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Refurbished electronics retailer musicMagpie has cheered a recovery in trading after being knocked by postal strikes and poor consumer confidence at the start of its year.
The group said underlying earnings raced 42% higher year-on-year to £2 million in its second quarter to May 31 thanks to stronger trading from February.
A “challenging” start to the financial year, weighed on by Royal Mail industrial action and shopper cut backs in December and January, left overall first half growth in underlying earnings up by a more muted 7.7% at £2.8 million.
The group said it focused on keeping a tight rein on costs and boosting profit margins rather than growing revenues on less profitable products, which helped drive earnings higher.
The first half update showed consumer technology revenues fell to £41.2 million from £46 million a year ago, while disc media and book sales remained in decline as expected, falling to £20.8 million from £25.3 million a year ago.
It is especially gratifying to see that our profit improvement has been driven by an increased margin
Steve Oliver, chief executive of musicMagpie
It said the first six months are traditionally quieter for the group, given that peak trading is seen around Black Friday in November and added it was “confident” in achieving full year expectations.
Steve Oliver, chief executive and co-founder of musicMagpie, said: “It is especially gratifying to see that our profit improvement has been driven by an increased margin.
“This has been achieved both by focusing on higher margin sales through our own musicMagpie online store, as well as the continued strong growth of our rental offering.
“While we remain very mindful of the current tough consumer environment, the momentum in our business as we head into the second half means that we are confident of achieving our full year expectations.”
It saw a leap in customers signing up to its consumer technology rental service, at around 39,000, up from 30,500 in November last year.
The firm is also launching its Buy Now Pay Later service over the final six months focusing on “more profitable, higher credit quality customers”.
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