Music Magpie has reported falling profits despite a record Black Friday trading week and more than doubling its rental subscribers year on year.
The retailer posted a 46.7% decrease in EBITDA for the year to November 30, 2022, from £12.2m to £6.5m.
Gross profit for the year was £38.1m, a 14.2% decrease on the previous year, while revenue decreased 0.2% to £145.3m.
Music Magpie, which specialises in reselling refurbished consumer technology, also reported a 12.2% increase in consumer technology revenue to £96.6m, reflecting 66% of its total group revenue.
The company more than doubled its rental subscribers from 13,500 to 30,500 at the end of the period and said it finished the year with record Black Friday sales.
The retailer revealed plans to broaden its partnership with the SMARTDrop Kiosk programme across Asda stores in the UK to “install in other high footfall areas during 2023”, as well as expanding its third-party platform partnerships this year.
Music Magpie said it has started the new financial year “having to navigate through the challenges of well-publicised postal strikes, in addition to the tough consumer environment and continuing macroeconomic uncertainty”.
Co-founder and chief executive Steve Oliver said: ”In common with many consumer-facing businesses, this has been a tough year for Music Magpie in the face of a rapidly changing macroeconomic environment.
”However, against this backdrop, I am delighted with the performance of our core consumer technology business, which grew by over 12% and now accounts for nearly 70% of our total revenue.
”We achieved a huge amount in the year, from completing the roll-out of our SMARTDrop kiosks with Asda, significantly growing our consumer rental subscriber base, to adding our products to both Back Market and Walmart and launching our consumer tech rental service for corporates.
“Our rental subscription service for phones, tablets and other products has continued to grow strongly as both consumers and businesses alike have started to recognise the outstanding value and flexibility that it offers.
”As of February 28, we had 36,000 active renters on our books and recently launched a 24-month rental contract, which we believe will be even more attractive to customers in the current economic climate.
“While the short-term outlook continues to be challenging, we believe our ability to help consumers raise cash and save money positions us well for resilient trading. In the longer term, we remain very confident in Music Magpie’s future prospects and especially those of our rental business.”
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