MusicMagpie sees EBITDA rise 7.7% in H1

MusicMagpie has reported adjusted EBITDA of £2.8m, up 7.7% in H1 2023 compared with £2.6m in H1 2022, according to its interim results for the six months ended 31 May 2023.

It also stated that following a challenging start to H1, with postal strikes and low consumer confidence impacting December and January, trading performance strengthened from February onwards, driving a strong Q2 EBITDA which was up 42% on Q2 2022.

However, the group’s H1 2023 revenue declined to £61.9m compared with £71.3m in H1 2022.

Its Consumer Technology gross profit also increased 13.5% to £10.9m (H1 2022: £9.6m), contributing 59% (H1 2022: 50%) of total group gross profit.

Additionally, gross margin increased 3.1% to 29.7% (H1 2022: 26.6%) driven by a combination of direct from consumer product sourcing, a higher proportion of sales through the MusicMagpie store and an increasing contribution from rental subscriptions.

Its percentage of UK Consumer Technology sales on the musicMagpie store, versus third party marketplaces, saw a 79% rise, up from 72% in FY22.

The group made strong progress in its rental subscription service as its active subscriptions increased to 39,000 as at 31 May 2023 (31 May 2022: 24,000).

Consumer Technology revenue and Disc Media and Books revenue also dropped to £41.1m and £20.9m, as the group prioritised higher margin sales.

Looking ahead the group said that despite challenging trading conditions due to the prevailing macro-economic factors in the market, the “the board is confident of the group meeting its full year expectations” as “strong momentum” seen in Q2 has thus far been carried into the early part of Q3 of our 2023 financial year.

Steve Oliver, chief executive officer of musicMagpie, said: “After a challenging first quarter, I am pleased with the performance of the business during Q2 and the momentum that has been carried over into H2, which is traditionally the seasonally more important half for musicMagpie.

“By focusing on ‘buying and selling for more margin’, which includes sourcing more products directly from consumers and increasing the proportion of sales made through the musicMagpie store, we have delivered a strong improvement in Consumer Technology gross profit.”

He added: “Looking ahead, we have a clear plan for our rental business and for our enhanced Buy Now Pay Later offering, which should drive sales and make our offering even more attractive to consumers looking to save cash. Despite the tough consumer environment, we expect consumers to increasingly look to the refurbished tech market and are confident that the business has the right strategy in place for future profit growth.”