Shares in audio tech company Focusrite dropped as much as eight per cent, after it said revenue fell to £77m in the first half of the year, down from over £86m.
The company’s net debt more than doubled to £27.3m, which it blamed on higher working capital levels. It said it expects these to “largely reverse” in the second half of the year.
Focusrite provides the hardware and software to musicians that helps with recording and production processes.
Its Audio Reproduction division, which helps artists record and create sound, performed well, but this was offset by the weaker performance of its Content Creation unit, where sales dropped nearly 20 per cent in the first half.
Chief executive Tim Carroll said: “The Content Creation division has faced a particular set of challenges in HY24, with both macro-economic weakness and an oversupply in the channel, particularly as we navigate the transition of our Scarlett range from the 3rd to the 4th generation.
“Conversely, our Audio Reproduction division has seen significant growth, bolstered by successful product launches in the previous year and the inclusion of new brands within its portfolio.
“Though the industry outlook, particularly for Content Creation, remains tough, we remain encouraged by our product registration data which is comfortably outperforming the market,” he added.
The High Wycombe-based company’s Scarlett amplifiers are popular among hobbyists starting at-home audio projects like Youtube channels and podcasts.
Pre-tax earnings fell from £18.1m in the first half of 2023 to £12.1m in the same period this year. Operating profit also tumbled down to £4.7m, down from £11.5m, which Focusrite said was due to the cost of acquisitions and eleven new product launches.
In December 2023, Focusrite announced that it had bought UK-based Sheriff Technology, a company specialising in entertainment technologies.
Commenting on the company’s outlook, Carroll said: “With a series of planned product launches in the coming months and a continued emphasis on our strategic growth initiatives, which will lead to a greater weighting of sales in the second half, we remain confident of meeting our full-year expectations.”