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Gear4music expects significant profit rise after 'exceptionally strong' first quarter

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Screenshot: Gear4music.com
Screenshot: Gear4music.com
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Gear4music expects significant profit rise after 'exceptionally strong' first quarter

Gear4music today hailed an “exceptionally strong” first quarter of its financial year during the coronavirus lockdown, with UK sales up by 80% and total sales up by 68%. It now expects that full-year profits will be well ahead of last year.

 

The online musical instrument and equipment retailer, ranked Top250 in RXUK Top500 research, has reported sales of £37.3m in the three months to June 30 2020. That’s up by 68% compared to the same time last year. Sales growth was strongest in the UK, where sales reached £21.2m, up by 80% on the same time last year. In Europe and the rest of the world, sales of £16.1m were 55% ahead of last time.

 

Gear4music chief executive Andrew Wass said in today’s trading update that the Covid-19 lockdown had brought an “exceptionally strong period of trading” in April and May 2020, and that sales had continued to be strong in June and beyond.

 

“The strong trading momentum has continued into July and we continue to achieve higher gross margins and with a lower marketing cost than we would typically expect, alongside a controlled cost base," said Wass.

 

“As a result, and whilst still early in the current financial year, the board is confident that a significant improvement in profits will be achieved for the full financial year, which are now expected to be meaningfully ahead of our previous expectations.”

 

The update comes a month after Gear4music posted a 2% rise in sales for its last financial year, to March 31, with profits reaching £3.1m from a pre-tax loss of £0.8m a year earlier. At the time, the retailer said demand had taken off during lockdown as shoppers

 

It now plans to invest in the customer experience, with improvements expected to its mobile website, customer communication and personalisation, followed longer-term by new ways of buying products, such as digital downloads of music software. However, it also warned last month that its sales may be affected in future as the UK’s trading relationship with Europe changes. Gear4music has showrooms and distribution centres in Sweden and Germany.

 

 

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