Shares of York-based online musical equipment retailer Gear4music fell as much as 10% after it announced a year-end trading update covering the 12 months to March 31, 2023, saying that revenues and profits were “impacted by weaker consumer demand during February and March.”

The firm’s shares are down about 80% for the past year, reducing its stock market value to about £17 million.

Gear4music said its total sales for the year rose 3% to £152 million and EBITDA earnings are now expected to be in the range of £7.3 million to £7.7 million.

Gear4music said consensus market expectations had been revenues of £155.1 million and EBITDA of £8.9 million.

Gear4music CEO Andrew Wass, said: “Whilst challenging economic conditions meant we were not able to grow revenues and profits as intended during FY23, we are pleased to have made good progress with our objective of significantly reducing the group’s net debt position, from £24.2m a year ago, to £14.5m as at 31 March 2023.

“The further investment into our European distribution infrastructure during FY22 underpinned our progress in Europe during FY23, although high rates of inflation continue to squeeze consumer spending on discretionary items across all of our markets.

“In the UK, as previously announced, courier disruption impacted trading during our busiest period.

“We are confident, however, of profitability recovering in FY24 as growth initiatives such as AV.com gain traction and the benefits of our continued focus on overhead cost efficiencies filter through.

“In March 2023 we strengthened our position as the UK’s leading retailer of musical instruments and equipment by launching our latest growth initiative, entry into the second-hand market.

“Our proprietary second-hand trade-in system simplifies the process for consumers of selling their equipment, providing instant trade-in prices across thousands of products.

“Customer trade-in take-up has been encouraging during the initial soft-launch period and, as we scale-up the number of products available for trade-in and launch the system across Europe, we are confident our second-hand platform will help to support a return to stronger growth in the business.

“Although the current economic challenges are reflected in our FY23 results, we have taken decisive actions to ensure the group continues to be appropriately configured and well-funded.

“As FY24 progresses, we expect to make further progress in reducing our net debt, and believe we are well positioned to return to profitable growth.”