musicMagpie

AIM: MMAG

Market Cap£21m

Last Close 19.15p

musicMagpie is a leader of re-commerce in the UK and US in consumer technology, books and disc media through its proprietary technology platform. It is expanding its offer into rentals of smartphones and other consumer technology, and widening its sourcing infrastructure.

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Investment summary

The company reported a slower rate of revenue growth during August and September for outright Technology sales due to more cautious consumer behaviour than was anticipated, and continuing margin pressure. Given the deteriorating macroeconomic outlook and pressures on consumer disposable incomes, management now also assumes a more prudent rate of revenue growth through the end of FY22. Q4 is typically a material contributor to full year results. On the positive side, Rentals revenue has benefited from the more difficult economic environment, the launch on Back Market has been positive, and, we infer, Disc Media and Books revenue is in line with expectations. We reduced our FY22–24 EBITDA estimates by 19–30%.

Y/E Nov
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2020A 153.4 13.9 9.2 10.52 1.8 1.4
2021A 145.5 12.2 7.9 6.11 3.1 1.7
2022E 146.3 6.5 (1.0) (0.75) N/A 3.2
2023E 156.9 9.2 (0.8) (0.64) N/A 2.2
Industry outlook

The markets for pre-owned products in its core categories in the UK and US were worth £9bn in FY20, of which the UK was £1.6bn and the US was £7.1bn (source: musicMagpie’s Admission Document). According to independent third-party research commissioned by management, medium-term annual market growth rates for the product categories were forecast to be Technology 15%, Books stable/low growth and Media negative 5–10%.

Last updated on 30/11/2022
Content on musicMagpie
musicMagpie – Weak Technology outright sales
Consumer | research Update | 27 September 2022
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musicMagpie – Management optimistic about growth initiatives
Consumer | research Update | 28 July 2022
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musicMagpie – Buy more, sell more, rent more
Consumer | research Initiation | 11 July 2022
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Share price graph
Balance sheet
Forecast net debt (£m) 10.4
Forecast gearing ratio (%) 46
Price performance
%
1m
3m
12m
Actual 91.5 (37.2) (88.2)
Relative* 79.3 (39.2) (88.5)
52-week high/low 167.5p/8.9p
*% relative to local index
Key management
Steve Oliver CEO
Matthew Fowler CFO
Ian Storey COO