Last checked at 14 Jan 2021 07:00
14 January 2021
Gear4music (Holdings) plc
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 three months to 31 December 2020.
£m | 3 months to 31 December 2020 | 3 months to 31 December 2019 | % change |
UK sales | 23.0 | 20.9 | +10% |
Europe and Rest of the World sales | 29.2 | 19.4 | +51% |
Total sales | 52.2 | 40.3 | +30% |
Highlights
· Gross margin improved by 370bps to 29.9% (FY20: 26.2%)
· Gross profit increased by £5.0m (47%) from £10.6m to £15.6m
· Logistics and IT infrastructure performed well during peak trading
· FY21 EBITDA to be ahead of expectations, and not less than £16.5m (FY20: £7.8m)
Gear4music's Chief Executive Officer, Andrew Wass, said:
"I am pleased to report a very successful FY21 peak trading period, that continues to reflect the significant commercial and operational progress that we have made during the last two years, alongside the continuing hard work and commitment of our staff.
Strong growth during the period has been driven by products that can be used and played at home, including Guitars, Keyboards and Home Recording equipment. We know many of our customers are looking forward to rehearsing and performing together again, and as social distancing restrictions are eased, we expect our Live Sound, Drums and Orchestral categories to return to stronger growth.
As expected, the end of the Brexit transition period and the UK's departure from the EU customs union was not without its challenges, which we had extensively planned for and have carefully managed. New cross border processing costs have been introduced, alongside the added complexity and cost of additional rules of origin duties contained within the Brexit trade deal.
The planned scale-up of our European hub infrastructure has provided a solid operational platform to help overcome these challenges, and also helped to mitigate the impact of port closures in December 2020 as a result of COVID. Whilst there are further refinements for us to make, I am pleased that the planned reconfiguration of our delivery systems and transport network has performed well, and has supported stronger trading since 1 January 2021 than the Board had initially expected.
As a result of the very successful Christmas trading period, and early indications of positive trading post-Brexit, we expect to report results for the full financial year ahead of recently upgraded consensus market expectations. Notwithstanding what has been an exceptional period of trading since lockdowns began in March 2020, the Board remains confident that the Group is well resourced and positioned to deliver further growth."
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Enquiries:
Gear4music Andrew Wass, Chief Executive Officer Chris Scott, Chief Financial Officer | +44 (0)20 3405 0205 |
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N+1 Singer - Nominated Adviser and Broker Peter Steel/Amanda Gray, Corporate Finance Tom Salvesen, Corporate Broking |
+44 (0)20 7496 3000
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Alma - Financial PR Rebecca Sanders-Hewett Helena Bogle Harriet Jackson |
+44 (0)20 3405 0205 gear4music@almapr.co.uk |
About Gear4music.com
Operating from a Head Office in York, and Distribution Centres and showrooms in York, Sweden and 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, more recently, into 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.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.