REG - Focusrite PLC - Trading Update

FocusriteAnnouncement

20/03/2025 07:00

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RNS Number : 3605B  Focusrite PLC  20 March 2025

Strictly embargoed for 07.00, 20 March 2025

Focusrite plc

("Focusrite" or "the Group")

Trading Update

Focusrite plc (AIM: TUNE), the global music and audio products group supplying
hardware and software used by professional and amateur musicians and the
entertainment industry, provides the following update on trading for the six
months ended 28 February 2025 ("HY25").

The Group's performance for the period was in line with expectations(1).
Revenue for the first half is expected to be not less than £80 million,
compared with £76.9 million in the first six months of the prior year. On an
underlying basis, eliminating the revenue benefit of the planned increase in
stock in the US sales channel to mitigate potential tariffs, the Content
Creation division grew c.5% in the first half.  This growth was partially
offset by a decrease of approximately 6% in Audio Reproduction, reflecting the
previously highlighted ongoing market realignment following the one off
post-COVID boost and a particularly strong comparator in H1 of FY24. The Audio
Reproduction division continues to have a stable sales pipeline and, with a
seasonal weighting to the second half, revenue is expected to improve in the
second six months of this period across this division.

Whilst gross margins have compressed slightly in HY25 due to ongoing elevated
freight costs and product mix, planned pricing adjustments and new product
introductions are expected to deliver improvements in the remainder of the
current period.  Price increases relating to US tariffs have been
communicated to our customers, effective from 1 May 2025.  Overheads have
increased in line with expectations, due largely to the resetting of variable
remuneration levels as compared to the prior year.

Net debt stands at approximately £18 million as at 28 February 2025 (31
August 2024: net debt of £12.5 million), reflecting the payment of the final
dividend and an increase in stock and working capital in anticipation of the
expected US tariffs. Net debt levels are expected to improve in the second six
months of the current period with an overall cash inflow for the 12 months as
a whole.  The Group continues to maintain a disciplined approach to capital
allocation with £50 million of committed credit facilities ensuring
flexibility to support strategic initiatives and future growth opportunities.

Against a background of a normalising market in Content Creation, after an
extended period of volatility in the sales channel, Focusrite continues to
maintain its leading market position, supported by continuing robust
underlying end-user registrations. While broader economic conditions remain
fluid, the Group has plans in place to navigate potential challenges and the
Board's expectations (1) for the first twelve months of the current
eighteen-month period remain unchanged.   However, as previously highlighted,
H1 EBITDA will be lower than the prior year, and more heavily weighted to the
second six months of this period.

The Group looks forward to providing a more detailed trading review when it
announces its half year results in late April 2024.

( 1) Market expectations are understood to be a range for EBITDA for the 12
months to 31 August 2025 of between £24.5 million and £26.0 million.

- Ends -

 Enquiries:
 Focusrite plc                                           +44 (0) 1494 462246
 Tim Carroll (CEO) / Sally McKone (CFO)
 Investec Bank plc (Nominated Adviser and Joint Broker)  +44 (0) 20 7597 5970
 David Flin / Nick Prowting / James Smith
 Rosewood (Financial PR)                                  +44 (0) 20 7653 8702
 John West / Llewellyn Angus / Lily Pearce

 

Notes to Editors

Focusrite plc is a global audio products group that develops and markets
proprietary hardware and software products. Used by audio professionals and
musicians, its solutions facilitate the high-quality production of recorded
and live sound. The Focusrite Group trades under thirteen established brands:
Focusrite, Focusrite Pro, Novation, Ampify, ADAM Audio, Martin Audio, Optimal
Audio, Linea Research Sequential, Oberheim, Sonnox, OutBoard and TiMax.

With a high-quality reputation and a rich heritage spanning decades, its
brands are category leaders in the music-making and audio recording
industries. Focusrite and Focusrite Pro offer audio interfaces and other
products for recording musicians, producers and professional audio facilities.
Novation and Ampify products are used in the creation of electronic music,
from synthesizers and grooveboxes to industry-shaping controllers and
inspirational music-making apps. ADAM Audio studio monitors have earned a
worldwide reputation based on technological innovation in the field of studio
loudspeaker technology.  Martin Audio designs and manufactures
performance-ready systems across the spectrum of sound reinforcement
applications. Linea designs, develops, manufactures and sells market
innovative professional audio equipment globally. Sequential designs and
manufactures high end analogue synthesizers under the Sequential and Oberheim
brands. Sonnox is a leading designer of innovative, high-quality,
award-winning audio processing software plug-ins for professional audio
engineers. TiMax specialises in innovative immersive audio and show control
technologies. OutBoard manufactures and sells industry standard rigging
control products for live events, together with enterprise-level safety test,
preparation and quality management for global rental companies and venues.

The Company has offices in four continents and a global customer base with a
distribution network covering approximately 240 territories.

Focusrite plc is traded on the AIM market, London Stock Exchange.

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