The price of shares in AIM-listed musical equipment retailer Gear4music (LON:G4M) increased by 20.78% to 386.49p (as of 15:05 BST) after it returned to profit during the year ended 31st March. Revenues for the period were up by 2%, but EBITDA surged 239% as gross margins improved by 310 basis points. Management said that trading in April and May had been exceptionally strong and management were confident in further profit growth for the current year.
CEO Andrew Wass commented: “We set out at the start of FY20 seeking to execute our renewed strategy and return the Group to a more profitable growth trajectory. As a result of the efforts across our team and the excellent commercial and operational progress we have made over the past 12 months I am pleased to report that profits for the year are ahead of the board’s expectations.
“As previously announced, the commitment and hard work of our employees has enabled us to continue operating safely, whilst successfully serving our customers throughout the COVID-19 crisis.
“With an increasing number of people throughout the COVID-19 lockdown recognising the benefits that playing , creating and recording music can bring , we have seen a significant increase in demand during this exceptional period. Positive sales trends with improved margins have continued into June, and we have also incurred lower marketing costs than we would typically expect.
“The improvements we have made during FY20, and the exceptionally strong trading we have experienced during the lockdown period, mean we are financially stronger and better placed than ever to make the most of future growth opportunities within our market“.