Gear4music Acquires Assets from Competitor, Sees Strong Trading Performance
Why we think this is very good
The RNS announcement from Gear4music (Holdings) plc contains positive news on multiple fronts. The company has acquired valuable assets, including stock, websites, trademarks, and commercial data, from the administrators of a competitor, GAK.co.uk Ltd and The Guitar, Amp & Keyboard Centre Ltd, for a relatively low consideration of £0.6 million. This suggests the company is making strategic investments to strengthen its market position. Additionally, the company has reported a marked improvement in UK and European like-for-like sales in the latter half of March, which has been sustained over the first two weeks of April, leading to a return to double-digit sales growth over the last 30 days. This provides the Board with further confidence in the outlook for the year ending 31 March 2026, with the company believing current consensus market expectations for revenues, EBITDA, and profit before tax are achievable. Given the positive trading performance and the strategic asset acquisition, the overall sentiment for this announcement is very good, as it indicates the company is performing well and making prudent investments to drive future growth.
Key Points
- Gear4music has acquired assets, including stock, websites, trademarks, and commercial data, from the administrators of GAK.co.uk Ltd and The Guitar, Amp & Keyboard Centre Ltd for £0.6 million
- The company has reported a marked improvement in UK and European like-for-like sales in the latter half of March, which has been sustained over the first two weeks of April, leading to a return to double-digit sales growth
- The company believes current consensus market expectations for the year ending 31 March 2026 are revenues of £153.8 million, EBITDA of £10.9 million and profit before tax of £2.65 million
Summary
Gear4music (Holdings) plc, the UK's largest retailer of musical instruments and music equipment, has announced the purchase of stock with a cost value of £1.8 million, together with certain intangible assets including websites, trademarks, and commercial data, for a total consideration of £0.6 million. These assets are being purchased from the Administrators of GAK.co.uk Ltd and The Guitar, Amp & Keyboard Centre Ltd.
The Group also reported that the marked improvement in UK and European like-for-like sales in the latter half of March has been sustained over the first two weeks of April, with a return to double-digit sales growth over the last 30 days providing the Board with further confidence in the outlook for the year ending 31 March 2026. The company believes that current consensus market expectations for the year ending 31 March 2026 are revenues of £153.8 million, EBITDA of £10.9 million and profit before tax of £2.65 million.