musicMagpie trading update warns of ‘cautious consumer behaviour’

‘Cautious consumer behaviour’ in August and September has led Stockport headquartered circular economy pioneer, musicMagpie, to warn of slower than expected sales growth for the second half of the year in a trading update issued 26th September.

While the Group still expects improved trading performance in the second half of the year despite challenging macroeconomic conditions, consumer technology sales have been weaker than anticipated in the firm’s Interim Half Year Results released in July. The growth of the business’ device rental offer has also impacted sales, however, these contracts are more profitable and have strategic importance as a recurring revenue stream.

musicMagpie now expects that revenue generated in the second half will show lower growth over the first half than previously expected, and that profitability for the year to 30 November 2022 will be below its previous expectations and those of the market.

In its trading update, the tech reseller does, however, expect the Black Friday sales period of November and October will see consumer interest peak, but musicMagpie is reducing its expectations for the period as a result of cost of living pressures on consumers’ disposable income. The firm also boasts a strong balance sheet, including a £30 million revolving credit facility and with its SMARTdrop kiosk roll-out with ASDA on track to complete by the end of the year.

As a result of its profit warning, the Group’s share value was down 70% to 19p per share when markets opened this morning, a drop of 8.5p on yesterday’s close of 27.5p.

Pictured: musicMagpie CEO Steve Oliver and Mount Recyclemore, an art installation commissioned by the group to urge G7 leaders to act on electronic waste.