Shares in global music and audio products group Focusrite (TUNE:AIM) shot up 10% to 810p on Monday after the firm said full-year revenues and profits for the period ended 31 July 2020 would be ahead of current market expectations.
STRONG GROWTH
The core Focusrite Engineerring business grew approximately 23% while a full-year contribution from ADAM audio and eight months from Martin Audio, acquired in December 2019, helped to push revenues up by half from £84.7 million last year to around £129 million.
Gross profits and earnings before interest, tax, depreciation and amortisation (EBITDA) also improved and are expected to be ahead of analysts' current projections of £58.25 million and £27.43 million respectively.
Cash on hand at 31 August was £3 million, a substantial improvement from the £19.9 million net debt position at the end of February.
Both professional and amateur demand via e-commerce channels rose substantially over lockdown with Rolling Stone magazine reporting that DIY music was 'booming’.
Meanwhile Netflix actors are using the company’s products for voice-over work and the Scarlett range is being used on TV shows such as The Voice.
REPAYING FUNDS
As a consequence of the better performance the company will repay all funds received under the government’s job retention scheme, which to date amount to £164,000.
Chief executive Tim Carroll commented, ‘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.’
