York’s Gear4music: quarterly sales up 30% to £52m

Shares of York-based international online music equipment retailer Gear4music rose another 8% on Thursday after it published a trading update for the three months to December 31, 2020.

Gear4music said quarterly sales rose 30% to £52.2 million with UK sales up 10% and sales in Europe and the rest of the world soaring 51%.

Gross profit during the quarter rose 47% year-on-year to £15.6 million.

Gear4music said it expects FY21 EBITDA to be ahead of expectations, and not less than £16.5 million (FY20: £7.8 million).

Gear4music’s share price has soared about 270% in the past 12 months as sales of musical instruments and equipment soared during lockdown.

Gear4music CEO Andrew Wass said: “I am pleased to report a very successful FY21 peak trading period, that continues to reflect the significant commercial and operational progress that we have made during the last two years, alongside the continuing hard work and commitment of our staff.

“Strong growth during the period has been driven by products that can be used and played at home, including guitars, keyboards and home recording equipment.

“We know many of our customers are looking forward to rehearsing and performing together again, and as social distancing restrictions are eased, we expect our live sound, drums and orchestral categories to return to stronger growth.

“As expected, the end of the Brexit transition period and the UK’s departure from the EU customs union was not without its challenges, which we had extensively planned for and have carefully managed.

“New cross border processing costs have been introduced, alongside the added complexity and cost of additional rules of origin duties contained within the Brexit trade deal.

“The planned scale-up of our European hub infrastructure has provided a solid operational platform to help overcome these challenges, and also helped to mitigate the impact of port closures in December 2020 as a result of COVID.

“Whilst there are further refinements for us to make, I am pleased that the planned reconfiguration of our delivery systems and transport network has performed well, and has supported stronger trading since 1 January 2021 than the board had initially expected.

“As a result of the very successful Christmas trading period, and early indications of positive trading post-Brexit, we expect to report results for the full financial year ahead of recently upgraded consensus market expectations.

“Notwithstanding what has been an exceptional period of trading since lockdowns began in March 2020, the Board remains confident that the Group is well resourced and positioned to deliver further growth.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.