Stockport-based musicMagpie — which allows consumers to buy, rent and sell refurbished consumer technology — has announced significant growth in its subscription base with active paying subscribers rising from 7,500 to 24,000 in the past year.

In a trading update for the six months ended May 31, 2022, musicMagpie said: “It has been a resilient revenue performance overall despite the well-publicised economic headwinds impacting the consumer sector and there has been continued momentum in the group’s innovative device rental subscription service.

“Total revenue for the period was £71.3m, which was marginally down on the prior year (2021: £72.8m).

“Within this, sales in the group’s consumer technology products division (which accounts for approximately two-thirds of group revenue and is the main area of strategic focus) were up 15.9% to £46.0m (2021: £39.7m).

“Sales of disk media and books fell 23.6% to £25.3m (2021: £33.1m) with the prior year H1 a beneficiary of increased sales during the period of Covid lockdowns.

“The year-on-year growth in outright product sales in consumer technology has been intentionally tempered by promoting our contracted monthly rental subscription service over outright purchase.

“This area of the business is expected to earn higher revenue and EBITDA over the life of a device, as opposed to a one-off sale, underpinned by a contracted recurring income and cash flow stream, which will become more visible in the group’s performance in the medium-term.

“The group has taken a sustainable and disciplined approach to growth in the subscription base, and active paying subscribers are now c24,000 compared to c7,500 at 31 May 2021.

“Margin performance for H1 on consumer technology was in line with management’s revised expectations as set out in the full year results on 2 March 2022.

“This, combined with the sales normalisation of disk media and books, saw an unaudited adjusted EBITDA for the first six months of the year of £2.6m (2021: £6.2m).

“Whilst acknowledging the current uncertain economic environment facing all consumer businesses, the board is confident of achieving its full year expectations with a much stronger H2 profit performance from increased contribution from the growing rental subscribers alongside continued anticipated sales revenue growth from the recent expansion of ‘marketplace’ sales channels, including Back Market, on which the group has recently successfully launched.”

CEO Steve Oliver said: “The economic environment facing consumers is increasingly tough and the issues of affordability and cash-flow constraints are being felt by many.

“Against that backdrop, our twin proposition of giving people a way to recycle their tech products for cash, as well as our ability to sell or rent refurbished, lower cost consumer technology products, becomes increasingly attractive.

“Whilst recognising we are in the early stages of our second half, our sales channel expansion has started well and we are confident about our short term growth and remain excited about our medium-term prospects.”