REG - Focusrite PLC - Interim Results
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RNS Number : 9901F Focusrite PLC 04 November 2025
Focusrite plc ("Focusrite" or "the Group")
Unaudited interim financial results for the 12 months ended 31 August 2025
Growth across Content Creation and stable margins demonstrate strong
operational resilience
Focusrite plc, the global music and audio products company supplying hardware
and software used by professional and amateur musicians and the entertainment
industry, today announces its interim results for the 12 months ended 31
August 2025. In October 2024, Focusrite announced that it was changing its
year end from 31 August to 28 February. As a result, the next audited
results will be for the 18 month period to 28 February 2026.
Commenting on the results and outlook, Tim Carroll CEO said:
"Following several challenging years, the past 12 months have seen a return to
more stable markets across our Content Creation regions, particularly EMEA and
APAC. This has resulted in sales growth of 11.0% for the division, supported
by sustained demand for our leading brands and successful new product launches
across the portfolio. The refresh of our flagship Scarlett range in Focusrite
is now complete, and Novation continues to deliver new market-leading products
and special editions. Incremental new product introductions from both ADAM and
Sequential have also further contributed to overall revenue growth.
"As previously reported, Audio Reproduction has normalised following 18 months
of unusually high post-lockdown demand, with 12-month revenues down 3.8% year
on year. However, the pipeline for this division remains strong, reflecting
the success of our expanded portfolio and broader market reach.
"During the year, we took early and decisive action to implement pricing
changes and relocate manufacturing to stabilise our margins in the face of
tariff increases into the US in excess of 20% on most of our manufacturing
locations. Additional pricing actions have since been implemented to help
maintain gross margins amid an evolving tariff landscape. We recognise that
macroeconomic uncertainties persist, particularly in our key US market, and
remain vigilant and ready to respond swiftly to any further changes.
"The outlook for the current period continues to be in line with the Board's
expectations. Despite a challenging market, trading since August has
reflected healthy underlying demand for the Group's products. Our continued
investment in people, innovation, and product development positions the Group
well for sustained growth and long-term success."
Key financial metrics
12 months ended 12 months ended
31 Aug 25 31 Aug 24
Revenue (£ million) 168.9 158.5
Gross margin % 44.4% 44.5%
Adjusted(1) EBITDA(2) (£ million) 24.7 25.2
Operating profit (£ million) 9.4 5.7
Adjusted(1) operating profit (£ million) 15.3 16.6
Basic earnings per share (p) 9.2 4.5
Adjusted(1) diluted earnings per share (p) 16.7 18.0
Interim dividends per share (both first and second interim dividend) (p) 4.2 6.6
Net debt(3) (£ million) 10.8 12.5
Financial and Operating Highlights
* Revenue up 6.6% to £168.9 million (FY24: £158.5 million), or 8.8% on an
organic constant currency⁴ (OCC) basis, driven by strong growth in Content
Creation, partially offset by a decline in Audio Reproduction.
* Content Creation revenue increased 11.0% (14.0% OCC⁴) to £123.0 million
(FY24: £110.8 million), reflecting successful new product launches across key
brands.
* Audio Reproduction revenue declined by 3.8% (3.2% OCC⁴) to £45.9 million
(FY24: £47.7 million), against a particularly strong prior-year comparator,
especially in APAC following post-COVID demand surges.
* Gross margin remained broadly stable at 44.4% (FY24: 44.5%), with pricing
actions in the US offsetting tariff impacts and Audio Reproduction margins
returning to more historic levels.
* Adjusted¹ EBITDA² of £24.7 million (FY24: £25.2 million), reflecting
higher sales offset by normalised variable remuneration and inflationary
pressures.
* Operating profit increased to £9.4 million (FY24: £5.7 million), benefiting
from the non-repeat of a prior-year impairment charge of £5.3 million.
* Net debt reduced to £10.8 million from £12.5 million in August 2024 and
£17.5 million in February 2025
* Second interim dividend, following the period-end change, of 2.1 pence,
reflecting confidence in the Group's long-term outlook.
(1) Adjusted for amortisation of acquired intangible assets and other
adjusting items as detailed in note 4 to the Interim Statement.
(2) Comprising earnings adjusted for interest, taxation, depreciation and
amortisation.
(3) Net debt defined as cash and cash equivalents, overdrafts and amounts
drawn against the RCF including the costs of arranging the RCF.
(4) Organic constant currency growth. This is calculated by comparing FY25
revenue to FY24 revenue adjusted for FY25 exchange rates and the impact of
acquisitions.
Enquiries:
Focusrite plc +44 (0) 1494 462246
Tim Carroll (CEO) / Sally McKone (CFO)
Investec Bank plc (Nominated Adviser and Broker) +44 (0) 20 7597 5970
David Flin / Nick Prowting / James Smith
Rosewood Communications (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 reproduction
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 Research 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 Group 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.
Business and operating review
Overview
We are pleased to report our unaudited financial results for the 12 months
ended 31 August 2025. These are the second set of interim results in respect
of the 18 month financial period to 28 February 2026. Overall, the Group
delivered a performance in line with expectations which demonstrated the
strength of our brands and the resilience of our strategy amid continued
global economic uncertainty and industry-wide headwinds.
Our Content Creation brands achieved an 11.0% year-on-year increase in
revenue, marking a return to growth after a prolonged period of channel
correction and softer market demand. Growth was recorded across all major
brands, with the impact of earlier first-half sales, implemented to mitigate
US tariff effects, offset in the second half of the year. Stocking levels
across all major sales channels, outside of the US, have now normalised and we
are encouraged by multiple data points(1), channel feedback, and internal
registration metrics that show we have grown market share in several key
categories. This is a significant achievement in what remains a highly
competitive and price-sensitive environment.
As anticipated and previously reported, the Audio Reproduction market has
begun to normalise. As a result, our Audio Reproduction division recorded a
slight decline in revenue (3.8%) compared with a very strong prior-year
period, which had benefited from post-pandemic demand. However, the breadth of
our enhanced portfolio, which now spans Martin, Optimal, Linea, and our more
recent acquisitions TiMax and Panlab, continues to support a strong business
pipeline.
Group gross margin for the year was 44.4% (FY24: 44.5%), with pricing actions
in the US largely offsetting the impact of tariffs. The prior year gross
margin included two offsetting impacts which have not repeated this year, the
negative impact of the provisioning and sale of Vocaster stock, and the
enhanced margins in Audio Reproduction from a greater proportion of royalty
based Martin sales in China.
During the year the international trading landscape was significantly affected
by fluctuating tariffs on goods sold into the US. Approximately 12% of Group
revenue is generated from products manufactured in China and sold into the
US. Of these products, around one fifth currently benefit from a potentially
temporary tariff exemption covering computers and accessories. The remaining
products for the US market are sourced from Malaysia, Germany, UK and the US.
Anticipating the risk of additional tariffs, the Group acted decisively in the
first six months of the period to build stock within our US Content Creation
sales channels and to increase inventory levels in our own US warehouse for
Audio Reproduction. In addition, we implemented price increases across
Content Creation in the US from 1 May, and continue to monitor developments
closely across both divisions to make further adjustments as necessary. The
majority of our US-bound products are already manufactured outside China, and
we are continuing to relocate additional product ranges where appropriate.
Whilst we believe we are well positioned to mitigate current risks, we have
established contingency plans to address any potential escalation.
Nonetheless, the situation in the US remains dynamic and uncertain.
(1 ) Includes Music Trades quarterly retail sales data and sales rankings
on key reseller websites (Thomann, and Sweetwater)
Operating review
Our Group's portfolio has grown substantially in recent years and now consists
of thirteen market leading brands, organised across two divisions: Content
Creation and Audio Reproduction.
Content Creation consists of:
· Focusrite Novation: Focusrite, Focusrite Pro, Novation and
Ampify
· ADAM Audio
· Sequential: Sequential and Oberheim
· Sonnox
Audio Reproduction consists of:
· Martin Audio: Martin Audio, Optimal Audio and Panlab
· Linea Research: Linea Power amplification
· Sheriff Technologies: OutBoard and TiMax brands
12 months to 12 months to Reported Growth OCC Growth(1)
31 August 31 August
2025 2024
Revenue from external customers £'000 £'000 % %
Focusrite 67,820 60,278 12.5% 15.6%
Novation 17,337 16,257 6.6% 9.4%
Focusrite Novation(2 ) 85,157 76,535 11.3% 14.3%
ADAM Audio 25,581 22,610 13.1% 16.0%
Sequential 9,839 9,705 1.4% 4.0%
Sonnox 2,461 1,968 25.1% 27.6%
Content Creation 123,038 110,818 11.0% 14.0%
Audio Reproduction 45,875 47,706 -3.8% -3.2%
Total 168,913 158,524 6.6% 8.8%
(1 Organic constant currency (OCC) growth rate is calculated by comparing FY25
revenue to FY24 revenue adjusted for FY25 exchange rates and the impact of
acquisitions)
2 This period Focusrite and Novation brands have been merged into one
operating segment within the financial statements following the reorganisation
of the relevant R&D teams, resulting in Novation no longer meeting
the criteria for separate disclosure as a cash generating unit. The brands
are shown here separately for reference and to provide added clarity in the
comments below.
Content Creation
Our Content Creation brands offer best in class audio recording hardware
technology, software, electronic music instruments and controllers, and studio
reference monitors designed for content creators at all levels and price
points.
Our products are showcased in the world's leading recording and
post-production studios, as well as in the homes of millions of hobbyists and
aspiring professionals. Over the past four years, this segment has faced
unprecedented challenges, presenting both opportunities and obstacles.
During the pandemic, the Group experienced exceptional growth in demand for
our Focusrite, Novation, and ADAM brands, as individuals sought high quality
solutions for home recording and streaming. However, the subsequent period
presented numerous hurdles, including component shortages, rising input and
shipping costs, global inflation and geopolitical tensions. All of these
weighed heavily on the music creation industry.
Despite stabilisation in prices and supply availability, these challenges,
combined with a softer post-pandemic macroeconomic backdrop, resulted in
elevated inventory levels across many product segments in FY24. The Group
responded proactively by reducing channel stock, maintaining tight cost
control, and continuing to launch award-winning products to stimulate renewed
interest and support recovery.
As a result, this past year we delivered an encouraging performance, with
Focusrite, Novation, Sequential, Sonnox, and ADAM all reporting revenue
growth.
Content Creation: Revenue by region
12 months to 12 months to Reported Growth OCC Growth(2)
31 August 31 August
2025 2024
Content Creation £'000 £'000 £'000 £'000
Americas(1 ) 53,655 52,299 2.6% 6.2%
EMEA 55,577 47,714 16.6% 18.5%
APAC(1 ) 13,806 10,805 27.8% 31.7%
Total 123,038 110,818 11.0% 14.0%
1 Regions restated to reflect revised Group operating model with LATAM now
part of Americas and APAC replacing Rest of World
2 Organic constant currency (OCC) growth rate is calculated by comparing FY25
revenue to FY24 revenue adjusted for FY25 exchange rates and the impact of
acquisitions
Geographically, all three regions (Americas, EMEA and APAC) achieved year on
year growth in Content Creation. EMEA and APAC delivered a particularly strong
performance as both regions saw channel stock normalise after a period of
destocking in the prior year. This, combined with continued robust demand and
sell-through to end customers, created favourable conditions for growth.
In the Americas, which now includes LATAM, during the first half the Group
focused on reducing excess channel inventory although this was partly offset
by a strategic increase in stock for targeted products in the US ahead of
recently raised tariffs. This tactical move brought forward shipments
originally scheduled for later in the year to maximise the benefit of
temporary exemptions announced by the US government during the year, such that
the overall impact of tariffs on sales levels for the year as a whole was not
material. Given ongoing uncertainty in the US market, we continue to maintain
moderately elevated inventory levels in the US channel to provide contingency
against potential future tariff changes. These levels are expected to unwind
gradually over the next 12 to 18 months.
Our direct to customer eCommerce business, covering all Content Creation
brands continued to grow year on year and now represents 8% (FY24: 7%) of
divisional revenue. As this channel expands, the Group plans to increase
investment in its development, as we believe it will become an increasingly
important route to market for the business.
Content Creation: Products and Brands
Focusrite audio interfaces, comprising our Scarlett, Clarett and Vocaster
ranges, are a suite of audio interfaces designed to allow both beginners and
professionals alike to create the best quality audio possible. These products
are core to home recording and audio streaming, across a wide range of price
points.
At the start of FY24, the Group launched the 4(th) generation of the lower
input/output (I/O) Scarletts, those with 1, 2 or 4 inputs (Scarlett Solo, 2i2
and 4i4). These new interfaces represent a completely re-engineered product
line, with many new features designed to deliver unprecedented ease of use
while offering professional-grade technical specifications. Following this,
and impacting FY25, we introduced the higher channel count Scarlett interfaces
in September 2024. These models build upon the innovations of the lower I/O
models, adding extra features and functionality tailored to more advanced
users. They have been extremely well received, earning strong acclaim from
industry media and our global channel partners. Additionally, the Group has
released several feature and functionality updates for existing end users, all
of which have been positively received by both customers and the wider
industry.
We track sales to our end user customers through our registration data, with
most purchases being registered in order to utilise our easy start process and
bundle of free software tools. These data reveals that the overall number of
registrations of Scarlett interfaces in the year have closely mirrored those
of the previous year. This contrasts with industry data which shows an overall
decline of approximately 1% across this product category compared to 2024.
Clarett, our mid-range interface offering, performed in line with expectations
and continues to be a highly regarded solution among more experienced
musicians and recording engineers.
Focusrite Pro offers a suite of solutions for professionals that employ "audio
over internet protocol" (AOIP) technology for scale in enterprise solutions,
both in live events and in permanent installations such as recording and
post-production studios. Some of the most prestigious events across the world,
including the US Superbowl and the Grammys utilise our Pro products as the
backbone of the audio systems deployed. Additionally, many recording and
post-production studios have adopted our products to produce and deliver
content in enhanced formats, such as Dolby ATMOS.
Our Novation brand is an integral part of the Focusrite business unit,
dedicated to empowering electronic musicians. It offers a range of solutions
including groove boxes, controllers, synthesizers and desktop and iOS creation
apps. During the first six months, we introduced an update to the popular
Launchkey family (version MK4). These products set a new benchmark for
keyboard controllers owing to their ability to integrate with a multitude of
software platforms for creating music. The new Launchkey range has performed
strongly during the 12 months to August, with end-user registrations showing
significant growth versus the prior year. In the second half, the Group
launched two special edition versions of existing products, together with the
updated LaunchControlXL, which has hit a positive chord with many electronic
musicians as a multi-purpose controller to aid musicians in their creative
workflows.
ADAM Audio, based in Berlin and acquired in July 2019, is a globally
recognised brand with a passionate team dedicated to delivering exceptional
monitor speakers and headphones for audio content creators. ADAM Audio's
portfolio of reference monitors encompasses the T-Series, A-Series, S-Series
and recently introduced D-series. The T-Series speakers are award winning
reference monitors designed for the home studio market. The A-Series are used
in both high-end home studios and professional facilities, while the
enterprise level S-Series are installed in some of the most prestigious audio
production facilities in the world. Both the A-series and S-Series speakers
are seeing growing adoption in upgraded facilities to integrate mixing in an
immersive sound environment.
ADAM launched their first desktop monitors, the D3Vs in September 2024. These
speakers have received numerous awards and accolades across the industry,
setting a new performance mark for a three inch, compact solution for the
desktop and sales have exceeded original expectations. We are also seeing the
D3Vs gain traction with a number of Hi-Fi companies who sell into the more
mainstream consumer audio market.
ADAM's new headphones, the H200, was also launched in the first six months of
the period. Initial response has been very positive, and we expect this
segment to grow as we expand the product line to offer a full headphone
portfolio. Additionally, a number of accessories for the H200 and D3Vs were
launched in the second half of the year. Overall, ADAM delivered a strong
result for the 12 month period, with continued robust sales of the T-Series,
renewed momentum in the high-end S-Series, and strong demand for the new
desktop D3Vs.
Sequential, based in San Francisco and acquired in April 2021, is a legendary
brand in the industry, synonymous with iconic analogue synthesizers. It has
been at the forefront of electronic music innovation for over 40 years. In
May 2023, the Group acquired the exclusive rights to another prestigious
synthesizer brand, Oberheim, which now operates with the Sequential business
as a separate brand.
The majority of Sequential and Oberheim products are positioned at price
points of US$3,000 and above, catering primarily to professional and aspiring
musicians and composers. This segment has faced notable challenges over the
past year due to continued softness across the industry, compounded by global
cost-of-living pressures.
To that end, Oberheim introduced a new, lower-cost synthesizer, the TEO-5,
which began shipping in September 2024, complementing the more affordably
priced Sequential models successfully launched in FY24. This was followed by
three additional product launches, the latest being the Fourm, which began
shipping in August 2025. The Fourm is a lower price-point synthesizer that
retains all the hallmark quality and functionality expected of the brand,
including a true analogue polyphonic engine with polyphonic aftertouch,
retailing for under US$1,000.
This new model has been met with highly positive global coverage and strong
reviews across trade publications.
Sonnox, based outside of Oxford and acquired in December 2022, develops
industry leading software plug-ins for audio production. These plug-ins,
normally residing inside a DAW (Digital Audio Workstation) enable users to
refine their audio and produce professional quality recordings.
Sonnox has had a particularly strong performance towards the end of the
current period, with a number of end user and channel promotions that not only
made up for the decline in the first half but put Sonnox in a strong finishing
position for the full 12 month period, growing by 25% compared to the prior 12
months. Sonnox also launched Soften, an exclusive free offering for the
Focusrite user base which greatly expanded the awareness and user base for
Sonnox products. In addition, the Sonnox team's exceptional engineering skills
have continued to contribute to the further development of new products across
the Focusrite and ADAM brands, forming an integral part of the Group's overall
Research and Development talent base.
Audio Reproduction
The Audio Reproduction brands provide high quality, professional grade
solutions for both permanent installations and live sound events. The Group
first invested in this segment with the acquisition of Martin Audio in
December 2019. Since then, the portfolio has grown significantly, both
organically and through strategic acquisitions, resulting in a strong lineup
of solutions tailored for the touring, theatre, and installation markets.
With the additions of amplifiers, through the acquisition of Linea Research in
March 2022, and further immersive sound capabilities, with the acquisitions of
Sheriff Technology in December 2023 and then Innovate in April 2024, the
division can now provide a complete offering across the dynamic field of Audio
Reproduction and immersive audio.
Audio Reproduction: Revenue by region
12 months to 12 months to Reported Growth OCC Growth(2)
31 August 31 August
2025 2024
Audio Reproduction £'000 £'000 £'000 £'000
Americas(1) 13,464 13,317 1.1% 4.6%
EMEA 18,638 19,414 -4.0% -5.2%
APAC(1) 13,773 14,975 -8.0% -7.3%
Total 45,875 47,706 -3.8% -3.2%
( )
(1) (Regions restated to reflect revised Group operating model with LATAM now
part of Americas and APAC replacing "Rest of World")
(2 Organic constant currency (OCC) growth rate is calculated by comparing FY25
revenue to FY24 revenue adjusted for FY25 exchange rates and the impact of
acquisitions)
As previously reported, the Audio Reproduction segment experienced exceptional
growth across the 2023 and 2024 financial years, following a period of very
low demand during the pandemic and a subsequent reinvestment of capital into
the industry during the return of live events. As expected, market demand is
now normalising towards pre-pandemic levels.
For Martin Audio, this trend was especially evident during this past year in
China, with particularly strong growth in this region in the prior year due to
the delayed lifting of COVID restrictions in this market. Although both
APAC and EMEA also showed declines over the prior heightened demand year, the
Americas had a strong performance, driven by an increase in investment in the
sales team to complement the increased portfolio of offerings. This resulted
in an overall decline in revenue for Audio Reproduction of 3.8% compared to
the prior year, which is lower than reports of industry decline from peers and
customers.
We believe our significantly broader product offering and increased market
presence has had a positive impact on our results compared to industry
reports. Overall, the order book for our Audio Reproduction business is robust
and with our extended offerings including immersive options with TiMax, we
continue to find new opportunities to grow our pipeline.
Audio Reproduction: Products and Brands
Martin Audio was founded in 1972 to deliver world class touring systems for
the supergroups of the day. The ethos of "Uniting the Audience" has remained
core to the company's mission and success. Martin's market stature is built
on the meticulous detail of its loudspeakers' sonic performance, further
enhanced through software and digital signal processing (DSP) which allows
precise shaping and control of overall sound performance.
Martin's product portfolio is best understood in terms of "throw" (the
distance sound must travel to create the ideal listening experience). Martin
offers solutions across its Flexpoint, TORUS, Wavefront Precision, Blackline X
and CDD Live ranges to address any size requirement for either a permanent
installation or live event.
Optimal Audio, the commercial audio brand which has been organically developed
over the last four years has benefitted from increased product availability
and continues to grow steadily in a large and competitive market.
Linea Research has established itself as a trusted and innovative industry
leader in high quality power amplification. Linea Research's portfolio
includes integrated digital signal processing, a unique combination of
high-quality sound and power that professional installations and events
require.
Linea Research has integrated well into the wider Group since being acquired
in March 2022 providing a reliable source of amplification technology for
Martin Audio's products, whilst also continuing to serve a broad base of
third-party customers through its own product lines. Linea Research was
honoured with a King's Award for Innovation in 2024, reflecting its ongoing
commitment to excellence in engineering.
Sheriff Technologies, comprises two brands serving the Audio Reproduction
market: TiMax and OutBoard.
TiMax is a pioneer in the rapidly growing field of immersive audio
experiences, specialising in innovative sound and show control solutions
through their SoundHub and TrackerD4 products. These technologies support a
wide range of applications including entertainment, events, branding, themed
environments and exhibition spaces
OutBoard, built on extensive experience from the touring and rigging
industries, offers a comprehensive suite of compact, robust chain-hoist motor
controllers, as well as systems for safety testing, preparation, and quality
management, all designed for use by global rental companies and large-scale
venues.
New Products: Our Audio Reproduction brands launched 14 new products across
the past 12 months. Most notably, TiMax Panlab for immersive integration
solutions, the Blackline Q series of point source speakers, column speakers
and subs for a large range of applications, additions to the well-established
ADORN speaker family, and System 8 software which introduces a new
workflow-based approach to configuring, controlling and monitoring Linea
Research amplifiers.
Research and development (R&D)
R&D remains a cornerstone of the Group's strategy. During the period, the
Group successfully launched 37 new products to market (23 across our Content
Creation brands and 14 within our Audio Reproduction division). Additionally,
the Group delivered 92 product updates, ranging from new functionality
enhancements to compatibility improvements. Our R&D teams are embedded
within each business unit, working collaboratively across technical, design,
and manufacturing disciplines. The Group holds three Queen's and King's Awards
for Innovation, and this continued focus on innovation generates annual cash
flow benefits of over £1 million through RDEC tax credits and Patent Box
incentives.
All development projects undergo a rigorous product lifecycle assessment,
evaluating market competition, technical feasibility, and anticipated economic
returns to ensure that each initiative delivers either a range refresh or a
new product introduction. As always, the Group has a strong pipeline of
launches planned for the next 12 months, comprising a mix of refreshed models
and entirely new products.
Financial Review
Overview
The Group reported revenues of £168.9 million, representing a 6.6% increase
compared to the 12 months ended 31 August 2024. On an organic constant
currency ("OCC") basis, the underlying increase was 8.8%.
Adjusted EBITDA(2) of £24.7 million was 2.0% lower than the prior year, with
the stronger sales performance and stable gross margins being offset by
anticipated increases in costs due to the normalisation of variable
remuneration from low levels in the prior year, together with inflationary
impacts and the investment in our eCommerce Direct to Customer channel.
Reported operating profit increased to £9.4 million (FY24: £5.7 million),
reflecting the non-repeat of a £5.3 million impairment charge recorded in the
prior year. Adjusted¹ diluted EPS was 16.7 pence, compared with 18.0 pence in
FY24, reflecting the increased dilutive impact of share options.
Income statement
12 months to 31 August 2025 12 months to 31 August 2024
Adjusted Adjusting items(1) Reported Adjusted Adjusting items(1) Reported
Revenue 168.9 168.9 158.5 - 158.5
Cost of sales (93.8) (93.8) (88.0) - (88.0)
Gross profit 75.1 75.1 70.5 - 70.5
Administrative overheads (50.4) (0.5) (50.9) (45.3) (0.1) (45.4)
EBITDA(2) 24.7 (0.5) 24.2 25.2 (0.1) 25.1
Amortisation of intangible assets (6.5) (5.4) (11.9) (5.7) (10.8) (16.5)
Depreciation of tangible assets (2.9) (2.9) (2.9) - (2.9)
Operating profit 15.3 (5.9) 9.4 16.6 (10.9) 5.7
Net finance expense (2.6) (2.6) (3.2) - (3.2)
Profit before tax 12.7 (5.9) 6.8 13.4 (10.9) 2.5
Income tax expense (2.7) 1.3 (1.4) (2.7) 2.8 0.1
Profit for the period 10.0 (4.6) 5.4 10.7 (8.1) 2.6
Memo: Total administrative expenses (59.8) (5.9) (65.6) (53.9) (10.9) (64.8)
(1) Adjusted for amortisation of acquired intangible assets and other
adjusting items detailed in note 5 to the Interim Financial Statements.
(2) Earnings (Profit after tax) before Interest, Tax, Depreciation and
Amortisation
Revenue analysis
12 months to 31 August Acquisition Adjustment 12 months to 31 August 12 months to 31 August 2024 Reported 12 months to 31 12 months to 31 Reported Growth OCC Growth(1)
August
August
2025 Reported 2025 Adjusted
2024 Currency
2024 Adjusted
Focusrite 67,820 67,820 60,278 (1,624) 58,654 12.5% 15.6%
Novation 17,337 17,337 16,257 (415) 15,842 6.6% 9.4%
Focusrite 85,157 85,157 76,535 (2,039) 74,496 11.3% 14.3%
Novation(2)
ADAM 25,581 25,581 22,610 (556) 22,054 13.1% 16.0%
Sequential 9,839 9,839 9,705 (243) 9,462 1.4% 4.0%
Sonnox 2,461 2,461 1,968 (40) 1,928 25.1% 27.6%
Content Creation 123,038 123,038 110,818 (2,878) 107,940 11.0% 14.0%
Audio 45,875 (393) 45,482 47,706 (740) 46,966 -3.8% -3.2%
Reproduction
Total 168,913 (393) 168,520 158,524 (3,618) 154,906 6.6% 8.8%
1 Organic constant currency (OCC) growth rate is calculated by comparing
FY25 revenue to FY24 revenue adjusted for FY25 exchange rates and the impact
of acquisitions
2 This period Focusrite and Novation brands have been merged into one
operating segment within the financial statements following the reorganisation
of the relevant R&D teams, resulting in Novation no longer meeting the
criteria for separate disclosure as a cash generating unit. The brands are
shown here separately for reference and to provide added clarity in the
comments below.
Group revenue increased by 6.6% to £168.9 million (FY24: £158.5 million).
When adjusted for acquisitions and constant currency effects, this equates to
an organic constant currency (OCC) growth of 8.8%. Sheriff Technology,
acquired in December 2023, contributed two months of revenue in the prior
year. Currency movements experienced headwinds, reducing reported revenue by
approximately £3.6 million, primarily due to the weakening of the US dollar.
The Content Creation division sustained the sales momentum reported in the six
months to February 2025, with all brands achieving growth for the full year,
resulting in an overall increase of 11.0% (OCC: 14.0%). Stock levels have now
normalised across EMEA and APAC, while remaining somewhat higher in the US as
a precaution against ongoing market uncertainties. The additional stock build
in the US during the first half of the year, before the introduction of
tariffs, largely unwound in the second half, such that the overall impact of
tariffs on underlying revenue growth was not material for the 12-month period.
Focusrite Novation achieved revenue of £85.2 million, an increase of 11.3%
(OCC: 14.3%) compared to the prior year. Both brands reported growth during
the period, with Focusrite performing particularly strongly (up 12.5%),
although against comparators that reflected significant destocking in the
previous year. Growth was further supported by the release of the final
Scarlett 4(th) Generation models at the start of the year and a special 40(th)
anniversary Scarlett at year end, as well as by higher inventory placements
into European sales channels ahead of the winter holiday season.
Novation also benefitted from new products, including the launch of the fourth
iteration of the Group's successful Launchkey controller in the first six
months and a special edition White range in the second six months of the
period, both of which have been well received by reviewers and have delivered
increased sales and registrations.
ADAM Audio continues to grow with an expanded range, which now includes
desktop speakers and headphones. Revenue grew by 13.1% (OCC: 16.0%) to
£25.6 million, with an improved growth rate in the first half, as sales were
brought forward from the second half to mitigate tariff impacts.
Despite a continued challenging market for higher-priced synthesizers,
Sequential returned to growth with revenue of £9.8 million, up 1.4% year on
year (OCC: 4.0%). Growth for the full 12 months moderated from the 15%
increase reported at the half-year stage, which had benefited from low
comparators. The 12-month comparison period includes the successful launch of
the lower price-point TEO-5 synthesizer at the end of FY24, which drove much
of the growth and continues to perform strongly across all regions. This has
now been complemented by the launch of Fourm, a second, more accessible model
further expanding the product range.
Sonnox had a strong finish to the year with a successful cross-selling
campaign and launch of a new product to Focusrite Novation registered users
which together with ongoing promotions delivered 62% growth in the second six
months and 25.1% overall for the 12 months.
As previously reported, the Audio Reproduction market continues to normalise
following a period of strong growth after the lifting of COVID restrictions.
Sales declined by 2.9% between March and August, an improvement on the 5.8%
decrease reported for the period to February, resulting in a full-year decline
of 3.8% (OCC: -3.2%). The broadened product portfolio has enabled the division
to maintain a robust pipeline of sales orders, extending over the next 18
months, with an order book broadly consistent with the end of the prior year.
Currency impact
The US Dollar weakened during the period (with detailed exchange rate
movements provided below), accounting for the £3.6 million negative
translation impact on Group revenue for the 12 months to August 2025 relative
to the comparable 12 months in 2024. However, the impact at the profit level
was minimal as purchases of inventory from manufacturers in China and Malaysia
are also denominated in USD, creating a natural hedge that offsets much of the
currency fluctuation.
Segment Profit
Segment profit is disclosed in more detail in note 3 to the Interim Financial
Statements named, 'Operating Segments'. These segments compare the revenue
of the products of the relevant brands with the directly attributable costs to
create segment profit.
Gross Profit analysis
The Group's gross margin percentage for the period was 44.4%, broadly in line
with the prior year. The second six months gross margin of 45.0% represented
an improvement on the 43.9% reported in the first six months. Although the
overall margin remained relatively stable, this masks a number of offsetting
movements during the year, with margins in Audio Reproduction declining,
whilst those in Content Creation increasing.
In the Content Creation division, reported gross margin increased by 2.3
percentage points to 45.0% from 42.7% in the prior year. FY24 was impacted
by a provision and the sell-out of our podcasting product, Vocaster, which
reduced the division's gross margin by approximately 1.8 percentage points.
Excluding this, the underlying year-on-year increase was around 0.5 percentage
points.
This improvement was driven by price increases that offset initial tariff
impacts, with higher rates for Malaysia, Indonesia, and Vietnam taking effect
only from July 2025 and therefore with minimal impact in the current period.
We continue to closely monitor the situation, with further adjustments
expected once new arrangements with China are finalised and following the
outcome of the upcoming Supreme Court case concerning the legality of the
tariffs.
Our Audio Reproduction division, which delivered particularly strong gross
margins of 48.6% in the prior year, reported a gross margin of 43.1% in the 12
months to August, which reflects a return to a level in line with the previous
average of 43.5% across FY21 to FY23. The key driver was a sharp reduction
in sales to the Chinese market, where a portion of sales are recognised on a
royalty basis via our contract manufacturers. This market weakness in China
significantly impacted both revenue and gross profit in the division.
Increased tariffs have also impacted this market, but with the majority of
products imported to the US being made in the UK this has been less
significant than Content Creation division.
Freight rates remained relatively stable across the period at a similar level
to the prior year.
Looking ahead, the outlook for gross margins remains somewhat uncertain given
the ongoing changes to tariff regulations. However, we expect margins to
continue improving in regions outside the US. In the US, our focus will remain
on maximising gross profit through proactive pricing and supply-chain
management.
Administrative expenses
Administrative expenses include sales, marketing, operations, the
uncapitalised element of R&D (partially offset by the Research and
Development Expenditure Credit regime ('RDEC') tax credit of £0.4 million),
as well as central functions such as legal, finance and the Group Board.
Total expenses were £50.4 million, up from £45.3 million in the prior year.
There were adjusting costs (see below) in the period of £0.5 million relating
to a restructuring charge (FY24: £0.1 million).
The £5.1 million increase in adjusted administrative expenses was primarily
driven by the normalisation of variable remuneration totalling £2.0 million,
and £1.4 million of labour cost inflation. The remaining increase relates to
the annualisation of costs associated with the acquisition of Sheriff
Technology in the prior year, together with investment in our sales teams in
the US and upgrades to the eCommerce platform across our Content Creation
brands.
Two years ago the Group implemented a new operating model designed to drive
regional sales and marketing synergies and establish a shared back-office
support structure. Now that this framework is fully in place, a review of its
effectiveness was undertaken towards the end of the year, resulting in a minor
restructuring to streamline the Content Creation division further. This
resulted in a one-off cost of £0.5 million and is expected to generate
annualised savings of over £1 million, a proportion of which has been
reinvested to support sales growth within the Audio Reproduction division.
Adjusted EBITDA
Adjusted EBITDA is an alternative performance measure widely used by
securities analysts, investors and other stakeholders to assess a company's
underlying profitability. Within the Group, it also forms the basis for
elements of senior management incentivisation, both at the operating company
and Group level.
Adjusted EBITDA decreased marginally from £25.2 million in FY24 to £24.7
million in FY25, a decrease of 2.0%. This reflects the offset of the
contribution from higher sales by higher administrative costs.
A reconciliation of adjusted EBITDA to operating profit can be found in Note
1.9 to these interim financial results.
Depreciation and amortisation
Depreciation is charged on tangible fixed assets using the straight-line
method over the assets' estimated useful lives, typically ranging between two
and five years.
Amortisation is primarily applied to capitalised development costs, with
charges spread over the expected lifecycle of the related product. Product
lifespans vary across the Group's brands, from approximately three years for
Focusrite and Novation, up to 11 years for Martin Audio and 15 years for
Sequential.
During the period, £10.4 million of development costs were capitalised (FY24:
£8.8 million). Amortisation totalled £5.1 million (FY24: £5.0 million)
increasing as more new products are released, principally the final models in
the Scarlett Gen 4 refresh.
The amortisation of the acquired intangible assets totalled £5.4 million
during the period (FY24: £5.5 million) and has been disclosed within
adjusting items.
Adjusting items
In the 12 months to August 2025 adjusting items totalled £0.5 million,
relating to restructuring costs, referred to above, following a review of the
Content Creation division cost base, offset by a £0.1m reduction in the final
earnout for the Sheriff acquisition (see note 12 to the interim financial
statements). In FY24, adjusting items of £0.1 million which related to the
due diligence costs for the acquisition of Sheriff Technology which was
completed on 19 December 2023. £5.4 million (FY24: £5.5 million) relating to
amortisation of acquired intangible assets is also shown as an adjusting item
in both reporting periods.
Foreign exchange and hedging
The exchange rates were as follows:
Exchange rates 12 months to 31 August 2025 12 months to 31 August 2024
Average
USD:GBP 1.30 1.26
EUR:GBP 1.19 1.17
Period end
USD:GBP 1.35 1.31
EUR:GBP 1.15 1.19
The average USD rate has weakened to $1.30 for FY25 (FY24: $1.26). The USD
accounts for over half of Group revenue but nearly all of the cost of sales,
so there is a useful natural hedge against currency fluctuations.
The Group enters into forward contracts to convert Euro to GBP. The policy
adopted by the Group is to hedge approximately 50% of the anticipated Euro
flows for the current 12 month period (year ending 28 February 2027).
Corporation tax
The effective tax rate for the period has increased to 20.5% (FY24: 4%).
This increase in the rate is due to the benefit last year of an initial
patent box relief, which resulted in a £0.5 million prior year positive
adjustment, together with the reduction of tax rates in the US. A similar
benefit of £0.1 million was included this year in respect of a new patent
granted in January 2025. The underlying effective rate excluding the impact
of the catch up for attributable profits prior to the grant date of the new
patent is 22.6%. The headline effective tax rate is expected to remain around
the UK corporate tax rate in future years due to the ongoing permitted
deductions under the Patent Box scheme offsetting the impact of higher tax
rates on profits from non-UK entities.
Earnings per share ('EPS')
The basic EPS for the year was 9.2 pence, up 104% from 4.5 pence in FY24.
This increase has resulted from the change in reported profit after tax, which
was largely due to the non repeat of the prior year's impairment charge. The
weighted average number of shares used for the calculation has increased
marginally compared to the prior year to 58,645,000 shares (FY24: 58,612,000
shares). The more comparable measure, excluding adjusting items and including
the dilutive effect of share options, is the adjusted diluted EPS. This
decreased to 16.7 pence, from 18.0 pence in FY24, a decrease of 7.2%.
12 months to 12 months to
31 August 2025
31 August 2024
Pence Pence
Basic 9.2 4.5
Diluted 9.0 4.4
Adjusted basic 17.0 18.3
Adjusted diluted 16.7 18.0
Balance sheet
31 August 2025 31 August 2024
£m £m
Non-current assets 93.2 94.0
Current assets
Inventories 41.9 49.3
Trade and other receivables 42.8 37.6
Cash 19.5 22.0
Current liabilities
Trade, other payables and provisions (33.5) (34.8)
Non-current liabilities
Bank loan (30.3) (34.5)
Deferred tax (10.0) (10.8)
Other non-current liabilities (5.7) (6.8)
Net assets 117.9 116.0
Working capital(1) 51.2 52.1
Working capital as a % of last 12 months revenue 30.3% 32.8%
(1) Working capital is defined as inventories plus trade and other receivables
less trade and other payables and provisions
Non-current assets
The non-current assets comprise intangible assets (£80.2 million: FY24 £80.3
million), both acquired and internally generated, with a lesser amount of
tangible assets (£10.5 million; FY24 £11.1 million), together with a
deferred tax asset of £2.5 million (FY24: £2.7 million). Acquired assets
include goodwill, brands, and capitalised development costs. Internally
generated intangible assets comprise capitalised R&D and acquired
licences, trademarks and software. Tangible assets comprise property, plant
and equipment and one building.
The goodwill totals £14.3 million (FY24: £14.2 million) and in line with
accounting standards is not amortised.
As there have been no acquisitions in the year the costs of brands (£25.1
million) and acquired development costs in use (£37.6 million) have remained
stable with only minimal adjustments due to foreign exchange and the transfer
of £0.5 million of assets from assets under development. They continue to
be amortised in line with the expected useful economic lives of the brands
and assets and at the end of August 2025 had a combined net book value of
£33.6 million (FY24: £38.6 million)
Internally generated technology and patent costs comprise capitalised research
and development costs for products currently in use. The amortisation
periods range from three years to fifteen years depending on the expected life
of the products. The shorter amortisation periods are more usual for
Focusrite and Novation products and the longer periods for the ADAM Audio
monitors, Martin Audio live speakers and Sequential synthesisers. The
capitalised technology and patent costs as at 31 August 2025 had a carrying
value, net of amortisation, of £12.5 million (FY24: £14.2 million).
Capitalised technology and patent costs still under development comprise
acquired and internally generated technology and patent costs for products
currently still in development. The cost of these items has increased from
£7.1 million at 1 September 2024 to £13.7 million as at 31 August 2025, as a
result of our £10.1 million ongoing investment in new products, net of the
transfer of £3.6 million of costs to products now in use.
Overall, amortisation of intangible assets totals £11.9 million (FY24: £11.2
million). This is split between amortisation of acquired intangible assets
of £5.4 million (FY24: £5.5 million), and other amortisation of £6.5
million (FY24: £5.7 million). The amortisation of acquired intangible assets
has been treated as an adjusting item. In the 12 months to August 2024 the
assets relating to the Sequential acquisition were impaired by £2.8 million
and the goodwill of £2.5 million was fully impaired, resulting in an
additional amortisation charge in FY24 of £5.3 million.
Based on current trading and management forecasts, we have conducted
impairment reviews for those subsidiaries impacted by difficult markets and
have concluded that no impairments to the carrying value of the intangible
assets being deemed necessary. This will be reassessed at the next reporting
date for any evidence of any permanent diminution in value.
The remaining £6.1 million of net book value of intangible assets (FY24:
£6.1 million) is in respect of purchased licences, software and trademarks.
This includes licences for a new platform technology currently under
development and a licence entered into as part of a strategic partnership
licencing cost with Klevgrand, a new third party software partner for
Focusrite Novation.
Tangible non-current assets of £10.5 million (FY24: £11.1 million) consist
mainly of right of use assets relating to the Group's leased offices and
warehouses, and tooling equipment for the manufacture of products.
Working Capital Analysis
As of 31 August 2025, working capital represented 30.3% of the last 12 months'
revenue, a decrease from 32.8% in the 12 months to August 2024, and 34.2% at
February 2025.
The decrease in working capital primarily reflects lower inventory levels over
the past year, including a significant reduction in Scarlett stock,
particularly Gen 3 products. This was achieved despite a £2 million increase
in Audio Reproduction inventory in the US, held to mitigate the impact of
tariffs. The reduction was partially offset by higher debtors at period end,
driven by strong final-quarter sales following new product launches and
pre-holiday channel stocking ahead of the calendar 2025 fourth quarter.
We expect working capital to stabilise over the next six months, resulting in
a modest seasonal cash outflow, before returning to a cash-generative position
in the 12 months to August.
Cash Flow Analysis
12 months to 12 months to
31 August 2025 31 August 2024
£m £m
Cash and cash equivalents at the beginning of the year 22.0 26.8
Foreign exchange movements (0.0) (0.4)
Cash and cash equivalents at the end of the year 19.5 22.0
Net decrease in cash and cash equivalents (per Cash Flow Statement) (2.5) (4.4)
Change in bank loan 4.0 (6.6)
Decrease/(increase) in net debt 1.5 (11.0)
Add back equity dividend paid 3.9 3.9
Add back acquisition of subsidiary (net of cash acquired) 0.4 2.5
Free cash inflow/ (outflow) 5.8 (4.6)
Add back non underlying items (cash outflow) 0.4 0.1
Underlying free cash inflow/(outflow) (1) 6.2 (4.5)
( )
(1)Defined as cashflow before equity dividends, acquisition of subsidiary (net
of cash acquired) and adjusting items.
The underlying free cash inflow in the 12 months to August 2025 was £6.2
million, compared to a cash outflow of £4.5 million in FY24. The Group
remains inherently cash generative, and the aim is to continue the historic
norm of consistent free cashflow generation in future years.
The net debt balance at the period-end was £10.8 million (FY24: net debt of
£12.5 million). The net debt includes the arrangement fee for the revolving
credit facility (RCF) of £0.5 million which is being amortised across the
period of the facility.
The Group has a £50 million RCF facility split evenly between HSBC and
NatWest which was renewed in September 2023 and is due to expire in September
2028, together with an uncommitted facility for a further £50 million. As
at the balance sheet date £30.8 million was drawn down from the facility
(FY24: £35.1 million).
Dividend
The Board has approved a second interim dividend of 2.1p which will bring the
total interim dividends declared in the 12 month period to date to 4.2p (FY24:
6.6p). The lower level of declared dividends compared with the previous 12
months is due to the Group moving the financial reporting date to February
from August as referred to below. This will enable the recommendation of a
final dividend for the 18 month period to February 2026.
Change in year end
As announced on 29 October 2024, the Group's year end has been changed from 31
August to 28 February. As a result, the Group is reporting unaudited interim
results for the 12 month period to 31 August 2025 to be followed by audited
full period results for the 18 month period to 28 February 2026.
Summary and Outlook
Following several challenging years, the past 12 months have seen a return to
more stable markets across our Content Creation regions, particularly EMEA and
APAC. This has resulted in sales growth of 11.0% for the division, supported
by sustained demand for our leading brands and successful new product launches
across the portfolio. The refresh of our flagship Scarlett range in Focusrite
is now complete, and Novation continues to deliver new market-leading products
and special editions. Incremental new product introductions from both ADAM and
Sequential have also further contributed to overall revenue growth.
As previously reported, Audio Reproduction has normalised following 18 months
of unusually high post-lockdown demand, with 12-month revenues down 3.8% year
on year. However, the pipeline for this division remains strong, reflecting
the success of our expanded portfolio and broader market reach.
During the year, we took early and decisive action to implement pricing
changes and relocate manufacturing to stabilise our margins in the face of
tariff increases into the US in excess of 20% on most of our manufacturing
locations. Additional pricing actions have since been implemented to help
maintain gross margins amid an evolving tariff landscape. We recognise that
macroeconomic uncertainties persist, particularly in our key US market, and
remain vigilant and ready to respond swiftly to any further changes.
The outlook for the current period continues to be in line with the Board's
expectations. Despite a challenging market, trading since August has
reflected healthy underlying demand for the Group's products. Our continued
investment in people, innovation, and product development positions the Group
well for sustained growth and long-term success.
Tim Carroll Sally McKone
Chief Executive Officer Chief Financial Officer
4 November 2025
Risks and Uncertainties
The Board has considered the principal risks and uncertainties affecting the
Group as described on pages 34 to 39 of the Group's Annual Report for the year
ended 31 August 2024 (a copy of which is available on the Group's website at
https://focusriteplc.com/investors/reports-andpresentations/
(https://focusriteplc.com/investors/reports-andpresentations/) ) as updated
when we announced our results for the six months ended 28 February 2025 (a
copy of which is available on the Group's website at
https://focusriteplc.com/investors/reports-and-presentations/
(https://focusriteplc.com/investors/reports-and-presentations/) ). These
remain relevant to the rest of this financial year, with the updates as set
out below
Adverse changes in macroeconomic conditions
The changeable nature of the tariffs introduced by the USA government on goods
imported from China and at a lower level on goods produced in other countries
causes uncertainty for the Group in terms of being able to react quickly to
pricing changes and manufacturing decisions. In addition, the overall impact
on the US economy and the wider global economy remains unclear. The Group
continues to monitor the situation closely and has taken action to mitigate
the impact through increasing inventory in the US and increasing prices where
relevant, whilst remaining mindful of our competitive position.
We continue to explore options regarding the country of origin for our
products across all our brands, in particular working with those of our
current Chinese-based contract manufacturing partners, which can typically
offer alternative manufacturing locations across Asia.
In addition, the Group's business remains subject to the political, economic
and other risks that are currently at play in the changing global environment,
with sales to certain markets continuing to be impacted by ongoing conflicts,
particularly in the Ukraine and the Middle East.
Cyber threat
Since the publication of our FY24 Annual Report, we continue to see
increasingly sophisticated and personalised infiltration attempts on our
information systems, often powered by AI, making threats harder to detect. In
response, the Group continues to invest in AI-driven tools to block these
evolving threats and is actively exploring further measures to strengthen our
24/7 system monitoring.
Forward looking statements
The risks and uncertainties facing the Group were reported in detail in the
2024 Annual Report and are monitored closely by the Group. The forward-looking
statements in this interim financial statement cannot be relied upon as a
guarantee or prediction of future performance. We, like all businesses,
continue to face known and unknown risks, uncertainties and other factors,
many of which are beyond our control, which may mean our actual results differ
from those expressed in this interim report.
Condensed Consolidated Income Statement
For the year ended 31 August 2025
Note 12 months to 12 months to
31 August 2025
31 August 2024
£'000 £'000
Revenue 2 168,913 158,524
Cost of sales (93,832) (88,031)
Gross profit 75,081 70,493
Administrative expenses (65,643) (64,797)
Adjusted EBITDA (non-GAAP measure) 24,684 25,219
Depreciation and amortisation (9,347) (8,574)
Adjusting items for Adjusted EBITDA:
Amortisation of acquired intangible assets 9 (5,417) (5,510)
Impairment of acquired intangible assets - (5,355)
Other adjusting items 5 (482) (84)
Operating profit 9,438 5,696
Finance income 150 100
Finance costs (2,833) (3,292)
Profit before tax 6,755 2,504
Income tax (expense)/income 6 (1,387) 104
Profit for the period from continuing operations 5,368 2,608
Earnings per share
From continuing operations
Basic (pence per share) 8 9.2 4.5
Diluted (pence per share) 8 9.0 4.4
Condensed Consolidated Statement of Other Comprehensive Income
12 months to 12 months to
31 August 2025
31 August 2024
£'000 £'000
Profit for the period 5,368 2,608
Items that may be reclassified subsequently to the income statement
Exchange differences on translation of foreign operations 342 (923)
Loss on forward foreign exchange contracts designated and effective as a (807) (491)
hedging instrument
Exchange gain on acquired amortisation 140 67
Tax on hedging instrument 202 123
Total comprehensive income for the period 5,245 1,384
Profit attributable to:
Equity holders of the Company 5,245 1,384
Condensed Consolidated Statement of Financial Position
Note 31 August 2025 31 August 2024(1)
£'000 £'000
Assets
Non-current assets
Goodwill 14,335 14,194
Other intangible assets 9 65,889 66,065
Property, plant and equipment 10 10,519 11,096
Deferred tax assets 2,485 2,666
Total non-current assets 3 93,228 94,021
Current assets
Inventories 41,929 49,267
Trade and other receivables 11 42,797 37,391
Current tax assets - 226
Cash and cash equivalents 11 19,484 22,040
Total current assets 104,210 108,924
Current liabilities
Trade and other payables (29,255) (30,745)
Other liabilities (1,575) (1,527)
Current tax liabilities (1,274) (2,022)
Provisions (578) (522)
Derivative financial instruments 11 (814) -
Total current liabilities (33,496) (34,816)
Net current assets 70,714 74,108
Total assets less current liabilities 163,942 168,129
Non-current liabilities
Bank loans and arrangement fee 11 (30,329) (34,565)
Deferred tax (10,012) (10,815)
Other liabilities (5,683) (6,793)
Total non-current liabilities (46,024) (52,173)
Total liabilities (79,520) (86,989)
Net assets 117,918 115,956
Capital and reserves 59 59
Share capital
Share premium 115 115
Merger reserve 14,595 14,595
Merger difference reserve (13,147) (13,147)
Translation reserve (3,198) (3,680)
Hedging reserve (807) -
EBT reserve (1) (1)
Retained earnings 120,302 118,015
Equity attributable to owners of the Company 117,918 115,956
Total equity 117,918 115,956
1 Restated for the reclassification of outstanding bank loans as non-current
liabilities from current liabilities. See note 1.10 for more
details.
Condensed Consolidated Statements of Changes in Equity
12 months to 31 August 2025 Share capital Share premium Merger reserve Merger difference reserve Translation reserve Hedging reserve EBT reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 September 2024 59 115 14,595 (13,147) (3,680) - (1) 118,015 115,956
Profit for the period - - - - - - - 5,368 5,368
Other comprehensive income/(expense) for the period - - - - 482 (807) - 202 (123)
Total comprehensive income/(expense) for the period - - - - 482 (807) - 5,570 5,245
Transactions with owners of the Company:
Share-based payment deferred tax deduction in excess of remuneration expense - - - - - - - (1) (1)
Share-based payments - - - - - - - 565 565
Shares withheld to settle employees' tax obligations associated with - - - - - - - (63) (63)
share-based payments
Share-based payments in lieu of bonuses - - - - - - - 83 83
Dividends paid - - - - - - - (3,867) (3,867)
Balance at 31 August 2025 59 115 14,595 (13,147) (3,198) (807) (1) 120,302 117,918
Condensed Consolidated Statements of Changes in Equity (Continued)
12 months to 31 August 2024 Share capital Share premium Merger reserve Merger difference reserve Translation reserve Hedging reserve EBT reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 September 2023 59 115 14,595 (13,147) (2,757) (491) (1) 119,097 118,452
Profit for the period - - - - - - - 2,608 2,608
Other comprehensive (expense)/ income for the period - - - - (923) (491) - 190 (1,224)
Total comprehensive (expense)/ income for the period - - - - (923) (491) - 2,798 1,384
Share-based payment deferred tax deduction in excess of remuneration expense - - - - - - - (84) (84)
EBT shares issued - - - - - - - 22 22
Share-based payments - - - - - - - 158 158
Shares withheld to settle employees' tax obligations associated with - - - - - - - (106) (106)
share-based payments
Dividends paid - - - - - - - (3,870) (3,870)
Balance at 31 August 2024 59 115 14,595 (13,147) (3,680) - (1) 118,015 115,956
Consolidated Statement of Cash Flow
12 months to 31 August 2025
Note 12 months to
31 August 2025
12 months to
31 August 2024
£'000 £'000
Cash flows from operating activities
Profit for the period 5,368 2,608
Adjustments for:
Income tax expense/(credit) 1,387 (104)
Net interest charge 2,683 3,192
Loss on disposal of property, plant and equipment 10 18 13
Loss on disposal of intangible assets 9 21 75
Amortisation of intangibles 9 11,912 11,198
Impairment of goodwill and acquired intangibles - 5,355
Depreciation of property, plant and equipment 10 2,852 2,887
Other non-cash items (369) (625)
Share-based payments charge 565 158
Operating cash flow before movements in working capital 24,437 24,757
Increase in trade and other receivables (5,406) (4,909)
Decrease in inventories 7,338 6,362
Decrease in trade and other payables (840) (10,367)
Operating cash flow before interest and tax 25,529 15,843
Net interest paid (2,420) (2,403)
Income tax paid (1,020) (1,781)
Cash flow generated by operations 22,089 11,659
Net foreign exchange movements 298 (563)
Net cash inflow from operating activities 22,387 11,096
Cash flows from investing activities
Purchases of property, plant and equipment 10 (1,714) (1,540)
Purchases of intangible assets 9 (1,201) (3,040)
Capitalised R&D costs (11,743) (9,660)
Acquisition of subsidiary, net of cash acquired 12 (402) (2,494)
Net cash used in investing activities (15,060) (16,734)
Cash flows from financing activities
Proceeds from loans and borrowings - 9,355
Repayments of loans and borrowings (4,000) (2,750)
Payment of right of use liabilities (1,964) (1,423)
Equity dividends paid (3,867) (3,870)
Net cash (utilised in)/generated from financing activities (9,831) 1,312
Net decrease in cash and cash equivalents (2,504) (4,326)
Cash and cash equivalents at beginning of the period 22,040 26,787
Net foreign exchange movement (52) (421)
Cash and cash equivalents at end of the period 19,484 22,040
Notes to the Condensed Consolidated Interim Financial Statements
1. Basis of preparation and significant accounting policies
Focusrite plc (the 'Company') is a company incorporated in the UK. The
condensed consolidated interim financial statements ('interim financial
statements') as at and for the 12 months ended 31 August 2025 comprised the
Company and its subsidiaries (together referred to as the 'Group').
The Group is a business engaged in the development, manufacture and marketing
of professional audio and electronic music products.
Statement of compliance
The condensed set of financial statements are for the year ended 31 August
2025 are presented in Pounds ('GBP' thousands; £'000). This is the functional
currency of the Group.
The condensed set of financial statements has been prepared in accordance with
the recognition and measurement requirements of UK-adopted international
accounting standards and the AIM rules.
The financial statements of the Group for the 18 month period ending 28
February 2026 will be prepared in accordance with UK-adopted international
accounting standards. These condensed set of financial statements has been
prepared applying the accounting policies and presentation that were applied
in the preparation of the company's published consolidated financial
statements for the year ended 31 August 2024 which were prepared in accordance
with UK-adopted international accounting standards in conformity with the
requirements of the Companies Act 2006.
AIM listed companies are not required to comply with IAS 34 'Interim Financial
Reporting' and accordingly the Company has taken advantage of this exemption.
The condensed financial statements do not include all the information required
for a complete set of IFRS financial statements. However, selected explanatory
notes are included to explain events and transactions that are significant to
an understanding of the changes in the Group's financial position and
performance since the last annual consolidated financial statements as at and
for the year ended 31 August 2024.
These interim financial statements were authorised for issue by the Company's
Board of Directors on 4 November 2025.
The comparative figures for the financial year ended 31 August 2024 are the
Company's statutory accounts for that financial year. Those accounts have been
reported on by the Company's auditor and delivered to the registrar of
companies. The report of the auditor was (i) unqualified, (ii) did not include
a reference to any matters to which the auditor drew attention by way of
emphasis without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006.
Change of Reporting Date and One-off Enhanced Disclosures
As previously announced, the Group has changed its financial year end from 31
August to 28 February to better align its reporting timetable with its
operational and strategic planning cycle. As a result of this change, the
period covered by this interim announcement is the twelve months to 31 August
2025.
Given the length of this reporting period and its comparability to a full
financial year, the Group has included certain additional disclosures in these
interim financial statements, including expanded notes to the financial
statements and enhanced commentary on financial performance and position.
These enhanced disclosures are provided on a one-off basis to assist
shareholders in understanding the results for this transitional period and
should not be regarded as a commitment to provide such additional information
in future interim announcements.
Material accounting policies
1.1 Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Company and subsidiaries controlled by the Company drawn up to 31 August 2025.
1.2 Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the
Group has the power to govern the financial and operating policies of an
entity so as to obtain benefits from its activities. In assessing control, the
Group takes into consideration potential voting rights that are currently
exercisable. The acquisition date is the date on which control is transferred
to the acquirer. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until
the date control ceases.
1.3 Going concern
The Board of Directors have a reasonable expectation that the Company and the
Group have adequate resources to continue in operational existence and meet
their liabilities as they fall due for a period of at least 12 months from the
date of approval of these interim financial statements ("the going concern
period"). Accordingly, the interim statements have been prepared on a going
concern basis.
The Group meets its day-to-day working capital requirements from cash balances
and a revolving credit facility of £50.0 million which was renewed in
September 2023. In September 2024 the revolving credit facility was extended
for a further year to a maturity date of September 2028. The availability of
the revolving credit facility is subject to continued compliance with certain
covenants.
The Directors have prepared projected cash flow forecasts for the period
ending 12 months from the date of their approval of these financial
statements. These forecasts include a severe but plausible downside scenarios,
including the impact of a recession, a reduction in gross margins, loss of a
major distributor and an inability to ship from China for a period of time.
The base case covers the period to February 2027 and includes realistic
forecast growth. The forecast has been extracted from the Group's forecast and
strategic plan for the going concern period. Key assumptions include:
· Future growth assumptions in line with market growth and recent
group performance assumptions and planned product introductions
· Continued investments in research and development in all areas of
the Group.
· No further acquisitions
Throughout the period the forecast cash flow information indicates that the
Group will have sufficient liquidity and comply with the leverage and interest
cover covenants contained within the facility.
The Directors have modelled severe but plausible downside scenarios of the
risks identified above. This model assumes that purchases of stock would, in
time, reduce to reflect reduced sales, if they occurred. The Group would also
respond to a revenue shortfall by taking reasonable steps to reduce overheads
within its control. In these scenarios, the Group would be expected to remain
well within the terms of its loan facility with the leverage covenant (net
debt to adjusted EBITDA) in the period not exceeding the maximum of 2.5x.
Separately, as a reverse stress test, the Directors estimate that if the Group
were to experience a shortfall in revenue of greater than 25% than the
current expectations permanently from the start of the forecast period,
leverage could rise towards the upper limits allowed by the banking covenants
by November 2026. This scenario includes consequential reductions in the
purchases of stock and the level of dividends. However, the Directors' view
is that any scenario of a revenue shortfall of greater than the severe yet
plausible scenario above is not realistic. In the year just completed the
Group's revenue levels are higher than the prior period and should be further
bolstered by plans for more product introductions in the next six months.
As at 20 October net debt had increased slightly to £13.4 million from £10.8
million at the 31 August, following payments of corporate tax and seasonal
working capital outflows.
Consequently, the Directors are confident that the Group will have sufficient
funds to continue to meet their liabilities as they fall due for at least 12
months from the date of approval of the financial statements and therefore
have prepared the financial statements on a going concern basis.
1.4 Earnings per share
The Group presents basic and diluted earnings per share ('EPS') data for its
ordinary shares. Basic EPS is calculated by dividing the profit attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period. For diluted EPS, the weighted average number of
ordinary shares is adjusted for the dilutive effect of potential ordinary
shares arising from the exercise of granted share options.
1.5 Accounting estimates and judgements
In application of the Group's accounting policies, the Directors are required
to make judgements, estimates and assumptions about the carrying amounts of
assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ
from these estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by the Directors in applying the Group's
accounting policies and key sources of estimation uncertainty were the same as
those applied to the Group's financial statements for the year ended 31 August
2024.
1.6 Revenue Recognition
The core principle of IFRS 15 is that an entity recognises revenue to depict
the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in
exchange for those goods or services. Having identified the customer, the
performance obligations and the transaction price, the revenue is recognised
when the Group satisfies the performance obligations.
The value of revenue comprises the fair value of the consideration received or
receivable for the sale of goods and services in the ordinary course of the
Group's activities. Revenue is shown net of sales taxes and discounts. If a
contract includes variable consideration, Focusrite will estimate the amount
of consideration to which it will be entitled and present this as a contract
liability within Trade and other payables. Variable consideration will take
into account discounts, incentives and penalties expected due based on
expected value calculated from historic experience and planned future
marketing campaigns. We have constrained the revenue recognised to an amount
that it is highly probable that a significant reversal will not occur. Due to
the fact that the vast majority of sales by Focusrite involve sale of goods,
the timing of the revenue recognition is considered in relation to
'Performance obligations satisfied at a point in time' (IFRS 15; 38)
considering the following factors:
1) The entity has a present right to payment for the asset.
2) The customer has legal title to the asset.
3) The entity has transferred physical possession of the asset.
4) The customer has the significant risks and rewards of ownership of
the asset.
5) The customer has accepted the asset.
Sale of goods
The Group has three routes to market for the sale of goods: distributors,
resellers and direct to end users. These cover all segments and geographical
markets. Revenue from sales to distributors, resellers and direct to end users
are recognised in line with the terms defined within the contract of sales, as
this will define when control is passed to the customer. This is deemed to be
in line with the Incoterms of the shipment, which clarify when the customer
has accepted the asset and legal title and therefore risk of ownership has
passed. For the majority of shipments this occurs on despatch of goods, but
may differ depending on the specific shipment terms agreed with the customer.
Payment is also due to the Group in line with agreed credit terms at this
point.
Sale of software
Revenue from the download of apps and paid feature upgrades is recognised upon
confirmation of the sale from the app store provider. Perpetual licences are
recognised in entirety at the point of sale, monthly subscriptions on a
recurring basis when the subscription is due.
1.7 Foreign currencies
The individual financial statements of each subsidiary are presented in the
currency of the primary economic environment in which it operates (its
functional currency). Sterling is the predominant functional currency of the
Group and presentation currency for the consolidated financial information.
In preparing the financial statements of the individual companies,
transactions in currencies other than the entity's functional currency
(foreign currencies) are recognised at the rates of exchange prevailing on the
dates of the transactions. At each balance sheet date, monetary assets and
liabilities that are denominated in foreign currencies are retranslated at the
rates prevailing at that date. Non-monetary items carried at fair value that
are denominated in foreign currencies are translated at the rates prevailing
at the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences are recognised in profit or loss in the period in which
they arise. Exchange differences on revenue are recognised within revenue. The
exception to this is exchange differences on transactions entered into to
hedge certain foreign currency risks (see below under cash flow
hedges/financial instruments).
For the purpose of presenting consolidated financial information, the assets
and liabilities of the Group's foreign operations are translated at exchange
rates prevailing on the balance sheet date. Income and expense items are
translated at the average exchange rates for the period, unless exchange rates
fluctuate significantly during that period, in which case the exchange rates
at the date of the transactions are used. Exchange differences arising, if
any, are recognised in the income statement.
1.8 Hedge accounting
The Group has adopted hedge accounting for qualifying transactions.
Derivatives are initially recognised at fair value at the date a derivative
contract is entered into and are subsequently remeasured to their fair value
at each balance sheet date. The resulting gain or loss is recognised in profit
or loss immediately unless the derivative is designated and effective as a
hedging instrument, in which event the timing of the recognition in profit or
loss depends on the nature of the hedge relationship. The Group designates
certain derivatives as either hedges of the fair value of recognised assets or
liabilities of firm commitments (fair value hedges), hedges of highly probable
forecast transactions or hedges of foreign currency risk of firm commitments
(cash flow hedges), or hedges of net investments in foreign operations.
Cash flow hedges
Where a derivative financial instrument is designated as a hedge of the
variability in cash flows of a recognised asset or liability, or a highly
probable forecast transaction, the effective part of any gain or loss on the
derivative financial instrument is recognised directly in the hedging
reserve. Any ineffective portion of the hedge is recognised immediately in
the income statement.
When the forecast transaction subsequently results in the recognition of a
non-financial item, the associated cumulative gain or loss is removed from the
hedging reserve and is included in the initial carrying amount of the
non-financial asset or liability. For all other hedged forecast
transactions, the associated cumulative gain or loss is removed from equity
and recognised in the income statement in the same period during which the
hedged expected future cash flows affects profit or loss.
When the hedging instrument is sold, expires, is terminated or exercised, or
the entity revokes designation of the hedge relationship but the hedged
forecast transaction is still expected to occur, the cumulative gain or loss
at that point remains in equity and is recognised in accordance with the above
policy when the transaction occurs. If the hedged transaction is no longer
expected to take place, the cumulative unrealised gain or loss recognised in
equity is recognised in the income statement immediately.
1.9 Alternative Performance Measures (APMs) and Adjusting items
The Group has disclosed certain alternative performance measures ('APMs')
within these interim results. The APMs presented are used in discussions with
the Board, management and investors to aid the understanding of the
performance of the Group. The Group considers that the presentation of APMs
allows for improved insight to the trading performance of the Group. The Group
considers that the term 'Adjusted' together with an adjusting items category,
provides a helpful view of the ongoing trading performance of the Group.
Adjusted results will therefore exclude certain significant costs such as
amortisation on acquired intangibles, together with some non-recurring costs
and benefits and so should not be regarded as a complete picture of the
Group's financial performance.
Adjusting items are those items that are unusual because of their size, nature
or incidence, and are applied consistently year on year. The Directors
consider that these items should be separately identified within their
relevant income statement category to enable full understanding of the Group's
results. Items included are acquisition costs, earnout payable to employees
of acquired businesses, and restructuring costs, together with amortisation or
impairment of acquired intangible assets.
The following APMs have been used in these financial results:
· Organic constant currency growth - this is calculated by
comparing current period revenue to prior period revenue adjusted for current
period exchange rates and the impact of acquisitions, shown within the
Financial Review.
· Adjusted EBITDA - comprising earnings (operating profit) adjusted
for interest, taxation, depreciation, amortisation, impairments and other
adjusting items. This is shown on the face of the income statement.
· Adjusted operating profit - operating profit adjusted for
adjusting items. See reconciliation following
· Adjusted earnings per share ('EPS') - earnings per share
excluding adjusting items. See reconciliation following
· Free cash flow - net increase/(decrease) in cash and cash
equivalents excluding net cash used acquisitions, movements on the bank loan
and dividends paid. See reconciliation following
· Underlying free cash flow - as free cash flow but adding back
adjusting items. See reconciliation following
· Net debt - comprised of cash and cash equivalents, overdrafts and
amounts drawn against the RCF including the costs of arranging the RCF. See
reconciliation following
Reconciliation of Alternative Performance Measures to Statutory Reported
Measures
12 months to 12 months to
31 August 2025
31 August 2024
Adjusted EBITDA Adjusted Operating Profit Adjusted Diluted EPS Adjusted EBITDA Adjusted Operating Profit Adjusted Diluted EPS
£'000 £'000 £'000 £'000 £'000 £'000
Reported Operating Profit 9,438 9,438 5,696 5,696
Reported Profit after tax 5,368 2,608
Add back (deduct):
Underlying depreciation and amortisation 9,347 8,574
Amortisation on acquired intangibles 5,417 5,417 5,417 5,510 5,510 5,510
Acquisition costs - - - 98 98 98
Impairment of goodwill and acquired intangibles - - - 5,355 5,355 5,355
Earnout in relation to acquisition (60) (60) (60)
Restructuring 542 542 542 (14) (14) (14)
Tax on adjusting items (1,290) (2,842)
Adjusted 24,684 15,337 9,977 25,219 16,645 10,715
Weighted average number of total ordinary shares including dilutive impact 59,910 59,400
Adjusted diluted EPS (p) 16.7 18.0
12 months to 12 months to
31 August 2025
31 August 2024
Free Adjusted free Free Adjusted
cash flow
cash flow
cash flow
free
cash flow
£'000 £'000 £'000
£'000
Net decrease in cash and cash equivalents during the year (2,504) (2,504) (4,326) (4,326)
Add back: dividends paid 3,867 3,867 3,870 3,870
Add back: cash outflow in relation to acquisition of business - 402 2,494 2,494
Change in bank loan 4,000 4,000 (6,605) (6,605)
Add back: adjusting items - 426 - 84
Free cashflow/Adjusted Free cashflow 5,363 6,191 (4,567) (4,483)
Definition of net debt 31 August 2025 31 August 2024
Net debt Net debt
Cash and cash equivalents 19,484 22,040
Bank loan (30,808) (35,101)
RCF arrangement fee 479 536
Net debt (10,845) (12,525)
1.10 Prior year restatement
During the period, an update to IAS 1: Presentation of Financial Statements
requires entities to consider the substance of liabilities and their
classification as either current or non-current and the conditions applicable
to any renewal of the loan. The directors have the right to defer payment of
the bank loans for longer than 12 months from the Balance Sheet date and as a
result, the bank loans held by the Group have been reclassified as non-current
with the change being applied retrospectively. As at 31 August 2024 a total of
£34.6m has been reclassified as non-current liabilities from current
liabilities.
2. Revenue
An analysis of the Group's revenue is as follows:
12 months to 31 August 2025 12 months to 31 August 2024
Americas EMEA APAC Total Americas(1) EMEA APAC(1) Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Focusrite Novation(2) 40,011 35,498 9,648 85,157 37,808 31,039 7,688 76,535
ADAM Audio 8,179 14,089 3,313 25,581 8,959 11,437 2,214 22,610
Sequential 4,672 4,675 492 9,839 4,810 4,409 486 9,705
Sonnox 793 1,315 353 2,461 722 829 417 1,968
Content Creation 53,655 55,577 13,806 123,038 52,299 47,714 10,805 110,818
Audio Reproduction 13,464 18,638 13,773 45,875 13,317 19,414 14,975 47,706
Total 67,119 74,215 27,579 168,913 65,616 67,128 25,780 158,524
(1) (Regions restated to reflect revised Group operating model with LATAM now
part of Americas and APAC replacing Rest of World)
(2) This period Focusrite and Novation brands have been merged into one
operating segment within the financial statements following the reorganisation
of the relevant R&D teams, resulting in Novation no longer meeting the
criteria for separate disclosure as a cash generating unit.
( )
3. Operating segments
Products and services from which reportable segments derive their revenue
Information reported to the Group's Chief Executive Officer (who has been
determined to be the Group's Chief Operating Decision Maker) for the purposes
of resource allocation and assessment of segment performance is focused on the
main product groups which the Group sells. While the results of Novation and
Ampify are reported separately to the Board, they meet the aggregation
criteria set out in IFRS 8 'Operating Segments'. The Group's reportable
segments under IFRS 8 are therefore as follows:
Focusrite Novation
- Sales of Focusrite and Focusrite Pro, Novation
and Ampify branded products
ADAM
Audio
- Sale of ADAM Audio products
Sequential
- Sale of Sequential products.
Sonnox
- Sale of Sonnox software plug ins
Martin
Audio
- Sale of Martin Audio, Optimal Audio, Linea
Research and Sheriff Technology trading brands TiMax and OutBoard (acquired 19
December 2023) products.
The revenue and profit generated by each of the Group's operating segments are
summarised as follows:
12 months to 12 months to
31 August
31 August
2025 2024
£'000 £'000
Revenue from external customers
Focusrite Novation(1) 85,157 76,535
ADAM Audio 25,581 22,610
Sequential 9,839 9,705
Sonnox 2,461 1,968
Content Creation 123,038 110,818
Audio Reproduction 45,875 47,706
Total revenue from external customers 168,913 158,524
Segment profit
Focusrite Novation 36,663 30,135
ADAM Audio 12,142 11,217
Sequential 4,147 4,044
Sonnox 2,355 1,899
Audio Reproduction 19,774 23,198
Total segment profit 75,081 70,493
Central sales and administrative expenses (65,161) (59,358)
Adjusting items (482) (5,439)
Operating profit 9,438 5,696
Finance income 150 100
Finance costs (2,833) (3,292)
Profit before tax 6,755 2,504
Tax (1,387) 104
Profit after tax 5,368 2,608
(1) This period Focusrite and Novation brands have been merged into one
operating segment within the financial statements following the reorganisation
of the relevant R&D teams, resulting in Novation no longer meeting the
criteria for separate disclosure as a cash generating unit.
Segment profit represents the profit earned by each segment without allocation
of the share of central administration costs, other income, finance income and
finance costs, and income tax expense. This is the measure reported to the
Group's Chief Executive Officer for the purpose of resource allocation and
assessment of segment performance.
Central administration costs comprise principally the employment-related costs
and other overheads incurred by the Group. Also included within central
administration costs is a charge relating to the share option scheme of
£565,000 for the 12 month period to 31 August 2025 (12 months to 31 August
2024: charge of £158,000).
Segment net assets and other segment information
Management does not make use of segmental data relating to net assets and
other balance sheet information for the purposes of monitoring segment
performance and allocating resources between segments. Accordingly, other
than the analysis of the Group's non-current assets by region shown below,
this information is not available for disclosure in the condensed consolidated
financial information.
The Group's non-current assets, analysed by region, were as follows:
31 August 31 August
2025 2024(1)
£'000 £'000
Non-current assets
Americas(1) 17,998 18,003
EMEA 75,132 75,949
APAC(1) 98 70
Total non-current assets 93,228 94,022
UK 61,560 62,170
(1) Regions restated to reflect updated regional assessment of asset
allocation and revised Group operating model with LATAM now part of Americas
and APAC replacing Rest of World
4. Staff costs
12 months to 12 months to
31 August
31 August
2025 2024
£'000 £'000
Wages and Salaries 32,653 29,791
Social Security costs 4,331 3,960
Other pension costs 936 805
Share-based payments 565 158
38,485 34,714
Less: amounts capitalised within development costs (8,485) (7,373)
Total 30,000 27,341
5. Adjusting items
The following adjusting items have been charged/(credited) to the income
statement in the period
12 months to 12 months to
31 August 31 August
2025 2024
£'000 £'000
Other adjusting costs
Acquisition and due diligence costs - 98
Earnout in relation to acquisition (60) -
Restructuring 542 (14)
Total other adjusting items for adjusted EBITDA 482 84
Impairment of goodwill and acquired intangibles assets - 5,355
Amortisation of acquired intangible assets 5,417 5,510
Total adjusting items for adjusted operating profit 5,899 10,949
Tax on adjusting items (1,290) (2,842)
Total adjusting items for adjusted profit after tax 4,609 8,107
6. Taxation
The tax charge for the 12 months to 31 August 2025 is based on the estimated
tax rate for the full year in each jurisdiction.
The tax charge for each year can be reconciled to the profit per the Income
Statement as follows:
12 months to 12 months to
31 August
31 August
2025 2024
£'000 £'000
Profit before tax on continuing operations 6,755 2,504
Tax at the UK corporation tax rate of 25% (FY24: 25%) 1,689 626
Effects of
Expenses not deductible for tax purposes 380 236
Rate changes - (177)
Additional UK tax reliefs (814) (428)
Prior period adjustments (139) (499)
Impact of foreign tax rates 271 (62)
Other differences - 200
1,387 (104)
The additional UK tax reliefs principally relate to patent box tax relief.
7. Dividends
The following equity dividends have been declared:
12 months to 12 months to
31 August 2025
31 August 2024
Second interim dividend per qualifying ordinary share 2.1p 6.6p
During the period, the Company paid a final dividend in respect of the year
ended 31 August 2024 of 4.5 pence per share and a first interim dividend
relating to the current period of 2.1 pence. The Board has approved a second
interim dividend of 2.1 pence per ordinary share on 4 November 2025. This
will be payable on 7 January 2026 to ordinary shareholders on the register on
28 November 2025. The ex-dividend date will be 27 November 2025.
8. Earnings per share
Reported EPS
The calculation of the basic and diluted EPS is based on the following data: 12 months to 12 months to
31 August
31 August
2025 2024
£'000 £'000
Earnings for the purposes of basic and diluted EPS being net profit for the 5,368 2,608
period
Adjusting items (see note 5) 5,899 10,949
Tax on adjusting items (1,290) (2,842)
Total adjusted profit for adjusted EPS calculation 9,977 10,715
Number of shares 12 months to 12 months to
31 August
31 August
2025 2024
Weighted average number of ordinary shares for the purposes of basic EPS 58,645
calculation
58,612
Effect of dilutive potential ordinary shares:
Employee and Director share option plans 1,265 788
Weighted average number of ordinary shares for the purposes of diluted EPS 59,910 59,400
calculation
Pence
EPS Pence
Basic EPS 9.2 4.5
Diluted EPS 9.0 4.4
Adjusted basic EPS(1) 17.0 18.3
Adjusted diluted EPS(1) 16.7 18.0
( )
At 31 August 2025, the total number of ordinary shares issued and fully paid
was 58,659,589. This included shares held by the Employee Benefit Trust
('EBT') to satisfy options vesting in future years. The operation of this EBT
is funded by the Group so the EBT is required to be consolidated, with the
result that the weighted average number of ordinary shares for the purpose of
the basic EPS calculation is the net of the weighted average number of shares
in issue less the weighted average number of shares held by the EBT. It should
be noted that the only right relinquished by the Trustees of the EBT is the
right to receive dividends. In all other respects, the shares held by the EBT
have full voting rights.
The effect of dilutive potential ordinary share issues is calculated in
accordance with IAS 33 and arises from the employee share options currently
outstanding, adjusted by the profit element as a proportion of the average
share price during the period.
9. Other intangible assets
Brands Acquired technology and patents costs Internally generated technology and patents costs Technology and patents under Development Intellectual property, Licences and Trademarks Computer software Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 September 2023 25,708 35,051 31,531 8,529 5,430 1,565 107,814
Additions - acquired separately - - - - 3,037 3 3,040
Additions - products developed during the period - - 1,859 6,934 - - 8,793
Additions through business combination - 2,242 - - - - 2,242
Transfer - - 8,306 (8,306) - - -
Disposals - - (2,446) - (55) - (2,501)
Foreign exchange (468) (135) (207) (54) (11) - (875)
At 31 August 2024 25,240 37,158 39,043 7,103 8,401 1,568 118,513
Additions - acquired separately - - - - 1,052 149 1,201
Additions - products developed during the period - - 283 10,123 124 104 10,634
Transfer - 465 3,112 (3,577) - - -
Disposals - - (4,780) - (491) (295) (5,566)
Foreign exchange (127) (61) (19) 1 13 - (193)
At 31 August 2025 25,113 37,562 37,639 13,650 9,099 1,526 124,589
Amortisation
At 1 September 2023 5,598 10,797 21,522 - 2,024 1,164 41,105
Charge for the period 1,888 3,622 4,988 - 470 230 11,198
Impairment 1,303 784 745 - - - 2,832
Eliminated on disposal - - (2,411) - (15) - (2,426)
Foreign exchange (156) (67) (33) - (5) - (261)
At 31 August 2024 8,633 15,136 24,811 - 2,474 1,394 52,448
Charge for the year 1,778 3,639 5,066 - 1,173 256 11,912
Disposals - - (4,760) - (490) (295) (5,545)
Foreign Exchange (98) (44) 20 - 7 - (115)
At 31 August 2025 10,313 18,731 25,137 - 3,164 1,355 58,700
Carrying amount
At 31 August 2025 14,800 18,831 12,502 13,650 5,935 171 65,889
At 31 August 2024 16,607 22,022 14,232 7,103 5,927 174 66,065
10. Property, plant and equipment
Land and Buildings Plant, tooling equipment and machinery Right -of-use assets Fixtures, fittings and leasehold improvements Computer equipment Customer demonstration units Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 September 2023 1,500 4,763 11,131 3,794 2,227 119 23,534
Additions - 126 411 351 255 397 1,540
Disposals - (11) - (10) (8) - (29)
Foreign exchange - (1) (95) (22) (20) - (138)
At 31 August 2024 1,500 4,877 11,447 4,113 2,454 516 24,907
Additions - 424 582 323 328 639 2,296
Disposals - (819) (147) (128) - - (1,094)
Foreign exchange - (1) 20 13 (18) - 14
At 31 August 2025 1,500 4,481 11,902 4,321 2,764 1,155 26,123
Amortisation
At 1 September 2023 60 3,142 3,855 1,968 1,897 117 11,039
Charge for the period 60 782 1,023 725 297 - 2,887
Eliminated on disposal - (5) - (10) (1) - (16)
Foreign exchange - (1) (55) (25) (18) - (99)
At 31 August 2024 120 3,918 4,823 2,658 2,175 117 13,811
Charge for the year 60 812 1,354 359 267 - 2,852
Eliminated on disposal - (819) (147) (110) - - (1,076)
Foreign Exchange - (1) 13 17 (12) - 17
At 31 August 2025 180 3,910 6,043 2,924 2,430 117 15,604
Carrying amount
At 31 August 2025 1,320 571 5,859 1,397 334 1,038 10,519
At 31 August 2024 1,380 959 6,624 1,455 279 399 11,096
11. Financial instruments
The fair value of the Group's derivative financial instruments is calculated
using the quoted prices. Where such prices are not available, a discounted
cash flow analysis is performed using the applicable yield curve for the
duration of the instruments for non-optional derivatives, and an option
pricing model for optional derivatives. Foreign currency forward contracts are
measured using quoted forward exchange rates and yield curves derived from
quoted interest rates matching maturities of the contract.
IFRS 13 'Fair Value Measurements' requires the Group's derivative financial
instruments to be disclosed at fair value and categorised in three levels
according to the inputs used in the calculation of their fair value.
Financial instruments carried at fair value should be measured with reference
to the following levels:
· Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities;
· Level 2: inputs other than quoted prices included
within Level 1 that are observable for the asset or
liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices); and
· Level 3: inputs for the asset or liability that are not
based on observable market data (unobservable inputs).
The financial instruments held by the Group that are measured at fair value
all related to financial assets/(liabilities) measured using a Level 2
valuation method.
The fair value of financial assets and liabilities held by the Group are:
12 months to 31 August 2025 12 months to 31 August 2024
£'000 £'000
Financial assets
Fair value
Cash and cash equivalents 19,484 22,040
Trade receivables 39,446 33,454
Designated cash flow hedge relationships
Derivative financial assets designated and effective as cash flow hedging - -
instruments
58,930 55,494
Financial liabilities
Fair value
Trade payables 17,720 18,710
Bank loan and arrangement fee 30,329 34,565
Amounts payable in relation to staged acquisition payments 1,600 2,166
Lease liabilities 5,658 6,331
Designated cash flow hedge relationships
Derivative financial assets designated and effective as cash flow hedging 814 -
instruments
56,121 61,772
12. Acquisition of a subsidiary
There were no acquisitions in the period.
On 19 December 2023, the Group completed the acquisition of 100% of the share
capital of Sheriff Technology Limited (Sheriff), which trades principally
under the OutBoard and TiMax brands. The total consideration was calculated as
£2.8 million, with £2.4 million paid on completion and a forecast discounted
amount of £0.5 million included as additional consideration. The final
payment of £0.4 million was made in March 2025, resulting in a £0.1m
adjustment in the current period. Please refer to note 5 for additional
information on the adjusting items relating to the acquisition of Sheriff
Technology Limited.
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