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MusicMagpie expects its full-year revenues to reach £136.6m, slightly down from £143.3m in the year prior, despite a “record” Black Friday period which has helped off-set a softer H1.
However, the retailer maintained that consumer technology revenues for the second half increased 7.5% over the same period in 2022, and reached £95.4m for the full-year ending 30 November. This figure is almost toe-to-toe with the £96.6m reported last year.
In addition, the group’s overall gross margin was slightly higher than last year’s at 27.7% as it continued to focus on margin expansion as opposed to revenue growth.
As a result of the gross margin increase and ongoing tight cost control, EBITDA is expected to be up 15.4% at £7.5m compared with £6.5m reported in 2022.
As of 30 November, the retailer’s net debt stood at £13.1m, slightly under £13.6m reported at the end of May 2023. This was attributed to MusicMagpie benefiting from management’s focus on cash versus rental growth.
While the challenging consumer environment and inflationary pressures continue, the board is “encouraged” by its H2 performance and remains “confident” in its strategy and in its medium-term prospects.
Steve Oliver, CEO and co-founder of MusicMagpie, 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.
“Our strategy of proactively managing the number of active rental subscribers has also helped in this regard and will support our short-term objectives on profits and cash into 2024, bolstered by an enhanced BNPL offering.”
He added: “I remain confident in the business and our ability to navigate the difficult external market conditions, especially given the outstanding level of trust that consumers continue to have in our brand, as demonstrated by our excellent 4.4 star Trustpilot rating based on over 277,000 reviews.”
