TIDMG4M
RNS Number : 8679O
Gear4music (Holdings) PLC
13 October 2021
13 October 2021
Gear4music (Holdings) plc
Half Year 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 2021.
GBPm 6m to 30 6m to 30 6m to 30 % Change % Change
Sept 2021 Sept 2020 Sept 2019 on FY21 on FY20
H1 H1
(FY22 H1) (FY21 H1) (FY20 H1)
UK sales 36.7 36.7 24.8 - +48%
----------- ----------- ----------- --------- ---------
European and Rest
of the World sales 28.0 33.5 24.6 -16% +14%
----------- ----------- ----------- --------- ---------
Total sales 64.7 70.2 49.4 -8% +31%
----------- ----------- ----------- --------- ---------
FY21 H1 Highlights
- Total sales of GBP64.7m down 8% when compared to the exceptionally strong FY21 H1
- Robust UK sales, in line with FY21 H1
- European sales down 16% due to post-Brexit challenges
- New European distribution centres became operational in
September 2021 to address post-Brexit challenges
- Gross margins remain strong at 28.0% (FY21 H1: 28.6%; FY20 H1: 25.2%)
- Gross profit of GBP18.1m (FY21 H1: GBP20.1m; FY20 H1: GBP12.5m)
- Acquisition of AV Distribution Ltd on track to complete by December 2021
- Strong levels of inventory going into peak trading period
- Trading for the full-year in-line with consensus market expectations*
Gear4music's Chief Executive Officer, Andrew Wass, said:
"We are pleased to report that trading during FY22 H1 has been
in line with the Board's expectations which, as previously
reported, was not expected to meet the same level of trading as
during the exceptional FY21 H1 period that was significantly
enhanced by COVID lockdowns.
With a 280bps improvement in gross margin relative to FY20 H1,
we are particularly pleased to have retained a large part of the
gross margin upside achieved during FY21 H1, alongside strong
two-year sales growth.
Our previously announced new Irish and Spanish distribution
centres have now become operational, which following the challenges
of Brexit, we expect will positively impact our European sales
during FY22 H2 by largely eliminating cross border shipments, and
increasing the breadth, strength and capacity of our delivery
proposition within Europe.
The acquisition of AV Distribution Ltd, an online retailer of
Home Cinema and HiFi equipment, is on track to complete by December
2021, which will significantly increase the Group's addressable
market size. Preparatory work to integrate AV Distribution Ltd is
progressing well, and we expect to launch AV.com in January 2022
following our peak Christmas trading period.
Whilst the musical instruments and equipment market is not
immune to global supply chain issues and increased shipping costs,
we are well placed to continue minimising the impact of this
situation, having deliberately and significantly increased on-hand
stock from GBP23.3 million at 30 September 2020, to GBP30.4 million
at 30 September 2021**.
As such, the Board is confident that results for the full
financial year will be in-line with consensus market
expectations*."
The Group will report Interim results for the six months ended
30 September 2021 on 16 November 2021.
* Gear4music believes that current consensus market expectations
for the year ending 31 March 2022 are revenue of GBP156.6 million,
EBITDA of GBP14 million and profit before tax of GBP7.3
million.
**On-hand stock excludes stock in transit
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/Amanda Gray, Corporate Finance
Tom Salvesen, Corporate Broking +44 (0)20 7496 3000
Investec Bank plc - Joint Broker
David Flin
Alex Wright
Harry Hargreaves +44 (0)20 7597 5970
Alma PR - Financial PR +44 (0)20 3405 0205
Harriet Jackson Gear4music@almapr.co.uk
Josh Royston
Faye Calow
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.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
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END
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