Gear4music (Holdings) PLC Trading Update (1880N)
January 19 2023 - 1:00AM
UK Regulatory
TIDMG4M
RNS Number : 1880N
Gear4music (Holdings) PLC
19 January 2023
19 January 2023
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 three months to
31 December 2022.
GBPm 3m to 31 3m to 31 % change
Dec 2022 Dec 2021 on FY22
Q3
UK revenue 26.0 26.0 -
---------- ---------- ---------
European and Rest of the World
revenue 23.5 21.2 +11%
---------- ---------- ---------
Total revenue 49.5 47.2 +5%
---------- ---------- ---------
FY23 Q3 Highlights
- +11% European sales growth reflects successful execution of
infrastructure investment during FY22 to improve European customer
proposition
- UK revenues affected by continued weak consumer sentiment and
consequences of the Royal Mail strikes through December
- Gross margins of 25.6% (FY22 Q3: 28.4%, FY20 Q3*: 26.2%)
reflecting targeted stock reductions of slower moving product
lines
- Gross profit of GBP12.7m is 6% lower than FY22 Q3 and 20% higher than FY20 Q3*
- Improving labour efficiencies and lower marketing costs largely offset lower gross margin
- FY23 EBITDA and net debt reduction in-line with consensus market expectations**
Gear4music's Chief Executive Officer, Andrew Wass, said:
"We are pleased to report that, despite several external
challenges, financial performance during our FY23 peak seasonal
trading period was in line with the Board's expectations.
UK revenues during December were impacted by Royal Mail strikes
and the knock-on disruption of other couriers, which led to longer
delivery times and an earlier pre-Christmas cut-off date than we
would expect under normal trading conditions.
A continuing targeted reduction of both on-hand inventory and
net debt, combined with a period of weaker consumer sentiment and
lower own-brand sales led to subdued gross margins, although tight
control over marketing and labour costs largely compensated for
this and we expect margins to recover during FY24.
As we continue to make good progress with new growth orientated
projects, we remain confident in our long-term profitable growth
strategy, and that the Group is appropriately resourced and well
placed to make the most of opportunities as they arise."
* Last pre-Covid comparator
** Gear4music believes that current consensus market
expectations for the year ending 31 March 2023 are revenue of
GBP155.1 million, EBITDA of GBP8.9 million, profit before tax of
GBP1.0 million, and pre-IFRS16 net debt of GBP17.5 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 Joint Broker
Peter Steel/Sam Butcher, Corporate Finance
Tom Salvesen, Corporate Broking +44 (0)20 7496 3000
Investec Bank plc - Joint Broker
David Flin
Alex Wright
Alice King +44 (0)20 7597 5970
Alma PR - Financial PR +44 (0)20 3405 0205
David Ison Gear4music@almapr.co.uk
Joe Pederzolli
Josh Royston
About Gear4music (Holdings) plc
Operating from a Head Office in York, Distribution Centres in
York, Sweden, Germany, Ireland & Spain, and showrooms in York,
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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