Sales volumes surge as Gear4music invests in expansion

Online musical instruments and equipment retailer Gear4music Holdings posted a year-end trading update for the 12 months ended 28 February on Friday, reporting a 43% increase in total revenue following continuing strong growth in the UK and Europe.

The AIM-traded firm said UK sales grew 27% to £44.26m, while Europe and the rest of the world was ahead 69% to £35.84m.

That made for total sales of £80.1m.

Gear4music said conversion across all websites improved to 3.25% from 2.75% in the prior year, while active customer numbers increased 39% to 474,600.

The company said its own-brand sales growth kept pace with other brand growth throughout the period.

“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,” said chief executive Andrew Wass.

“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.”

Wass said EBITDA for the second half of the 2018 financial year would be ahead of the six-month period ended 28 February 2017, although as a result of the investments the firm made during the year into its customer proposition, infrastructure, staff, systems and marketing, the board expected EBITDA for the full financial year to be in line with its 2017 result.

“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.”

Gear4music was due to report results for the financial year on 15 May.