robbie Williams, Christina Aguilera and 50 Cent to Hilary Duff, TV's 'Lizzie McGuire', and Little Red, the Duchess of York's new book character.

Screen division

Creates and produces quality music TV programming as well as a large number of music DVD releases, with recent success by Black Sabbath, Neil Young and Pet Shop Boys.

Latest Results preliminary results ending 30th september 2003.

Highlights:

• Turnover increased by 28.5% to 151.7m (2002: 118.1m)

• EBITDA increased by 20.0% to 24.5m (2002: 20.4m)

• Normalised pre-tax profits rose by 19.7% to 17.0m (2002: 14.2m)*

• Normalised earnings per share rose by 21.5% to 3.85p (2002: 3.17p)

• Dividend per share increased by 14.3% to 0.4p (2002: 0.35p)

• Continuing improvement in cash conversion


Highlights During The Period Included

. In recorded music included Kiss, whose double album 'Alive IV'
has shipped Gold in the US. The DVD was Number One in the US and went double
Platinum in December 2003. There were strong sales in the US for the new
album by Lynyrd Skynyrd whilst The Libertines 'debut album 'Up The Bracket'
has sold over 170,000 copies worldwide to date.

• In Artist Management, Iron Maiden played to over a million people across
Europe as part of their most successful year ever, and Led Zeppelin's live
DVD became the best selling music DVD of all time. New managers were
attracted bringing with them acts such as Mick Fleetwood, Manic Street
Preachers, Groove Armada and The Von Bondies.

• In the best year ever for live music, Sanctuary was involved in some
7,000 shows across Europe, Asia and Australasia for acts including Dido,
Robbie Williams, The Darkness, Red Hot Chili Peppers, and Coldplay from
their Agency roster of over 350 acts. Merchandising also benefited from this
increase in live activity, representing acts ranging from Eminem and
Christina Aguilera through to Bon Jovi and Robbie Williams.

During the period the company also achieved the following,

• Acquired Music World Entertainment, which manages such global selling
artists as Beyonce, Kelly Rowland and Destiny's Child, and formed 'Urban'
focused music division.

• Post year-end, completed fund raising of up to 30 million, through the
issue of convertible loan notes and warrants, to support the Group's
strategic growth.

Commenting on the results, Exec Chairman Andy Taylor said

'I am very pleased to be able to report such strong results which, once again,
justify our belief that music in all forms is as popular as ever and that,
globally, people will continue to consume and pay for high quality music. Live
performance continues to be a key driver in the success of an artist's career,
and each year brings evermore innovative ways for artists to create revenue from
their music, through merchandising, ringtones, downloads and sponsorship: our
360 degree music business model, which gives us exposure to all of these key
areas, represents the key to Sanctuary's continuing prosperity.

The past few years have seen significant changes in the global music industry
and this evolution has created a short period of unprecedented opportunities
for Sanctuary to acquire competitively valued, high quality assets. We firmly
believe that, through the funds we have recently raised, it is in the best
interests of our shareholders for us to take selective advantage of some of
these excellent opportunities. It is this strategy that will deliver high
quality earnings and enhance cash and capital returns in the medium term.'

Forward Outlook

We expect to see strong growth and for the Sanctuary model to bloom further in
2004. Records, with its recent successes with a fully structured global
distribution capability is well-positioned to take advantage of the growing
distribution mechanisms available through internet and telecoms downloads and
audio visual, but will also continue to be one of the first ports of call for
both new and established long term career acts. Although we have seen
consistent strong growth in the sales of CDs over the past few years, we
nonetheless welcome the progress being made in the provision of
consumer-friendly legitimate download services. We have either already reached
agreements on licensing, or are in the process of negotiating the licensing of
our material to all legitimate services on a global basis.

Our move into Urban music with some of the biggest artists in the business,
combined with the strength and breadth of our roster of clients in Artist
Services (which is second to none), allows us to take full advantage of the
rapidly growing live performance and artist-associated merchandising,
sponsorship and endorsement opportunities.

Overall, therefore, I expect to see continued growth in both profitability and
turnover across all of our business areas. In combination, the maturing of our
Records model, which is starting to see strong cashflow from previous signings
exceeding investment in new acts, and the growth of our highly cash generative
Artist Services model should also see cash conversion continue to grow.

Finally, we remain fundamentally committed to our strategy for growth, taking
advantage of the many opportunities existing in the current market place through
both organic means and via selective acquisitions.


Latest News

The company has built a 30 million war chest to fund acquisitions through the issue of issuing loan notes last September.
It recently picked up reggae label Creole records and it has three to four other acquisitions in its sights.
Sanctuary's existing business has been enjoying some noteworthy successes and recently achieved its first ever UK number one single.

Fundementals.

At the current price of 52.5p the shares are valued at 12.4 times earnings forecast for the year to the end of September and 11.2 times expectations for the year after, as you can see these are hardly demanding figures, and the share price should be bouyed by the acquisitions that the board are seeking this year.

Market Capitalisation on 27-Feb-2004 178m
No of shares in issue 338.317m


I rate this a medium to long term investment. If you like the story please remember to DYOR and you are responsible for your own buying and selling timing actions.

cheers GF.

Chart showing the price is now moving up into a gap and looking strong.



cheers GF.

Brokers Forecasts.

WHAT THE BROKERS SAY

Strong Buy 2

Buy 0

Neutral 3

Sell 0

Strong Sell 0

Total 5

cheers GF.

Hi GF

I don't hold but I do rate the company. I have held it on and off since 1999 and was fortunate enough to hold it during its run up in 1999 from 29p before selling at 76p. I have bought it on a few occasions since but the share price has never taken off, I think because of its heavy issuance of paper and debt to fund its acquisitions. To me, it is now big enough perhaps to be a takeover target for a major. It has close ties to BMG of Germany and it wouldn't surprise me if they eventually snap it up. That is my opinion only.

I think Andy Taylor is the key man and much depends on his continung enthusiasm and drive.

Bones

Hi Bones, yes Ive been in and out over the past 5 years and its never dissapointed. BMG of Germany could go for this one especially in the light of increased take over action.

Im just pleased that they have said they are looking at perhaps getting four aquisitions on the cheap.

cheers GF.

Some good Institutional news..............

Sanctuary Group PLC
12 March 2004

Sanctuary Group PLC



The Company was notified on 11 March 2004 that Morgan Stanley Securities Limited
('MSSL') acquired an interest in the ordinary shares of the Company on 10 March
2004 with the result that MSSL now have a beneficial interest in the Company of
20,752,491 shares, being approximately 6.20% of the issued share capital of the
Company.



MSSL have transferred from time to time shares to third parties on terms which
gave MSSL the right to require the return of an equivalent number of shares.
Accordingly, MSSL's interest in 16,599,000 shares is pursuant to Section 208(5)
of the Companies Act 1985.



MSSL is a member of the Morgan Stanley Group of companies. Those group companies
which are direct or indirect holding companies of MSSL are, under the terms of
section 203 of the Companies Act 1985, each interested by attribution in any
shares in which MSSL is interested.


This information is provided by RNS
The company news service from the London Stock Exchange



cheers GF.

A good time to Add I think at 47p

I agree, the future looks like steady if unspectacular growth (despite recent slip in price) , I'm in for medium term and reasonable gains.