A rare story of financial success emerged during the Coronavirus chaos, with musical instrument and equipment retailer Gear4music (AIM:G4M) watching their shares spike on an impressive set of full-year results.
For the 12 months ended 31 of March, the company booked a 9% year-on-year jump in revenues, up to £120.3 million. This led a 16% jump in gross profits, up to £31.2 million, and a year-on-year swing from a net loss of £0.2 million, to a £2.6 million profit for the full-year ended March 2020.
Further, the company noted that its growth margin rose from 22.8% to 25.9% on-year, while its number of active customers jumped 11% to 807,000 and its EBITDA skyrocketed by 239%, to £7.8 million.
Looking ahead, the company is in a strong position. cash at the end of the period was up year-on-year, at £7.8 million compared to £5.3 million the year before. Gear4music also noted that trading was ‘exceptionally strong’ in April and May 2020, and it remained confident in further profit improvement in FY21.
Gear4music response
Company CEO Andrew Wass, said in response to the positive update:
“With an increasing number of people throughout the COVID-19 lockdown recognising the benefits that playing , creating and recording music can bring , we have seen a significant increase in demand during this exceptional period. Positive sales trends with improved margins have continued into June, and we have also incurred lower marketing costs than we would typically expect.”
“The improvements we have made during FY20, and the exceptionally strong trading we have experienced during the lockdown period, mean we are financially stronger and better placed than ever to make the most of future growth opportunities within our market.”
“Therefore, whilst still early in the current financial year, the Board is confident of continued financial improvements during FY21 and look forward to the year ahead with optimism.”
Investor insights
Following the news, Gear4music shares rallied 20.78% or 66.49p, to 386.49p per share 23/06/20 13:59 BST. The company are not currently paying dividends.