Gear4music shares jump on trading update
shares jumped after an increase in gross margins and total sales boosted its profits.
The online musical instrument and equipment retailer reported £30.4 million in total sales for the 2 months ending 31 December 2019, a 7% bump from the prior 2 months.
Gear4music also revealed that gross margins improved to 260bps to 26.5%, up from 23.9%, and gross profits were £8 million, up 18% from £6.8 million.
The company told investors it expects FY20 profits to be in line with expectations.
Shares in gear4music were trading 13.4% higher at 275p on Thursday
Gear4music's Chief Executive Officer, Andrew Wass, said: "I am very pleased to report a successful FY20 peak trading period, that reflects the commercial and operational progress we have made across the business during the last calendar year.”
“As previously communicated, our primary FY20 objective has been to improve our operational strength and efficiency, gross margins and profitability relative to quickly growing market share during FY19.”
The company said that its logistics and IT infrastructure performed well during peak trading, especially during Black Friday and Cyber Monday, where it dispatched over 26,000 consignments, a 34% jump from last year’s Black Friday weekend.
Mr. Wass said he was confident about the future, adding: “Our three distribution locations have the capacity headroom required to achieve our medium-term objectives without the need for further significant investment, as we return to focusing on and delivering new growth orientated projects during FY21.”
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