REG - Gear4music - Interim Results
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RNS Number : 8894H Gear4music (Holdings) PLC 18 November 2025
18 November 2025
Gear4music (Holdings) plc
Interim results for the six months ended 30 September 2025
"Strong momentum and progress in executing Growth Strategy leads to further
upgrades"
Gear4music (Holdings) plc, ("Gear4music" or "the Group") (LSE: G4M), the
largest UK based online retailer of musical instruments and music equipment,
today announces its unaudited financial results for the six months ended 30
September 2025 ("the Period").
£m 6-months ended 30 Sept 2025 ('FY26 H1') 6-months ended 30 Sept 2024 ('FY25 H1') Change on FY25 H1
UK revenue 49.6 38.7 +28%
European & Rest of World revenue 31.1 23.0 +35%
Total revenue 80.7 61.7 +31%
Gross profit 22.7 16.5 +38%
Gross margin 28.2% 26.7% +150bps
EBITDA 6.9 2.9 +4.0m
Operating profit/(loss) 3.4 (0.5) +3.9m
Profit/(loss) before tax 2.7 (1.2) +3.9m
FY26 H1 Highlights:
- Results reflect progress in delivering our Growth Strategy in
improved market conditions:
o Very strong revenue growth across markets and brands: accelerated from 27% in
FY26 Q1 to 34% in FY26 Q2
o Gross margin of 28.2% (FY25 H1: 26.7%) reflects improving product margins
o EBITDA improved by £4.0m to £6.9m equating to an EBITDA margin of 8.5% (FY25
H1: 4.7%)
o Figures include £1.1m gross profit on previously reported stock acquired out
of the insolvencies of two UK competitors
- Net bank debt of £16.0m was £1.6m higher than last year (30
September 2024: £14.4m) reflecting tactical intake of stock ahead of peak,
and additional inventory to support sales growth.
Trading Outlook:
- Strong trading has continued in FY26 Q3 to date.
- UK warehouse expected to operate near maximum capacity during the
upcoming peak seasonal trading period; plans in place to increase capacity
during FY27 in line with our long-term strategy.
- Full-year outlook ahead of recently upgraded consensus market
expectations, with EBITDA now expected to be not less than £15.0m.
Commenting on the results, Andrew Wass, Executive Chair said:
"We are delighted to report a strong operational and financial performance for
FY26 H1, with revenues increasing by 31%, margins improving, and profit before
tax up by £3.9m during what is typically our quieter half of the year.
I am extremely proud of the work our teams continue to undertake in
implementing the revised Growth Strategy we announced in June 2024. Their
efforts have enabled us to capitalise on the significant market opportunities
that have arisen during 2025 as we enter an exciting new phase of our
profitable growth journey.
As we approach the peak seasonal trading period, we are well prepared,
although based on the current trajectory we expect our UK distribution centre
in York will operate close to maximum capacity during December. To ensure we
continue to deliver a market-leading customer proposition, we plan to open a
new Yorkshire-based distribution centre within the next 12 months.
Complementing our existing York facilities, the new site will increase our UK
distribution capacity by approximately 2.5 times and provide the operational
efficiency needed to support the next phase of our expansion and our long-term
growth ambitions.
The strength of year-to-date trading gives the Board further confidence to
again raise its expectations for the Group's financial performance for the
year ending 31 March 2026, following the upgrades announced in June 2025,
September 2025 and October 2025, and we now expect EBITDA to be not less than
£15.0m.
We look forward to providing a further trading update after the Christmas
period on 20 January 2026."
* Gear4music believes that current consensus market expectations prior to the
release of this update for the year ending 31 March 2026 were revenues of
£169.4 million, EBITDA of £13.7 million and profit before tax of £5.5
million.
Enquiries:
Gear4music +44 (0)20 3405 0205
Andrew Wass, Executive Chair
Gareth Bevan, 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 Strategic Communications - Financial PR +44 (0)20 3405 0205
Rebecca Sanders-Hewett Gear4music@almastrategic.co.uk
Joe Pederzolli
Sarah Peters
About Gear4music (Holdings) plc
Gear4music is the largest retailer of musical instruments and music equipment
in the UK, delivering to 190 countries across Europe and the Rest of the
World.
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.
Operating from a Head Office in York, the Group has Distribution Centres in
York, Bacup, Sweden, Germany, Ireland & Spain, and showrooms in York,
Bacup, Sweden & Germany.
Having developed its own e-commerce platform, with multilingual, multicurrency
websites, the Group continues to build its overseas presence.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon the
publication of this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public domain.
Business Review
The Group reports its results for the six months to 30 September 2025, and
updates on the Strategic, Commercial and Financial progress made in the
Period.
Growth Strategy
Having laid the foundations for our revised Growth Strategy announced in June
2024 through strategic investments in people, processes, and structures during
FY24, we refocused on driving profitable revenue growth in FY25. In FY26, we
have made tangible progress across multiple Growth Strategy initiatives,
resulting in a step-up in revenue growth to 31% in the Period in addition to a
significant increase in margins and profitability:
- Asset acquisitions
During the Period, the insolvencies of Guitar, Amp & Keyboard ('GAK') in
April 2025 and PMT Play Music Today ('PMT') in June 2025 created a UK market
opportunity estimated at up to £63 million, based on their most recently
filed accounts, and with our strength of brand and customer proposition we are
well placed to take further market share. These developments also contributed
to a more stable competitive environment, which had previously experienced
periods of unusually aggressive pricing on certain branded products.
As announced we acquired the inventory of these two businesses and report
related revenue of £1.9m and gross profit of £1.1m in the Period. At 30
September 2025 we had inventory with a carrying value of £1.4m remaining.
- Marketing
In FY25 H1, as previously announced, we encountered challenges with the
implementation of an outsourced AI-based marketing system, which resulted in
inefficient marketing and over-spend, and adversely impacted own-brand and
European sales. In FY25 H2 we resolved these issues and recruited a new
experienced Marketing Director with a background in e-commerce to build and
lead a new team. Marketing performance in FY26 H1 has been transformed with
costs as a percentage of sales improving from 7.3% in FY25 H1 to 6.4% in FY26
H1.
We brought Pay-per-Click ('PPC') management back in house and have now
integrated with three European marketplaces, further developed our affiliate
programs, and leveraged influencers to expand our reach. We are in the process
of moving to a new Customer Relationship Management ('CRM') platform that will
provide a single customer view and higher quality, more reliable insights.
- Product offer - improved breadth and Own-brand progress
Through the Period we invested in inventory to add breadth to support sales
growth, use our scale to access buying opportunities as and when they arise,
and towards the end of the Period we pulled forward intake to reduce inbound
warehouse pressures during peak and enable a focus on fulfilling orders.
On-hand 'Stock-Keeping-Units' ('SKU's) increased from 24,700 last year to
29,200 this year.
We continue to invest in our Own-brand team with headcount increasing from 25
to 27 since the start of the financial year to support product development,
efficient purchasing and inventory management across our distribution centres,
to increase own-brand revenue into the medium term. In the Period we increased
own-brand SKU count to 5,710 accounting for 22.2% of total product sales from
8.7% of total SKUs.
Product highlights include launches of several new ranges under our AVCOM,
Studiospares, Gear4music Life, Premier, Hartwood, Eden and Vision brands.
- New UK Distribution Centre
The Group is close to agreeing a 15-year lease for a new, 132,000 square foot,
distribution centre in Yorkshire, located close to its existing operations.
The new distribution centre is scheduled to be operational in Autumn 2026
and will support the Group's strategic expansion and free up space in the
current York site to enhance Showrooms, Second-hand sales, and Returns
operations, and to consolidate operations from our Bacup site.
The Group will invest an estimated £13m-15m into automation and fitting out
through FY27 with a 3-5 year payback period, increasing and enhancing the
Group's operational capacity to support continued growth which once
established, is expected to deliver increasing operational efficiencies as the
business expands.
Current trading and outlook
Whilst macro-economic uncertainties continue to weigh on consumers in the UK
and across Europe, we see a continuation of the trends that have supported
this period of very strong revenue growth. We remain confident in the enduring
consumer demand for Gear4music products, and we are well-placed to further
benefit once the consumer discretionary spend environment improves.
We are well-prepared ahead of the seasonal peak trading period and are taking
pro-active action to manage the capacity limitations we anticipate at our York
distribution centre. As a result of these factors, we are again in a position
to upgrade our expectations with current year EBITDA now expected to be not
less than £15.0m.
The Group plans to issue a Christmas trading update on 20 January 2026.
Commercial Review
FY26 H1 FY25 H1 Change on FY25 H1
Revenue £80.7m £61.7m +31%
Total sessions 34.8m 28.4m +23%
Mobile sessions 16.6m 14.4m +15%
Conversion rate - Sessions 1.12% 1.05% +7bps
Average order value £163 £153 +7%
Active customers * 928,000 805,000 +15%
Proportion of repeat customers ** 25.5% 26.6% -110bps
Email subscriber database 2.13m 1.92m +11%
Trustpilot rating 4.6/5 4.7/5 -
* Active customers are those that have purchased products within the last 12
months
** Repeat customers are those that have made a purchase in the Period and have
historically made at least one purchase
UK revenue in the Period was 28% ahead of last year (FY25 H1: +6%), reflecting
a more favourable competitive landscape following the insolvencies of GAK in
April 2025 and PMT in June 2025, and the strength of our brand and proposition
allowing us to take market share. We estimate our share of the UK market for
new musical instruments and equipment to have increased to 11.4% from 9.7% in
FY25 H1.
International revenues returned to very strong growth being 35% ahead of last
year (FY24 H1: down 12%), reflecting improved market conditions and a
normalised level of efficient marketing as we move on from the problems we had
with an outsourced AI-based marketing system.
We have responded to Google Analytics reporting challenges (due to opt-out of
cookie consent leading to a higher proportion of modelled data) by refocusing
on trends in session rather than user data. We are in the process of moving to
a new customer data platform that will provide a single customer view and
higher quality, more reliable insights:
- Website sessions increased 23% from 28.4m to 34.8m, comprising a
21% increase in UK traffic and 25% in international traffic, reflecting
heightened demand for our proposition in the current market. Mobile sessions
increased by 15% to 16.6m, representing 48% of total sessions (FY25 H1: 51%).
- Conversion rates by session improved from 1.05% last year to 1.12%
this year, with similar improvements in the UK from 1.05% to 1.13% and in
Europe from 1.06% to 1.13%. Mobile conversion increased from 1.21% to 1.45%.
As artificial intelligence continues to reshape consumer behaviour and the
search landscape, investing in brand visibility within search engine AI
overviews and large language models ('LLM's) is increasingly important.
Despite the industry-wide rise in 'zero-click' searches driven by AI-generated
results, Gear4music's organic traffic share in the Period increased from 26%
last year to 28% of total sessions. However, the growing influence of AI
discovery, combined with reduced cookie consent rates, contributed to a
decline in tracked direct sessions, which fell from 23% to 15% of overall
traffic.
Our own-brand influencer marketing initiative has been significantly upscaled
in FY26 and is delivering strong results. Our approach includes a focus on
Europe, with the aim of producing more localised and engaging content for our
European audience. Key performance highlights for FY26 H1 include:
- Content Published: 710pcs (+315% YoY)
- Total Views: 24.6m (+510% YoY)
- Total Engagements: 1.68m (+624% YoY)
- Engagement %: 6.8% (+110bps YoY)
'Average Order Value' ('AOV') increased 7% to £163 reversing a 5% decrease
last year, and reflecting proportionally more high value branded sales and
less pricing pressures on some SKUs in certain territories as compared to last
year.
The Group served 433,000 customers in the Period (+24% on FY25 H1) and 'Active
customers', being those that have purchased products within the last 12
months, increased by 15%.
The proportion of repeat customers fell slightly to 25.5% (FY25 H1: 26.6%)
reflecting proportionally higher level of paid-for new customers following the
insolvency of several competitors. Our level of repeat custom continues to be
lower than in many other e-commerce sectors, reflecting the nature of the
Group's product range and high average order value, and re-affirms the
importance of the Group being profitable from the first customer transaction.
Our email subscriber base increased by 0.2 million to 2.1 million. We are in
the process of migrating to a new Customer Engagement Platform, designed to
enhance customer retention and lifetime value through data-driven
personalisation and targeted communications.
We continue to invest in our customer proposition and service teams, resulting
in an excellent overall customer experience, reflected in Gear4music.com's
Trustpilot score of 4.6/5 and 'Excellent' rating from over 138,000 reviews.
Product and Supply Chain
FY26 H1 FY25 H1 Change on FY25 H1
Own-brand product sales £17.2m £13.8m +25%
Other brand product sales £60.3m £45.3m +33%
Product margin 32.1% 30.9% +120bps
Products listed 65,700 63,300 +4%
Brands listed 1,142 1,111 +3%
Achieving strong gross margins is important to the profitability of the Group
and a key business objective. FY26 H1 gross margin of 28.2% is a 150bps
improvement on last year reflecting:
- A 120bps improvement in product margin comprising:
o a 170bps improvement in own-brand margin to 49.1% having improved by 320bps
last year;
o a 140bps improvement in branded margins to 27.3% (FY25 H1: 25.9%);
o a sales mix effect with a higher weighting of branded sales (77.8% v FY25 H1:
76.7%) following the failure of two competitors that predominantly retailed
branded product;
o £1.1m gross profit on £1.9m of sales of branded deal-stock bought out of the
insolvencies of GAK and PMT; and
- A 30bps decrease in net shipping costs reflecting higher AOV and a
number of improved carrier deals.
The number of SKUs we list was flat between 30 September 2024 and 31 March
2025 at 63,300 and has since increased 4% to 65,700 at 30 September 2025. We
continue to de-list less profitable, slow-moving SKUs.
Own-brand
Building on last year's focus on brand and range development we have again
increased our in-house team to enable us to create wider appeal and innovative
product offering.
The number of own-brand SKUs increased from 5,510 at 30 September 2024 to
5,710 (+4%) at 30 September 2025, with own-brand revenue accounting for 22.2%
of total product sales (FY24 H1: 23.3%) from 8.7% of total SKUs (FY25 H1:
8.7%), reflecting the significant on-going efforts of our in-house team in
developing our range of high-quality instruments and equipment at affordable
prices.
Product highlights include:
- Studiospares brands re-launched following complete range overhaul;
- Launched Gear4music Life - a range of instruments and accessories
to support mindfulness, sound therapy and creative exploration;
- Expanded our Keynote pianos range to include new Keynote Junior
models;
- Launched new Premier drum kits, snare drums, and accessories;
- Launched new Hartwood electric and acoustic Guitar ranges, as well
as the brands first Bass Guitar ranges;
- Expanded the Eden offering, with new Accessories and the
introduction of the NovaTone range of heads and cabinets;
- Continued expansion of the VISION range including additional
VISIONAMP, VISIONPAD, and VISIONSTRING Mini; and
- In our AV.com business launched AVCOM 'centrepiece' products to
complement the existing range of accessories and furniture.
Our outsourced consolidation infrastructure in China enables us to increase
SKU coverage across our distribution centres whilst minimising the working
capital investment. This also helped maintain strong product margins.
Software Development
We continue to leverage a combination of in-house capability with a team of 40
developers (30 September 2024: 32), and the outsourcing of one distinct
project to external contractors.
The Group capitalised £1.7m (FY25 H1: £1.6m) in relation to its e-commerce
platform in the Period including £0.4m (FY25 H1: £0.4m) of outsourced
development that is now being wound-down as the new purchasing platform
project approaches launch.
Recent deployments include:
- Integrated with marketplace aggregator to create a scalable
marketplace operation (Phase 1 delivered August 2025 and on-going);
- Promo Centre creates the ability to create, manage and report on
variety of promotions, including trade-ins (Phase 1 delivered October 2025 and
on-going);
- Integrated with 3rd party to create a scalable Customer Engagement
platform, allowing highly targeted marketing activities through a variety of
channels. (Phase 1 delivered Oct 2025 and ongoing); &
- Various platform infrastructure upgrades - improved security,
resilience and efficiency ahead of peak.
'AI-based Forecasting and Purchasing platform' expected to launch FY26 Q4.
Financial Review
FY26 H1 FY25 H1 Change on FY25 H1
Revenue £80.7m £61.7m +31%
Gross profit £22.7m £16.5m +38%
Gross margin 28.2% 26.7% +150bps
EBITDA £6.9m £2.9m +139%
Operating profit/(loss) £3.4m (£0.5m) £3.9m
Marketing costs £5.1m £4.5m +14%
Marketing costs as % of revenue 6.4% 7.3% -90bps
Total Labour costs £7.4m £6.4m +16%
Total Labour costs as % of revenue 9.2% 10.3% -110bps
Revenue
Revenue growth accelerated from 4% in FY25 H2 to 31% in FY26 H1 helped by the
insolvencies of GAK and PMT in the UK, and BAX in Europe in FY26 Q1, and the
opportunity that presented itself to increase our market share.
Growth increased from 27% in FY26 Q1 to 34% in FY26 Q2. In FY25 we reported
58% of our full year revenue in H2, but that will be difficult to repeat in
FY26 due to warehouse capacity constraints in the peak trading weeks.
UK revenue was 28% ahead of last year taking our estimated share of a flat UK
market to 11.4% (FY25 H1: 9.7%). International revenues of £31.1m were 35% up
on last year reversing a 12% decrease in FY25 H1, reflecting improving trading
conditions and increased marketing investment in Europe. International revenue
accounted for 39% of the Group total revenue compared to 37% in FY25 H1.
In the Period we acquired the residual stock of GAK and PMT out of
Administration and report £1.9m revenue and £1.1m gross profit on this
stock. At 30 September 2025 we had £1.4m related stock remaining.
Gross Margin and Gross Profit
As outlined in the 'Commercial Review' gross margin improved 150bps from 26.7%
last year to 28.2%, reflecting a 120bps improvement in product margin, and a
30bps decrease in net delivery costs reflecting a higher AOV.
Own-brand product margin improved to 49.1% (FY25 H1: 47.4%) and branded-margin
to 27.3% (FY25 H1: 25.9%). Own-brand revenue growth of 25% is very strong but
lagged growth in branded-products which created an adverse mix effect.
As referenced above, we paid £2.2m for certain stock out of the
Administrations of GAK and PMT in the Period and report a £1.1m gross profit
on sale of £0.8m of this stock, at a 59% gross margin. Adjusting to remove
the upside on sales of this stock in the Period results in adjusted revenue of
£78.8m (+28% on FY25 H1), adjusted gross profit of £21.6m (+31% on FY25 H1),
and adjusted gross margin of 27.4% (+70bps on FY25 H1).
Operating Profit and Administrative Expenses
Operating profit of £3.4m represents a £3.9m improvement on FY25 H1, being
the net of a £6.2m increase in gross profit and a £2.5m increase in Admin
expenses.
Admin expenses increased 14% relative to a 31% increase in revenue reflecting
an improved Marketing setup and returns and retaining wider cost control
discipline. Admin expenses decreased from 28.1% of revenue in FY25 H1 to 24.6%
in FY26 H1.
Marketing and labour costs continue to be major components of our overhead
base, accounting for a combined 63% of Admin expenses in the Period and in the
prior year:
Marketing
Marketing costs of £5.1m (FY25 H1: £4.5m) equated to 6.4% of sales (FY25 H1:
7.3%) reflecting an improved team and set-up having resolved last year's issue
with an outsourced marketing system, and improved market conditions.
Marketing spend continues to be heavily PPC-focused, accounting for 86% of
total marketing spend (FY25 H1: 88%) targeting a pre-defined and measurable
return on investment.
Labour costs
Total labour costs increased £1.0m (14%) on FY25 H1 to £7.4m reflecting:
- FY26 H1 average headcount of 436 being 22 (5%) higher than FY25
H1; and
- FY26 H1 average cost per head being 10% higher than FY25 H1.
Total headcount at 30 September 2025 of 470 is 36 (8%) higher than last year.
Other Administrative expenses
European distribution centre local expenses increased £0.1m (5%) on FY25 H1
to £2.5m reflecting a £0.1m increase in labour costs linked to increased
activity.
Depreciation and amortisation in the Period totalled £3.5m (FY25 H1: £3.4m)
including amortisation of £2.1m (FY25 H1: £2.0m) relating to our bespoke
e-commerce platform, and £0.8m depreciation of 'Right of Use' assets (FY25
H1: £0.8m).
EBITDA
We report FY26 H1 EBITDA of £6.9m which is £4.0m (139%) higher than last
year and equates to an EBITDA margin of 8.5% compared to 4.7% last year.
Adjusted EBITDA to remove the gross profit impact of the sale of GAK and PMT
stock in full is £5.8m which is £2.9m (100%) higher than last year and
equates to an EBITDA margin of 7.3%.
Financial Expenses and Net Profit
Net financial expenses of £0.7m include £0.5m net bank interest (FY25 H1:
£0.5m), and £0.2m interest on lease liabilities (FY25 H1: £0.2m).
A tax charge of £0.7m reflects an increase in taxable Group profits and
includes a £0.2m deferred tax expense.
We report a profit in the Period of £2.0m compared to a £1.2m loss in FY25
H1, equating to a basic profit per share of 9.6p (FY25 H1: 5.9p loss per
share).
Cash Flow and Balance Sheet
Net bank debt at 30 September 2025 was £16.0m (FY25 H1: £14.4m) reflects an
additional £10m investment in inventory to support sales growth, take
advantage of opportunities, and bring stock in earlier to reduce pressure on
our Distribution Centres during peak. In FY25 Q3 we dispatched stock with a
cost value of £32.1m.
This is a low point in the annual cash cycle as we invest in inventory ahead
of peak seasonal trading. Nevertheless, this equates to just 1.1 times
12-month rolling EBITDA at 30 September 2025 (£14.0m), and we continue to own
our freehold head office with a net book value of £6.2m.
This represents significant headroom of £14.0m within the Group's £30m RCF,
and a marked reduction is expected by 31 March 2026 as seasonal increases in
stock unwind and convert into cash.
FY26 H1 FY25 H1 Change on FY25 H1
£m £m £m
Opening cash 5.6 4.7 0.9
Net cash used in Operating Activities (6.3) (3.8) (2.5)
Net cash used in Investing Activities (1.8) (1.7) (0.1)
Net cash from Financing Activities 6.6 7.4 (0.8)
Closing cash 4.0 6.6 (2.6)
Net bank debt (16.0) (14.4) (1.6)
Reported inventory of £50.0m (FY25 H1: £40.1m) includes £8.7m of inbound
stock-in-transit (FY25 H1: £7.6m) as we pull-forward intake to provide
certainty and reduce pressure during peak to focus on fulfilling orders. This
is 25% higher than last year relative to a 31% increase in revenue.
Trade and other payables of £25.4m were £4.3m (20%) higher than last year
and includes £1.4m of customer prepayments (30 September 2024: £1.1m).
Capitalised software development costs totalled £1.7m in the Period (FY25 H1:
£1.6m) compared to amortisation of £2.1m, resulting in a £0.4m decrease in
net book value since the start of the financial year.
Property, plant and equipment capital expenditure was limited to £138,000 in
the Period (FY25 H1: £123,000).
Dividend Policy
The Board does not recommend the payment of a dividend (FY25 H1: nil).
Consistent with its previously stated approach, the Group will revisit its
shareholder distribution policy at the appropriate time.
Unaudited consolidated interim statement of profit and loss and other
comprehensive income
6 months ended 30 September 6 months ended 30 September Year ended
31 March 2025 (audited)
2025 (unaudited) 2024 (unaudited)
Note
£000 £000 £000
Revenue 3 80,747 61,742 146,720
Cost of sales (58,005) (45,247) (107,057)
Gross profit 22,742 16,495 39,663
Administrative expenses 3,4 (19,869) (17,360) (37,335)
Other income 4 537 374 910
Operating profit/(loss) 3,410 (491) 3,238
Financial expenses 6 (729) (763) (1,791)
Financial income 6 40 50 115
Profit/(loss) before tax 2,721 (1,204) 1,562
Taxation 7 (709) (25) (730)
Profit/(loss) for the Period 2,012 (1,229) 832
Other comprehensive income
Items that will not be reclassified to profit or loss:
Deferred tax movements 3 104 5
Items that are or may be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations (35) 44 36
Total comprehensive profit/(loss) for the Period 1,980 (1,081) 873
Profit/(loss) per share attributable to equity shareholders of the company
Basic profit/(loss) per share 5 9.6p (5.9p) 4.0p
Diluted profit/(loss) per share 5 9.1p (5.9p) 3.8p
Unaudited consolidated interim statement of financial position
30 September 30 September 31 March 2025 (audited)
2025 2024 (unaudited)
(unaudited)
Note £000 £000 £000
Non-current assets
Property, plant and equipment 8 9,778 10,461 10,134
Right-of-use assets 9 5,654 7,283 6,479
Intangible assets 10 21,158 21,689 21,606
36,590 39,433 38,219
Current assets
Inventories 11 50,044 40,065 34,193
Trade and other receivables 12 5,391 3,049 3,147
Corporation tax receivable - 505 239
Cash and cash equivalents 4,045 6,553 5,576
59,480 50,172 43,155
Total assets 96,070 89,605 81,374
Current liabilities
Trade and other payables 14 (25,131) (21,086) (19,921)
Lease liabilities 15 (1,860) (1,790) (1,869)
Corporation tax payable (134) - -
(27,125) (22,876) (21,790)
Non-current liabilities
Interest bearing loans and borrowings 13 (20,000) (21,000) (12,000)
Other payables 14 (253) (30) (238)
Lease liabilities 15 (5,095) (6,865) (5,940)
Deferred tax liability (2,253) (1,546) (2,103)
(27,601) (29,441) (20,281)
Total liabilities (54,726) (52,317) (42,071)
Net assets 41,344 37,288 39,303
Equity
Share capital 2,098 2,098 2,098
Share premium 13,286 13,286 13,286
Foreign currency translation reserve 105 147 140
Revaluation reserve 1,145 1,171 1,145
Retained earnings 24,710 20,586 22,634
Total equity 41,344 37,288 39,303
Unaudited consolidated interim statement of cash flows
Note 6 months ended 6 months ended Year ended
31 March 2025 (audited)
30 September 30 September 2024
2025 (unaudited)
(unaudited)
£000 £000 £000
Cash flows from operating activities
Profit/(loss) for the Period: 2,012 (1,229) 832
Adjustments for:
Depreciation and amortisation 8-10 3,460 3,364 6,802
Financial expense 6 688 713 1,553
Loss/(profit) on sales of property, plant and equipment - 1 (5)
Share-based payment charge/(credit) 61 (59) 63
Tax charge/(credit) 7 527 (131) 340
6,748 2,659 9,585
(Increase)/decrease in trade and other receivables (2,244) 31 (69)
(Increase) in inventories (15,851) (14,422) (8,550)
Increase in trade and other payables 5,034 7,709 6,860
(6,313) (4,023) 7,826
Tax received 9 175 429
Net cash (used in)/generated from operating activities (6,304) (3,848) 8,255
Cash flows from investing activities
Proceeds from sales of property, plant and equipment 1 6 16
Acquisition of property, plant and equipment 8 (138) (144) (349)
Capitalised development expenditure 10 (1,693) (1,649) (3,573)
Payment of deferred consideration - - (25)
Purchase of other intangibles - - (102)
Interest received 40 50 115
Net cash used in investing activities (1,790) (1,737) (3,918)
Cash flows from financing activities
Proceeds from new borrowings 13 8,000 9,000 -
Interest paid 6 (402) (718) (1,774)
Payment of lease liabilities (1,035) (840) (1,692)
Net cash generated from/(used in) financing activities 6,563 7,442 (3,466)
Net (decrease)/increase in cash and cash equivalents (1,531) 1,857 871
Cash at beginning of Period 5,576 4,696 4,696
Foreign exchange movement - - 9
Cash at end of Period 4,045 6,553 5,576
Unaudited consolidated interim statement of changes in equity
Share Share Foreign currency translation reserve Revaluation reserve Retained Total
capital premium earnings equity
£000 £000 £000 £000 £000 £000
Balance at 1 April 2025 2,098 13,286 140 1,145 22,634 39,303
Comprehensive income for the period
Profit for the period - - - - 2,012 2,012
Other Comprehensive income:
Foreign currency translation difference - - (35) - - (35)
Deferred tax adjustment - - - - 3 3
Total comprehensive income for the period - - (35) - 2,015 1,980
Transactions with owners
Share based payments charge - - - - 61 61
Total transactions with owners - - - - 61 61
Balance at 30 September 2025 2,098 13,286 105 1,145 24,710 41,344
Balance at 1 April 2024 2,098 13,286 103 1,171 21,708 38,366
Comprehensive income for the period
Loss for the period - - - - (1,229) (1,229)
Other Comprehensive income:
Foreign currency translation difference - - 44 - - 44
Deferred tax adjustment - - - - 104 104
Total comprehensive income for the period - - 44 - (1,125) (1,081)
Transactions with owners
Share based payments charge - - - - 3 3
3 3
Balance at 30 September 2024 2,098 13,286 147 1,171 20,586 37,288
Balance at 1 April 2024 2,098 13,286 103 1,171 21,708 38,366
Comprehensive income for the period
Profit for the period - - - - 832 832
Other Comprehensive income:
Foreign currency translation difference - - 37 - - 37
Deferred tax adjustment - - - - 5 5
Depreciation transfer - - - (26) 26 -
Total comprehensive income for the period - - 37 (26) 863 874
Transactions with owners
Share based payments charge - - - - 63 63
Total transactions with owners - - - - 63 63
Balance at 31 March 2025 2,098 13,286 140 1,145 22,634 39,303
Notes to the Interim Financial Information
General Information
Gear4music (Holdings) plc is a public limited company incorporated and
domiciled in the United Kingdom and is listed on the Alternative Investment
Market ('AIM') of the London Stock Exchange.
The Group financial information consolidates the financial information of the
Company and its subsidiaries (collectively referred to as the "Group"). The
Group has 100% owned trading subsidiaries in the UK ('Gear4music Limited'),
Sweden ('Gear4music Sweden AB'), Germany ('Gear4music GmbH'), Ireland
('Gear4music Ireland Limited') and Spain ('Gear4music Spain S.L.'). The Group
also has one 100% owned dormant subsidiary in the UK ('Cagney Limited').
The principal activity of the Group is the retail of musical instruments and
equipment.
The registered office of Gear4music (Holdings) plc (company number: 07786708)
and Gear4music Limited (company number: 03113256) is Holgate Park Drive, York,
YO26 4GN.
1 Accounting policies
Basis of preparation
The consolidated interim financial information, which has been neither audited
nor reviewed by the auditor, has been prepared under the historical cost
convention, except for land and buildings that are stated at their fair value,
and in accordance with the recognition and measurement requirements of
UK-adopted International Accounting Standards. The condensed consolidated
interim financial information does not constitute financial statements within
the meaning of Section 434 of the Companies Act 2006 and does not include all
the information and disclosures required for full annual financial statements
and is thus not in full compliance with UK-adopted international accounting
standards. It should therefore be read in conjunction with the Group's Annual
Report for the year ended 31 March 2025, which has been prepared in accordance
with UK-adopted International Financial Reporting Standards and is available
on the Group's investor website.
The accounting policies used in the financial information are consistent with
those used in the Group's consolidated financial statements as at and for the
year ended 31 March 2025, as detailed on pages 75 to 80 of the Group's Annual
Report and Financial Statements for the year ended 31 March 2025, a copy of
which is available on the Group's website, www.gear4musicplc.com.
As permitted, this interim report has been prepared in accordance with the AIM
rules and not in accordance with IAS 34 "Interim financial reporting".
The comparative financial information contained in the condensed consolidated
financial information in respect of the year ended 31 March 2025 has been
extracted from the 2025 Financial Statements. Those financial statements have
been reported on by Grant Thornton UK LLP and delivered to the Registrar of
Companies. The report was unqualified, did not include a reference to any
matters to which the auditor drew attention by way of emphasis without
qualifying their report, and did not contain a statement under Section 498(2)
or 498(3) of the Companies Act 2006.
Selected explanatory notes are included to explain events and transactions
that are significant to an understanding of the changes in financial position
and performance of the Group since the last annual consolidated financial
statements as at the year ended 31 March 2025.
Notes to the Interim Financial Information (continued)
Going concern
The Group's business activities and position in the market, and principal
risks, uncertainties and mitigations are described in detail in the Strategic
Report included on pages 1 to 51 of the Group's 2025 Annual Report and
Financial Statements.
In June 2025 the Group extended its RCF with HSBC at £30m for a further
one-year period to 15 June 2027. This facility provides a good and appropriate
level of headroom that has been factored into the Directors going concern
assessment.
The Group's policy is to ensure that it has sufficient facilities to cover its
future funding requirements.
At 30 September 2025 the Group had net debt of £16.0m (30 September 2024:
£14.4m) including £4.0m cash (30 September 2024: £6.6m), with a good and
appropriate level of headroom that has also been factored into the Directors'
going concern assessment.
The Directors have considered the Group's prospects based on its current
proposition and online offering in
the UK and Europe, strategic developments delivered and in progress and
concluded that there are significant opportunities for profitable growth as
channel shift continues and customers move online.
There is a diverse supply chain with no key dependencies.
Having duly considered all these factors and having reviewed the forecasts for
the period to 31 December 2026, the Directors have a reasonable expectation
that the Group has adequate resources to continue trading for the foreseeable
future, and as such continue to adopt the going concern basis of accounting in
preparing the financial statements.
2 Principal risks and uncertainties
The Board considers the principal risks and uncertainties which could impact
the Group over the remaining six months of the financial year to 31 March 2026
to be unchanged from those set out in the group's Annual Report and Financial
Statements for the year ended 31 March 2025, and can be summarised as:
- IT and Cyber Security
- Warehousing and Distribution
- Supply chain
- Macroeconomic and geopolitical factors
- Climate risk and sustainability
- UK outside the EU
- Change management - Operational, Regulatory and Technological
- Brand and proposition
- Competition
- Financial risk
- ESG
These are set out in detail on pages 44 to 49 of the Group's Annual Report and
Financial Statements for the year ended 31 March 2025, a copy of which is
available on the Group's Plc website, www.gear4musicplc.com.
Notes to the Interim Financial Information (continued)
3 Segmental analysis
Revenue by Geography:
6 months ended 6 months ended 30 September 2024 Year ended
31 March 2025
30 September
2025
£000 £000 £000
UK 49,642 38,711 90,230
Europe and Rest of the World 31,105 23,031 56,490
80,747 61,742 146,720
Administrative expenses by Geography:
6 months ended 6 months ended 30 September 2024 Year ended
31 March 2025
30 September
2025
£000 £000 £000
UK 17,367 14,976 32,605
Europe and Rest of the World 2,502 2,384 4,730
19,869 17,360 37,335
Revenue by Category:
6 months ended 6 months ended 30 September 2024 Year ended 31 March 2025
30 September
2025
£000 £000 £000
Other-brand products 60,347 45,334 104,677
Own-brand products 17,182 13,787 35,665
Carriage income 2,840 2,382 5,763
Warranty income 229 172 412
Other 149 67 203
80,747 61,742 146,720
Notes to the Interim Financial Information (continued)
4 Expenses and other income
Included in profit/loss are the following:
6 months ended 30 September 6 months ended 30 September 2024 Year ended
31 March 2025
2025
£000 £000 £000
Depreciation of property, plant and equipment 493 539 1,065
Depreciation of right-of-use assets 825 817 1,620
Amortisation of intangible assets 2,141 2,008 4,118
Loss/(profit) on disposal of property, plant and equipment - 1 (5)
R&D expenditure recognised as an expense 65 105 126
Other income
6 months ended 6 months ended 30 September 2024 Year ended 31 March 2025
30 September
2025
£000 £000 £000
RDEC tax credits 182 156 390
Rental income 201 115 289
Other 154 103 231
Total other income 537 374 910
Rental income relates to our freehold Head Office in York and sublet of part
of our Spanish distribution centre. 'Other' includes income from on-site café
at our Head Office in York, grants and marketing support.
Notes to the Interim Financial Information (continued)
5 Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for
the period attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated by dividing the net profit for the
period attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the period plus the weighted average number
of ordinary shares that would be issued on the conversion of all dilutive
potential ordinary shares into ordinary shares.
Dilutive shares are not included as where their effect is anti-dilutive.
6 months ended 6 months ended 30 September Year ended
31 March 2025
30 September 2024
2025
Profit/(loss) attributable to equity shareholders of the parent (£'000) 2,012 (1,229) 832
Basic weighted average number of shares 20,976,938 20,976,938 20,976,938
Dilutive potential Ordinary shares 1,178,166 1,119,604 969,604
Dilutive weighted average number of shares 22,155,104 22,096,542 21,946,542
_________ _________ _________
Basic profit/(loss) per share 9.6p (5.9p) 4.0p
Diluted profit/(loss) per share 9.1p (5.9p) 3.8p
6 Financial expenses & Financial Income
6 months ended 6 months ended 30 September 2024 Year ended
31 March 2025
30 September
2025
£000 £000 £000
Bank interest 584 559 1,192
IFRS16 lease interest 181 220 418
Net foreign exchange (gain)/loss (36) (16) 179
Net fair value movements - - 2
Total financial expenses 729 763 1,791
6 months ended 6 months ended 30 September 2024 Year ended
31 March 2025
30 September
2025
£000 £000 £000
Interest Received 40 50 115
Total financial income 40 50 115
Notes to the Interim Financial Information (continued)
7 Taxation
6 months ended 6 months ended 30 September 2024 Year ended
31 March 2025
30 September
2025
£000 £000 £000
Current tax expense 556 243 490
Deferred tax expense/(credit) 153 (218) 240
Total tax expense 709 25 730
Deferred tax balances have been provided at 25% which was the tax rate which
was substantively enacted at 30 September 2023.
Notes to the Interim Financial Information (continued)
8 Property, plant and equipment
Freehold property Plant and Fixtures Motor vehicles Computer equipment Total
equipment and fittings
£000 £000 £000 £000 £000 £000
Cost
Balance at 1 October 2024 8,201 2,438 7,678 30 1,390 19,737
Additions - 78 93 - 33 204
Disposals - (49) - - (17) (66)
Balance at 31 March 2025 8,201 2,467 7,771 30 1,406 19,875
Additions - 11 88 - 38 138
Disposals - - (2) - (2) (3)
Balance at 30 September 2025 8,201 2,478 7,858 30 1,443 20,010
Depreciation
Balance at 1 October 2024 727 2,199 5,057 26 1,268 9,277
Charge for the Period 82 88 311 - 45 526
Disposals - (50) - - (12) (62)
Balance at 31 March 2025 809 2,237 5,368 26 1,301 9,741
Charge for the Period 82 85 285 - 41 493
Disposals - - (1) - (2) (3)
Balance at 30 September 2025 891 2,322 5,652 26 1,340 10,231
Net book value as at 30 September 2025 7,310 156 2,206 4 103 9,779
Net book value as at 31 March 2025 7,392 230 2,403 4 105 10,134
Net book value as at 30 September 2024 7,474 239 2,621 4 122 10,461
Notes to the Interim Financial Information (continued)
9 Right-of-use Assets
Leasehold properties
At 30 September 2025 the Group had five leased properties: Distribution
centres and showrooms in York, Sweden and Germany, and Distribution centres in
Ireland and Spain.
As at 30 September 2025 the associated right of use assets are as follows:
Land and Buildings
£000
Cost
Balance at 1 October 2024 and 31 March 2025 15,253
Balance at 30 September 2025 15,253
Depreciation
Balance at 1 October 2024 7,971
Charge for the Period 803
Balance at 31 March 2025 8,774
Charge for the Period 825
Balance at 30 September 2025 9,599
Net book value as at 30 September 2025 5,654
Net book value as at 31 March 2025 6,479
Net book value as at 30 September 2024 7,283
Notes to the Interim Financial Information (continued)
10 Intangible assets
Goodwill Software Brand Domain names Other Intangibles Total
platform
£000 £000 £000 £000 £000 £000
Cost
Balance at 1 October 2024 5,324 30,380 1,372 3,043 149 40,268
Additions - 1,924 98 4 - 2,026
Balance at 31 March 2025 5,324 32,304 1,470 3,047 149 42,294
Additions - 1,693 - - - 1,693
Balance at 30 September 2025 5,324 33,997 1,470 3,047 149 43,987
Amortisation
Balance at 1 October 2024 - 17,904 563 8 103 18,578
Amortisation for the Period - 2,088 - 2 20 2,110
Balance at 31 March 2025 - 19,992 563 10 123 20,688
Amortisation for the Period - 2,119 - 4 18 2,141
Balance at 30 September 2025 - 22,111 563 14 141 22,829
Net book value at 30 September 2025 5,324 11,886 907 3,033 8 21,158
Net book value at 31 March 2025 5,324 12,312 907 3,037 26 21,606
Net book value at 30 September 2024 5,324 12,476 809 3,035 46 21,689
11 Inventories
30 September 2025 30 September 2024 31 March 2025
£000 £000 £000
Finished goods 50,044 40,065 34,193
The cost of inventories recognised as an expense and included in cost of sales
in the period ended 30 September 2025 amounted to £53.1m (FY25 H1: £41.5m).
Inventories include £8.7m of predominantly Own-brand stock-in-transit (30
September 2024: £7.6m) from Far East manufacturers.
Notes to the Interim Financial Information (continued)
12 Trade and other receivables
30 September 2025 30 September 2024 31 March 2025
£000 £000 £000
Trade receivables 1,650 1,377 1,100
Prepayments 3,741 1,672 2,047
5,391 3,049 3,147
Trade receivables include cash lodged with payment providers, Amazon and the Group's consumer finance partners, and UK and International education and trade accounts where standard credit terms are 30-days.
13 Interest bearing loans and borrowings
30 September 2025 30 September 2024 31 March 2025
£000 £000 £000
Non-current liabilities
Bank loans 20,000 21,000 12,000
20,000 21,000 12,000
Current liabilities
Bank loans - - -
- - -
Total liabilities
Bank loans 20,000 21,000 12,000
20,000 21,000 12,000
Revolving Credit Facility
In June 2025 the Group extended its £30m RCF with HSBC for a further one-year
period, to June 2027. This is secured by a debenture over the Group's assets.
Loans incur interest at variables rates linked to SONIA, with a margin
non-utilisation fee.
Notes to the Interim Financial Information (continued)
14 Trade and other payables
30 September 2025 30 September 2024 31 March 2025
£000 £000 £000
Current
Trade payables 16,336 14,803 12,112
Accruals and deferred income 6,057 4,059 4,802
Deferred consideration - 23 -
Other creditors including tax and social security 2,738 2,201 3,007
25,131 21,086 19,921
Non-current
Accruals and deferred income 253 30 238
Accruals at 30 September 2025 include:
- £1,363,000 (30 September 2024: £1,136,000) relating to
customer prepayments; and
- £64,000 (30 September 2024: £30,000) relating to the estimated
cash bonuses accrued relating to the CSOP schemes.
The Directors consider the carrying amount of other 'trade and other payables'
to approximate their fair value.
15 Lease liabilities
The Group has five property leases. Each lease is reflected on the statement
of financial position as a right-of-use asset and a lease liability. The Group
classifies its right-of-use assets in a consistent manner to its property,
plant and equipment.
Lease liabilities are presented in the statement of financial position as
follows:
30 September 2025 30 September 2024 31 March 2025
£000 £000 £000
Current 1,860 1,790 1,869
Non-current 5,095 6,865 5,940
6,955 8,655 7,809
Notes to the Interim Financial Information (continued)
16 Share based payments
The Group operates share option plans for qualifying employees of the Group.
Options in the plans are settled in equity in the Company and are subject to
vesting conditions. Relevant events in the Period include:
Options granted - LTIP (2025)
On 3 July 2025 the Group adopted a new long term incentive plan ('LTIP') with
share awards made to the three executive directors of Gear4music (Holdings)
plc.
Under the LTIP, Gear4music Limited, a wholly owned subsidiary of the
Gear4music (Holdings) plc issued 200,000 'F' ordinary shares of one pence
each, which are non-voting, non-dividend, restricted shares to the relevant
individuals. The initial subscription cost was paid by way of a cash bonus.
These F Shares vest subject to achieving a £5 share price target in July
2028, at which point they can be exchanged on a one-for-one basis for new
ordinary shares in Gear4music (Holdings) plc.
Options granted - CSOP (2025)
On 1 August 2025 options over a total of 11,340 Ordinary shares were granted
to four non-Director employees under the Company's CSOP scheme.
17 Related party transactions
There were no significant related party transactions during the six months to
30 September 2025 (30 September 2024: none).
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