Gear4music (Holdings) PLC Trading Update (0646A)

TIDMG4M

RNS Number : 0646A

Gear4music (Holdings) PLC

18 January 2024

18 January 2024

Gear4music (Holdings) plc

Trading Update

Peak season trading in-line with Board expectations, strong margin progress, trading in line with full year market expectations

Gear4music (Holdings) plc ("Gear4music" or "the Group"), the largest UK based online retailer of musical instruments and music equipment, today announces a trading update for the three months to 31 December 2023.

 
 GBPm                               3m to 31    3m to 31   % change 
                                    Dec 2023    Dec 2022    on FY23 
                                                                 Q3 
 UK revenue                             26.2        26.0        +1% 
                                  ----------  ----------  --------- 
 European and Rest of the World 
  revenue                               20.2        23.5      (14%) 
                                  ----------  ----------  --------- 
 Total revenue                          46.4        49.5       (6%) 
                                  ----------  ----------  --------- 
 

FY24 Q3 Highlights

- Revenues reflect previously announced FY24 prioritisation of gross margins ahead of sales growth

   -     Strong gross margin of 28.2% (FY23 Q3: 25.6%) more than offsets lower revenues 
   -     Gross profit of GBP13.1m (FY23 Q3: GBP12.7m) is GBP0.4m higher than FY23 Q3 
   -     Delivery of cost reductions in line with the Board's expectations 
   -     FY24 EBITDA and net debt reduction in-line with consensus market expectations* 

Gear4music's Chief Executive Officer, Andrew Wass, said:

"We are pleased to report that financial performance during our FY24 peak seasonal trading period was in line with the Board's expectations, and we have continued to make good progress with our previously stated objective of prioritising profitability ahead of revenue growth.

As anticipated Christmas trading returned to 'historically normal' patterns, with a robust Black Friday period and peak revenues occurring the week before Christmas, following a relatively subdued period of trading in October and early November.

January trading to date continues to be in line with the Board's expectations. We are confident that the actions we have taken during FY24 to improve our gross margins and reduce our cost base and net debt ensure that the business is well positioned for profitable growth during FY25."

* Gear4music believes that current consensus market expectations for the year ending 31 March 2024 are revenue of GBP144.1 million, adjusted EBITDA of GBP9.8 million, adjusted profit before tax of GBP1.3 million, and pre-IFRS16 net debt of GBP11.6 million.

ENDS

Enquiries:

 
 Gear4music 
  Andrew Wass, Chief Executive Officer 
  Chris Scott, Chief Financial Officer          [phone] 
 
 Singer Capital Markets - Nominated Adviser 
  and Broker 
  Peter Steel/Sam Butcher, Corporate Finance 
  Tom Salvesen, Corporate Broking               [phone] 
 
 Alma - Financial PR                            [phone] 
  Rebecca Sanders-Hewett                         [e-mail] 
  Joe Pederzolli 
  David Ison 
 

About Gear4music (Holdings) plc

Operating from a Head Office in York, Distribution Centres in York, Bacup, Sweden, Germany, Ireland & Spain, and showrooms in York, Bacup, Sweden & Germany, the Group sells own-brand musical instruments and music equipment alongside premium third-party brands including Fender, Yamaha and Roland, to customers ranging from beginners to musical enthusiasts and professionals, in the UK, Europe and the Rest of the World.

Having developed its own e-commerce platform, with multilingual, multicurrency websites delivering to over 190 countries, the Group continues to build its overseas presence.

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END

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January 18, 2024 02:00 ET (07:00 GMT)