Focusrite has released an upbeat closing update for the year to 31 August 2019, highlighting ahead-of-market-expectations revenue of £84m (Edison FY19 forecast: £79.8m, broadly consistent with consensus). This includes growth of c 10% (6% CCY) in the existing business plus six weeks of revenue for the recently acquired ADAM Audio studio monitor business.
EBITDA is also expected to be ahead of market expectations (Edison FY19 forecast: £16.3m, consistent with consensus), with margins having remained broadly consistent with the prior year. These results are testament to the success of the global growth strategy, despite macro-economic headwinds, and strength of the core brands.
The release of the third generation Scarlett range of products in July has been well received and the company continues to focus on product development and innovation. Robust cash generation resulted in net cash of £14.9m at 31 August, after taking into account the £16.2m acquisition of ADAM in July (FY18: £22.8m). We place our forecasts under review.
Author: Kate Heseltine