The head of musical equipment firm Gear4Music struck an upbeat tone about the company’s prospects despite a flattening of growth.
In a trading update the York-based retailer reported a growth in revenue of 43 per cent to £80m following continuing strong growth in the UK and Europe.
Its active customer numbers increased 39 per cent to 474,600 and its own-brand sales increased in tandem with those of its competitors.
However EBITDA figures will remain comparable with that seen at its last yeat of full-year results, something Gear4Music attributed to a series of investments into infrastructure, systems and development capabilities.
Despite the update investor group Peel Hunt said it was maintaining its buy recommendation on Gear4Music, saying it stood by the claim its earnings would double over the next three years.
Gear4music’s chief executive officer, Andrew Wass, said: “We are very pleased to have grown our revenues from £56m last year to £80m this year, particularly given the heightened economic uncertainty that has impacted many retailers during the last 12 months.
“As previously communicated, in 2017 we focused on scaling-up our business to ensure we have the capacity for further growth, investing into our European distribution centres, our new head office in York, and expanding our platform development capability.”
He added: “We are confident that we are well placed to significantly grow both revenues and profitability during the next 12 months, as margins normalise, and the up-front investments we have made clearly demonstrate their ongoing value to the business.”
A Peel Hunt spokesperson said: “Today might not be the day that G4M does much work towards our target price but we continue to believe the equity story here is highly compelling and with operational gearing starting to emerge next year, we remain keen buyers.”
The group will report its full-year results on May 15.