'Challenging' market conditions hit MusicMagpie, shares slide

MusicMagpie reported a fall in interim revenues on Thursday, after a "challenging" start to the year.

The recycling retailer, which buy and sells pre-used technology, said postal strikes and low consumer confidence had hit trading in December and January.

Although trading strengthened from February onwards, revenues in the six months to 31 May were still down year-on-year, falling to £61.9m from £71.3m.

Adjusted earnings before interest, tax, depreciation and amortisation rose to £2.8m from £2.6m, after the cost of sales eased.

Pre-tax losses widened significantly, however, to £3.2m from £1m a year previously after an exceptional gain of £1.1m, recorded in November 2022, was unwound.

The gain related to an energy contract secured below market price, but has since been unwound based on usage and subsequent changes in electricity prices.

Looking to the second half - when the majority of its profits are generated - MusicMagpie acknowledged that trading conditions remained "challenging due to the prevailing macro-economic factors".

But it added that the momentum seen in the second quarter "had thus far been carried into the early part of the third quarter", leaving it confident of meeting full-year expectations.

Steve Oliver, chief executive officer, said: "After a challenging first quarter, I am pleased with the performance of the business during the second quarter.

"Looking ahead, we have a clear plan for our rental business and for our enhanced buy now, pay later offering, which should drive sales and make our offering even more attractive to consumers looking to save cash.

"Despite the tough consumer environment, we expect consumers to increasingly look to the refurbished tech market and are confident that the business has the right strategy in place for future profit growth."

The AIM-listed stock - which trades as MusicMagpie in the UK and Decluttr in the US - was off 13% at 16.35p at 0915 BST.