Musical equipment retailer Gear4music said on Tuesday that revenues and profits fell in the twelve months to March 31 as Covid-fueled benchmarks proved too difficult to match.
Gear4music reported a 6% drop in year-on-year revenue to £147.6m, an 11% drop in gross profit to £41.1m and a contraction of 150 basis points in gross margins to 27.9%. Underlying profit was down 43% to £11.2m and pre-tax profit was 66% lower at £5.0m.
However, Gear4music also managed to generate a 23% increase in revenue, a 32% increase in gross profit and a 200 basis point improvement in gross margin over pre-COVID business year performance. 2020.
Net debt at the end of the year was £24.2m, a marked difference from the net cash balance of £2.7m reported in the same period a year earlier, G4M using partially its new £35.0m revolving credit facility for mergers and acquisitions and an increase in stock as part of an effort to hedge against supply chain issues and price inflation.
Managing Director Andrew Wass said: “In FY21, Gear4music would have been the world’s fastest growing large online retailer of musical instruments and musical equipment, being uniquely positioned to serve customers during Covid closures. As previously stated, this meant that our financial results for FY21 were outstanding. , and comparing FY22 with FY20 pre-pandemic levels provides a better indication of the company’s progress.
“I am delighted to report results for FY22 today which are slightly above our previous expectations, with EBITDA of £11.2m and pre-tax profit of £5.0m. These results are a significant improvement over pre-pandemic levels in fiscal 2020, demonstrating the continued growth and development of our business, and a testament to the hard work and determination of our talented teams.”
In 1010 BST, shares of Gear4music were up 4.29% at 182.50p.
Reporting by Iain Gilbert on Sharecast.com