Gear4music still playing out solid performance

Gear4music, the UK’s largest online musical instruments and equipment retailer, reported a 44% increase in total revenue in its first half on Tuesday, with continued “strong growth” in the UK and across Europe.

The AIM-traded company said active customer numbers increased by 44% to 390,000, and it claimed a “strong start” for new distribution centres in Sweden and Germany

“We are very pleased with our trading performance over the last six months, with 44% revenue growth being ahead of our expectation for H1 as indicated at the start of the year, and equates to two-year growth of 150%,” said chief executive Andrew Wass.

“Revenue growth in our core UK market continues to be strong, alongside very strong growth in our international markets, driven by our new distribution centres improving our customer proposition resulting in market share gains across Northern Europe.”

A period of investment into the company’s proposition and infrastructure in the first half has increased the company's operational costs and restricted margins in the short term, the board noted.

Encouragingly, however, revenue growth over the last six weeks supported the board’s expectation that, as previously stated, revenue and profitability is was likely to be more H2 weighted in FY18 than in FY17.

“We remain focused on delivering long-term sustainable growth through investment in our people, products, websites and operational capabilities, and raising £4.2m growth capital in May 2017 has enabled us to start accelerating investment in these key areas.

“The group continues to trade in line with our expectations and is well prepared for a busy seasonal period.”

Gear4music said it would report interim results for the six months to 31 August on 24 October.