Online retailer Gear4Music sees revenue rise to £80m in 'transformational year'

Gear4music plc, the online retailer of musical instruments and music equipment, has reported a “transformational year” for its financial results for the 12 months ending 28th February 2018.

Operating from a head office in York, and distribution centres and showrooms also in the city, Sweden and Germany, Gear4music sells own-brand musical instruments and music equipment alongside third-party brands.

For the year ending February 2018, the company saw overall revenue increase by 43% to £80.1m, and UK revenue rise 27% to £44.3m, which gives Gear4Music an estimated 5.9% market share in the UK.

International revenue also grew by 69%, further adding to 124% growth in FY17 and 73% in FY16. Revenue growth was evenly spread across the year, with 44% in H1 and 42% in H2.

With the last 12 months being a “period of investment”, Gear4Music also reported that European distribution centre administrative expenses were £1.5m compared with £500k during the same period last, which led to a lower operating profit of £2m (FY17: £2.6m).

As well as investing in its European distribution centres, the company also acquired a new head office for £5.3m.

As a result of these investments, Gear4Music saw pre-tax profit drop 43% to £1.5m, which fell from £2.6m.

Andrew Wass, CEO of Gear4Music, said: “This has been a transformational year of investment for Gear4music. During the year we raised an additional £4.2m of growth capital, our European distribution centres became fully operational, and we moved into our new Head Office.

“We accelerated investment in our employees, systems, marketing and customer proposition, to firmly establish ourselves as one of Europe’s leading online retailers of musical instruments and music equipment.

“In my report last year, I explained that FY18 would be a period of targeted investment, and that would have short-term profitability implications. FY19 will be focused on achieving returns resulting from these investments, with the objective of delivering strong and sustainable revenue and profitability growth.

“As a result of the significant efforts of our team, and the investments we have made during FY18, we move into the new financial year with a market leading e-commerce platform, infrastructure and customer proposition. Whilst still early in the financial year, I am pleased to say that trading to date is in line with expectations and we are confident of achieving our objectives and hitting expectations for FY19.

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