Focusrite's (TUNE) revenue and adjusted cash profits may have come in ahead of market expectations in 2019, but the music and audio products group warned that first-quarter revenue for this year would be lower, lacking last year's benefits of US price increases and weaker sterling.
Revenue growth was driven by the release of the third-generation Scarlett range in July, with revenue for Scarlett and Clarett rising by more than a fifth. Conversely, sales for electronic music equipment specialist Novation suffered, as the lead product reached the end of its life-cycle, causing a 12 per cent decline in revenue for this business. However, updated products were released close to the year-end, and so far have been well-received, management said.
The group’s net cash fell by a quarter after it acquired ADAM Audio, a specialist in loudspeaker technology, for €18.0m (£16.2m) in July. The purchase is part of Focusrite’s strategy to boost revenue growth by broadening its product range, said chief executive Tim Carroll, along with geographical expansion. The group is eyeing markets in Latin America, Japan and China, he said.
House broker Panmure Gordon is forecasting adjusted pre-tax profits of £14.3m and EPS of 21.9p for the year to August 2020, rising to £18.7m and 21.8p the following year.
| FOCUSRITE (TUNE) | ||||
| ORD PRICE: | 539p | MARKET VALUE: | £313m | |
| TOUCH: | 530-548p | 12-MONTH HIGH: | 595p | LOW: 422p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 26 | |
| NET ASSET VALUE: | 92p* | NET CASH: | £14.9m | |
| Year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 48.0 | 6.5 | 10.4 | na |
| 2016 | 54.3 | 7.1 | 11.8 | 2.0 |
| 2017 | 66.1 | 9.5 | 15.4 | 2.7 |
| 2018 | 75.1 | 11.7 | 18.4 | 3.3 |
| 2019 | 84.7 | 13.0 | 20.4 | 3.8 |
| % change | +13 | +11 | +11 | +15 |
| Ex-div: | 09 Jan | |||
| Payment: | 31 Jan | |||
| *Includes intangible assets of £24m, or 41p a share | ||||
