Gear4Music tunes up for growth

Gear4Music is tuning up to gain momentum in Europe after investments in its mainland operations.

Its European distribution centres are “materially improving” its proposition in Northern Europe, it said in a statement this morning.

CEO Andrew Wass is preparing to address shareholders at an AGM today, in which he will say the York-based instrument and music supplies retailer is on track this year, with strong UK and international growth. It said that the first half was very strong and it anticipates further growth, particularly in European sales, in the second half.

It emphasised that the first half of the current financial year will include the costs of embedding its European distribution centres and setting up its recently acquired head office in York.

Wass will say: “Our strategy of investing to deliver long term growth remains on track, and was further bolstered in May 2017 when we raised £4.2m of additional growth capital in an oversubscribed placing. I would like to thank our existing and new investors for their support.

“As previously outlined, the current financial year is expected to follow a more typical seasonal trading pattern, with a higher proportion of sales and profits being generated during the second half of the year than was the case in the previous year.

“Based on the overall performance of the business during the financial year to date, the Board is confident of another year of good progress.”

Paul Hickman, analyst at Edison Investment Research said: “Gear4music (G4M) confirms that trading is on track for the first four months of FY18. The return to a more normal second half-weighted revenue split has already been flagged.

“Significant development of the offer and the platform is underway as the company focuses on the international opportunity. Given this focus, the market’s expectation of the time the company is likely to take to build European market share may be too cautious, which would imply upside for the share price.”