MusicMagpie hit by postal strikes and inflation – but there are reasons to be cheerful
Online retailer MusicMagpie was hit hard by postal strikes and low consumer confidence, although an “improved trading performance” after February saw a strong rebound.
MusicMagpie – who specialise in consumer tech and disc media – said revenues were at £61.9m, down from £71.3m last year.
Total gross profit for the group was also slightly lower, at £18.4m down from £19m, although gross margins improved slightly to 29.7 per cent and the electronics retailer usually makes the majority of its gains in the second half of the year.
The Stockport-headquartered firm said it remained positive it would meet targets for the year ahead, largely on the back of a 42 per cent revenue boost year-on-year in the second quarter.
It’s key consumer technology segment – which contributes to nearly half of its total profits – saw gains of 13.5 per cent, up to £10.9m.
Steve Oliver, Chief Executive Officer of musicMagpie, said: “After a challenging first quarter, I am pleased with the performance of the business during Q2 and the momentum that has been carried over into H2, which is traditionally the seasonally more important half for musicMagpie.
Despite the tough consumer environment, we expect consumers to increasingly look to the refurbished tech market and are confident that the business has the right strategy in place for future profit growth.”
It comes after a miserable start to 2023 for the used-technology reseller, who said in March that Royal Mail postal strikes had dented its outlook for 2023, despite it narrowing losses.
The dispute between the Communication Workers Union (CWU) and Royal Mail saw the companies’ biggest ever walk-out earlier in the year.
However this week, posties voted overwhelmingly to accept a deal with the CWU ending a national dispute that saw over 115,000 workers take 18 days of strike action in the final quarter of last year.
Inflation has also dented MusicMagpie’s outlook, squeezing margins and hitting consumer confidence.