Operating losses have narrowed at online musical instrument retailer Gear4Music, on the back of latest growth strategy.
The York-based seller said consumer confidence was still lacking in many European countries it sells to, as it revealed half year results showing operating losses narrowed to £500,000 in the six months to the end of September. Bosses said that macro-economic worries continued to weigh on customers as European and rest of world revenues fell 12% to £23m in the period, but º£½ÇÊÓƵ revenues grew 6% to £38.7m. European earnings had been impacted by teething issues with a newly introduced, outsources AI-based marketing system.
In trading since the end of September, the retailer has seen 5% revenue growth and said it is looking forward to the key Christmas selling period. It said it was still on course to meet full year market expectations of £154.7 m revenue and £2.8m pre-tax profit in the year to the end of March, 2025.
Andrew Wass, Gear4Music's executive chair said he was pleased the refreshed growth strategy was bearing improvements. He said: "Aware of the potential for ongoing weakness in the European consumer retail environment, we maintained a disciplined approach to cost management during FY25 H1, contributing to a further reduction in our net debt. While the recent º£½ÇÊÓƵ Budget will introduce additional employment costs from FY26 onwards estimated at £0.3m, we are confident these can be largely mitigated through further cost-saving measures.
"Our second-hand sales platform continued to gain significant traction during FY25 H1, with sales growing by 286% to £1.4m in the Period. We anticipate sustained strong growth in this area as we expand consumer awareness and our channels to market.
"Our long-term focus remains on growing higher-margin revenues, and we will continue to invest in areas that support this objective, such as the Studiospares acquisition announced on 22 October 2024, our second-hand platform, and our own-brand product offering, teams and infrastructure. Our full-year outlook remains in-line with consensus market expectations, we are well prepared for our seasonal peak trading period, and look forward to providing a further trading update after the Christmas period on 21 January 2025."
