Musicmagpie has reported a boost to annual earnings after the second-hand smartphone seller experienced a “record” Black Friday last November.
The firm posted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of £7.5m for the year ended 30 November 2023, up 15 per cent from £6.5m in 2022.
Musicmagpie said its overheads ticked down £1.3m to £31.7m in 2023 as it continued with cost-cutting measures, including reducing staff numbers in the UK and US into 2024 “to right-size the business and support our future profits.”
The company’s loss before tax widened to £6.8m in 2023 from £1.5m in 2022. A £30m revolving credit facility with HSBC UK and Natwest committed until July 2026 helped the company stay afloat, with net debt rising to £13.1m from £7.9m after drawing £5.9m.
Musicmagpie announced last November that it was in the early stages of exploring a sale of the business to both BT and Aurelius Group. However, both firms walked away later that month.
More than two-thirds (70 per cent) of Musicmagpie’s revenues came from its consumer technology division. The arm saw £95.4m in revenues last year, down slightly from £96.6m in 2022.
Active subscribers to its device rental service increased to 37,100 in 2023 from 30,500 in 2022.
The firm said the recently closed first quarter of its 2024 financial year saw trading in line with management’s expectations. It expected its enhanced buy-now, pay-later offering to have a “positive impact on revenue.”
Co-founder and chief executive Steve Oliver commented: “Having recently made changes to our US Consumer Technology buying strategy and operations, and implemented further cost savings in the UK, we believe that Musicmagpie is well positioned for the remainder of the year.
We expect second-use markets to continue to grow which will complement our strategy of unlocking a ‘world of inventory’ from consumers homes and providing them with a solution that is ‘smart for you, smart for the planet’ across of our existing product categories and potential new product categories. As such we remain confident in Musicmagpie’s future prospects.”