Trading Update for the year ended 31 August 2022
Focusrite plc
("the Company" or "the Group")
Trading Update for the year ended 31 August 2022
Focusrite plc (AIM: TUNE), the global music and audio products company supplying hardware and software used by professional and amateur musicians and the entertainment industry, is pleased to give the following update on current trading for the year ended 31 August 2022 (FY22).
Underlying demand for the Group's portfolio of products has remained strong with end user registrations for our content creation and market leading audio interface solutions continuing at rates experienced ahead of the pandemic. In addition, the Group continues to see ongoing strength in the live and installed sound markets. As a result, we expect revenues for the full year to be in-line with the Board expectations at approximately £180 million, up from £173.9 million in the prior year.
As previously reported, there are a number of global, industry wide factors continuing to drive up costs, including scarcity of key semiconductors and other components, and high freight costs. These have created downward pressure on gross margins, partially offset by price increases which we expect to continue into the next financial year (FY23). In addition, reflecting the increased scale of the Group, including recent acquisitions, we have continued to invest in our systems, people and direct sales channels in order to drive growth. As a result of these factors, we now expect EBITDA 1 for FY22 to be slightly below the Board's expectations.
Cash generation remains a priority. As at 31 August 2022 the Company had a net cash balance of approximately nil (FY21: £17.6 million net cash). This reflects the acquisition of Linea Research in May for £12.1m, as well as the planned rebuilding of inventory from the extremely low levels at the end of the prior year, including inventory of both finished goods and scarce components.
Tim Carroll, Chief Executive commented:
"The Group continues to see increased demand for solutions that enable the creation and playback of audio content for music, post-production, podcasting, and streaming compared to pre-pandemic levels. We now have nine established brands covering a much broader customer and geographic footprint than in previous years. In addition, our acquisitions continue to integrate well. Overall, the Group's revenue is now running at about twice the level it was in the last financial year prior to the pandemic.
"Current customer registrations remain robust. We are optimistic about our future prospects, but mindful of the current global economic and political challenges and uncertainties, as well as the ongoing cost pressures in the supply chain. Over this past financial year, we have successfully built back our inventory position to provide greater resilience against supply chain volatility and ensure we are able to adequately meet demand as we head into the key holiday season."
The Company expects to announce final results for the year ended 31 August 2022 in late November 2022.
1 Comprising earnings adjusted for interest, taxation, depreciation, amortisation, goodwill impairment and adjusting items
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
-ends-
Enquiries:
Focusrite plc +44 (0) 149 446 2246
Tim Carroll, Chief Executive Officer
Sally McKone, Chief Financial Officer
Investec Bank plc (Nominated Adviser and Joint Broker) +44 (0) 20 7597 5970
David Flin
William Brinkley
Charlotte Young
Peel Hunt LLP (Joint Broker) +44 (0) 20 7418 8900
Michael Burke
Paul Gillam
James Smith
Belvedere Communications +44 (0) 20 3008 6864
John West
Llew Angus
Notes to Editors
Focusrite plc is a global audio products group that develops and markets proprietary hardware and software products. Used by audio professionals and musicians, its solutions facilitate the high-quality production of recorded and live sound. The Focusrite Group trades under nine established brands: Focusrite, Focusrite Pro, Novation, Ampify, ADAM Audio, Martin Audio, Optimal Audio, Sequential and Linea.
With a high-quality reputation and a rich heritage spanning decades, its brands are category leaders in the music-making and audio recording industries. Focusrite and Focusrite Pro offer audio interfaces and other products for recording musicians, producers and professional audio facilities. Novation and Ampify products are used in the creation of electronic music, from synthesisers and grooveboxes to industry-shaping controllers and inspirational music-making apps. ADAM Audio studio monitors have earned a worldwide reputation based on technological innovation in the field of studio loudspeaker technology. Martin Audio designs and manufactures performance-ready systems across the spectrum of sound reinforcement applications. Sequential designs and manufactures high end analogue synthesizers. Linea designs, develops, manufactures and sells market innovative professional audio equipment globally.
The Focusrite Group has offices in four continents and a global customer base with a distribution network covering approximately 240 territories.
Focusrite plc is traded on the AIM market, London Stock Exchange.
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