Music Magpie has delivered a “strengthened” trading performance as it chose to focus on cost control and increasing gross margins instead of “growing revenues on lower-margin products”.
The retailer said it had a “challenging” start to the year with postal strikes and low consumer confidence impacting sales over the Christmas period but trading improved from February.
EBITDA increased to £2.8m in the six months ending May 31, up 7.7% from H1 2022 and in line with the board’s expectations.
Consumer technology revenue in this period was £41.2m, making up two-thirds of total revenue. Sales of disc media and books fell to £20.8m, down from £25.3m last year.
Active rental service customers for consumer technology products increased to 39,000, up from 24,000 during the same period last year.
In the second half of the year, Music Magpie will launch its enhanced buy now, pay later option, which aims to increase choice for consumers.
The retailer also expects to have a much stronger second half of the year as seasonal peak trading occurs around the Black Friday weekend in November. It expects to achieve its full-year expectations.
Chief executive Steve Oliver said: “We are pleased with our performance in what is always the seasonally quieter half of the year for Music Magpie. It is especially gratifying to see that our profit improvement has been driven by an increased margin.
“This has been achieved both by focusing on higher margin sales through our own Music Magpie online store, as well as the continued strong growth of our rental offering.
“While we remain very mindful of the current tough consumer environment, the momentum in our business as we head into H2 means that we are confident of achieving our full-year expectations.”
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