Chrysalis's abortive att­empts to find a buyer weighed heavily on its interim results, but the music publisher declared it was "back in business" after a "difficult" start to the year.

Net publishers' share - the measure of income in the publishing business - fell 7.4 per cent in the seven months to March 31, as the auction coincided with a weak period for new releases and the US writers' strike.

"I don't remember a period where the stars were so unaligned," said Jeremy Lascelles, chief executive. "We were unable to find any new artists, which are the lifeblood of the business."

Chrysalis, which said last month it would change its financial year end to September 30, reported a £13.1m pre-tax loss for the first seven months, compared with a £2.3m loss for the six months to February 2007.

The higher loss was largely accounted for by an £11.8m charge for a previously announced pension scheme buy-out and £900,000 of costs related to the sale process.

Interim revenues of £28.6m for the first seven months were below the £29m made in the 2007 interim period.

Since the auction ended, however, "we're on fire as a company", Mr Lascelles said. The second half had started "very well", with chart hits by Estelle, Portishead, Gnarls Barkley and the Raconteurs, and the group announced it had signed the White Lies.

Chris Wright, executive chairman of Chrysalis, turned down an offer of 155p a share from EMI in April, which would have given Chrysalis an enterprise value of about £133m. Shares in Chrysalis slipped 1½p to 119p.

Net debt dropped from £68m to £14.3m after December's £96.5m return of capital to shareholders from the sale of Chrysalis Radio. The group earned more interest than expected on the proceeds.

● The drawn-out auction damaged morale, as "we could have been sold to anybody who most probably could have fired the lot of us", Mr Lascelles noted. The mood has clearly improved since then, but these figures give some clue as to why offers fell short. Chrysalis remains sub-scale in a consolidating publishing business and bidders may well come back once credit markets are healthier. On forecasts that net publishers' share will dip to £11.4m this year and bounce back to £12m in 2009, Chrysalis trades at an undemanding 6.7 times NPS multiple, but it will have to show consistent performance in a hit-driven business to gain the 200p-plus valuation it wants.