24 April 2024
Gear4music (Holdings) plc
Year-End Trading Update
Full year revenue and EBITDA in line with market expectations, with net debt reduction ahead of market expectations
Gear4music (Holdings) plc ("Gear4music" or "the Group"), the largest UK based online retailer of musical instruments and music equipment, today announces a year-end trading update covering the 12 months to 31 March 2024.
| £m | 12m to 31 Mar 2024 | 12m to 31 Mar 2023 | % Change on FY23 |
| UK sales | 83.1 | 82.0 | +1% |
| European and Rest of the World sales | 61.3 | 70.0 | -12% |
| Total sales | 144.4 | 152.0 | -5% |
FY24 Highlights
· Revenues, in line with market expectations*, reflect previously announced FY24 prioritisation of gross margins, profitability, and net debt reduction ahead of sales growth
· Gross margin expected to be 27.3% (FY23: 25.7%; FY22: 27.8%)
· EBITDA expected to be in line with market expectations*
· Net debt reduced significantly to £7.3m at 31 March 2024 (31 March 2023: £14.5m; 31 March 2022: £24.2m), ahead of market expectations*
· Planned cost reductions delivered during FY24 H2 will support further net debt reduction and profitability improvements
Gear4music's Chief Executive Officer, Andrew Wass, said:
"We are pleased to report that the Group's financial performance during FY24 was in line with market expectations, having delivered both gross margin and profitability improvements. As a direct result of the affirmative actions taken to prioritise cash generation and reduce costs, we have almost halved the Group's net debt since 31 March 2023, down to £7.3m at 31 March 2024, being a reduction of £16.9m in two years.
We continued to invest into and develop our bespoke e-commerce platform during FY24, improving key areas of our proposition to drive further efficiencies and future profitable growth. The Board is confident that the positive impact of the cost reductions made during FY24 will deliver full-year benefits in FY25.
With ongoing investment into key areas of our business, including further development of our second-hand system and higher margin product categories, the Group is well positioned to build on the results achieved in FY24 and deliver on our long-term profitable growth strategy."
* Gear4music believes that current consensus market expectations for the year ended 31 March 2024 are revenue of £144.1 million, adjusted EBITDA of £9.8 million, adjusted profit before tax of £1.3 million, and pre-IFRS16 net debt of £11.6 million.
- Ends -
Enquiries:
| Gear4music Andrew Wass, Chief Executive Officer Chris Scott, Chief Financial Officer | +44 (0)20 3405 0205 |
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| Singer Capital Markets - Nominated Adviser and Broker Peter Steel/Sam Butcher, Corporate Finance Tom Salvesen, Corporate Broking | +44 (0)20 7496 3000
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| Alma - Financial PR Rebecca Sanders-Hewett Joe Pederzolli David Ison | +44 (0)20 3405 0205 Gear4music@almastrategic.com |
About Gear4music (Holdings) plc
Operating from a Head Office in York, Distribution Centres in York, Bacup, Sweden, Germany, Ireland & Spain, and showrooms in York, Bacup, Sweden & Germany, the Group sells own-brand musical instruments and music equipment alongside premium third-party brands including Yamaha, Roland and Roland, to customers ranging from beginners to musical enthusiasts and professionals, in the UK, Europe and the Rest of the World.
Having developed its own e-commerce platform, with multilingual, multicurrency websites delivering to over 190 countries, the Group continues to build its overseas presence.
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