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20 Oct 2022 07:00
20 October 2022
Gear4music (Holdings) plc
Half Year Trading Update
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 six months to 30 September 2022.
£m | 6m to 30 Sept 2022 (FY23 H1) | 6m to 30 Sept 2021 (FY22 H1) | % Change on FY22 H1 |
UK sales | 35.5 | 36.7 | -3% |
European and Rest of the World sales | 30.8 | 28.0 | +10% |
Total sales | 66.3 | 64.7 | +2% |
FY23 H1 Highlights
- Total sales growth of 2% despite the challenges reported in our 9 September 2022 trading update
- Stronger European growth of 10% reflects the successful rollout of our Irish and Spanish distribution hubs last year
- FY23 H1 gross margin expected to be 26.3% (FY22 H1: 28.0%), reflecting targeted stock reductions
- Gross profit expected to be £17.4m (FY22 H1: £18.1m)
- Net debt of £21.8m at 30 September 2022, £2.4m lower than at 31 March 2022
Trading Outlook
- Improved trading momentum during H2 to date
- Maintaining expectation of a return to pre-Covid, H2 weighted trading seasonality*
- Strong levels of inventory going into peak trading period
- Full-year outlook in-line with recently updated consensus market expectations**
Gear4music's Chief Executive Officer, Andrew Wass, said:
"We are pleased to have delivered sales growth during FY23 H1, a period which was impacted by the challenges reported in our 9 September 2022 trading update, and by the mourning period for Queen Elizabeth II including the additional UK bank holiday in mid-September.
Whilst mindful of continued uncertainty and volatility across the consumer environment, we are also pleased to report that trading momentum in both our UK and European markets improved towards the end of September, and we have continued to perform well during October to date.
Net debt reduced by £2.4m over the period to £21.8 million at the end of September, comfortably within our £35m facility. We expect net debt will reduce further by the end of the current financial year following our peak trading period.
We have strong levels of inventory heading into our peak trading period, our infrastructure is performing well, and we are on track to deploy several new growth orientated website upgrades alongside further productivity enhancements during H2. The Board therefore remains confident that results for the full financial year will be in-line with recently updated consensus market expectations**."
The Group will report Interim results for the six months ended 30 September 2022 on 15 November 2022.
* H1 sales as % of full-year sales were 44% in FY22, 45% in FY21, 41% in FY20, 36% in FY19 and 39% in FY18.
** Gear4music believes that current consensus market expectations for the year ending 31 March 2023 are revenue of £155.1 million, EBITDA of £8.9 million and profit before tax of £1.1 million.
ENDS
Enquiries:
Gear4music Andrew Wass, Chief Executive Officer Chris Scott, Chief Financial Officer | +44 (0)20 3405 0205 |
Singer Capital Markets - Nominated Adviser and Joint Broker Peter Steel/Amanda Gray, Corporate Finance Tom Salvesen, Corporate Broking | +44 (0)20 7496 3000
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Investec Bank plc - Joint Broker David Flin Alex Wright Alice King | +44 (0)20 7597 5970
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Alma PR - Financial PR David Ison Lily Soares Smith Joe Pederzolli Josh Royston | +44 (0)20 3405 0205 Gear4music@almapr.co.uk
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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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