musicMagpie is a circular economy pioneer in refurbished consumer technology and media in the UK and United States. It is expanding its offer into rentals of smartphones and other technology to consumers and corporates, and widening its sourcing infrastructure.
The markets for pre-owned products in musicMagpie’s core categories in the UK and United States were worth £9bn in FY20, of which the UK was £1.6bn and the United States 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%.
Consumer |
Outlook
Consumer |
edison tv
Consumer |
Update
Consumer |
edison tv
Ian Storey
COO
Matthew Fowler
CFO
Steve Oliver
CEO
Forecast net debt (£m)
14.5
Forecast gearing ratio (%)
86
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 0.0 | (5.4) | (36.4) |
Relative | (4.7) | (5.8) | (39.1) |
52 week high/low | 44.6p/8.9p |
musicMagpie’s H123 results highlighted management’s focus on higher margin sales, leading to a gross margin improvement of 3.1pp y-o-y to 29.7% despite a 13% fall in total revenue. Margin gains came from a higher proportion of sales made through MMAG’s proprietary website, greater sourcing of product direct from consumers and the continued expansion of the Rental business. Cost savings further down the P&L translated to c 8% EBITDA growth. Our EBITDA forecasts for FY23 and FY24 were unchanged following the publication of the results.
Y/E Nov | Revenue (£m) | EBITDA (£m) | PBT (£m) | EPS (fd) (p) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2021A | 145.5 | 12.2 | 7.9 | 6.70 | 2.6 | 1.4 |
2022A | 145.3 | 6.5 | (0.9) | (0.77) | N/A | 3.1 |
2023E | 134.3 | 8.2 | (2.2) | (1.73) | N/A | 2.5 |
2024E | 138.6 | 10.5 | (1.1) | (0.82) | N/A | 2.0 |