Gear4music (G4M) H2 2026 earnings summary

Executive summary

• Achieved transformative financial performance in FY26 with revenue up 30% to £190.7m, gross profit up 37% to £54.2m, and EBITDA up 84% to £18.4m, resulting in profit before tax of just over £10 million, an improvement of £8.7 million from the prior year.

• Fulfilled a record 1.2 million orders, reaching maximum capacity in the UK warehouse, prompting investment in new automated distribution facilities and significant investments in automation, AI-driven systems, and logistics.

• Growth was broad-based across product categories, geographies, and customer segments, with education sales and showroom locations performing particularly well.

• Profits exceeded upgraded market expectations, and the business is well positioned for continued momentum.

• Strategic investments in proprietary technology, AI, and logistics underpinned operational efficiency and market share gains.

Financial highlights

• Revenue increased 30% year-over-year to £190.7m; UK revenue up 26% to £114.1m, international revenue up 36% to £76.6m.

• Gross margin improved by 140bps to 28.4%, with product margin at 32.0% and own-brand margin up 360bps; supported by disciplined buying, pricing, and a one-off upside from deal stock acquired from insolvent competitors.

• EBITDA reached £18.4m, the second highest ever, with EBITDA margin improving to 9.7% from 6.8% year-over-year.

• Net bank debt reduced to £5.0m (0.3x EBITDA), with strong cash flow and £45m revolving credit facility secured.

• Basic EPS increased to 34.9p from 4.0p year-over-year.

Outlook and guidance

• Trading in the current financial year has started well, with double-digit revenue growth in line with Board expectations.

• Most growth-focused system upgrades were deployed in Q4 FY26, with further benefits expected in the current year.

• New automated UK warehouse to be completed ahead of peak trading, supporting over 60% of UK order volumes and enabling future scaling at stable operating costs.

• Short-term profit may dip due to duplicated costs during warehouse transition, but investment expected to pay back in 3-5 years.

• Strategic initiatives in AI, CRM, and logistics to drive further growth and operational leverage.