TIDMG4M
RNS Number : 5813Q
Gear4music (Holdings) PLC
19 October 2023
19 October 2023
Gear4music (Holdings) plc
Half Year Trading Update
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 six months to
30 September 2023.
GBPm 6m to 30 Sept 6m to 30 Sept % Change
2023 2022 on FY23 H1
(FY24 H1) (FY23 H1)
UK revenues 36.5 35.5 +3%
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European and Rest
of the World revenues 26.1 30.8 -15%
--------------- -------------- ------------
Total revenues 62.6 66.3 -6%
--------------- -------------- ------------
FY24 H1 Highlights:
- Revenues reflect the previously announced focus on
prioritising gross margins ahead of sales growth, in what continues
to be a challenging market
- FY24 H1 gross margin expected to be 27.1%, 80bps higher than last year (FY23 H1: 26.3%)
- Gross profit expected to be GBP17.0m (FY23 H1: GBP17.4m)
- Net debt reduced by GBP3.7m to GBP18.1m at 30 September 2023
(FY23 H1: GBP21.8m, FY22 H1: GBP24.2m), reflecting normal seasonal
build of inventory ahead of peak
Cost saving initiatives:
- GBP4.0m annualised cash savings implemented during FY24 H1 that will benefit FY24 H2 onwards:
o Team size reduced by 20% compared with September 2022:
-- GBP2.5m reduction in software development team annual
salaries
-- GBP1.0m reduction in other annual wages and salaries
-- One-off non-recurring cost of GBP0.5m
o GBP0.5m annualised reduction in other Administrative
expenses
Trading Outlook:
- UK revenues continue to be stronger than European revenues
- Expectation of a 'normal' H2 weighted trading seasonality
- Well prepared ahead of peak seasonal trading period
- Second-hand continues to perform well and show signs of being a long-term growth driver
- Full-year outlook remains in-line with consensus market expectations*
Gear4music's Chief Executive Officer, Andrew Wass, said:
"We have continued to make good progress with our strategic
objectives in what we anticipated would be challenging market
conditions. We are pleased to have achieved growth in the UK,
whilst our European markets have been impacted by lower consumer
demand.
Mindful of the current trading environment, we have retained our
pricing discipline and focused on improving gross margins. In
addition, we have taken decisive action to drive further
efficiencies and ensure our cost base is appropriately configured
to deliver our profitable growth strategy.
As we look to leverage the potential of AI driven technologies
and further reconfigure the business into a lower cost operation,
we will continue to invest into future growth projects such as our
second-hand system, ensuring the Group is well positioned to
quickly and profitably scale further as economic conditions
improve."
The Group will report Interim results for the six months ended
30 September 2023 on 14 November 2023.
* Gear4music believes that current consensus market expectations
for the year ending 31 March 2024 are revenue of GBP161.7 million,
EBITDA of GBP9.8 million and profit before tax of GBP1.2
million.
ENDS
Enquiries:
Gear4music
Andrew Wass, Chief Executive Officer
Chris Scott, Chief Financial Officer +44 (0)20 3405 0205
Singer Capital Markets - Nominated Adviser
and Sole Broker
Peter Steel/Sam Butcher, Corporate Finance
Tom Salvesen, Corporate Broking +44 (0)20 7496 3000
Alma - Financial PR +44 (0)20 3405 0205
Rebecca Sanders-Hewett Gear4music@almas trategic
Joe Pederzolli .co.uk
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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END
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(END) Dow Jones Newswires
October 19, 2023 02:00 ET (06:00 GMT)
Grafico Azioni Gear4music (holdings) (LSE:G4M)
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