The independent music company Sanctuary has managed to shrug off the current gloom surrounding the music industry by posting a large rise in profits.

Sales of recorded music have been in decline, undermined by CD piracy and illegal downloading from the internet.

But Sanctuary said its wide range of interests, which include merchandising and management as well as CD sales, had helped its pre-tax profits to rise 25% to �14.2m.

The company works with a diverse range of artists, including Dolly Parton, Guns n' Roses and new acts such as The Libertines.

Expansion

The Sanctuary Group began 25 years ago as manager of the heavy metal band Iron Maiden, but has since expanded to include interests across the music business.

It specialises in working with acts that might not be the most fashionable, but tend to have a long track record and a solid fan base.

That means its acts include artists such as the Pet Shop Boys, Alison Moyet and Gary Moore.

It has also gained a large extensive back catalogue by buying labels such as Castle and Trojan.

The Trojan label provided the tracks for the reggae compilation 'Young, Gifted and Black' which was one of Sanctuary's best sellers last year.

It also has interests in new acts such as The Strokes - whose debut album went platinum - through its joint venture with Rough Trade Records.

Growing demand

Sanctuary's chairman Andy Taylor told BBC Radio 4's Today programme that while CD sales might be falling, the firm's model would stand it in good stead.

"Our model, unlike record companies, is a 360 degree model across the music industry, so we handle touring, merchandising, DVDs, CDs etc.

"From our point of view the demand on a global basis for music is continuing to grow.

"If you put it all together you see a growing trend, if you look purely at the sale of CDs there is a decline, but we believe that's to a large part because of the poorer nature of the product available."