Musical instruments retailer slips to a loss amidst tough trading conditions
York-based Gear4music says it has contended with a difficult period for retailers, with high levels of inflation and increasing interest rates impacting consumer confidence and disposable income.
Reporting its audited results for the year ended 31 March 2023 the online musical equipment retailer, has recorded revenues of £152m (FY 2022: £147.6m) and a pre-tax loss of £400,000 (FY 2022: £5m).
The group’s reported EBITDA of £7.4m is 34% below FY22 and 5% below FY20.
Andrew Wass, chief executive officer said: “I am pleased to be reporting FY23 full year results that are in line with guidance provided in April, with the business generating revenues of £152m and EBITDA of £7.4m.
“Throughout what has been a challenging year, we continued to make good progress in building the technical and operational infrastructure required for our long-term success as the UKs leading retailer of musical instruments and equipment.
“We have continued to make good progress in reducing our bank debt and to provide certainty and headroom for the medium term, we have renewed our committed borrowing facility with HSBC at £30m for a further three-years.
“To ensure the group can return to profitability during FY24 H2, we will focus on product margins, efficiency and overhead cost reduction ahead of revenue growth, while we continue to develop new growth initiatives for the longer term.”
The business notes customer demand across its markets remains volatile and difficult to predict, reflecting the continuing impact of geo-political and macro-economic uncertainties affecting consumer confidence across Europe.
But the company stresses its long-term prospects are positive, noting it now has an operational infrastructure in place capable of delivering revenues of more than £250m.
