Gear4music swings to almost £600K loss despite sales spike

Music equipment and instrument retailer Gear4music has posted losses before tax of £600,000 for the 13 months ended 31 March 2019.

EBITDA also declined to £2.3m during the period, £1.2m lower than 2018. Despite this, revenue increased by 48% to £118m during the period, compared with £80m recorded the previous year, and the retailer said it is “confident” in delivering strong growth and profit improvements in FY20.

Earlier this year the retailer issued a warning on profit for 2019 saying it would be “slightly below” last year’s results. The warning came against the backdrop of a 41% year-on-year sales growth, which saw sales rise to £48.7m. The group also announced that UK sales had risen by 36% to £25.5m, with sales in the rest of the world rising by 47% to £23.2m.

CEO Andrew Wass said: “Alongside delivering strong revenue growth in the period, we have worked hard to implement a number of commercial and operational initiatives to address the previously reported issues.

“Our FY20 H1 focus is on improving gross margins and ensuring a robust operational infrastructure is in place ahead of our peak H2 trading period, and I am pleased to report these actions are already yielding positive results.”

He added: “We are confident that we have the right strategy, customer proposition, financial resources and focus, to overcome the challenges of FY19, and achieve our objectives of maximising customer satisfaction and delivering value to shareholders.”