As I suspected revenue isn’t going to hit forecast for the full year (£154.7m) this would require a 24% improvement for the Q4 period. The lower range of the Singer forecast (£148m) looks doable at a 5% Q4 improvement vs last year. Importantly though there is some room for manoeuvre with the lower revenues and the profit forecast was reiterated, sales momentum is also positive. If the European arm starts to pick up (signs of the declines slowing) this really will start to look interesting as they return to profitable growth, free of debt and with a focus on higher margin product. |
And? Any forecast? |
 Singer comment
Gear4music (G4M.L, Market Cap £31m, Corporate, Target Price 245p, Buy). Driven by a strong Dec, sales growth accelerated in the last 6 weeks of Q3. The benefits from delivery of its refreshed growth strategy (detailed in June) are clearly now feeding through. With continued pricing discipline, own brand expansion, and the likelihood of cost efficiencies across the P&L, G4M is well on track to deliver FY EBITDA expectations. We believe this EBITDA could be achieved on a range of sales (e.g. £148-154m). In addition to the c£0.5m marketing overspend in H1, which shouldn’t recur, these factors also provide underpinning for what appear to be prudent assumptions next year. Confidence in the growth outlook therefore continues to build, but the shares have gone backwards, leaving G4M on 3.0x Mar’26 EV/EBITDA. The 66% TSR to our 245p target price uses only modest multiples and will roll forward a year in Apr. BUY.
Gear4music (G4M LN) - Confidence continues to grow after growth over peak - Buy |
I’ll be delighted to see an inline with forecast outcome tomorrow but have a nagging feeling that this might be difficult to deliver. As mentioned previously we need to see H2 revenue growth at 14% to hit forecast which would be a record H2 and the biggest differential between H1 and H2 performance in G4M history. My guess is that they trim the revenue forecast but perhaps find a way of keeping the profit forecast unchanged. We’ll have to wait until April for details of how much net debt has reduced (I think they’ll get close to eliminating the debt by end of March based on previous years prioritisation) but think the ability of the business to generate cash has been overlooked and should force a re-rating in the coming quarters. Fingers crossed for good news tomorrow. |
so anyone can say what can we expect from the coming update- previous news indicate progress have been made! |
so anyone can say what can we expect from the coming update- previous news indicate progress have been made! |
Trading statement on Tuesday |
Bought some here @ 1.46 |
I believe G4M are actively trying to compete again in Europe now that some local price wars are over. Gross margin is very important to them |
hxxps://www.gear4musicplc.com/media/1381/g4m-gently-growing-into-the-new-growth-strategy-22-oct-2024.pdf
Progressive Note is upbeat |
Pretty decent update ahead of key Xmas season. Good to see budget fears not hit UK sales as some had feared. |
Market makers setting the price around buyers limit |
Ronit Capital LLP increased holding by nearly 2% yet share price is down?!? |
Freight rates easing.
Signs of freight headwinds easing
You may recall us, earlier in the summer months of 2024, flagging a notable upward trend in world freight prices, which had seen spot prices rise to c.$7k/40-ft container in a couple of months. Prices did move on further from there, with suppliers within the UK consumer goods arena talking of prices as high as $9k being quoted for August. However, rates have moved on again in more recent weeks, falling back to $6.5k and we even hear of an in-month rate of $4k being offered. Summer cost headwinds appear to be materially easing, as much of the industry anticipated, with the potential for the benefits of a stronger GBP/USD to come. |
Bought a few more see if that helps the price Call me impatient |
Tighten that spread and I will be first in 176.4 to buy at present |
Just a few small traders moving on to the next mover.
Have just spoken to a very happy Institutional holder. |
Well I thought the statement read ok In for a few more today |
Singers Gear4music (G4M LN)
Follow to Open Report
Retail | Corporate Client
Mkt cap: £39.3m | CP: 187.5p | TP: 245p
In line update and on track to revert to growth in H2
Trading so far in H1 has been in line with expectations, and G4M remains confident in the delivery of its medium and longer-term profitable growth strategy. Today’s AGM update indicates that results from this renewed focus on growth are expected to start in H2. We outlined the potential from the growth strategy in our last research note, confidence in which led us to upgrade our target price for a second time in quick succession. We re-iterate Buy. |
Illiquidity Close is rather narrow but remains a two way street... |
Over 75% held by founder and Institutions so few shares available. |
Three year chart Pretty large gap up to around 400p The mind boggles if you can believe that chart |
At my last meeting with the company after the results they stressed that they were not expecting much, if any growth in UK sales.
Emphasis was Europe , especially areas where there is less competition and own brand goods have not been marketed. |
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