Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Consumer
musicMagpie’s (MMAG’s) H124 results reflected several strategic decisions taken by the management team to improve profitability and cash generation. The decision to make the US a sourcing-only geography to benefit margins had a notable impact on revenues, with US revenues declining by more than half. Despite the double-digit decline in group revenue, the adjusted EBITDA margin remained relatively stable at 4.4% (H123: 4.5%), reflecting the focus on profitability. The outlook remains challenging, but management is encouraged by the progress made on right-sizing the cost base, the entry into new categories and the historical H2 weighting of the business. MMAG remains in the offer period as numerous discussions with interested parties are ongoing.
Written by
musicMagpie |
Strategically positioning for profitability |
H124 results |
Retail |
1 July 2024 |
Share price performance
Business description
Analysts
musicMagpie is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||
musicMagpie’s (MMAG’s) H124 results reflected several strategic decisions taken by the management team to improve profitability and cash generation. The decision to make the US a sourcing-only geography to benefit margins had a notable impact on revenues, with US revenues declining by more than half. Despite the double-digit decline in group revenue, the adjusted EBITDA margin remained relatively stable at 4.4% (H123: 4.5%), reflecting the focus on profitability. The outlook remains challenging, but management is encouraged by the progress made on right-sizing the cost base, the entry into new categories and the historical H2 weighting of the business. MMAG remains in the offer period as numerous discussions with interested parties are ongoing.
Year end |
Revenue (£m) |
EBITDA* (£m) |
PBT* |
EPS |
EV/EBITDA |
P/E |
11/20 |
153.4 |
13.9 |
9.2 |
11.6 |
1.1 |
0.5 |
11/21 |
145.5 |
12.2 |
7.9 |
6.7 |
1.2 |
0.9 |
11/22 |
145.3 |
6.5 |
(0.9) |
(0.8 |
2.3 |
N/A |
11/23 |
136.6 |
7.5 |
(4.2) |
(3.3) |
2.0 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
MMAG reported a 13.1% decline in revenue in H124, as a challenging consumer environment was coupled with a 54.6% decline in US revenues following the shift to using the region for sourcing-only. The 17.0% decline in the Consumer Technology business was predominantly driven by the decline in the US, as UK outright sales grew slightly to £28.7m (H123: £28.6m) in a more competitive market for second-hand technology. Rentals revenue came down 5.1% to £3.8m (H123: £4.0m), with the number of active subscribers reducing from 37.1k at end-FY23 to 32.7k as management focuses on high-credit scoring customers to improve renewal and upgrade rates. Management consequently anticipates delivering lower year-on-year rental revenue for the full year, however, it believes that lower depreciation charges and impairment losses will benefit the bottom line. Disc Media and Books continued its expected decline to £19.7m (H123: £20.9m), although the rate of 5.5% is slowing relative to prior periods (FY23: 15.5%, H123: 17.6%).
To date, management has focused on improving profitability and managing cash. Early in the period management took the decision to make the US a sourcing-only location to sell items at a higher margin in the UK. Adjusted EBITDA fell 14.5% to £2.4m (H123: £2.8m) due to the lower revenues from the US, however the prior period benefited from £0.3m in proceeds from the disposal of delinquent rental accounts. Overheads have been reduced by £2.4m following the reduction in headcount in both the US and UK, while the lower rental asset base resulted in a lower depreciation charge of £2.4m (H123: £2.7m). Consequently, the reported loss before tax improved to £3.0m (H123: £3.2m).
MMAG has announced that in June 2024 it entered branded fashion buying, a new category for the group. Users can sell used branded items such as clothes or accessories, which MMAG then sells on to third-party partners. Management noted that it could potentially enter other attractive new categories given its existing infrastructure to buy, process and sell used items.
|
|
Research: Investment Companies
SDCL Energy Efficiency Income Trust (SEEIT) recorded a 9% increase in cash from investments in FY24, generating £92.5m (FY23: £85.1m), ensuring its DPS of 6.24p was fully covered by cash 1.1x. The board guided a target dividend of 6.32p per share for FY25 (9.5% prospective yield). The portfolio valuation stood at £1,117m (4.8% increase from H124 and 1.6% from FY23). Both SEEIT’s NAV and NAV per share remained flat for FY24, at £982m and 90.5p/share, compared to H124, with the majority of the reduction from FY23 (£1,125m and 101.5p/share) arising from the unrealised impact of increased discount rates applied in the first half of FY24. SEEIT currently trades at a 26% discount to NAV with a 9.4% dividend yield, and management has made strong progress in addressing the discount to NAV through proving its asset valuations.