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Focusrite PLC (TUNE)

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Monday 14 September, 2020

Focusrite PLC

Trading Update

RNS Number : 8203Y
Focusrite PLC
14 September 2020
 

Strictly embargoed until 07.00, 14 September 2020

Focusrite plc

( " the Company" or " the Group")

Trading Update for the year ending 31 August 2020

Focusrite plc (AIM: TUNE), the global music and audio products group of companies, supplying hardware and software used by professional and amateur musicians and the entertainment industry, is pleased to update the market on a strong trading year in which revenue, profits and cash flow have all grown substantially.

The Group expects revenue for the financial year ending 31 August 2020 to be ahead of market expectations at approximately £129 million, up from £84.7 million last year.  This growth comprises a full year of ADAM Audio revenue, acquired in July 2019; eight months of revenue from Martin Audio, acquired in December 2019 and growth of approximately 23% in the core Focusrite Audio Engineering business.  Gross margins have improved from the prior year and as a result EBITDA is also expected to be ahead of market expectations. 

Cash generation remains a high priority for management and, as at 31 August 2020, the Company had a net cash balance of approximately £3 million.  This has improved substantially from a net debt position of £19.9 million as at 29 February 2020.  For comparison the net cash balance as at 31 August 2019 was £14.9 million, prior to the acquisition of Martin Audio for £35.3 million, net of acquired cash but prior to acquisition costs.

As a consequence of this strong performance, the Board has decided to repay all assistance received by Martin Audio under the UK Coronavirus Job Retention Scheme and does not intend to make any claims for the associated Job Retention Bonus.  To date, this assistance totals approximately £164,000.

Tim Carroll, Chief Executive commented:

"The Group continues to see increased demand for solutions that enable the creation and playback of audio content for music, podcasting and streaming.   Much of the Focusrite Audio Engineering and ADAM Audio portfolios cater to these workflows and consequently have experienced continued high demand over and above our growth levels prior to the initial lock-downs.  The demand for Martin Audio products, especially for live sound events such as tours, festivals and theatres, has been negatively impacted since March 2020 due to COVID-19 restrictions.  However, we are now seeing some early signs of recovery for installed sound solutions in many regions for clubs, houses of worship and corporate audio / visual solutions.

We are very pleased to have repaid the net debt, required to fund the acquisition of Martin Audio, so quickly.  This has been achieved in part by reductions in inventories of finished goods due to high demand. We are optimistic about our future growth prospects as we continue to execute our strategy of growing our core customer base, focusing on customer value and expanding our business, both organically and through further acquisitions."

The Company expects to announce final results for the year ended 31 August 2020 in late November 2020.

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Enquiries:

 

Focusrite plc:  +44 1494 836301

 

Tim Carroll (CEO) 

Jeremy Wilson (CFO) 

 

Panmure Gordon (Nominated Adviser and Broker)                                 +44 20 7886 2500

 

Freddy Crossley / Alina Vaskina

Erik Anderson

 

Belvedere Communications                                                                          +44 20 3687 2756

 

John West

Llew Angus 

 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

 

Notes to Editors

 

Focusrite plc is a global audio products group that develops and markets proprietary hardware and software products. Used by audio professionals and musicians, its solutions facilitate the high-quality production of recorded and live sound.  The Focusrite Group trades under six established brands: Focusrite, Focusrite Pro, Novation, Ampify, ADAM Audio and Martin Audio.

 

With a high-quality reputation and a rich heritage spanning decades, its brands are category leaders in the music-making and audio recording industries. Focusrite and Focusrite Pro offer audio interfaces and other products for recording musicians, producers and professional audio facilities. Novation and Ampify products are used in the creation of electronic music, from synthesisers and grooveboxes to industry-shaping controllers and inspirational music-making apps.  ADAM Audio studio monitors have earned a worldwide reputation based on technological innovation in the field of studio loudspeaker technology.  Martin Audio designs and manufactures performance-ready systems across the spectrum of sound reinforcement applications.

 

The Focusrite Group has a global customer base with a distribution network covering approximately 160 territories.  Focusrite is headquartered in High Wycombe, UK, with marketing offices in Los Angeles and Hong Kong.  ADAM Audio has offices in Berlin, Nashville and Dongguan, China. Martin Audio is also based in High Wycombe with a subsidiary in US.

 

Focusrite plc is traded on the AIM market, London Stock Exchange.

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