By Leah Montebello
Revenue dipped for circular economy firm musicMagpie as squeezed wallets bite into profits and margins.
In its interim results, the company posted a revenue of £71.3m, with growth in Consumer Technology largely offsetting the expected post-pandemic reduction in Disc Media and Books.
Disc Media and Books revenue fell 23.6 per cent to £25.3m (H1 2021: £33.1m) with the prior year H1 benefitting from pandemic lockdowns.
Gross profit hit £19m, compared to £23.7m in 2021, with gross margin reducing to 26.6 per cent as a result of the change in overall product mix towards Consumer Technology, with an increased proportion of these products being sourced from intermediary wholesale partners.
The firm made strong progress with its device rental subscription service, increasing to 24,000 active subscriptions as at 31 May, from an initial 7,500 in May last year.
It expanded this subscription service from phones to include MacBooks, tablets and games consoles in February, and revenues from subscriptions hit £2.3m.
Commenting on the results, Steve Oliver, Chief Executive Officer of musicMagpie, said he was pleased with the results and said:”In light of the continuing squeeze on consumer spending, we believe that this will become an increasingly attractive option to a wider range of consumers seeking to replace their non-discretionary technology products in a cost-effective way.”
The Board is confident that the business is well positioned for future growth and Adjusted EBITDA remains in line with its expectations for the full year.
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