Focusrite PLC

Latest Results (14.08.2024):

Revenue Decline

Focusrite PLC reported a 10.9% decrease in total Group revenue for the half-year ended 29 February 2024 (HY24) compared to the same period in the previous year (HY23). The revenue drop was primarily driven by ongoing challenges in the Content Creation market, which saw a 19.8% decline in revenue. However, the Audio Reproduction division experienced a 21.4% increase in revenue, partially offsetting the overall decline.

Gross Margin

The gross margin for Focusrite PLC in HY24 was 45.8%, down from 47.1% in HY23. The 1.3 percentage point decline was mainly due to a one-off stock provision related to the Vocaster range. Excluding this provision, the underlying gross margins remained consistent with the previous year, despite increased freight costs and aggressive promotional campaigns by competitors.

Adjusted EBITDA

Focusrite PLC's adjusted EBITDA for HY24 was £12.1 million, a decrease from £18.1 million in HY23. The reduction in EBITDA reflects lower sales and the impact of the excess stock provision within the gross margin. Despite these challenges, the company managed to control costs and offset inflationary impacts through savings.

Operating Profit

The operating profit for Focusrite PLC in HY24 was £4.7 million, down from £11.5 million in HY23. This decline is attributed to the reduced EBITDA and increased amortisation from acquisitions and new product launches. The company continues to focus on strategic growth initiatives to improve profitability in the second half of the year.

Net Debt

Focusrite PLC's net debt increased to £27.3 million in HY24, compared to £13.2 million in HY23. The rise in net debt is due to higher working capital levels, with increased stock in the Audio Reproduction division to support growth and higher debtors in the Content Creation division. These factors are expected to largely reverse in the second half of the year.