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Gear4music, an online retailer of musical instruments and music equipment, has revealed it returned to revenue growth during its second quarter as its turnaround strategy started to bear fruit.
In a trading update for the six months ended 30 September 2024, the retailer revealed that overall its total revenues for the half year fell by 1% to ( £61.7m) due to a tough Q1 where revenues were down 4% YOY.
Performance was particularly strong in the UK where HY revenues were up 4% to £38m, however this was offset by a 9% decline in Europe and the rest of the world.
As a result, reported loss before tax is expected to improve by £0.7m to £1.2m compared with FY24 H1.
It said net debt was also further reduced by £3.6m to £14.5m at 30 September 2024 (FY24 H1: £18.1m,
FY23 H1: £21.8m), reflecting the normal seasonal build of inventory ahead of peak trading.
During the period, Gear4music also acquired the brand, IP and other assets of Studiospares Europe Limited for £150,000, further expanding its own-brand portfolio.
Gear4music executive chair, Andrew Wass, said: ”We are pleased to report good progress in executing the growth strategy we announced in June, with a return to growth in FY25 Q2 and further growth momentum during October trading to date. We are also pleased to have further reduced our Net Debt, and improved our overall profitability compared with the same period last year.
“This performance comes despite initial challenges with the rollout of a new AI-based marketing
system during H1, which temporarily increased marketing costs and impacted the sales mix
between our own-brand and other-brand products and our European sales. These issues have
now been resolved, and our marketing investments have stabilised. I am also pleased to report
the recent appointment of a new experienced marketing director.”
He added: “Additionally, we recently acquired the brand and certain assets of Studiospares, a business
established in 1983 with a strong reputation for high-quality studio equipment and accessories.
We are excited to integrate Studiospares’s brand offering into our existing own-brand portfolio,
which will support our long-term objective of product margin growth.
“Our second-hand sales platform gained significant traction during FY25 H1, and we anticipate
continued growth in this area as we build upon our unique offering. As we enter our peak trading season, which has historically been a key driver of our profits and revenues, the board is confident that our full-year outlook remains in-line with consensus market expectations.”
