Weaker consumer confidence across retail landscape set to continue, says Gear4music

The largest UK based online retailer of musical instruments and music equipment has announced its financial results for the year ended 31 March 2022.

The company said its gross profit of £41.1m was 11% below an exceptional, Covid boosted performance the previous year and 32% ahead of its performance pre-pandemic.

Commenting on the results, Andrew Wass, Chief Executive Officer said: "During FY21, Gear4music was reportedly the world's fastest growing large online retailer of musical instruments and music equipment, being uniquely positioned to serve customers during Covid lockdowns. As previously reported, this meant our FY21 financial results were exceptional, and comparing FY22 against FY20 pre-pandemic levels provides a better indication of the progress the business has made.

"I am pleased to be reporting FY22 full year results today that are slightly ahead of our previous expectations, with EBITDA of £11.2m and pre-tax profit of £5m. These results are a significant improvement on FY20 pre-pandemic levels, showing the continued growth and development of our business, and are a testament to the hard work and determination of our talented teams."

"In April 2021, we agreed a new £35m borrowing facility with HSBC which, as planned, was partially utilised by making acquisitions totalling £11.4m to help drive future growth. We also deliberately invested over £17m into additional short-term inventory, to ensure continuing high levels of customer service and strong website conversion during what has been a prolonged period of supply chain disruption. We continue to have a significant amount of headroom within our banking facilities and covenants, and during FY23 we expect the additional inventory will reduce, and our year-end net debt position will decrease accordingly."

"We have a strong pipeline of growth orientated projects due to be deployed during FY23, including the launch of AV.com into Europe and our second-hand platform, alongside multiple new product releases, including from the recently acquired Premier brand which celebrates its 100th anniversary."

Mr Wass added: "As previously stated, weaker consumer confidence across the broader retail landscape is likely to continue impacting our progress during H1, although alongside careful overhead cost management we believe our growth initiatives will help offset these headwinds and provide opportunities for stronger growth during H2. We continue to trade in line with market expectations for FY23 and remain confident in our medium and long-term profitable growth strategy."