musicMagpie revenue slips to £144.8m

musicMagpie CEO Steve Oliver

Shares of Stockport-based musicMagpie — which allows consumers to buy, rent and sell refurbished consumer technology — fell about 12% on Wednesday after the firm published a trading update for the full year ended November 30, 2022. 

musicMagpie said its full year revenue will slip to £144.8 million from £145.5 million in the prior year.

The company said its financial performance for the year is in line with management’s expectations.

“Following cautious consumer behaviour over the summer and early autumn, November saw increased activity culminating in record sales during Black Friday week,” said musicMagpie.

“Full year revenue for the group will be £144.8m (2021: £145.5m) and EBITDA will be in line with management’s expectations.

“The group’s growing rental service also had a strong year end. 

“Whilst rental reduces outright sales as consumers choose to rent rather than buy, it provides a higher margin and significantly greater profitability to musicMagpie over the lifetime of the device.

“Active subscribers at 30 November 2022 were 30,500, up 27% since the group’s interim period end on 31 May 2022. 

“To further improve recurring revenues from rentals and reduce consumer costs, the group launched a 24 month contract option in December 2022 and expects this expansion of the offering to help drive growth into the new financial year.

“With strong trading in November, net debt at 30 November 2022 was £8.2m, better than management’s prior expectations. 

“The group has a £30m committed revolving credit facility to support future growth in the rental service.

Whilst cognisant of the challenging consumer environment and growing cost pressures on both businesses and the consumer, the board remains confident in the group’s strategy and in its medium-term growth prospects, underpinned by the growing and differentiated rental proposition.”