- MusicMagpie upbeat but annual revenue set to come in lower than a year ago
MusicMagpie shares rose sharply on Thursday after the group enjoyed ‘record’ sales during the Black Friday period.
The group said full-year revenue was expected to achieve £136.6million, down from £143.3million last year, with consumer technology revenues up 7.5 per cent year-on-year in the second half.
Gross margins swelled to 27.7 per cent from 26.2 per cent as the group continued to focus on margin expansion over revenue growth.
Boost: MusicMagpie boss Steve Oliver said he ‘remained confident’ in the business
The group’s shares were up 21.3 per cent or 2.45p to 13.95p on Thursday morning amid a broad market rally, having fallen 38 per cent in the last year.
Active rental subscriber numbers grew 21 per cent in the year reaching 37,100, with total rental revenues for the period up 57 per cent to £8.3million.
A rise in gross margins, tight cost controls and a strong end to the year, earnings before nasties are expected to rise 15.4 per cent to £7.5million for the year.
Profits are also set to be ‘bolstered by an enhanced Buy Now Pay Later offering’, the group added.
MusicMagpie said that while a ‘challenging consumer environment and inflationary pressures continue’, it was encouraged by its second half performance and remained confident in its strategy and medium-term prospects.
In its pre-close trading update, MusicMagpie said its net debt stood at £13.1million on 30 November, down from £13.6million at the end of May. The firm said it had benefited from its ‘focus on cash versus rental growth’.
Chief executive Steve Oliver, said: ‘We are pleased with the performance of the Group in the second half of the year, and are delighted that our focus on profits and cash has delivered significant EBITDA growth.
‘I remain confident in the business and our ability to pilot the difficult external market conditions.’
Last month, MusicMagpie said it would continue to seek buyers after telecoms group BT confirmed it would not make an offer for the online retailer of used smartphones and electronic products.
In November, Musicmagpie said it was in early-stage talks with BT and Aurelius Group regarding a possible buyout offer. A few days later, Aurelius Investment said it did not intend to make an offer for the company.
Neither BT or Aurelius provided a reason for dropping out of the takeover talks.
MusicMagpie was founded from a Stockport garage by Walter Gleeson and Steve Oliver, who had been the managing director of high-street entertainment retailer Music Zone until its collapse in 2007.
