Focusrite Plc (AIM: TUNE), the global music and audio company supplying hardware and software products used by professional and amateur recording engineers and musicians, is pleased to update the market on another successful year in which revenue and profits have grown strongly.
The Company expects revenue for the financial year ending 31 August 2019, to be ahead of market expectations at approximately £84 million, up from £75.1 million last year. This growth comprises an increase of approximately 10% for the existing business (c6% on a constant currency basis) and approximately six weeks of revenue for ADAM Audio, a German studio monitor company, which was acquired on 16 July 2019 for a total consideration of £16.2 million in cash. Margins have remained consistent with the prior year and as a result EBITDA is also expected to be ahead of market expectations.
Cash generation continues to be a prime focus for the Group and, despite the acquisition, net cash as at 31 August 2019 remained a healthy £14.9 million. For comparison the net cash balance as at 31 August 2018 was £22.8 million.
Tim Carroll, Chief Executive commented:
“We have held steadfast to our core growth strategy and executed as planned despite so many macro-economic factors at play across the world. We successfully released the latest generation of the Scarlett range of products (Gen 3) in July 2019, which has been well received by resellers and end users. They have welcomed the advances we made in the hardware, as well as the innovative new software features that make the product easier to set up and use.
Additionally, we made our first significant acquisition since becoming a publicly listed company, acquiring Berlin-based ADAM Audio in July. The acquisition extends the Group’s product offering to incorporate a comprehensive range of studio monitors well-aligned to our existing customer base. The business is growing and profitable and early indicators are that it is a good fit. The ADAM team are settling in well.
Our product roadmap continues to strengthen with significant new product releases planned for the first half of the new financial year. We continue to execute on our growth strategy while closely monitoring unpredictable global issues such as US tariffs and Brexit and have in place action plans to mitigate any foreseen negative impacts to our business.”