The largest UK based online retailer of musical instruments and music equipment, Gear4music (LON:G4M), revealed a 34% drop in earnings on Tuesday.
Shares in the business were trading almost 8% lower following the announcement.
For the 13 months ended 31 March, Gear4music said that its earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 34% to £2.3 million.
The company, which said that its active customers were up 53% to 727,000, also posted a net loss of £163,000.
Despite swinging to loss, the business said that it has made “swift strategic operational changes” to reduce the risk of this continuing into the year ahead.
Revenue increased 48% to £118.2 million, and gross profit grew 32% to £26.9 million.
Gear4music, which issued a profit warning in January, said that it remains confident of continued strong growth and delivering profit improvement in the following year.
“Alongside delivering strong revenue growth in the period, we have worked hard to implement a number of commercial and operational initiatives to address the previously reported issues,” Andrew Wass, Chief Executive Officer, commented on the results.
“Our FY20 H1 focus is on improving gross margins and ensuring a robust operational infrastructure is in place ahead of our peak H2 trading period, and I am pleased to report these actions are already yielding positive results,” the Chief Executive Officer continued.
“We are confident that we have the right strategy, customer proposition, financial resources and focus, to overcome the challenges of FY19, and achieve our objectives of maximising customer satisfaction and delivering value to shareholders.”
The business said that it has taken decisive action to address the underlying causes of the profitability challenges faced over the previous year.
Gear4music operates from a head office in York, selling own-brand musical instruments and music equipment alongside other premium brands.
It sells to the UK, Europe and recently the Rest of the World.
Shares in Gear4music Holdings plc (LON:G4M) were trading at -7.83% as of 12:14 BST Tuesday.