Gear4music (G4M) H2 2026 earnings summary

Executive summary

• Achieved transformative financial performance in FY26 with revenue up 30% to £190.7m, gross profit up 37% to £54.2m, and EBITDA up 84% to £18.4m, resulting in profit before tax of just over £10 million, an £8.7 million improvement from the prior year.

• Fulfilled a record 1.2 million orders, reaching maximum capacity in the UK warehouse, prompting investment in new automated distribution facilities and significant investments in automation, AI-driven systems, and logistics.

• Growth was broad-based, driven by education sales, showroom performance, higher value product sales, and market share gains.

• Profits exceeded upgraded market expectations, and the business is well positioned for continued momentum.

• Strategic investments in technology, logistics, and customer experience are expected to support continued growth and operational efficiency.

Financial highlights

• Revenue increased 30% year-over-year to £190.7m; UK revenue up 26% to £114.1m, international revenue up 36% to £76.6m.

• Gross margin improved by 140bps to 28.4%, aided by disciplined buying, pricing, and a one-off sale of deal stock from competitor insolvencies; product margin at 32.0% and own-brand margin up 360bps.

• EBITDA reached £18.4 million, the second highest ever, with net debt reduced for the fourth consecutive year to £5 million (0.3x EBITDA).

• Average order value increased by 7%, reflecting a shift to higher value products.

• Own-brand products contributed 23% of revenue from just 9% of SKUs, supporting margin enhancement.

Outlook and guidance

• Trading in line with Board expectations; double-digit revenue growth continues into FY27.

• New UK automated warehouse to be completed ahead of peak trading, supporting over 60% of UK order volumes and enabling future scaling.

• Short-term profit may dip due to duplicated costs during warehouse transition, but investment expected to pay back in 3-5 years.

• Strategic initiatives in AI, CRM, and logistics to drive further growth and operational leverage.