Chrysalis, the independent music group, said it would end the year in the red, and blamed the faltering economy, a lack of hits in summer, the Hollywood writer's strike, and an abortive sale process for its difficulties.

The company, which manages the copyrights to songs from acts ranging from Blondie to teenage folk star Laura Marling, said it would make an operating loss of about £1.2 million in the 13 months to September 30 - the same level of loss it reported in its first seven months of its financial year.

Chrysalis said in a trading statment, that it had felt "the effects more recently of the challenging macroeconomic environment" which had damaged its royalty income from CD music sales, and added there was less demand for music as a soundtrack in advertising or on television.

It went on to say that there was "a relatively quiet period for new releases" in the summer months, industry code for an absence of top sellers, and that its small record label, The Echo Label, also struggled.

The interim loss was blamed on the uncertainty stemming from the failed sales process, in which the company -- one of a handful of remaining indepdent music business of any substance -- could not attract a reasonable offer. EMI, the last bidder in the race, cut its initial offer, forcing Chrysalis to reject the £150 million bid.

The writer's strike in Hollywood also tempered demand for the use of its music in US films and television, in the first half.

With its independence confirmed, Chrysalis said it was back in the business of signing new songwriters such as Marling, to its music publishing catalogue, but would only say that it was "hopeful that the music publishing business would return to growth in the medium term".

It expected that its most important source of income, its share of songwriter royalities, would be lower than last year by an unspecified amount. Last year its net publishing share of revenues was £11.9 million, and the company's target is to outperfom the four majors by improving at around 5 per cent a year.

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