Gear4music (Holdings) PLC – Interim Results

Gear4music (Holdings) PLC – Interim Results

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 2019 (“the Period”).

Financial and Operational Highlights:

£m

6-months ended 30 September 2019

6-months ended 31 August 2018

Change

Revenue

49.4

42.5

+16%

Gross profit

12.5

9.6

+29%

Gross margin

25.2%

22.7%

+250bps

EBITDA *

2.0

0.7

+206%

Operating profit/(loss) *

0.2

(0.3)

Net loss *

(0.1)

(0.4)

 

·    Operating profit increased by £0.5m, EBITDA up by 206% to £2.0m*

·    Gross margin improved by 250bps to 25.2% reflecting the Group’s focus on higher margin products

·    Current trading in line with the board’s full year EBITDA expectations

* FY20 H1 profit figures reported on an IFRS16 basis; comparative FY19 H1 figures remain unchanged. FY20 H1 EBITDA, operating profit and net loss on a pre-IFRS16 basis are £1.3m, £0.1m and £0.2m respectively. See Note 1.2 to the Financial Information for detail.

 

Commenting on the results, Andrew Wass, Chief Executive Officer said:

“This has been an important period of balancing sales growth with our primary objective of improving gross margins and profitability, and I am pleased to report tangible evidence that we are making good progress in achieving that objective.

Having grown our revenues by more than 350% over the last four years, our recent focus has been on ensuring that our operational infrastructure is able to keep pace with our increased scale, and I am very pleased with the progress we have made during the period in further developing our back-end systems and logistics platform.

Having made these improvements, we expect to rebalance our development resources back towards growth orientated projects from next year, which alongside further systems improvements, we are confident will deliver long term growth in profits and revenues.

As we approach the Christmas trading period, we will remain focused on improving profitability rather than driving growth in market share, particularly in the UK where the market remains highly competitive.

Having appropriately reconfigured the business, we now expect gross margins to be higher and revenues to be lower than previous guidance, reflecting our focus this year on building a sustainable platform for growth in all areas. We believe that this is the right strategy for the delivery of long-term shareholder value and we remain confident that the business is well-positioned to trade in line with our full year EBITDA expectations.”

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