York-based online musical equipment retailer Gear4music said its revenue fell 6% to £46.4 million in the three months to December 31, 2023, reflecting previously announced “prioritisation of gross margins ahead of sales growth.”
In a trading update, Gear4music said peak season trading was in-line with board expectations, with strong margin progress and trading in line with full year market expectations.
Gear4music believes that current consensus market expectations for the year ending March 31, 2024, are for revenue of £144.1 million, adjusted EBITDA of £9.8 million, adjusted profit before tax of £1.3 million, and pre-IFRS16 net debt of £11.6 million.
The firm said “strong” gross margin of 28.2% (FY23 Q3: 25.6%) “more than offsets lower revenues.”
Gear4music’s CEO Andrew Wass said: “We are pleased to report that financial performance during our FY24 peak seasonal trading period was in line with the board’s expectations, and we have continued to make good progress with our previously stated objective of prioritising profitability ahead of revenue growth.
“As anticipated Christmas trading returned to ‘historically normal’ patterns, with a robust Black Friday period and peak revenues occurring the week before Christmas, following a relatively subdued period of trading in October and early November.
“January trading to date continues to be in line with the board’s expectations.
“We are confident that the actions we have taken during FY24 to improve our gross margins and reduce our cost base and net debt ensure that the business is well positioned for profitable growth during FY25.”