musicMagpie says record Black Friday helps offset softer first half

(Alliance News) - musicMagpie PLC on Thursday said a record Black Friday helped offset a soft first half of its financial year, but it still expects annual revenue to be down.

Shares in musicMagpie were up 21% to 13.95 pence each in London on Thursday morning.

The Stockport-based used-technology reseller said it expects revenue to fall 4.7% to GBP136.6 million in the financial year that ended November 30 from GBP143.3 million the year before.

But it was keen to stress that business had picked up in the second half.

Consumer technology revenue for the second half was up 7.5% from a year earlier, leaving full-year revenue down 1.2% to GBP95.4 million from GBP96.6 million in financial 2022.

Overall gross margin for financial 2023 was 27.7%, up from 26.2%, which musicMagpie said was due to a continued focus on margin expansion as opposed to revenue growth.

Alongside "ongoing tight costs control" and a strong end to the year, musicMagpie said it expects financial 2023 earnings before interest, tax, depreciation and amortisation to be up 15% to GBP7.5 million from GBP6.5 million

Active Rental subscribers grew by 21% to 37,100 at November 30 from 30,500 a year earlier, while Rental revenue rose 57% to GBP8.3 million from GBP5.3 million.

Looking ahead, musicMagpie said it is encouraged by its second half-performance, despite a challenging consumer environment and continuing inflationary pressures. It said remains confident in the group's strategy and in its medium-term prospects.

"[We] are delighted that our focus on profits and cash has delivered significant Ebitda growth. Our strategy of proactively managing the number of active Rental subscribers has also helped in this regard and will support our short-term objectives on profits and cash into 2024, bolstered by an enhanced 'buy now pay later' offering," said Co-Founder & Chief Executive Officer Steve Oliver.

"I remain confident in the business and our ability to navigate the difficult external market conditions, especially given the outstanding level of trust that consumers continue to have in our brand."

Net debt stood at GBP13.1 million on November 30 , down 3.7% from GBP13.6 million a year earlier.

By Greg Rosenvinge, Alliance News senior reporter

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