Focusrite says revenue and earnings likely to surpass market expectations
(AIM: TUNE ) said in its FY20 trading update for the 12 month period ending 31 August 2020 that it expects revenue and earnings to surpass market expectations.
The group previously outlined in half-year results that it had seen strong demand for its audio products due to the widespread availability of its global e-commerce platforms.
Specifically, Focusrite said that consumer registrations of products primarily focused on home recording equipment have risen, indicating increased consumer demand during the pandemic.
This has, in turn, led to increased reseller demand from the group, however the group expects that demand for these products will revert to a more normal level as the lock-downs ease.
Conversely, demand for the group’s Martin audio products has been significantly lower than pre-COVID levels of expectation due to the suspension of live music tours and festivals.
The group added that demand is now starting to show modest signs of recovery driven by the installed sound segment.
Shares in Focusrite were trading 7.09% higher at 680p on Friday morning.
Similarly, the Focusrite Pro brand has seen ‘muted performance’ as well, although the pipeline across education, post-production and installed sound is now showing signs of recovery.
Both resellers and distributors have paid on time and therefore, combined with the higher revenue, cash flow of the Group is reported as stronger than expected in the year to date.
Given the recent positive cash flow, the Board has now decided to pay an interim dividend of 1.3 pence, up 8.3% from the prior year interim dividend of 1.2 pence to be paid at the end of the year.
“The increase in demand for Focusrite and ADAM products has been pronounced during the lock-downs and we are very grateful that so many people around the world are choosing our solutions for their creative needs,” said Tim Carroll, Chief Executive of Focusrite.
“Martin Audio and Focusrite Pro are now starting to turn the corner and we are optimistic about the long term opportunities in the markets they serve.
Finally, I would like to thank our employees who have done an amazing job acclimatising so quickly to a home-working environment and worked incredibly hard. The Group has performed well across all departments in these very trying times,” he added.
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