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18 Jan 2024 07:00
18 January 2024
Gear4music (Holdings) plc
Trading Update
Peak season trading in-line with Board expectations, strong margin progress, trading in line with full year market expectations
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 2023.
£m | 3m to 31 Dec 2023 | 3m to 31 Dec 2022 | % change on FY23 Q3 |
UK revenue | 26.2 | 26.0 | +1% |
European and Rest of the World revenue | 20.2 | 23.5 | (14%) |
Total revenue | 46.4 | 49.5 | (6%) |
FY24 Q3 Highlights
- Revenues reflect previously announced FY24 prioritisation of gross margins ahead of sales growth
- Strong gross margin of 28.2% (FY23 Q3: 25.6%) more than offsets lower revenues
- Gross profit of £13.1m (FY23 Q3: £12.7m) is £0.4m higher than FY23 Q3
- Delivery of cost reductions in line with the Board's expectations
- FY24 EBITDA and net debt reduction in-line with consensus market expectations*
Gear4music's Chief Executive Officer, Andrew Wass, said:
"We are pleased to report that financial performance during our FY24 peak seasonal trading period was in line with the Board's expectations, and we have continued to make good progress with our previously stated objective of prioritising profitability ahead of revenue growth.
As anticipated Christmas trading returned to 'historically normal' patterns, with a robust Black Friday period and peak revenues occurring the week before Christmas, following a relatively subdued period of trading in October and early November.
January trading to date continues to be in line with the Board's expectations. We are confident that the actions we have taken during FY24 to improve our gross margins and reduce our cost base and net debt ensure that the business is well positioned for profitable growth during FY25."
* Gear4music believes that current consensus market expectations for the year ending 31 March 2024 are revenue of £144.1 million, adjusted EBITDA of £9.8 million, adjusted profit before tax of £1.3 million, and pre-IFRS16 net debt of £11.6 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 Broker Peter Steel/Sam Butcher, Corporate Finance Tom Salvesen, Corporate Broking | +44 (0)20 7496 3000
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Alma - Financial PR Rebecca Sanders-Hewett Joe Pederzolli David Ison | +44 (0)20 3405 0205 Gear4music@almastrategic.com |
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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