Gear4music reports weaker than expected consumer demand during February and March

Gear4music, the largest UK based online retailer of musical instruments and music equipment, today said it was moderating its overall growth expectations for the new financial year.

The company has published a year-end trading update covering the 12 months to 31 March 2022.

The company said it had achieved strong financial and operational progress compared with pre-Covid trading.

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It said revenues and EBITDA were slightly lower than FY22 (full year 2022) consensus market expectations, due to weaker than expected consumer demand during February and March 2022.

The company has published a year-end trading update covering the 12 months to 31 March 2022. Picture: PA

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Gear4music's Chief Executive Officer, Andrew Wass, said: "I am pleased to report strong revenue and profitability growth during FY22 compared against pre-pandemic levels.

"Although FY22 financial performance has been impacted by weaker consumer demand during February and March, we retained a significant proportion of the exceptional gross margins that benefited from Covid lockdowns during FY21.

"We also achieved a 41% improvement in EBITDA compared with FY20 despite the impact of Brexit. This clearly demonstrates our long-term strategy, focusing on profitable growth, is on track and working well.

"We look forward to building on these accomplishments during FY23, supported by a pipeline of new growth orientated initiatives, e-commerce platform upgrades, and our recently launched AV.com website.

"Short term inflation-linked overhead cost pressures and weaker consumer confidence across the broader retail landscape will mean the best opportunities for stronger growth during FY23 are likely to be in H2.

"We are, accordingly, moderating our overall growth expectations for the new financial year, which we believe is the prudent approach in the current environment. During what may be a more challenging FY23 H1 retail environment, sales and margins will be supported with good levels of inventory across our distribution centres, continuing expansion of our European operations to drive European website conversion, and sufficient working capital to continue investing where appropriate.

"We believe we have the right operating structure to continue accelerating our market share gains and remain confident in our medium and long-term profitable growth strategy. We look forward to providing further details of our progress when we publish our full FY22 results in June."