HALF YEAR PRE-CLOSE TRADING UPDATE

RNS Number : 0605P

musicMagpie plc

16 June 2022

 

16 June 2022

musicMagpie plc

("musicMagpie", or "the Group")

HALF YEAR PRE-CLOSE TRADING UPDATE

Sales growth of 15.9% in consumer technology products, despite a challenging economic environment

musicMagpie, a circular economy pioneer specialising in refurbished consumer technology in both the UK and US, announces a pre-close trading update for the six months ended 31 May 2022. It has been a resilient revenue performance overall despite the well-publicised economic headwinds impacting the consumer sector and there has been continued momentum in the Group's innovative device rental subscription service.

Total revenue for the period was £71.3m, which was marginally down on the prior year (2021: £72.8m). Within this, sales in the Group's Consumer Technology products division (which accounts for approximately two-thirds of Group revenue and is the main area of strategic focus) were up 15.9% to £46.0m (2021: £39.7m). Sales of Disk Media and Books fell 23.6% to £25.3m (2021: £33.1m) with the prior year H1 a beneficiary of increased sales during the period of Covid lockdowns.

The year-on-year growth in outright product sales in Consumer Technology has been intentionally tempered by promoting our contracted monthly rental subscription service over outright purchase. This area of the business is expected to earn higher revenue and EBITDA over the life of a device, as opposed to a one-off sale, underpinned by a contracted recurring income and cash flow stream, which will become more visible in the Group's performance in the medium-term. The Group has taken a sustainable and disciplined approach to growth in the subscription base, and active paying subscribers are now c24,000 compared to c7,500 at 31 May 2021.

Margin performance for H1 on Consumer Technology was in line with management's revised expectations as set out in the full year results on 2 March 2022. This, combined with the sales normalisation of Disk Media and Books, saw an unaudited adjusted EBITDA for the first six months of the year of £2.6m (2021: £6.2m).

Whilst acknowledging the current uncertain economic environment facing all consumer businesses, the Board is confident of achieving its full year expectations with a much stronger H2 profit performance from increased contribution from the growing rental subscribers alongside continued anticipated sales revenue growth from the recent expansion of 'marketplace' sales channels, including Back Market, on which the Group has recently successfully launched.

Steve Oliver, Chief Executive Officer & Co-Founder of musicMagpie, said:

"The economic environment facing consumers is increasingly tough and the issues of affordability and cash-flow constraints are being felt by many. Against that backdrop, our twin proposition of giving people a way to recycle their tech products for cash, as well as our ability to sell or rent refurbished, lower cost consumer technology products, becomes increasingly attractive. Whilst recognising we are in the early stages of our second half, our sales channel expansion has started well and we are confident about our short term growth and remain excited about our medium-term prospects." 

The Group will announce its interim results for the six months ended 31 May 2022 on Wednesday 27 July 2022.

Enquiries

musicMagpie plc Steve Oliver, CEO Ian Storey, COO Matthew Fowler, CFO	Tel: [phone]
Peel Hunt (Nominated Adviser and Joint Broker) Edward Knight Paul Gillam Tom Ballard	Tel: [phone]
Shore Capital (Joint Broker) Malachy McEntyre Mark Percy Daniel Bush John More	Tel: [phone]
Powerscourt (Financial Public Relations) Rob Greening Genevieve Ryan Sam Austrums	Tel: [phone]

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. Over 400,000 consumer technology products were resold in FY21. In addition, the Group re-sells approximately 2,500 tonnes of books and disc media each year that could have ended up as waste. During 2021, musicMagpie's UK consumer tech and disc media customers, along with its trade partners, helped to save over 50,000 tonnes of CO² by buying, selling and renting with the Group - an amount equivalent to providing heating for over 18,000 homes. 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 4.6* rating on UK Trustpilot with over 225,000 reviews.

For further information please visit: www.musicmagpieplc.com

 

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