TIDMG4M
RNS Number : 5594V
Gear4music (Holdings) PLC
06 April 2023
6 April 2023
Gear4music (Holdings) plc
Year-End Trading Update
Gear4music (Holdings) plc ("Gear4music" or "the Group") , the
largest UK based online retailer of musical instruments and music
equipment, today announces a year-end trading update covering the
12 months to 31 March 2023.
GBPm 12m to 31 12m to 31 % Change
Mar 2023 Mar 2022 on FY22
UK sales 82.0 82.6 -1%
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European and Rest of the
World sales 70.0 65.0 +8%
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Total sales 152.0 147.6 +3%
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FY23 Highlights
-- FY23 revenues and profits impacted by weaker consumer demand during February and March
-- Gross margin expected to be 25.7% reflecting significant
reduction in inventory levels through a challenging period for
discretionary retail (FY22: 27.8%; FY20: 25.9%)
-- EBITDA now expected to be in the range of GBP7.3m - GBP7.7m (FY22: GBP11.0m; FY20: GBP7.8m)
-- Net debt of GBP14.5m at 31 March 2023, reduced from GBP24.2m at 31 March 2022
-- Second-hand trade-in system launched in March 2023 with promising initial results
-- Further reduction of net debt and a return to more profitable growth expected during FY24
(1) Note: Gear4music believes that consensus market expectations
for the year ending 31 March 2023 prior to release of this
announcement were revenues 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
Gear4music's Chief Executive Officer, Andrew Wass, said:
"Whilst challenging economic conditions meant we were not able
to grow revenues and profits as intended during FY23, we are
pleased to have made good progress with our objective of
significantly reducing the Group's net debt position, from GBP24.2m
a year ago, to GBP14.5m as at 31 March 2023.
The further investment into our European distribution
infrastructure during FY22 underpinned our progress in Europe
during FY23, although high rates of inflation continue to squeeze
consumer spending on discretionary items across all of our markets.
In the UK, as previously announced, courier disruption impacted
trading during our busiest period.
We are confident, however, of profitability recovering in FY24
as growth initiatives such as AV.com gain traction and the benefits
of our continued focus on overhead cost efficiencies filter
through.
In March 2023 we strengthened our position as the UK's leading
retailer of musical instruments and equipment by launching our
latest growth initiative, entry into the second-hand market. Our
proprietary second-hand trade-in system simplifies the process for
consumers of selling their equipment, providing instant trade-in
prices across thousands of products*.
Customer trade-in take-up has been encouraging during the
initial soft-launch period and, as we scale-up the number of
products available for trade-in and launch the system across
Europe, we are confident our second-hand platform will help to
support a return to stronger growth in the business.
Although the current economic challenges are reflected in our
FY23 results, we have taken decisive actions to ensure the Group
continues to be appropriately configured and well-funded. As FY24
progresses, we expect to make further progress in reducing our net
debt, and believe we are well positioned to return to profitable
growth."
*7,500 products as of 03 April 2023
- 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, Bacup, Sweden, Germany, Ireland & Spain, and showrooms in
York, Bacup, Sweden & Germany, the Group sells own-brand
musical instruments and music equipment alongside premium
third-party brands including Yamaha, Roland 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 the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"). Upon the publication of this
announcement via the Regulatory Information Service, this inside
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