YORK, UK - Gear4music, the UK's leading online retailer of musical instruments and music equipment, provided a trading update today for the first half of the fiscal year ending September 30, 2024. The company reported a slight drop in total revenues to £61.7 million, a 1% decrease compared to the same period in the previous year, with UK revenues climbing 4% to £38.0 million while European and Rest of the World revenues fell by 9% to £23.7 million.
Despite the revenue dip, Gear4music has seen a return to growth in the second quarter of FY25, following the implementation of a new growth strategy earlier in June 2024. The company's gross margin is expected to be 26.7%, with a gross profit of £16.5 million. EBITDA is anticipated to increase to £2.9 million, up from £2.4 million reported in the first half of FY24, and the company has also successfully reduced its net debt by £3.6 million to £14.5 million.
Operational highlights include the acquisition of Studiospares Europe Limited, which is expected to enhance Gear4music's own-brand portfolio, and the successful traction of their second-hand sales platform. The company faced initial challenges with the implementation of a new AI-based marketing system, which temporarily affected marketing efficiency and sales mix, but these issues have been resolved with the hiring of a new Marketing Director in September 2024.
Looking ahead, Gear4music has experienced stronger growth in October and is well-prepared for the upcoming peak seasonal trading period. The company maintains that the full-year outlook aligns with consensus market expectations.
Andrew Wass, Executive Chair of Gear4music, expressed satisfaction with the company's progress and the successful execution of its growth strategy, noting the significant reduction in net debt and improved profitability. He also highlighted the potential of the Studiospares brand integration and the second-hand sales platform to contribute to the company's long-term margin growth.
Gear4music will release its interim results for the six months ended September 30, 2024, on November 19, 2024. The information for this update is based on a press release statement from the company.
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