Revenue dips for musicMagpie as pandemic boom fades and belts tightened
Shares dropped nine per cent in early morning trading for musicMagpie after the circular economy firm reported squeezed wallets were cutting into revenue and profits.
In its interim results, the company posted a revenue of £71.3m, with growth in Consumer Technology largely offsetting the expected post-pandemic reduction in Disc Media and Books.
Disc Media and Books revenue fell 23.6 per cent to £25.3m (H1 2021: £33.1m) with the prior year H1 benefitting from pandemic lockdowns.
Gross profit hit £19m, compared to £23.7m in 2021, with gross margin reducing to 26.6 per cent as a result of the change in overall product mix towards Consumer Technology.
The firm made strong progress with its device rental subscription service, increasing to 24,000 active subscriptions as at 31 May, from an initial 7,500 in May last year.
In February, musicMagpie expanded this subscription service from phones to include MacBooks, tablets and games consoles, and revenues from subscriptions hit £2.3m.
Commenting on the results, chief exec Steve Oliver said he was pleased with the results and said:”In light of the continuing squeeze on consumer spending, we believe that this will become an increasingly attractive option to a wider range of consumers seeking to replace their non-discretionary technology products in a cost-effective way.”
The Board is confident that the business is well positioned for future growth and Adjusted EBITDA remains in line with its expectations for the full year.