- Sales ahead of estimates
- Full year profit seen in line
- Year-end changed to 28 February
Global music and audio products group Focusrite (TUNE:AIM) said it expects full year revenue to be up 6% to approximately £168 million, ahead of market forecasts, while profit is projected to be in line with current expectations.
The news was well received with the shares jumping 14% higher to 187.4p, leaving them down by around a quarter year-to-date.
Analysts at Berenberg commented: ‘Overall, we view this as a positive statement given the large number of headwinds, with effective management action appearing to bear fruit.
‘We continue to regard Focusrite as a high-quality business, which has been winning market share during an industry-wide downturn.’
RESILIENT PERFORMANCE
Revenue to 31 August came in at £168 million compared with consensus forecasts of £163 million despite a negative foreign exchange translation impact due to a weaker dollar.
Content creation was the standout performer, supported by a refreshed Scarlett (audio interface) range and incremental launches at studio monitors division ADAM and synthesizer company Sequential.
Audio reproduction revenue was slightly lower year-on-year, but in line with previously indicated post-Covid trends.
Gross margins improved in the second half despite tariff increases, driven by selective price increases and product mix. This was offset by higher overheads reflecting normalisation of variable remuneration and inflationary pressures.
Consequently, EBITDA (earnings before interest, tax, depreciation, and amortisation) is expected to be in line with market expectations which sit between £24.5 million and £26 million.
Net debt closed at £11 million, an improvement on last year’s £12.5 million, reflecting ‘strong’ cash generation and disciplined capital allocation.
‘The company has maintained its £50 million credit facilities, which alongside year-on-year net debt improvement and strong cash generation indicates it is well placed to pursue mergers and acquisitions, in our opinion,’ said Berenberg.
CHANGE OF YEAR-END
As previously communicated, Focurite is changing its financial year end from 31 August to 28 February, which means its next audited results will cover the 18-month period to February 2026.
The company will report its unaudited results for the year to 31 August in early November 2025.
