Impressive sales growth at online musical instruments and equipment retailer Gear4music (G4M:AIM) sends shares in the £26.5 million cap up 6.8% to 140.5p.
A year-end trading statement reveals like-for-like sales grew by 46% to £35.5 million in the 12 months to 29 February, beating Panmure Gordon’s £32.6 million target.
The higher-than-expected growth suggests its positive Christmas trading has continued well into the New Year.
Gear4music says full year revenue and profits will be at the higher end of the board’s expectations.
UK sales grew by 39% and European sales increased by 73%, driven by competitive pricing and encouraging customer growth. Over 190,000 new customers were added during the year.
Chief executive Andrew Wass says its investment into stock, systems and website improvements has helped it to significantly increase market share.
Panmure analyst George O’Connor suggests this momentum should continue in 2016 as Gear4music benefits from a positive tailwind from its European sales traction, a growing customer population and its new 24/7/365 service.
The group is expected to swing from a pre-tax loss of £600,000 in the year ending February 2015 to a profit of £700,000 in 2016.
‘Gear4music is evidently well-managed, is making competitive gains, is best in niche, growing, cash generative with an increased user footfall,’ says O’Connor.
We wrote an in-depth article on Gear4music in the 3 September issue of Shares. You can read the online version here.