REG - Gear4music - Trading Update

Gear4music (HOLDINGS)Announcement

18/01/2024 07:00

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RNS Number : 0646A  Gear4music (Holdings) PLC  18 January 2024

18 January 2024

 

Gear4music (Holdings) plc

Trading Update

Peak season trading in-line with Board expectations, strong margin progress,
trading in line with full year market expectations

 

Gear4music (Holdings) plc ("Gear4music" or "the Group"), the largest UK based
online retailer of musical instruments and music equipment, today announces a
trading update for the three months to 31 December 2023.

 

 £m                                        3m to 31 Dec 2023  3m to 31 Dec 2022  % change on FY23 Q3
 UK revenue                                26.2               26.0               +1%
 European and Rest of the World revenue    20.2               23.5               (14%)
 Total revenue                             46.4               49.5               (6%)

 

FY24 Q3 Highlights

 

-     Revenues reflect previously announced FY24 prioritisation of gross
margins ahead of sales growth

-     Strong gross margin of 28.2% (FY23 Q3: 25.6%) more than offsets
lower revenues

-     Gross profit of £13.1m (FY23 Q3: £12.7m) is £0.4m higher than
FY23 Q3

-     Delivery of cost reductions in line with the Board's expectations

-     FY24 EBITDA and net debt reduction in-line with consensus market
expectations*

Gear4music's Chief Executive Officer, Andrew Wass, said:

"We are pleased to report that financial performance during our FY24 peak
seasonal trading period was in line with the Board's expectations, and we have
continued to make good progress with our previously stated objective of
prioritising profitability ahead of revenue growth.

As anticipated Christmas trading returned to 'historically normal' patterns,
with a robust Black Friday period and peak revenues occurring the week before
Christmas, following a relatively subdued period of trading in October and
early November.

January trading to date continues to be in line with the Board's expectations.
We are confident that the actions we have taken during FY24 to improve our
gross margins and reduce our cost base and net debt ensure that the business
is well positioned for profitable growth during FY25."

* Gear4music believes that current consensus market expectations for the year
ending 31 March 2024 are revenue of £144.1 million, adjusted EBITDA of £9.8
million, adjusted profit before tax of £1.3 million, and pre-IFRS16 net debt
of £11.6 million.

ENDS

 

Enquiries:

 

 Gear4music                                             +44 (0)20 3405 0205

 Andrew Wass, Chief Executive Officer

 Chris Scott, Chief Financial Officer

 Singer Capital Markets - Nominated Adviser and Broker  +44 (0)20 7496 3000

 Peter Steel/Sam Butcher, Corporate Finance

 Tom Salvesen, Corporate Broking

 Alma - Financial PR                                    +44 (0)20 3405 0205

 Rebecca Sanders-Hewett                                 Gear4music@almastrategic.com

 Joe Pederzolli

 David Ison

 

About Gear4music (Holdings) plc

Operating from a Head Office in York, Distribution Centres in York, Bacup,
Sweden, Germany, Ireland & Spain, and showrooms in York, Bacup, Sweden
& Germany, the Group sells own-brand musical instruments and music
equipment alongside premium third-party brands including Fender, Yamaha and
Roland, to customers ranging from beginners to musical enthusiasts and
professionals, in the UK, Europe and the Rest of the World.

 

Having developed its own e-commerce platform, with multilingual, multicurrency
websites delivering to over 190 countries, the Group continues to build its
overseas presence.

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