Online retailer hits the high notes during lockdown

Online music retailer Gear4music has turned its performance up to 11 during lockdown, putting it on track for a strong year.

It now expects its profits for the current year, to March 2021, will be “meaningfully ahead” of its previous forecasts.

In the three months to June, revenues increased by 68% to £37.3m – adding £1m-a-week in sales.

Chief executive Andrew Wass said Gear4music is continuing “to achieve higher gross margins and with a lower marketing cost than we would typically expect”.

Investors have responded well to previous updates and last night’s close of 410p was 45% higher than its pre-lockdown peak in February and three times higher than the lows seen in mid-March. In early trading its shares were up 14% to 460p, giving the company a market value of nearly £100m.

The York-based retailer is building on strong foundations, having turned a £0.6m pre-tax loss in 2019 into a £3.1m profit in the year to March.

Its revenues had been nearly evenly split between the UK and international, but an 80% increase domestically in the last quarter has shifted this closer to 60-40.

Wass added: “Whilst still early in the current financial year, the board is confident that a significant improvement in profits will be achieved for the full financial year, which are now expected to be meaningfully ahead of our previous expectations.”