Gear4music (Holdings) PLC Trading Update and Change of Year End (0582A)
September 07 2018 - 2:00AM
UK Regulatory
TIDMG4M
RNS Number : 0582A
Gear4music (Holdings) PLC
07 September 2018
7 September 2018
Gear4music (Holdings) plc
Trading Update and Change of Accounting Reference Date
Gear4music (Holdings) plc ("Gear4music" or "the Group"), the
largest UK based online retailer of musical instruments and music
equipment, today announces a trading update for the six months to
31 August 2018 and its decision to change its accounting reference
date from 28 February to 31 March.
GBP'000 6 months to 31 6 months to % change
August 2018 31 August 2017
UK sales 24,006 17,900 +34%
--------------- ---------------- ---------
European and Rest
of the World sales 18,515 13,319 +39%
--------------- ---------------- ---------
Total sales 42,521 31,219 +36%
--------------- ---------------- ---------
Highlights
-- Total sales growth of 36% to GBP42.5m (FY18: GBP31.2m)
-- Active customer numbers increased by 40% to 547,000
-- Good progress made with European distribution:
o German distribution centre orders fulfilled up by 230%
o New Swedish distribution centre on track to be operational by
the end of October 2018
Gear4music's Chief Executive Officer, Andrew Wass, said:
"We have continued to make good progress over the last six
months, with sales growth during the period of 36% being ahead of
our expectations.
Our core UK market continues to perform well and with the UK
distribution centre upgrades we announced in May progressing to
plan, we are well positioned to deliver further strong sales growth
during the busier second half of the year.
Whilst still strong, European sales growth reflects a slower
than anticipated build-up of inventory at our European distribution
hubs, particularly in Sweden. Completion of the move into our new
higher capacity Swedish distribution centre by the end of October,
combined with the recent expansion of our European purchasing team
will mean that the range and depth of inventory at both of our
European locations will be increased ahead of peak season. We
expect European sales growth will accelerate during the second half
of the year.
As noted in our AGM statement, we have seen an increase in
competitive pressures across our industry which is having an impact
on short term gross margins. At this stage in our growth cycle we
remain focused on best serving our customers, and see opportunities
to rapidly increase our market share as the industry continues to
consolidate and shift from traditional retail to agile e-commerce.
We are confident that strong sales growth alongside a controlled
overhead cost base will compensate for short term gross margin
compromise. The Board expects EBITDA for the full financial year to
be in line with our expectation."
The Group will report interim results for the six months ending
31 August 2018 on 16 October 2018.
Change of Accounting Reference Date
The Group today announces that it has agreed to change its
accounting reference date, with immediate effect, from 28 February
to 31 March. This will result in a reporting cycle that is more
compatible with the Group's seasonal trading pattern and will avoid
timetable conflicts with attendance at trade events that are
important to the Group.
Consequently, the Group will prepare audited accounts for the
13-month period from 1 March 2018 to 31 March 2019. These accounts
will be notified to the market and published by 31 August 2019.
- Ends -
Enquiries:
Gear4music
Andrew Wass, Chief Executive Officer
Chris Scott, Chief Financial Officer +44 20 3865 9668
Panmure Gordon
(Joint Financial Adviser, Joint Broker,
and Nominated Adviser)
Adam James - Investment Banking
Erik Anderson - Corporate Broking +44 20 7886 2500
Peel Hunt
(Joint Financial Adviser and Joint Broker)
Adrian Trimmings
George Sellar +44 20 7418 8900
Alma PR (Financial PR) Josh Royston/Rebecca +44 20 3865 9668
Sanders-Hewett/Helena Bogle Gear4Music@almapr.co.uk
About Gear4music.com
Operating from a Head Office in York, and Distribution Centres
and showrooms in York, Sweden and Germany, the Group sells
own-brand musical instruments and music equipment alongside premium
third-party brands including Fender, Yamaha and Roland, to
customers ranging from beginners to musical enthusiasts and
professionals, in the UK, Europe and, more recently, into the Rest
of the World.
Having developed its own e-commerce platform, with multilingual,
multicurrency and fully responsive design websites delivering to
over 190 countries, the Group has rapidly expanded its database and
continues to build its overseas presence.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
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END
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