Gear4music (G4M) H1 2025 earnings summary

Executive summary

• Returned to revenue growth in Q2 FY25 after a Q1 decline, with H1 revenue down 1% year-over-year to £61.7m.

• Gross margin slightly decreased to 26.7% from 27.1% in FY24 H1, while adjusted EBITDA remained stable at £2.9m.

• Net debt reduced by £3.7m to £14.4m, and reported loss before tax improved by £0.7m to £1.2m.

• Launched refreshed growth strategy, resolved AI-based marketing migration issues, and acquired Studiospares brand and assets.

• New Marketing and European Commercial Directors appointed to drive growth.

Financial highlights

• H1 FY25 revenue £61.7m, down 1% year-over-year; UK revenue up 6% to £38.7m, international revenue down 12% to £23.0m.

• Gross profit £16.5m (down 3%); gross margin 26.7%.

• Adjusted EBITDA margin improved by 10bps to 4.7%.

• Net loss reduced to £1.2m (from £1.9m in FY24 H1); loss per share improved to 5.9p.

• Net financial expenses decreased by £0.3m due to lower bank debt.

Outlook and guidance

• FY25 trading remains in line with Board expectations and consensus, with 5% revenue growth achieved in H2 to date.

• Well prepared for peak seasonal trading; ongoing focus on higher margin products and cost discipline.

• Additional UK employment costs of £0.3m expected from FY26, to be mitigated by cost savings.