Revenue at the London-listed online retailer Musicmagpie dropped 13 per cent in the firs six months of 2024 as the company struggled in the highly competitive second-hand market.
Revenue at the group – which specialises in consumer tech and disc media – totalled £53.8m in the first six months, down from the figure of £61.9m reported in the same period last year.
The company said the lower figure was due to the planned conversion of the group’s US business into a sourcing-only operation.
Its UK consumer technology sales ticked up to £28.7m (H1 2023: £28.6m), but its US consumer technology sales were £1.6m, down from £8.5m.
Musicmagpie stated that this was due to the change to a sourcing-only operation across the Atlantic.
Its rental revenue dropped to £3.8m (H1 2023: £4.0m) and its disc media and books sales slightly dropped to £19.7m (H1 2023: £20.9m).
The company told its shareholders it had achieved “successful delivery of cost reduction measures” in order to reduce overheads by £2.4m, mitigating much of the reduced gross profit from lower revenues.
Its net debt for bank reporting was £13.8m (31 May 2023: £13.7m), consistent with board expectations and the prior year.
On the outlook for the last six months of 2024, Musicmagpie said that due to the prevailing macroeconomic headwinds in the market, “current trading conditions remain challenging”.
Despite that, the second half of its financial year will include the Black Friday period, which “is historically when the majority of full year profits are earned”.
The board said by focusing on improving profitability, combined with the cost savings introduced, it remains confident in the strategy of unlocking inventory in people’s homes to further capitalise on the growth in second-use markets.
Commenting on the results, Steve Oliver, chief executive officer said: “Amidst an increasingly competitive environment for second-use technology, and with consumers continuing to feel the squeeze on their wallets, the market has undoubtedly been challenging.”
“However, our turnover remained robust in the UK, where consumer technology sales held firm and disc media and books showed welcome signs of stabilisation.”
“We have recently launched the buying of branded fashion items on the Musicmagpie platform and intend to continue broadening our offering and further unlock the ‘world of inventory’ that sits in consumers’ households,” he added.