Gear4music strikes the right note overseas
MUSICAL INSTRUMENTS retailer Gear4music has reported strong half-year growth, boosted by a 70 per cent increase in overseas sales.
The York-based firm also enjoyed a 30 per cent increase in UK sales to £17.9m in the six months to August 31, leading to a 44 per cent increase in total revenue to £31.2m.
The group has benefited from increased customer awareness as active customer numbers rose 44 per cent to 390,000 customers.
Gear4music’s chief executive Andrew Wass said: “We are very pleased with our trading performance over the last six months, with 44 per cent revenue growth being ahead of our expectation for the first half.”
He said this equated to a growth rate of 150 per cent over the past two years.
“Revenue growth in our core UK market continues to be strong, alongside very strong growth in our international markets, driven by our new distribution centres improving our customer proposition resulting in market share gains across Northern Europe,” he added.
The firm said investment over the first half has increased operational costs and restricted margins in the short term.
“Encouragingly, revenue growth over the last six weeks supports our expectation that, as previously stated, revenue and profitability is likely to be more second half weighted in 2018 than in 2017,” said Mr Wass.
The group raised £4.2m in May, which has enabled it to accelerate investment.
Mr Wass said the group is trading in line with expectations and is well prepared for the busy Christmas season.
Gear4music will report interim results for the six months to August 31 on October 24.
Analyst Peter Smedley at Panmure Gordon said: “Today’s encouraging pre-close trading update leads us to believe that Gear4music has profitably navigated a period of elevated investment into its proposition and infrastructure, whilst simultaneously delivering continued – and better than expected – strong sales growth in both the UK and internationally for overall first half sales growth of 44 per cent, one of the highest levels of growth amongst our universe of UK-based structural growth retailers.”
Revenue growth in our core UK market continues to be strong. Andrew Wass, chief executive of Gear4music