TIDMMMAG
RNS Number : 6909W
musicMagpie plc
14 December 2023
14 December 2023
musicMagpie plc
("musicMagpie" or the "Group")
FULL YEAR PRE-CLOSE TRADING UPDATE
Record Black Friday contributes to 15.4% increase in EBITDA
musicMagpie, a leading re-commerce business in the UK and US
specialising in refurbished consumer technology, is pleased to
announce a pre-close trading update for the full year ended 30
November 2023.
Full year revenue is expected to be GBP136.6m (2022: GBP143.3m),
with a record Black Friday period helping to off-set a softer H1.
Consumer technology revenues for H2 were up 7.5% over the same H2
period in 2022, and for the year were GBP95.4m (2022: GBP96.6m).
Overall gross margin was 27.7% (2022: 26.2%) as the Group continued
to focus on margin expansion as opposed to revenue growth.
As a result of the gross margin increase and ongoing tight cost
control, as well as the strong end to the year, EBITDA is expected
to be up 15.4% at GBP7.5m (2022: GBP6.5m).
The number of active Rental subscribers grew by 21% in the year
reaching 37,100 as at 30 November 2023 (30 November 2022: 30,500).
Total Rental revenue for the period was GBP8.3m, up 57% (2022:
GBP5.3m). The Group continues to segment the Rental offering to
those customers with higher credit ratings and a greater propensity
to renew and intends to maintain this managed approach to the
subscriber base for the foreseeable future.
Net debt as at 30 November 2023 was GBP13.1m (31 May 2023:
GBP13.6m) and benefitted from management's focus on cash versus
rental growth. Leverage at 30 November 2023, being EBITDA to net
debt, was 1.7x (31 May 2023: 2.0x). Net debt is mitigated by future
contracted rental revenue of GBP3.6m and Rental assets on the
balance sheet with a net book value of GBP7.7m. It also continues
to be supported by the GBP30m committed RCF facility provided by
HSBC and Natwest, due for renewal in July 2026.
Whilst the challenging consumer environment and inflationary
pressures continue, the Board is encouraged by musicMagpie's H2
performance and remains confident in the Group's strategy and in
its medium-term prospects.
Steve Oliver, Chief Executive Officer & Co-Founder of
musicMagpie, said: "We are pleased with the performance of the
Group in the second half of the year, and are delighted that our
focus on profits and cash has delivered significant EBITDA growth.
Our strategy of proactively managing the number of active Rental
subscribers has also helped in this regard and will support our
short-term objectives on profits and cash into 2024, bolstered by
an enhanced Buy Now Pay Later offering. I remain confident in the
business and our ability to navigate the difficult external market
conditions, especially given the outstanding level of trust that
consumers continue to have in our brand, as demonstrated by our
excellent 4.4* Trustpilot rating based on over 277,000
reviews."
Enquiries
musicMagpie plc
Martin Hellawell, Non-Executive Chairman
Steve Oliver, Chief Executive Officer and
Co-Founder +44 (0) 870 479
Matthew Fowler, Chief Financial Officer 2705
Shore Capital (Nominated Adviser and Broker)
Mark Percy +44 (0) 207 408
Daniel Bush 4090
Powerscourt (Financial Public Relations)
Rob Greening +44 (0) 20 7250
Sam Austrums 1446
About musicMagpie
Operating through two trusted brands - musicMagpie in the UK and
decluttr in the US - musicMagpie's core strategy is simple: to
provide consumers with a smart, sustainable and trusted way to buy,
rent and sell refurbished consumer technology and physical media
products with sustainability running to the very heart of its
operations. Founded in 2007, the Group has an established presence
in the UK, with operations in Stockport, Greater Manchester, and in
the US in Atlanta, Georgia.
musicMagpie has a strong environmental and social focus, as
demonstrated by its trademarked 'smart for you, smart for the
planet' ethos. Nearly 400,000 consumer technology products were
resold in FY22. In addition, the Group re-sells approximately 10m
books and disc media each year that could have ended up as waste.
During 2022, musicMagpie's UK consumer tech and disc media
customers, along with its trade partners, helped to save over
43,000 tonnes of CO2 by buying, selling and renting with the Group
- an amount equivalent to providing heating for over 16,000 homes,
or powering more than 50,000 flights from London to New York. The
Group has been given the London Stock Exchange's Green Economy Mark
in recognition of its contribution to the global green economy.
When selling to musicMagpie, the customer is offered a fixed
valuation via the website, provided with free logistics to ship the
products and (subject to it being 'as described') receives payment
for their product on the day of arrival at the Group's warehouse.
The Group also recently partnered with Asda to give customers the
option of using its SMARTDrop Kiosks in store for a fast and easy
way to recycle phones for instant cash. Customers purchasing from
musicMagpie receive branded refurbished product for a fraction of
the price of buying new.
The Group has the highest number of seller reviews on both
Amazon and eBay and has consistently achieved extremely positive
feedback scores. The Group also has a 4.4* rating on UK Trustpilot
with over 277,000 reviews, and is honoured to have won Best
Refurbished in the Uswitch Telecoms Awards 2023 as well as Best
Online Retailer and Best Secondary Market Provider at the Mobile
News Awards 2023.
For further information please visit: www.musicmagpieplc.com
Forward Looking Statements
This announcement contains certain forward-looking statements
with respect to the financial condition, results or operation and
businesses of musicMagpie plc. Such statements and forecasts by
their nature involve risks and uncertainty because they relate to
future events and circumstances. There are a number of other
factors that may cause actual results, performance or achievements,
or industry results, to be materially different from those
projected in the forward- looking statements.
These factors include general economic and business conditions;
changes in technology; timing or delay in signing, commencement,
implementation and performance of programmes, or the delivery of
products or services under them; industry; relationships with
customers; competition; and ability to attract personnel. You are
cautioned not to rely on these forward-looking statements, which
speak only as of the date of this announcement. We undertake no
obligation to update or revise any forward-looking statements to
reflect any change in our expectations or any change in events,
conditions or circumstances.
APPIX
MUSICMAGPIE PROFIT ESTIMATE
The following statements set out in musicMagpie's pre-close
trading update constitute an ordinary course profit estimate for
the purposes of Note 2 on Rule 28.1 of the Takeover Code (the "FY23
Guidance Statements"):
"Record Black Friday contributes to 15.4% increase in
EBITDA."
"Overall gross margin was 27.7% (2022: 26.2%)."
" As a result of the gross margin increase and ongoing tight
cost control, as well as the strong end to the year, EBITDA is
expected to be up 15.4% at GBP7.5m (2022: GBP6.5m)."
"Leverage at 30 November 2023, being EBITDA to net debt, was
1.7x (31 May 2023: 2.0x)."
"We are pleased with the performance of the Group in the second
half of the year, and are delighted that our focus on profits and
cash has delivered significant EBITDA growth."
Basis of preparation
The FY23 Guidance Statements are based on the Group's current
internal estimate for the year ended 30 November 2023 ("FY23
Estimate").
The basis of accounting used for the FY23 Guidance Statements is
consistent with the Group's existing accounting policies, which (i)
are in accordance with UK adopted International Accounting
Standards, IFRS as adopted by the EU and IFRS as issued by the
International Accounting Standards Board, (ii) were applied in the
preparation of the Group's financial statements for the year ended
30 November 2022; and (iii) are expected to be applied in the
preparation of the Group's financial statements for the year ended
30 November 2023.
The FY23 Guidance Statements have been prepared on the basis
referred to above and subject to the principal assumptions set out
below. The FY23 Guidance Statements are inherently uncertain and
there can be no guarantee that any of the factors referred to under
'Principal Assumptions' below will not occur and/or, if they do,
their effect on the Group's results of operations, financial
condition or financial performance, may be material. The FY23
Guidance Statements should therefore be read in this context and
construed accordingly.
Principal Assumptions
Factors outside the influence or control of the musicMagpie
Directors for the year ended 30 November 2023:
-- no material change to the Group's assumptions in the FY23
Estimate for growth of the Group's business;
-- no change in legislation, taxation or regulatory requirements
relating to the Group or the legislative or regulatory environment
within which the Group operates;
-- no litigation or contractual disputes which are material in the context of the Group;
-- no material movements in tax rates or foreign exchange rates
compared with the Group's estimates;
-- no change in the Group's existing debt arrangements, or its
ability to access external financing; and
-- no change in the accounting standards or policies which were
used for the FY23 Guidance Statements.
Factors within the influence or control of the musicMagpie
Directors for the year ended 30 November 2023:
-- no material change to the strategy, budget or operation of the Group's business;
-- no material change to the Group's assumptions in the FY23
Estimate in relation to revenue recognition, debtor provisioning
and inventory; and
-- no material change in the Group's relationship with its key partner relationships.
Directors' Confirmation
The MusicMagpie Directors confirm that the FY23 Guidance
Statements remain valid and have been properly compiled on the
basis of the principal assumptions stated above and that the basis
of accounting used is consistent with musicMagpie's accounting
policies as set out above.
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END
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