Gear4music said it has returned to revenue growth as the online musical instrument retailer‘s new growth strategy has started to pay off.
The London-listed firm reported revenue growth of one per cent year-on-year in its second quarter, while total revenue for six months to September ticked down one per cent to £61.7m.
In June, Gear4music launched a new strategy to try and return to profit by 2024. It swung to a pretax profit of £0.6m in the year to March 2024, compared to a previous £0.4m annual loss.
The firm said on Tuesday that it expected a pretax loss of £1.2m for the first half of its 2025 financial year, a £0.7m improvement compared to a year earlier.
Gear4music reported “significant traction” for its second-hand sales platform over the period, which it expected to continue into the second half of the year and beyond.
The firm said it achieved stronger growth during October, and its full-year outlook remained in line with market expectations.
“This performance comes despite initial challenges with the rollout of a new AI-based marketing system during H1, which temporarily increased marketing costs and impacted the sales mix between our own-brand and other-brand products and our European sales,” said Andrew Wass, Gear4music’s executive chair.
“These issues have now been resolved, and our marketing investments have stabilised.”
He continued: “As we enter our peak trading season, which has historically been a key driver of our profits and revenues, the board is confident that our full-year outlook remains in-line with consensus market expectations.”
Gear4music’s stock price gained two per cent in early trading following the update. Its shares are up 22 per cent so far this year.