Gear4music delivers increase in revenues during period of 'volatile' customer demand

The group said its revenues for the year ended March 31 2023 were three per cent ahead of the previous year, during a period when high levels of inflation and rising interest rates had a damaging impact on consumer confidence and disposable income.

Andrew Wass, the chief executive, said: "I am pleased to be reporting full year results that are in line with guidance provided in April, with the business generating revenues of £152m and EBITDA of £7.4m.

“Throughout what has been a challenging year, we continued to make good progress in building the technical and operational infrastructure required for our long-term success as the UK’s leading retailer of musical instruments and equipment.

"A particular recent highlight has been the launch of our second-hand system, which whilst still in 'soft launch' stage, has traded over 1,000 products within the first three months.

“We have continued to make good progress in reducing our bank debt and to provide certainty and headroom for the medium term, we have renewed our committed borrowing facility with HSBC at £30m for a further three-years.

He added: “Market conditions have continued to be challenging since our last update in April, and we are taking the appropriate and necessary actions to ensure our business is correctly configured, resourced and positioned strategically for long term success.

"To ensure the group can return to profitability during FY24 H2 (the second half of the 2024 financial year), we will focus on product margins, efficiency and overhead cost reduction ahead of revenue growth, whilst we continue to develop new growth initiatives for the longer term."

Commenting on outlook, Gear4music said: “Customer demand across our markets remains volatile and difficult to predict, reflecting the continuing impact of geo-political and macro-economic uncertainties affecting consumer confidence across Europe.

"Nevertheless, having delivered several development-led growth initiatives in FY23 and markedly reduced net debt, the board is confident that the group's customer proposition, enhanced operational infrastructure and balance sheet will enable the group to achieve its long-term business objectives, namely taking market share and delivering operational efficiencies providing the platform for profitable growth.”

The statement added: “The launch of our second-hand platform in March 2023 is our timely advancement into recycling and the circular economy.”

The group’s global expansion has been supported by distribution centres in Sweden, Germany, Ireland and Spain.