20 January 2022
Gear4music (Holdings) plc
Trading Update
Gear4music (Holdings) plc ("Gear4music" or "the Group"), the largest UK based online retailer of musical instruments and music equipment, today announces a trading update for the three months to 31 December 2021.
| £m | 3m to 31 Dec 2021 | 3m to 31 Dec 2020 | 3m to 31 Dec 2019 | % change on FY21 Q3 | % change on FY20 Q3 |
| UK sales | 26.0 | 23.0 | 20.9 | +13% | +24% |
| European and Rest of the World sales | 21.2 | 29.2 | 19.4 | -27% | +9% |
| Total sales | 47.2 | 52.2 | 40.3 | -10% | +17% |
FY22 Q3 Highlights
- Gross margins remained strong at 28.4%, compared to 26.2% in FY20 Q3 and an exceptional 29.9% last year
- Gross profits increased 27% compared to FY20 Q3
- Continued robust UK sales were 24% ahead of FY20 Q3 and 13% ahead of FY21 Q3
- FY22 EBITDA continues to be in-line with consensus market expectations*
- New European distribution centres are scaling up well to address post-Brexit challenges, which as previously reported have impacted European sales
- AV.com website launched as planned on 13 January 2022
Gear4music's Chief Executive Officer, Andrew Wass, said:
"We are pleased to report that financial performance during the FY22 peak seasonal trading period was in line with the Board's expectations, demonstrating good progress when compared with the same period in FY20.
UK sales growth continued to be robust against what were exceptional revenues last year, and as previously reported, European growth has been restricted due to short term Brexit related challenges. We are continuing to make good progress in scaling up our new European distribution centres in Ireland and Spain to strengthen our European customer proposition, and we expect European revenues to regain momentum as we head into FY23.
Following the successful acquisition of AV Distribution Ltd in December 2021, we were very pleased to have successfully launched AV.com as scheduled on 13 January 2022. AV.com is currently focused on retailing Home Cinema and HiFi equipment and accessories and significantly increases our addressable market size.
We have a strong pipeline of new products, e-commerce system developments and new website features due to be launched throughout FY23, and as such, we remain confident in our long-term profitable growth strategy."
* Gear4music believes that consensus market expectations for the year ending 31 March 2022 are currently revenue of £149.2 million and EBITDA of £12.0 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 Joint Broker Peter Steel/Amanda Gray, Corporate Finance Tom Salvesen, Corporate Broking | +44 (0)20 7496 3000
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| Investec Bank plc - Joint Broker David Flin Alex Wright Harry Hargreaves | +44 (0)20 7597 5970
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| Alma PR - Financial PR Rebecca Sanders-Hewett Josh Royston Faye Calow | +44 (0)20 3405 0205 Gear4music@almapr.co.uk
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About Gear4music (Holdings) plc
Operating from a Head Office in York, Distribution Centres in York, Sweden, Germany, Ireland & Spain, and showrooms in York, Sweden & Germany, the Group sells own-brand musical instruments and music equipment alongside premium third-party brands including Fender, Yamaha 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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