LONDON (ShareCast) - (Sharecast News) - Gear4music reported a 2% increase in total revenue to £146.7m for the year ended 31 March in an update on Wednesday, supported by a 9% rise in UK sales to £90.2m, although its result did fall short of previous market expectations.
The AIM-traded musical instrument and equipment retailer said European and rest-of-world revenues declined, however, by 8% to £56.5m, reflecting ongoing competitive pressures in certain international markets.

It said it expected to report EBITDA of £10m, up from £9.4m in the 2024 financial year, and profit before tax of £1.6m, an improvement from £0.6m a year earlier.

Gross margin was expected to be 27.1%, marginally down from 27.3% in the 2024 period but ahead of the 25.7% recorded in 2023.

Despite the year-on-year improvements in profitability and further reduction in net bank debt to £6.4m, the preliminary results fell short of market expectations.

Prior to the update, consensus forecasts had anticipated revenue of £154.7m, EBITDA of £11.7m, and profit before tax of £2.8m.

Gear4music noted that it remained the UK's largest online retailer of musical instruments and equipment, adding that it was continuing to focus on operational efficiency and profitability following a period of international expansion and margin recovery.

"Despite a challenging consumer environment over the past 12 months, we are pleased to report that the group's financial performance in 2025 is expected to surpass 2024," said executive chair Andrew Wass.

"Our performance reflects higher revenues, stable gross margins and a continued focus on cost control resulting in increased reported EBITDA, and a £1m improvement in profit before tax for the year.

"A further reduction in net bank debt translates into leverage of 0.6 times 2025 EBITDA."

Wass said financial performance in February and early March was subdued, primarily due to aggressive discounting from underperforming competitors in both the UK and Europe coupled with ongoing weak consumer confidence.

"However, both UK and European like-for-like sales improved markedly in the latter half of March, with early indications suggesting that the competitive pressures may be easing as a result of a number of significant retailers experiencing trading difficulties and now exiting the market.

"Through the 2025 financial year, we have laid robust foundations for our revised growth strategy first announced in June 2024, by investing in new own-brand products, expanding our second-hand offerings, strengthening our marketing capabilities, and enhancing our bespoke e-commerce platform.

"Economic uncertainty remains as we enter the new financial year, nevertheless we believe these strategic initiatives coupled with competitor developments in our market, position us well to maintain our recent positive momentum and drive accelerated commercial and financial performance in 2026 and beyond."

At 1123 GMT, shares in Gear4music Holdings were down 5.44% at 127.66p.

Reporting by Josh White for Sharecast.com.

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