Revenues slip at musical instruments retailer amidst lower European demand
Online musical equipment retailer, Gear4music, has reported total revenues of £62.6m for the six months to 30 September 2023, down 6% on the equivalent period for last year (2022: £66.3m).
The listed York-headquartered business says this result reflect its previously announced focus on prioritising gross margins ahead of sales growth, in what continues to be a difficult market.
It says it has made £4m worth of annualised cash savings during the FY24 H1 period, which will benefit the business from FY24 H2 onwards.
Chief executive officer, Andrew Wass, said: “We have continued to make good progress with our strategic objectives in what we anticipated would be challenging market conditions. We are pleased to have achieved growth in the UK, whilst our European markets have been impacted by lower consumer demand.
“Mindful of the current trading environment, we have retained our pricing discipline and focused on improving gross margins.
“In addition, we have taken decisive action to drive further efficiencies and ensure our cost base is appropriately configured to deliver our profitable growth strategy.”
Gear4 music says its full-year outlook remains in-line with consensus market expectations of revenues of £161.7m, EBITDA of £9.8m and profit before tax of £1.2m.
Further detailing the measures it has taken to cut costs, the company notes its headcount has been reduced by 20% compared with September 2022.
There has been a £2.5m reduction in software development team annual salaries, a £1m reduction in other annual wages and salaries, along with a £500,000 annualised reduction in other administrative expenses.
The company notes UK revenues continue to be stronger than European revenues. It adds that its second-hand operation continues to perform well and shows signs of being “a long-term growth driver.”
