(Sharecast News) - Global music and audio products maker Focusrite said in an update on Tuesday that its first half profits were in line with board expectations, which remained unchanged for the full year.
The AIM-traded company, which supplies hardware and software used by professional and amateur musicians and the entertainment industry, said stronger gross margins supported its profits.
Despite some industry-wide demand weakness in Asia markets, the overall demand for the firm's products across its content creation and audio reproduction businesses remained resilient.
The company noted that revenues for the first half were expected to be at least £85m, down from £93m in the first half of 2022.
Its board said it expected a weighting towards the second half due to the timing of major new product launches.
The audio reproduction businesses showed strong growth, reflecting increased demand for live sound.
That was supported by a strengthened supply chain following the acquisition of Linea Research in May last year.
Focusrite reported a net debt of £14m as at 28 February, reflecting increased inventory to support the new product launches in the second half.
The company said it also paid the final earnout relating to the acquisition of Sequential, or £1.2m, and the £7m consideration paid for Sonnox in December.
Focusrite's board said it expected the group's net debt position to improve going forward, as its underlying cash generation came through in the second half.
The group noted it had bank facilities in place totalling £40m.
"The group continues to see an improvement in gross margins as freight costs reduce to more normalised levels; component shortages and supply chain issues are easing; and pricing actions are taking effect," the board said in its statement.
"The board will give a more detailed update at the time of the announcement of the first half results, which is expected to be in late April."
At 1337 GMT, shares in Focusrite were down 2.92% at 665p.
Reporting by Josh White for Sharecast.com.
Focusrite (TUNE)