Focusrite maintains expectations amid economic uncertainty
Focusrite
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16:55 27/03/25
Audio production equipment specialist Focusrite reported first-half revenue growth in an update on Thursday, with performance in line with expectations, despite margin pressure from freight costs and product mix.
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The AIM-traded company said it anticipated a stronger second half, supported by pricing adjustments and new product launches.
Revenue for the six months ended 28 February was expected to be at least £80m, up from £76.9m in the same period last year.
Growth in the content creation division, which increased around 5% after adjusting for a planned stock increase in the US, was offset by a 6% decline in the audio reproduction segment.
The latter was continuing to normalise following a post-pandemic surge and a strong first half in 2024, the board said, although revenue was expected to improve in the second half due to seasonal factors.
Gross margins compressed slightly in the first half due to higher freight costs and product mix, but Focusrite said it expected the pressures to ease with planned pricing adjustments and the introduction of new products.
The company said it had also communicated price increases to customers in response to US tariffs, effective from 1 May.
Overheads increased as expected, primarily due to a reset of variable remuneration levels.
Net debt stood at about £18m as of 28 February, compared to £12.5m at the end of August.
The increase reflected final dividend payments and higher stock levels in anticipation of US tariffs.
Focusrite said it expected net debt to improve in the second half, with an overall cash inflow projected for the full financial period.
The company said it maintained £50m in committed credit facilities, ensuring flexibility for strategic initiatives and future growth.
Despite a market that was continuing to normalise after previous volatility, Focusrite said it was confident in its leading position, underpinned by steady end-user registrations.
While economic conditions remained uncertain, the company’s expectations for the full 12-month period within its current 18-month financial cycle were unchanged.
However, as previously noted, first-half EBITDA would be lower than the prior year, with a greater weighting towards the second half.
Focusrite said it would provide a detailed update when it releases half-year results in late April.
At 1213 GMT, shares in Focusrite were down 2.35% at 168.45p.
Reporting by Josh White for Sharecast.com.