Gear4music shares up 10% amid strong trading

Shares of York-based online music equipment retailer Gear4music rose 10% on Tuesday after it reported a strong trading update for the six months to September 30, 2019.

Gear4music said it had sales growth of 16% to £49.4 million in the period, while gross profit increased 29% to £12.4 million and gross margin improved from 22.7% to 25.2%.

Gear4music CEO Andrew Wass said: “We have restored our gross margins to FY18 levels whilst at the same time continuing to grow our revenues and taking market share.

“International sales growth continues to be strong, and whilst the UK market remains highly competitive, we have returned to a more profitable margin structure and believe that this is the right strategy from which to grow our revenues going forward.

“Our warehousing and infrastructure teams have worked tirelessly during the year to ensure we have a robust logistics operation in place ahead of our peak FY20 H2 trading period, and we are confident that we now have the capacity and efficiency required to make the most of the opportunities available to us.

“Our re-focused growth strategy is now in place and we are confident that the business is effectively configured to achieve a sustainable level of profitable growth.

“As such, we continue to trade in line with our full year EBITDA expectations as we head towards our seasonal peak.”