Gear4music hit by lower European sales
Gear4music has posted a 6% fall in half-year revenues following its focus on prioritising gross margins ahead of sales growth.
Revenues fell to £62.6 million in the six months to 30 September from £66.3 million at the same time in the previous year.
While UK revenues edged up 3%, sales in Europe declined by 15% due to lower consumer demand.
Gear4music chief executive Andrew Wass said: “We have continued to make good progress with our strategic objectives in what we anticipated would be challenging market conditions.
“Mindful of the current trading environment, we have retained our pricing discipline and focused on improving gross margins. In addition, we have taken decisive action to drive further efficiencies and ensure our cost base is appropriately configured to deliver our profitable growth strategy.”
Meanwhile, gross profit for the period is expected fall to £17 million from £17.4 million a year earlier.
Looking ahead, Gear4music said European revenue is continuing to lag behind the UK, although its full-year outlook remains in-line with market expectations.
Wass added: “As we look to leverage the potential of AI driven technologies and further reconfigure the business into a lower cost operation, we will continue to invest into future growth projects such as our second-hand system, ensuring the group is well positioned to quickly and profitably scale further as economic conditions improve.”
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