Shares of York-based Gear4music (Holdings) plc, the largest UK based online retailer of musical instruments and music equipment, rose about 6% on Thursday after it announced a trading update covering the 12 months to March 31, 2021.
Gear4music said its sales rose 31% to £157.5 million and EBITDA (earnings before interest, tax, depreciation and amortisation) is expected to be no less than £19 million, up from £7.8 million and ahead of current market expectations.
Sales of musical equipment soared during lockdown. Shares of Gear4music have risen more than 200% over the past 12 months to give it a current stock market value of around £170 million.
Gear4music CEO Andrew Wass said: “I am very pleased to be reporting results that are ahead of our previous expectations, representing a transformational FY21 trading performance for the group, and building on the significant progress we made in FY20.
“Further improvements in gross margins have driven our profits to record levels, amplified by the previously reported exceptional sales growth and marketing efficiencies which were driven by COVID-19 lockdowns, particularly evident during Q1 FY21.
“As part of the group’s ongoing strategy, the new enlarged banking facility will help us to accelerate our longer-term ambitions.
“As we lay the foundations in FY22 for the next stage of our growth journey, in addition to establishing new sales verticals, we will further strengthen our European distribution network, accelerate investment into our e-commerce platform, and consider acquisition opportunities as they arise.
“Whilst it is still very early in the new financial year, we are pleased with FY22 trading to date, relative to the exceptional period of trading during April FY21.
“We also remain mindful of the ongoing global pandemic and operational challenges posed by Brexit, but are confident that we have appropriate plans in place to mitigate their effects.
“Underpinned by our strong financial position, the board is confident that our online business model and specialist market knowledge, supported by our Europe-wide operational platform, will continue to deliver long-term sustainable and profitable growth.”