REG - Gear4music - Year-End Trading Update

Gear4music (HOLDINGS)Announcement

24/04/2024 07:00

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RNS Number : 7679L  Gear4music (Holdings) PLC  24 April 2024

24 April 2024

 

Gear4music (Holdings) plc

 

Year-End Trading Update

Full year revenue and EBITDA in line with market expectations, with net debt
reduction ahead of market expectations

Gear4music (Holdings) plc ("Gear4music" or "the Group"), the largest UK based
online retailer of musical instruments and music equipment, today announces a
year-end trading update covering the 12 months to 31 March 2024.

 £m                                    12m to 31 Mar 2024  12m to 31 Mar 2023  % Change on FY23
 UK sales                              83.1                82.0                +1%
 European and Rest of the World sales  61.3                70.0                -12%
 Total sales                           144.4               152.0               -5%

 

FY24 Highlights

·     Revenues, in line with market expectations*, reflect previously
announced FY24 prioritisation of gross margins, profitability, and net debt
reduction ahead of sales growth

·     Gross margin expected to be 27.3% (FY23: 25.7%; FY22: 27.8%)

·     EBITDA expected to be in line with market expectations*

·     Net debt reduced significantly to £7.3m at 31 March 2024 (31 March
2023: £14.5m; 31 March 2022: £24.2m), ahead of market expectations*

·     Planned cost reductions delivered during FY24 H2 will support
further net debt reduction and profitability improvements

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

 

"We are pleased to report that the Group's financial performance during FY24
was in line with market expectations, having delivered both gross margin and
profitability improvements. As a direct result of the affirmative actions
taken to prioritise cash generation and reduce costs, we have almost halved
the Group's net debt since 31 March 2023, down to £7.3m at 31 March 2024,
being a reduction of £16.9m in two years.

We continued to invest into and develop our bespoke e-commerce platform during
FY24, improving key areas of our proposition to drive further efficiencies and
future profitable growth. The Board is confident that the positive impact of
the cost reductions made during FY24 will deliver full-year benefits in FY25.

With ongoing investment into key areas of our business, including further
development of our second-hand system and higher margin product categories,
the Group is well positioned to build on the results achieved in FY24 and
deliver on our long-term profitable growth strategy."

* Gear4music believes that current consensus market expectations for the year
ended 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 Yamaha, Roland 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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