Music Magpie profits and sales soar following float

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Music Magpie has reported strong growth in profits and sales following its recent float on London’s junior market, with chief executive Steve Oliver hailing a “landmark period” for the retailer.

For the six months to May 31, 2021, the retailer, which specialises in reselling refurbished consumer technology, reported a 22.8% increase in adjusted profit before tax to £4m and a 3.8% jump in sales to £72.8m.

Gross profit for the period was £23.7m, a 24.1% increase on the previous year, while adjusted EBITDA grew 13.5% to £6.2m.

The unaudited results follow the retailer’s IPO on the junior AIM market in April of this year, which raised £15m.

Music Magpie said its strong results had been driven by “strong early progress” in its smartphone rental subscription service. Launched in October 2020, the service now has over 7,500 subscribers, equating to over £2.3m in revenues.

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Its SMARTDrop kiosk service, where customers can trade in old electronics for money, will also be expanded following a successful trial in Asda stores. Over the next 12 months, the company expects to expand from the current 20 kiosks to “around 300 or 350 individual SMARTDrop kiosks”, according to chief executive and co-founder Steve Oliver.

Internationally, Music Magpie also struck trade-in partnerships with Macworld and Red Pocket Mobile in the US. The retailer said these new tie-ups could potentially reach 9 million new customers.

The corporate recycling scheme has also experienced an increase in demand after launching in February. Oliver told Retail Week: “Businesses can sell in bulk to us, they don’t have to individually sell.” Music Magpie also provides a certified data wipe for all companies that sell their dated and unused electronics.

Music Magpie said current trading was in line with expectations and it remained on track to deliver profits and sales growth for the full financial year.

Oliver said: “This has been a landmark period for Music Magpie, and we are very pleased with the performance of the business as it has adapted quickly to life as a public company.

“We are seeing strong and growing demand for our unique circular economy model, as consumers continue to realise the benefits of buying and renting refurbished consumer technology products.

In addition, there is a growing awareness of the rising problem of e-waste, as illustrated by the fantastic reaction to our ‘Mount Recyclemore’ sculpture at the recent G7 summit. We are now seeing more people than ever before looking to recycle their old gadgets whilst freeing up cash and decluttering their lives in the process.

“These trends, combined with the launch of our exciting new mobile phone rental subscription service, mean that we continue to have a high degree of confidence in the future prospects of Music Magpie.”