Gear4music Holdings PLC’s (LON:G4M) saw its shares fall on Friday after the firm said it expected its full-year underlying earnings (EBITDA) to be flat year-on-year despite a stronger-than-expected performance in the second half, due to a squeeze on margins.
In a trading update, the AIM-listed musical instrument seller's chief executive Andrew Wass said: "EBITDA for the second half of FY18 will be ahead of the six-month period ended 28 February 2017, although as a result of the investments we have made during the year into our customer proposition, infrastructure, staff, systems and marketing, we expect EBITDA for the full financial year ended 28 February 2018 to be in line with our FY17 result."
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He added: "We are confident that we are well placed to significantly grow both revenues and profitability during the next 12 months, as margins normalise, and the up-front investments we have made clearly demonstrate their ongoing value to the business."
In the year-end trading update, covering the 12 months to 28 February 2018, Gear4Music said that revenue had grown 43% over the period and that own-brand sales had kept pace with other-brand growth.
It added that active customer numbers were also reported to have increased 39% over the year to 474,600.
The group will report its full-year results on 15 May 2018.
In mid-morning trading, Gear4Music shares were down 3,1% at 631p.