Music Magpie H1 revenues slightly lower amid 'challenging economic environment'

16th Jun 2022 07:29

(Sharecast News) - Electronics and entertainment retailer Music Magpie said interim revenues had only slightly contracted over the six months ended 31 May despite "a challenging economic environment".

Music Magpie said total revenue for the period was £71.3m, which was marginally down on the £72.8m reported a year earlier. Within this, sales in the company's consumer technology products division were up 15.9% at £46.0m, while sales of disk media and books fell 23.6% to £25.3m as it said the prior year was a beneficiary of increased sales during Covid-19 lockdowns.

The AIM-listed group noted the year-on-year growth in outright product sales in its consumer technology division had been "intentionally tempered" by the promotion of its contracted monthly rental subscription service - with that area of the business expected to earn higher revenue and underlying earnings over the life of a device, as opposed to a one-off sale.

"Margin performance for H1 on consumer technology was in line with management's revised expectations as set out in the full year results on 2 March 2022. This, combined with the sales normalisation of disk media and books, saw an unaudited adjusted EBITDA for the first six months of the year of £2.6m (2021: £6.2m)," said Music Magpie.

"Whilst acknowledging the current uncertain economic environment facing all consumer businesses, the board is confident of achieving its full-year expectations with a much stronger H2 profit performance from increased contribution from the growing rental subscribers alongside continued anticipated sales revenue growth from the recent expansion of 'marketplace' sales channels, including Back Market, on which the group has recently successfully launched."

As of 0905 BST, Music Magpie shares were up 2.50% at 51.25p.

Reporting by Iain Gilbert at Sharecast.com