Shares in music and audio products company Focusrite (TUNE:AIM) gained 6% to £10.40 on Friday after it said full-year results to 31 August 2021 would likely be ahead of current market expectations.
SUSTAINED GROWTH
Lockdown winner Focusrite indicated that demand had remained strong in the current financial year compared with the same period in 2020, and the board now expect revenues for the first half to 28 February to be in excess of £90 million compared with £49.9 million in the previous year's first half.
Prior to today’s unscheduled update, analysts had penciled in full-year revenues of £135 million and operating profit of £23.4 million, according to data provider Refinitiv.
This would mean year-on-year growth of just 3.4% and 1.7% respectively, implying analysts need to revisit their forecasts.
This morning, Peel Hunt analysts upped their current-year revenue estimate by 7% to £147 million and EPS estimates by 20% to 38p.
Clearly, there was an expectation that the strong growth seen under lockdown would be a tough hurdle for the company to overcome in 2021, but today’s upgrade suggests that view may be too pessimistic.
SUPPLY ISSUES
However, the company also cautioned investors about current supply constraints due to the global shortage of semiconductors and other components as reported by many consumer electronics companies.
Chief executive Tim Carroll commented, ‘We believe the constraint will be temporary, and our relatively high volumes and excellent contract manufacturers have helped us to continue to satisfy that demand so far, but this remains a risk we are monitoring closely.
‘How demand may be affected by the easing of lockdowns around the world is hard to judge although we do expect Martin Audio to rebound as live events restart.’
