Gear4music Holdings PLC reported an improvement in trading conditions in the second half of the year as it announced half-year results which showed revenue growth of 2% to £66.3mln despite a 3% decrease in UK sales due to a strong comparative and a more normalised trading environment post Covid.
For the six months to 30 September 2022, the online retailer of musical instruments and music equipment said EBITDA fell 44% to £2.7mln from £4.8mln, in line with the group’s revised expectations, and the company posted an operating loss of £0.3mln compared to a £2.4mln profit a year ago.
Gross margins slipped 170 basis points to 26.3% reflecting targeted stock reductions and challenging market conditions during July and August in particular.
On the upside, the company reported improved trading momentum during the second half of the year has continued into November, maintaining the board's expectation of a return to pre-Covid, second-half weighted trading seasonality.
Net debt and on-hand inventory is expected to reduce by 31 March 2023 and the company said its full-year outlook remains in line with consensus market expectations for revenue of £155.1mln, EBITDA of £8.9mln and profit before tax of £1.1mln.
Andrew Wass, chief executive officer, said: “I am pleased to report that we have seen a consistent improvement in trading momentum during the last two months, despite continuing macro volatility.”
“We are also well prepared for our peak seasonal trading period. The board therefore remains confident that results for the full financial year will be in line with current consensus market expectations.”