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Music Magpie sees increase in profit and revenue in first set of results since IPO

Music Magpie posted a pre-tax profit of £4m for the six months ending in May

Music Magpie (LON:MMAG), the technology reseller, confirmed on Wednesday that its revenue and profit rose in it’s first interim results since its IPO in April.

The retailer posted a profit before tax of £4m for the six months ending in May, an increase of £0.7m compared to the same period a year ago.

Revenue edged up from £71.1m to £72.8m over the same period of time.

As the cost of tech products rises, Music Magpie has carved out a niche in the market, while its awareness of environmental concerns has resonated with customers.

However, despite the positivity around its first set of results as a listed company, the Music Magpie share price is down by 1.89% during the morning session on the AIM market.

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Russell Pointon, Director, Consumer, at Edison Group, commented on the results: “In its first set of interim results since listing in April, musicMagpie has reported revenue growth of 2.3% (constant currency 3.7%), adjusted EBITDA growth of 13.5% (constant currency 14.8%), and adjusted EPS growth of 15.2%.”

“For all three product categories, revenue grew in the period, and gross margins continued to improve with the ongoing focus on buy and sell prices. By geography, the UK produced the strongest growth with 6.6% growth, but the US was down 6.3% as its focus on profitable trading continues. With respect to new initiatives, there are encouraging early signs with rental subscriptions, which temporarily suppresses one-off revenue growth in return for recurring revenue and higher EBITDA. Also, the SMARTDrop Kiosk concept to recycle phones at Asda is to be further rolled out.”

Pointon added: “Current is stated to be in line with management’s expectations, with strong growth in rentals. Management expects sales in disc media and books to revert to normalised pre-pandemic levels but for margins to remain resilient. In aggregate they expect adjusted EBITDA will be in line with expectations.”

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