MusicMagpie shares plummet by 70% as it warns on profits

Steve Oliver, CEO of musicMagpie at its Distribution Centre

Shares in MusicMagpie plummeted by 70% this morning after it warned that profits for the current financial year are set to fall below expectations.

In a trading update, the Stockport-based Listed company said that the performance of its consumer technology business, which represents about two thirds of group revenue, had been weaker than expected and margin pressures have persisted.

The company said: “Historically, October and November have been material contributors to overall group performance, with heightened activity and consumer interest around the Black Friday sales period, in particular.

“Whilst the group continues to expect that Black Friday will prove to be a peak trading period, it now believes it is prudent to reduce its expectations for contribution from this period due to the worsening economic outlook and increasing cost of living pressures on the UK consumer.”

Shares in the group dropped to 8p per share from this morning’s opening of 19p and last night’s close of 27.50p.

In July, MusicMagpie posted a dip in interim revenues, falling to £71.3m from £72.8m a year previously, which it blamed on “squeezed” customer wallets.

Adjusted earnings before interest, tax, depreciation and amortisation fell to £2.6m from £6.2m, although MusicMagpie said it remained in line with expectations for the full-year.