Music Magpie’s first half in line with expectations
Music Magpie has announced that EBITDA for its traditionally quieter first six months of the year is in line with expectations with growth of 7.7% to £2.8 million.
In a pre-close trading update for the six months to 31 May, the recommerce business specialising in refurbished consumer technology said its performance improved from February onwards after postal strikes and low consumer confidence impacted December and January trading. The company enjoyed a particularly strong second quarter with 42% growth in EBITDA to £2 million.
During the period, Music Magpie worked to control costs and increase gross margins rather than growing revenues on lower margin products. A gross margin improvement of 3.1 percentage points year-on-year was driven by a higher proportion of product being sourced directly from consumers, an increase in the proportion of sales made through the Music Magpie store, and an improvement in rental subscriptions.
Music Magpie has also announced that it has extended its £30 million revolving credit facility by one year to provide committed facilities through to July 2026.
The company is now looking ahead to what it says will be a much stronger second half weighting to its financial year, due in part to seasonal peak trading around the Black Friday weekend in November.
Steve Oliver, chief executive and co-founder of Music Magpie, 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.”