Hi, it's Paul here.

This is the placeholder for Thursday's reader comments.

Estimated timings for today's report: as usual this week, I'll be writing mainly from late morning, until estimated completion time of 5pm.

To get the early birds started, here is the link to yesterday's completed report, which I think had some useful & interesting stuff in it, including reader comments, which early risers might have otherwise missed.




Focusrite (LON:TUNE)

Share price: 530p (up 6.4% today, at 11:50)
No. shares: 58.1m
Market cap: £307.9m

Trading update - y/e 31 Aug 2019

Focusrite Plc (AIM: TUNE), the global music and audio company supplying hardware and software products used by professional and amateur recording engineers and musicians, is pleased to update the market on another successful year in which revenue and profits have grown strongly

This sounds good - ahead of expectations;

The Company expects revenue for the financial year ending 31 August 2019, to be ahead of market expectations at approximately £84 million, up from £75.1 million last year.

This growth comprises an increase of approximately 10% for the existing business (c6% on a constant currency basis) and approximately six weeks of revenue for ADAM Audio, a German studio monitor company, which was acquired on 16 July 2019 for a total consideration of £16.2 million in cash.

Margins have remained consistent with the prior year and as a result EBITDA is also expected to be ahead of market expectations.


Cash - Focusrite spent £16.2m on an acquisition (which seems to have been a full price, considering the acquired company only made a profit before tax of E1.0m). Despite this, the group still has £14.9m in net cash. It's a very well funded business, with an excellent balance sheet.

Outlook - sounds upbeat;

Our product roadmap continues to strengthen with significant new product releases planned for the first half of the new financial year.  We continue to execute on our growth strategy while closely monitoring unpredictable global issues such as US tariffs and Brexit and have in place action plans to mitigate any foreseen negative impacts to our business."


Valuation - is high, therefore the company really did need to perform ahead of expectations in order to justify the rich PER. I can't find any broker…

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