musicMagpie PLC, the seller of refurbished technology products, allayed fears of another profits warning by reaffirming full-year guidance.
While acknowledging the current uncertain economic environment facing all consumer businesses, the board is confident of achieving its full-year expectations with a much stronger profit performance in the second half of its financial year.
The upbeat tone is based on an increased contribution from the growing number of rental subscribers alongside continued anticipated sales revenue growth from the recent expansion of 'marketplace' sales channels.
In the six months to the end of May, revenue slipped to £71.3mln from £72.8mln the year before, largely as a result of a 23.6% year-on-year decline in the sales of Disk Media and Books.
Sales of Consumer Technology products rose 15.9% to £46.0mln from £39.7mln and the group said the increase could have been higher but it has chosen to emphasise its contracted monthly rental subscription service, which provides a steady recurring income. Active paying subscribers had increased to around 24,000 at the end of May 2022 from around 7,500 a year earlier.
Underlying earnings (adjusted EBITDA) slumped to £2.6mln from £6.2mln in the corresponding period 12 months earlier.
“The economic environment facing consumers is increasingly tough and the issues of affordability and cash-flow constraints are being felt by many. Against that backdrop, our twin proposition of giving people a way to recycle their tech products for cash, as well as our ability to sell or rent refurbished, lower-cost consumer technology products, becomes increasingly attractive,” said Steve Oliver, the chief executive officer of musicMagpie.
“Whilst recognising we are in the early stages of our second half, our sales channel expansion has started well and we are confident about our short-term growth and remain excited about our medium-term prospects," he added.