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(Sharecast News) - Online retailer MusicMagpie said on Wednesday that pre-tax losses had widened in the 12 months ended 30 November 2023 but said it "remains confident" about future prospects following strong trading in the first quarter of the new trading year.
MusicMagpie said pre-tax losses widened from £1.5m to £6.8m as it noted it had become "increasingly difficult" to qualify for UK R&D tax credits from which it had historically benefitted, while revenues decreased from £145.3m to £136.6m amid a "tough consumer macro environment".
On the other hand, adjusted underlying earnings rose from £6.5m to £7.5m, driven by "tight control" of margins and costs, while gross margins expanded from 26.3% to 27.7% as the firm continued to focus on margin expansion.
The AIM-listed group added that year-end net debt had surged from £7.9m to £13.1m following investments in rental assets, with year-end active renters contributing approximately £3.6m of committed revenue into 2024 and assets with a FY23 year-end balance sheet value of £7.2m.
MusicMagpie added that Q1 trading was in line with management's expectations, stating that its "positive start" to the new financial year, combined with recent changes made to its US buying strategy and operations, cost reduction exercises in the UK, and lower investment levels into its rental offering, gave it confidence in its FY24 and medium-term prospects.
As of 1000 GMT, MusicMagpie shares were down 4.11% at 8.63p.
Reporting by Iain Gilbert at Sharecast.com
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