Gear4music Holdings PLC (AIM:G4M) reported a 66% drop in profits and said inflationary pressures and weaker consumer confidence are likely to constrain growth in the short term.
However, the largest UK based online retailer of musical instruments insisted trading is in line with consensus market expectations for 2023.
"As a result of Brexit, Covid, and now the war in Ukraine, the general outlook for many retailers during 2022 remains challenging and difficult to predict, with increasing product and overhead costs forcing up product retail prices and potentially impacting profits," Andrew Wass, chief executive officer, said in a statement.
"To help combat these challenges, we have a strong pipeline of growth orientated projects launching in FY23, and we will retain a sharp focus on productivity, efficiency and overhead cost control.
"Inflationary pressures and weaker consumer confidence are likely to constrain growth in profitability in the short term. However, with the strategies and actions we are taking, along with our strong balance sheet and significant working capital headroom, we believe we remain well positioned to take market share and are confident in our medium and longer-term profitable growth strategy."
For the year ended March 31, 2022, pretax profit fell to £5.0mln compared to last year's £14.6mln, but was up 61% compared to fiscal 2020. Revenue decreased 6% to £147.6mln, but this was still 23% higher than 2020.
"I am pleased to be reporting FY22 full year results today that are slightly ahead of our previous expectations," said Wass. "These results are a significant improvement on FY20 pre-pandemic levels, showing the continued growth and development of our business."
Gear4Music said consensus market expectations for the year ending 31 March are for revenue of £163.9mln and EBITDA of £11.9mln.
Shares were up 1.03% at 71.75p in early trades in London.