(Alliance News) - Focusrite PLC shares fell on Wednesday as a warning that its annual earnings will fall short of expectations struck the wrong note with investors.
Updating on the financial year ended August 31, the High Wycombe, Buckinghamshire-based music and audio products company said earnings before interest, tax, depreciation and amortisation would come in "slightly" below the board's expectations.
Shares in the company were down 7.5% to 740.00 pence in London on Wednesday morning.
Over the year, the firm said it felt downward pressure on its gross margin, resulting from industry-wide factors which drove up costs. These included the scarcity of semiconductors and components, as well as high freight costs.
It also increased its spend on systems, people and direct sales channels to drive growth, reflecting the larger scale of its operations following recent acquisitions.
More positively, Focusrite said topline growth is set to meet expectations, with revenue anticipated at GBP180 million. This would be 3.5% higher than the GBP173.9 million the year before.
It noted strong underlying demand, with end user registrations for content creation and audio interface solutions outperforming the pre-Covid era.
"Overall, the group's revenue is now running at about twice the level it was in the last financial year prior to the pandemic. Current customer registrations remain robust. We are optimistic about our future prospects, but mindful of the current global economic and political challenges and uncertainties, as well as the ongoing cost pressures in the supply chain," commented Chief Executive Tim Carroll.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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Focusrite (TUNE)