Good morning!

Paul added further sections to yesterday 's report, which now includes:

It's available at this link.

Today, I'm going to start by covering £G4M (Gear4Music) and Crawshaw (LON:CRAW).



£G4M (Gear4Music)

  • Share price: 740p (-4%)
  • No. of shares: 21 million
  • Market cap: £155 million

Trading update

This is a fast-growing online retailer of musical instruments, which is the UK's largest.

Not having purchased a musical instrument in many years, I've just been doing a little bit of googling to see who else is prominent when you search to buy musical instruments online.

It looks like the biggest player in Europe is Thomann (external link), a family-owned German business in Bavaria. It is several times larger than G4M, earning revenues of €525 million back in 2013, according to Wikipedia. By contrast, G4M is forecast to earn £81 million in revenue during the latest financial year.

It's a fragmented marketplace. According to an Edison research note, Thomann's market share in 2016 was 13%, making it by far the largest company in the sector.

So can G4M catch up? The growth rates are certainly encouraging. Today's trading update includes the following table:


Christmas is a key buying period for G4M, making this an important update for the company's annual performance.

If I go back and compare this update versus the equivalent one from last year, growth rates last year were as follows: UK + 29%, International +129%, and total + 55%.

We can also compare against the growth rates in the interim results. In those results UK sales were +30%, International sales were +70%, and total sales were +44%. 

It's easier to grow from a smaller base, of course. But perhaps today's slight reduction in the share price reflects that…

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