Gear4music sees sales soar

CEO Andrew Wass said the fall in sterling means the firm has become more competitive

M'‹usical instruments retailer Gear4music'‹ reported a huge leap in half year sales '‹and said full year results are likely to beat expectations.

The York-based group is benefiting from the collapse in sterling after the Brexit vote on June 23 as it exports instruments to Europe while underlying sales are also increasing. In the four months to June 30, sales grew at 66 per cent and in the two months to August 31, they rose 87 per cent.

The company reported a 73 per cent jump in sales to £21.6m in the six months to August 31 thanks to rising website traffic and said trading looks strong heading into the important Christmas period.

UK revenue rose 44 per cent to £13.8m while European revenue jumped 169 per cent to of £7.8m.

Active customers increased by 45 per cent and the group now has an email subscriber database of over 600,000 people.

CEO Andrew Wass said the group was motoring ahead before the Brexit vote.

"We were already going great guns before Brexit. The fall in sterling means we have become more competitive. It has helped us grow," he said.

"We are trying to put ourselves in a position where it doesn't matter if we have a 'hard Brexit' (where Britain loses access to the single market). We have got European hubs in Stockholm and we're announcing a second one in Germany. By shipping from Europe we won't have to ship from the UK.

"We can use whatever currency is appropriate. We are breaking down barriers and becoming a European business anyway."

The group has been boosted by improvements to its website as it makes small adjustments to simplify areas like the check out process.

The firm's all important trading season is the run up to Christmas and it expects to see strong sales of digital pianos priced at £200 and a new product called a cajon, a box-shaped percussion instrument originally from Peru.

"It's made out of wood, a box that makes lots of interesting sounds. It costs £60, but you can assemble your own for less than £15. We expect it to sell well at Christmas," said Mr Wass.

Analyst Peter Smedley at Panmure Gordon said: "These are excellent half year results with strong current trading.

"We raise our 2017 PBT and 2018 PBT by 21 per cent and 6 per cent respectively to £2m and £2.9m.

"The strong momentum continues which, combined with the virtuous circle of strategic re-investment into the e-commerce platform, the product range, and new capability/capacity, points to further scope for our upgraded but still conservatively framed estimates to be surpassed."