Focusrite PLC, a global music and audio products group, has provided a trading update for the year ending 31 August 2024 based on the six months ended 29 February 2024. The company anticipates revenues for FY24 to be not less than £155 million, with EBITDA expected to be in the range of £27 million to £30 million. The challenging market conditions have continued, impacting the performance of the group's geographic regions, particularly in the Content Creation market globally.
The company's Focusrite brand sales have been affected by stock load-in for the transition of the Scarlett range from Generation 3 to Generation 4, resulting in softness and volatility in demand. Additionally, the launch of some higher-end Scarlett Generation 4 products has been delayed due to engineering resource constraints. Despite these challenges, underlying registrations for Focusrite products reflect solid underlying end user demand, indicating that the company's products continue to maintain or improve market share.
Sequential has seen sales decrease globally, particularly at the higher price points, impacted by cost-of-living issues and necessary sales price increases due to component price rises. However, the ADAM brand has shown encouraging growth, reflecting increased market awareness, and the benefit and scale from Group-led activities, while Novation is trading in line with the market.
The Audio Reproduction division remains robust with strong overall performance in HY24 and healthy pipeline projections for the full year, building on the strength of recent acquisitions. Group gross margins remain strong and stable, and the Group continues to actively leverage synergies to optimize costs.
As of 29 February 2024, the Group had net debt of approximately £26.0 million, with the increase mainly attributable to the impact of working capital phasing across debtors and stock, and with one-off impacts of approximately £5 million due to investment in future technologies and recent acquisitions. The Group remains well-positioned for future growth, with a clear focus on increasing market share, delivering new products, and making targeted acquisitions.
The Group looks forward to providing a more detailed trading review when it announces its half-year results in late April 2024.