Trading Update

RNS Number : 6213Q

Gear4music (Holdings) PLC

22 October 2019

 

22 October 2019

Gear4music (Holdings) plc

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 2019.

£m	6 months to 30 September 2019	6 months to 31 August 2018	% change
UK sales	24.8	24.0	+3%
European and Rest of the World sales	24.6	18.5	+33%
Total sales	49.4	42.5	+16%

Highlights

·    Total sales growth of 16% to £49.4m (FY19 H1: £42.5m)

·    Gross margin improved by 250bps to 25.2% (FY19 H1: 22.7%)

·    Gross profit increased by 29% from £9.6m to £12.4m

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

"I am very pleased to report that we have achieved our primary objective for the period of materially improving our gross margins. By cutting out less profitable sales and focusing on higher margin products, we have delivered an FY20 H1 gross margin of 25.2% and a 29% increase in gross profit.

We have restored our gross margins to FY18 levels whilst at the same time continuing to grow our revenues and taking market share. International sales growth continues to be strong, and whilst the UK market remains highly competitive, we have returned to a more profitable margin structure and believe that this is the right strategy from which to grow our revenues going forward.

Our warehousing and infrastructure teams have worked tirelessly during the year to ensure we have a robust logistics operation in place ahead of our peak FY20 H2 trading period, and we are confident that we now have the capacity and efficiency required to make the most of the opportunities available to us.

Our re-focused growth strategy is now in place and we are confident that the business is effectively configured to achieve a sustainable level of profitable growth. As such, we continue to trade in line with our full year EBITDA expectations as we head towards our seasonal peak."

The Group will report interim results for the six months ending 30 September 2019 on 12 November 2019.

Note: references to FY20 H1 represent the period 1 April 2019 to 30 September 2019, following the change to the accounting reference date and financial year end from 28 February to 31 March, with FY19 H1 representing the period 1 March 2018 to 31 August 2018.  

- Ends -

Enquiries:

Gear4music Andrew Wass, Chief Executive Officer Chris Scott, Chief Financial Officer	[phone]
N+1 Singer - Nominated Adviser and Broker Peter Steel/Justin McKeegan, Corporate Finance Tom Salvesen, Corporate Broking	[phone]
Alma - Financial PR Rebecca Sanders-Hewett Helena Bogle	[phone] [e-mail]

About Gear4music.com

Operating from a Head Office in York, and Distribution Centres and showrooms in York, Sweden and 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, more recently, into the Rest of the World.

Having developed its own e-commerce platform, with multilingual, multicurrency websites delivering to over 190 countries, the Group has rapidly expanded its database and continues to build its overseas presence.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.

 

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