Strong demand for children’s digital pianos and ukuleles for adults boosted sales at musical instruments retailer Gear4music, which announced record results in its first year as a listed company.
The York-based firm reported 94 per cent growth in PA systems, speakers and lighting equipment following a resurgence of live bands in pubs and other venues.
Gear4music’s chief executive Andrew Wass said: “People are very interested in playing live music again in pubs. There have been changes to the licensing laws so it’s easier to put on live music.
“We introduced a Junior Digital Piano for £150 designed for kids between the ages of three and nine. There hasn’t been a piano for kids on the market before.
“Demand for folk instruments surprised us all, particularly ukuleles which are popular because they’re so easy to learn to play. You can get a tune after just two or three hour learning.”
He was speaking as the firm announced a 46 per cent increase in revenue to £35.5m in the year to February 29. Adjusted earnings rose 100 per cent to £1.7m and the group made a pre-tax profit of £6,000 following IPO costs of £606,000. This was up from a £800,000 loss the previous year.
Mr Wass said the group’s float 11 months ago has been highly beneficial for the company.
“It’s been fantastic for the business and has put us in a really strong place in the market. Adjusted earnings doubled last year,” he said.
The group has benefited from the introduction of online consumer finance, which has enabled customers to pay for instruments over a period of one to four years.
“If you want to buy online you can spread the payments over 12 to 48 months. We are making it really easy for people and attracting a different sort of customer,” said Mr Wass.
Gear4music now sells a third of its products in Europe where it has seen strong growth
The firm said that strong Continental sales were driven by competitive pricing and the group’s online model cuts out the cost of having high street stores.
The group added more than 190,000 new customers over the year and following a successful trial over Christmas, it has introduced seven days a week delivery on a large range of products which has received good customer feedback.
The firm has taken on a number of new apprentices and now employs 150 people in York, up from 138 the previous year.
Analyst George Mensah at Shore Capital said: “An improved range supported the company’s performance domestically, with UK revenue growth at 39 per cent in full year 2016, up from 27 per cent in 2015.
“Gear4music exited the period with a net cash position of £2.6m, having used funds raised during the IPO in June 2015 to deleverage the balance sheet. Notably the company has stated that in light of a more robust financial position, it will review its dividend policy during 2017.”
Gear4music said it has seen strong sales momentum during the first two months of the new calendar year.