Gear4music hits all the right notes as annual sales and profits boom on international growth

 
Courtney Goldsmith
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Online instrument sales picked up over the past year at Gear4music (Source: Getty)

The UK's largest online musical instrument retailer struck a chord with international markets over the year as it revealed revenue and profits soared.

The figures

Gear4music said pre-tax profit for the year to the end of February was £2.6m, nearly 200 per cent up from profit of £6,000 the previous year.

Total revenue increased 58 per cent to £56.1m, driven by improved margin performance. In the UK, revenue was 34 per cent higher at £34.8m, but the international market was the real show-stopper with revenue up 124 per cent at £21.3m.

The number of visitors to Gear4music's website increased to 12.6m from 10.1m the year before, while active customers grew to 340,000 from 226,000.

The firm's shares lifted 5.6 per cent to 631.5p in afternoon trading.

Read more: Gear4music hits all the right notes as instrument sales skyrocket

Why it's interesting

The York-based company said it is well-placed to deal with Brexit as the depreciation of sterling since the vote to leave the EU has created "pricing and margin opportunities".

Over the year, the group, which floated in 2015, worked to build the infrastructure it needs to accelerate growth in the medium and longer term as it expands further abroad into a "truly global" business.

The firm opened distribution centres in Sweden and Germany to enhance European customer proposition, and since the period ended, Gear4music has also acquired a 50,000 square-foot freehold property in York that will become the group's new office with capacity for further expansion.

What Gear4music said

Chief executive Andrew Wass said: “This has been a transformational year for the business, with further expansion of the Gear4music brand driving record sales and profits.

“We begin our current financial year with good momentum and continued appetite from customers around the world for our market leading service and product offering. We are well positioned to deliver further growth and have plans in place to continue investing in our operational facilities and systems to support our growth plans. The next 12 months will be exciting as we move into our new head office in York, scale up our European operations, and enhance our worldwide proposition, and we remain confident in the long-term growth prospects for the group.”

What analysts said

"The current outlook for the business remains strong, and management has stated the business continues to trade in-line with expectations," said George Mensah, analyst at Shore Capital.

"Infrastructure investment has left the business well placed to accelerate growth in European markets. This is being supported by the introduction of showrooms, with one live currently in Sweden and another pencilled in for the German market."

Read more: Banging the drum for the north: Gear4music posts bumper results

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