Music Magpie revenues fall amidst competitive second-hand market
Looking ahead, the group stated that due to the prevailing macroeconomic headwinds in the market, current trading conditions ‘remain challenging’
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Music Magpie has reported a decline in group revenues from £61.9m to £53.8m for the six months ended 31 May 2024, as it struggled in the highly-competitive second-hand market.
The group attributed the reduction to the planned conversion of its US business into a sourcing-only operation, which also saw its US sales drop to £1.6m (H1 2023: £8.5m).
However, its UK Consumer Technology outright sales were marginally up at £28.7m (H1 2023: £28.6m)
The group’s rental revenue also dipped to £3.8m (H1 2023: £4.0m), with active subscribers reducing from 37,100 to 32,700 at 31 May 2024. Disc Media and Books sales also dropped from £20.9m to £19.7m.
Additionally it reported adjusted EBITDA of £2.4m (H1 2023: £2.8m), with the prior period benefiting from a one-off £0.3m from the sale of delinquents from the rental book
The group also narrowed its losses to £3.0m (H1 2023: £3.2m loss) on lower revenues and with significantly less cash investment.
Looking ahead, the group stated that due to the prevailing macroeconomic headwinds in the market, current trading conditions “remain challenging”.
However, the second half of its financial year includes the Black Friday period and this is “historically when the majority of full year profits are earned”.
Steve Oliver, chief executive officer of musicMagpie, said: “Amidst an increasingly competitive environment for second-use technology, and with consumers continuing to feel the squeeze on their wallets, the market has undoubtedly been challenging. However, our turnover remained robust in the UK, where Consumer Technology sales held firm, and Disc Media and Books showed welcome signs of stabilisation.
“We have been proactive in delivering savings to our cost base and right sizing our business. Combined with our efforts to refine and improve the way in which we buy, sell, and rent, our business is now in a stronger position and better able to capitalise on the continued growth of second-use markets.”
Oliver added: “We have recently launched the buying of branded fashion items on the musicMagpie platform and intend to continue broadening our offering and further unlock the ‘world of inventory’ that sits in consumers’ households.”
