CEO Andrew Wass (pictured) reports 66% growth in like-for-like sales for the four months to June and insists Gear4music is 'well positioned to take advantage of the short-term export opportunities created by the UK's EU Referendum vote'.
Founded by former sound recording engineer and keen pianist Wass in 2003 and operating out of an office, showroom and distribution centre in York, the £25 million cap is the largest UK-based online retailer of musical instruments and music equipment.
Selling own-brand instruments as well as beloved third party brands such as Fender, Yamaha and Gibson, Gear4music is a play on the shift towards online retailing in a mature UK market. Its expanding product range encompasses everything from kazoos costing less than a quid to high-ticket digital pianos, drum kits and guitars.
Gear4music's latest update will be music to the ears of shareholders attending today's AGM in Leeds. Total sales shot up 66% to approaching £13.8 million in the opening four months, with European sales rocketing 137% higher to £4.7 million and UK revenues up an impressive 44% to nearly £9.1 million.
Overseas expansion is happening rapidly, Gear4music reaping the benefits of investment in multi-lingual, multi-currency websites in 19 countries. European sales stormed 191% higher in the first full week following the Brexit vote, aided by the plunging pound, and now speak for 34% of the top line, a proportion that will rise with a first European warehouse set to be up and running in time for Christmas.
'We are very encouraged by our trading performance during the first four months of the new financial year,' comments Wass. 'We continue to invest the proceeds from our IPO in June 2015 in our ecommerce system, stock and staff to deliver on our strategy of constantly improving our proposition, which helped drive the 66% sales growth in the period.'
He believes Gear4music is 'well positioned to take advantage of the short-term export opportunities created by the UK's EU Referendum vote, while our long-term confidence in our European business is reflected by our commitment to establish a physical European footprint before the end of the calendar year.'
Panmure Gordon's Peter Smedley reiterates his 'buy' rating and 200p price target for Gear4music, which he describes as 'a structural growth story. Given G4M's early stage of growth (reflecting, in turn, G4M's still dramatically under-penetrated market share in the ongoing structural distribution shift to online retailing of musical instruments/equipment in UK/Europe), we also believe that G4M is a poor macro proxy which should therefore allay investor concerns about negative post-Brexit effects impacting G4M in any meaningful way.'