Gear4music (holdings) Share Discussion Threads

[geheimnis2] 03/3/2017 10:09

each to their own bestace.

[bestace] 03/3/2017 10:08

Geheimnis2 - of course the growth rate will decrease over time, but I would hope it won't be decreasing at this stage of the company's development given the small market share.

ramridge - yes, we're making the same point and I'm glad Edison's figure for the Jan/Feb growth rate agrees to me own calculation!

[ramridge] 03/3/2017 10:06

bestace- thanks for the Edison link.
If you look at Exhibit 1 - Geographic Sales (data provided by G4M) and focus on the European sales line, you get this
Growth on a comparable basis
H1 = 169%
Sep - Dec 2016 = 129%
Jan - Feb 2017 = 64%
If Europe is where the future market is, this is not good news.

[geheimnis2] 03/3/2017 09:54

no. the markt does not require increasing growth in sales and profits - merely a high rate of growth - this will naturally decrease over time.

[bestace] 03/3/2017 09:48

Edison note out:

[geheimnis2] 03/3/2017 09:43

growth is always going to slow as the company scales

I don't see the problem

58% sales growth is superb

[bestace] 03/3/2017 09:39

nurdin - indeed they are but scratching the surface, but my concern is that with a PE multiple of 50+, G4M is rated as a growth stock/momentum play, so it's the rate of topline growth that drives the share price not so much the market share they have.

Hopefully the new distribution hubs in Europe will provide further impetus to the growth rate, but despite the headline growth figures, when you dig a bit further the trend rate of growth over the last 12 months has not been so encouraging.

DD4 - why not? looking at individual periods YOY provides more of a leading indicator than just looking at the year end figures. The fact that FY2017 shows higher growth than FY2016 hides the fact that H2 2017 was slower growth than H1 2017.

[jitters3] 03/3/2017 09:35

Good top up price IMO

[rathlindri] 03/3/2017 09:33

Thanks Alphabeta4

[alphabeta4] 03/3/2017 09:29

Further article, don't need subscription for this one.



Edit: and Edison note (also non-sub)

[discodave4] 03/3/2017 09:20

It's not dropping off in Europe/ROW - last years FY LFL growth +73%, this years is +124%.No point comparing LFL for different interim periods IMO.DD

[nurdin] 03/3/2017 09:17

Thanks bestace. as I said they are only scratching the surface of their addressable market globally .

[bestace] 03/3/2017 09:13

Looking at the last 2 months of the financial year, revenue for Jan/Feb was YOY 25.7% higher for the UK and 64.1% higher for Europe/RoW.

The rate of growth is clearly dropping off in the UK - it's been gradually reducing with each trading update since this time last year. The 25% growth figure is also uncannily close to that implied by the increase in website hits (see posts 912/914).

The rate of European/RoW growth is also dropping off - it was +169% YOY growth in H1, despite the opening of the Swedish distribution hub in H2.

In terms of addressable markets, G4M refer in their last annual report to £749m in the UK and £3.5bn in Europe (excl. UK). Based on the figures they've released this morning, that implies a market share of around 4.5% of the UK and just 0.6% of the European market, perhaps less if they are also making international sales outside of Europe.

[nurdin] 03/3/2017 09:11

Subscription site.

[alphabeta4] 03/3/2017 09:08

Panmure note.

[discodave4] 03/3/2017 08:16

Last year total LFL Rev growth +46%, this years growth +58%, still growing, yep U.K. may be levelling off but always expected it to, its now Europe and ROW that will see significant growth IMO.DD

[adamb1978] 03/3/2017 08:04

ramridge - why should the year on year growth be higher of lower in any half? H2 might have xmas but then the comparable period last year also had xmas!!

[dgbell7] 03/3/2017 08:02

Unbelievable bounce on opening but let's see where we are at 430!

[ramridge] 03/3/2017 07:57

nurdin - remember 2nd half covers xmas period, so the bias should actually be the other way, i.e more growth in 2nd half?

[geheimnis2] 03/3/2017 07:56

Great research AdamB

I prefer a simple:

MMMMMMMOOOOOOOOOOOOOOOOOOOO!!!!!

[adamb1978] 03/3/2017 07:52

I think your growth figures are right ramridge, however the next leg of the growth for these should come from markets outside the UK which are growing rapidly and should continue to do so from their investment in those areas.

£100m turnover next year (ie Feb-19) looks very achieveable and they should be able to add a couple percentage points on to their margin too when at greater scale, which will have a huge impact on profits

[geheimnis2] 03/3/2017 07:50

MMMMMMOOOOOOOO!!!!!!!!

10 quid here we come!

[nurdin] 03/3/2017 07:49

Seasonal bias?

[ramridge] 03/3/2017 07:35

Guys - unless I am mistaken growth in 2HY was less than growth in 1HY :

Full year as reported today : UK +34% ; ROW 124% ; Total 58%
Half year stage : UK 44% ; ROW 169% ; Total 73%

Caution required? sure will be interesting day today!

[croasdalelfc] 03/3/2017 07:33

I think at the interims they stated they had market share in U.K. Of just 4%I'm factoring in circa50% growth in FY18 ... £80m revenue 4.5% margin and EPS of 20p£8 target by interims