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(Sharecast News) - Musical instruments and equipment retailer Gear4music said on Thursday that UK revenues had returned to growth during July and August but cautioned that European revenues were still being impacted by post-Brexit challenges.
Gear4music stated that trading to date remained in line with internal expectations, although it added that the board remained mindful of ongoing uncertainties surrounding the Covid-19 pandemic and the potential for supply chain disruption during the second half of the trading year.
The AIM-listed group, which will have two new distribution centres in Ireland and Spain operational by the second-half, a move it expects to eliminate most of the remaining post-Brexit challenges, also revealed it had exchanged contracts to acquire AV Distribution, trading as AV Online, an online retailer of Home Cinema and HiFi equipment and, separately, the website domain name AV.com.
Gear4music said the considerations of £6.2m for AV Online and £3.0m for the AV.com domain name would be settled in cash drawn from its £35.0m revolving credit facility with HSBC.
The acquisitions were expected to "significantly increase" the group's addressable market size and also offer synergies between the market in which Gear4music currently operates, and the closely related but separate AV market.
Chief executive Andrew Wass said: "Trading during Q1 FY22 was stronger than the Board had expected although, as anticipated, behind the exceptional period of trading during FY21.
"As a result of the operational and commercial actions we are taking, and the acquisitions we are making, the Board retains a high level of confidence that the group is well positioned to deliver on its long-term growth strategy."
As of 0940 BST, Gear4music shares were down 1.75% at 953.0p.
6 Sep 2016 07:43