Gear4music Holdings (G4M)

Business description

Gear4music is the largest dedicated, UK-based online retailer of musical instruments and music equipment. It sells branded instruments and equipment, alongside its own brand products, to customers ranging from beginners to professionals, in the UK and into Europe and the rest of the world.

Investment summary

Gear4music (G4M) is a disruptive online retailer in a traditionally fragmented market. The company finished the year in robust style, with 43% revenue growth. While marginally below our forecast, this represents good momentum going into FY19, where we only forecast 27%. While continued investment in scale means costs remain at planned levels, resulting in a pause in FY18 earnings growth, prospects for further market share gains remain bright and we see upside in the share price.

Last updated on 06/04/2018

Y/E Feb Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 35.5 1.7 0.6 3.1 232.9 N/A
2017A 56.1 3.7 2.7 11.6 62.2 N/A
2018E 80.1 3.7 1.7 7.3 98.9 N/A
2019E 102.1 5.0 3.1 12.5 57.8 N/A

Last updated on 05/04/2018

Latest video

Bitesize Briefings - Gear4music

Industry outlook

The UK musical instrument and equipment market is worth c £750m at retail value, according to management estimates. The European market (including the UK) is estimated at £4.3bn, the US at $7.7bn, and the world market at US$17bn. In the UK, the market is highly fragmented and G4M is the biggest player. The musical instrument (only) market is forecast to grow by a compound 1.7% over the next five years, according to ibisworld.co.uk.

Last updated on 06/04/2018

Key management

Andrew Wass, CEO
Chris Scott, FD

Company address

Kettlestring Lane
Clifton Moor
York
YO30 4XF
United Kingdom
+44 (0)330 365 4444
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