Digital investment pushes Indigo Books to a loss

TORONTO (Reuters) – Indigo Books & Music Inc slid to a loss in the fourth quarter on heavy charges for investments in its digital business such as its Kobo e-reader, results showed on Tuesday.

Canada’s biggest retailer of books, electronic books and e-readers said earnings fell to a loss of C$11.7 million ($12.06 million), or 47 Canadian cents a share for the three months ended April 2.

That compared with earnings of C$497,000, or 2 Canadian cents a share, in the same period a year earlier.

The company, which is spending heavily to tap into the trend of reading books on smartphones, tablets or notebooks, paid C$21.8 million in financing charges and interest during the quarter. That compared with charges of C$936,000 in the same period a year ago.

E-reading service Kobo, which was spun off in late 2009, but in which Indigo is still the majority shareholder, comes pre-installed on devices such as Samsung’s Galaxy Tab and Research In Motion’s PlayBook.

Kobo raised C$50 million in funds from investors earlier this year to speed up its expansion and new product development.

Indigo said its revenue fell nearly 8 percent to C$211 million in the fourth quarter, partly because the company lacked a hit equal in success to last year’s “Twilight” trilogy.

($1=$0.97 Canadian) (Reporting by Nicole Mordant; editing by Rob Wilson)