Gear4music (holdings) Share Discussion Threads

[saracen3] 23/1/2021 20:10

Walletinvestor raises target to 1175p.

[aimingupward2] 22/1/2021 19:46

Well, that was a pleasing and surprising rise at the very end of the week. Just perhaps this is the end of the retrace and it will be followed up by further rises over the next few weeks.

[saracen3] 19/1/2021 18:46

Up from 185p in 7 months so some profit taking before they break £10 on the next trading update.

[ali47fish] 19/1/2021 17:51

why the retrace?

[hastings] 19/1/2021 13:29

Singer goes for 44.8p EPS, but that looks very conservative to me!

[rp19] 19/1/2021 13:11

Thanks for sharing the EPS projections Gnome. Does anyone have the EPS forecasts from the recent N+1 Singer broker note? The Progressive broker note (14th Jan) has EPS forecast of 44.4p for the current year. As others say, hopefully these will be beaten considerably. Are brokers purposely under-egging or are they behind the curve?

[davro] 19/1/2021 08:51

No obvious issues with those figures gnome, good work. IF they hold true and we see an uplift of 20% in sales for the final 3 months of the year vs last year that could give us an additional 20p of earnings so up to 72p EPS for the whole year. Not sure we’ll see the deserved rerating though until they prove this isn’t a one year wonder (I’m confident it’s not!).

[masurenguy] 19/1/2021 08:35

If so, that's a PER of just circa 13.5 at the current price with net debt of only £6m or circa 29p a share.

[saracen3] 19/1/2021 08:26

February is usually the quietest month after Xmas and sales. If trading remains strong I would expect a further trading statement and more upgrades.
60p earnings per share quite feasible.

[masurenguy] 19/1/2021 07:59

Some good and useful projections gnome3 - thanks !

[gnome3] 19/1/2021 02:33

I've been having a look at the figures from the recent trading update to try to get an idea of where we stand after the first 9 months of the year. I've made the assumption that Admin costs remain broadly the same as the fist half and this suggests that we've already made over 50p eps with still 3 months of the year to go! Am I missing something? If anybody can see any obvious mistakes in the calcs and assumptions below, I'd be grateful for your feedback.

It seems that the Market wants to see the post-covid performance before applying any further re-rating. It's worth noting the CEO's final comment in the recent update, "Notwithstanding what has been an exceptional period of trading since lockdowns began in March 2020, the Board remains confident that the Group is well resourced and positioned to deliver further growth."

I think patience will be rewarded here.

Basic Assumptions:

Admin Costs 25m pa = 6.25m per Quarter

Amortisation 2.3m pa
Property Rents 1.4m pa
Financial Costs 1.0m pa

4.7m pa = 1.20m per Quarter


6 Months Apr – Sept 2020:

Revenue 70.2m
Gross Profit 20.1m
Gross Margin 28.6%
EBITDA 8.5m
Op Profit 6.4m
Net Profit 4.9m


3 Months Oct – Dec 2020:

Revenue 52.2m
Gross Profit 15.6m
Gross Margin 29.9%
EBITDA 9.35m (Estimate - 15.6m – 6.25m)
Op Profit 8.15m (Estimate - 9.35m – 1.20m)
Net Profit 6.20m (Estimate - 8.15m x 76%)

9 Month Est Net Profit 11.10m

9 Month Est eps (21m shares) 52p

[aimingupward2] 18/1/2021 14:37

There'll be more tops to come :-)

[shanklin] 18/1/2021 14:33

Looks like I bought at the top :-(

[rizler] 18/1/2021 13:50

Interesting. Wasn't expecting this dip. Might have to consider buying more if we see 700s

[aimingupward2] 17/1/2021 20:27

Thanks saracen.

What I now see on the company’s website under the heading ‘Our strategy’ is ‘We have some very exciting new developments planned for FY21 and FY22." - albeit they’re not saying in what areas yet. Just maybe the development of a parallel business in second hand instruments is part of this.

[saracen3] 17/1/2021 19:31

From post results presentation one page of many sorry hard to cut and paste out of overall context.

Evolving Digital Retail Strategy
FY22
FY20
FY23
THIRD PARTY FULFILMENT
Deep level integration with brands and distributors in strategic locations. Increase ranges & reduce hub requirements.
AGENCY SALES
Brands retain control of their content, pricing and inventory. Orders fulfilled by Gear4music.
DIGITAL PRODUCT SALES
Instant consumer download of certain software products, sound libraries & sheet music. Reduces fulfilment costs.
SECOND HAND PLATFORM
Buy and resell second hand products. Real-time buy offers, self service, high convenience and own-brand margins.
EXISTING MODEL:E-COMMERCE RETAIL
Source, stock & sell products from manufacturers & distributors.
Logistics & back-office Upgrades
Charging for Customer Returns & Online Portal
Digital Products Download System
Brexit Preparations completed
Marketing Platform upgrade
Third Party Integrations
Second Hand Platform
Agency Sales Platform
FY21
Examples of system upgrades running alongside core development projects during the next two years include:
•Apple Pay integration
•Mobile website enhancements
•Search system upgrade
•Payment gateway upgrade
•Database architecture upgrade
•New logistics and back-office features
•Integrated product reviews
•Website content & media platform upgrades
•Website design updates
Core Development projects
Supporting upgrades
Roadmap
N.B. Representative examples shown -timeline & actual projects may change

[aimingupward2] 17/1/2021 18:00

Thank you so much, saracen. Much appreciated.

If Singers really do believe that G4M can build a parallel business in second hand instruments, over the next 2-4 years, without undermining their existing t/o, this is a very significant matter which the company itself seems not to have promoted yet. As and when they do start talking it about as target, this can be expected to give major support to the share price.

[saracen3] 17/1/2021 16:25

It was in the presentation sent to me by Singers ahead of a conference call with the company. Will see if I can find it tomorrow. I asked whet9 this would canabalise the existing business and they said not but were confident of building similar sales at same margins in 2 to 4 years. Am sure it was on the website.

[aimingupward2] 17/1/2021 15:10

Thanks for the response, saracen, but I’m afraid I can’t locate it. Could you ‘cut and paste’ the key part please.

You did say ‘watch out for news’ re second hand, implying a future announcement though. So are you still expecting something additional in particular, or just the general thought that it’s likely to be mentioned again sometime, perhaps with the annual report and accounts?

When I google ‘Gear4music secondhand’, btw, nothing noteworthy comes up either.

[saracen3] 17/1/2021 10:51

See presentation after interim in November.

[glavey] 16/1/2021 04:33

"Ebay the only competition."

You are mistaken on that point.

[aimingupward2] 15/1/2021 22:10

That reference to a second hand market is really interesting, saracen. Could you please enlarge and/or say where you heard about that please.

[saracen3] 15/1/2021 19:03

Held up really well today in a horrible market. Any profit taking absorbed. European sales growth very impressive at 50% and they only have 2% market share. Watch out for news of creating a second hand market in musical instruments which could double turnover and profits. Ebay the only competition.

[aimingupward2] 14/1/2021 19:27

Is that the one timed at 15.44.52 ?

[saracen3] 14/1/2021 18:43

And another late buy 11,000 at 907p