MusicMagpie profits, revenue slump as trading normalises

MusicMagpie slid on Wednesday as it reported a slump in full-year profits and revenue as business normalised following a boost during the pandemic, and struck a cautious tone on the outlook.

In the year to 30 November 2021, adjusted pre-tax profit fell 14.4% to £7.9m, with revenues down 5.1% at £145.5m. The company said revenue was in line with management expectations, "as a result of business normalisation in FY21 following the first year of the pandemic in FY20". Compared with FY19, revenues were up 10.7%.

In the UK, revenue was down 3.1% to £115.4m, while US revenues were 6% lower at $41.5m "as the business continued with its strategy of focusing on profitable trading, protecting margin at the short-term expense of additional revenue".

MusicMagpie said it entered the new financial year with confidence following a record Black Friday sales period in both the UK and US.

"Our rental subscription service has continued to grow through Q1, however in line with current consumer trends, we have seen a moderation of outright sales and trade-in volumes in consumer tech," it added.

Chief executive officer and co-founder Steve Oliver said: "In the current uncertain climate for consumers, the benefits of buying and renting refurbished consumer technology products, whilst helping the environment, has never been more compelling. We are particularly pleased with the progress being made by our rental subscription service, which provides customers with a more affordable and flexible option than an outright purchase or a pay-monthly contract.

"We are extremely excited about its future growth prospects, and scaling this area of the business further will be a major point of focus for us in the coming year."

At 0855 GMT, the shares were down 29% at 115p.