Strictly embargoed until 07.00, 18 March 2020
("the Company" or "the Group")
Trading Update and Directorate Change
Focusrite plc (AIM: TUNE), the global music and audio products company supplying hardware and software used by professional and amateur musicians and the entertainment industry, is pleased to report that in the first half of the current financial year ending 31 August 2020 revenue has increased to approximately £50 million (HY19: £40.4 million).
The outbreak of COVID-19 caused disruption in deliveries from our suppliers in China during the month of February. This had some impact on half year revenue, given disruption to supply, but the Board believes that existing stocks held by the Company and its distributors and dealers across the globe have been able to satisfy the majority of customer demand, which remains buoyant with consumer registration data indicating strong end-user sales. Consequently, underlying performance remains in line with current market expectations although it is hard to quantify the future disruption due to the impact of COVID-19 in the second half of the financial year.
Reported revenues include the two acquisitions made last year, ADAM Audio and Martin Audio. Excluding those, the revenue for the half year is approximately £38 million (HY19: £40.4 million). In addition, there were orders in hand to support another £2 million of revenue, but the timing of supply of stock was impacted by COVID-19. These orders will now be satisfied during the second half of the financial year.
Cash conversion has remained positive and, as at 29 February 2020, net debt was approximately £20 million from a £40 million facility, despite the purchase of both ADAM Audio in July 2019 and Martin Audio in December 2019 for a combined cost of approximately £54 million (including fees and net of acquired cash). This is compared with net cash of £14.9 million as at 31 August 2019 and £26.2 million as at 28 February 2019.
The Company announces that Jeremy Wilson, CFO, has decided to leave the Company on 31 December 2020 to pursue a range of personal interests. Jeremy will remain in his current role to support the Company through the current financial year and ensure a seamless and orderly transition once a replacement has been found. Jeremy joined the Group prior to its IPO in 2014 and has been a valued and trusted member of the Board. He has contributed substantially to its success and the Board are grateful to him for his service and wish him well in his future endeavours. The Board will now start a formal recruitment process to find a replacement and will update the market accordingly.
Tim Carroll, Chief Executive commented:
"We are extremely pleased with the outcome for the half year, especially considering the significant navigation needed to deal with the issues created by COVID-19. Pleasingly, ADAM and Martin are both settling in very well. Integration is progressing to plan and both businesses are delivering incremental growth and profits to the wider Group.
We are all very sad that Jeremy has decided to leave the Company and would like to thank him for his efforts over the last six years. We wish him good fortune for the future and are grateful that he will stay with us until December 2020 so we can find a suitable replacement and ensure a smooth transition.
We are optimistic that as the effects of COVID-19 in Asia stabilise, we can continue to manufacture our excellent products for our ever-growing user base, although obviously COVID-19 will remain a significant concern in the second half as it affects the world's economies and the personal lives of all our customers, suppliers, distributors and employees."
The Company expects to issue its interim results for the period ended 29 February 2020 in late April 2020.
Focusrite plc: +44 1494 836301
Tim Carroll (CEO)
Jeremy Wilson (CFO)
Panmure Gordon (Nominated Adviser and Broker) +44 20 7886 2500
Freddy Crossley / Alina Vaskina
Belvedere Communications +44 20 3687 2756
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Notes to Editors
Focusrite plc is a global music and audio products group that develops and markets proprietary hardware and software products. Used by recording professionals and musicians alike, its solutions facilitate the high-quality production of recorded and live sound. The Focusrite Group trades under six established brands: Focusrite, Focusrite Pro, Novation, Ampify, ADAM Audio and Martin Audio.
With a high-quality reputation and a rich heritage spanning decades, its brands are category leaders in the music-making and audio recording industries. Focusrite and Focusrite Pro offer audio interfaces and other products for recording musicians, producers and professional audio facilities. Novation and Ampify products are used in the creation of electronic music, from synthesisers and grooveboxes to industry-shaping controllers and inspirational music-making apps. ADAM Audio studio monitors have earned a worldwide reputation based on technological innovation in the field of studio loudspeaker technology. Martin Audio designs and manufactures performance-ready systems across the spectrum of sound reinforcement applications.
The Focusrite Group has a global customer base with a distribution network covering approximately 160 territories. Both Focusrite and Martin Audio are headquartered in High Wycombe, UK, with marketing offices in Los Angeles and Hong Kong. ADAM Audio has offices in Berlin, Nashville and Dongguan, China. Martin Audio has a US subsidiary, based in Los Angeles.
Focusrite plc is traded on the AIM market, London Stock Exchange.