14th Mar 2023 10:58
(Alliance News) - Focusrite PLC on Tuesday said profit in the six months ended February 28 are in line with expectations, allowing the company's expectations for the full-year to remain unchanged.
The High Wycombe, England-based firm said overall demand for its products across its Content Creation and Audio Reproduction businesses have remained "resilient" in the half.
Focusrite is a music and audio products firm supply hardware and software used by musicians and the entertainment industry.
As a result, the company said it expects revenue in the first half of its financial year to be no less than GBP85 million. The year prior revenue totalled GBP93 million.
However, Focusrite added that it expects weighting towards the second half of its financial year due to the timing of major new product launches.
The company noted that industry-wide demand weakness in Asian markets during the period, with Focusrite branded products impacted by the earlier phasing of inventory sell-in prior to its "key holiday season".
More positively, the company said it continues to see improvement in its gross margin as freight costs reduce to more normalised levels, component shortages and supply chain issue ease, and its pricing actions take effect.
Focusrite said it will give a more detailed update at the time of its first half results, which are expected to be released in late April.
Shares in the firm were down 3.1% at 664.00 pence on Tuesday morning in London.
At February 28, Focusrite's net debt stood at GBP14 million, compared to GBP400,000 at August 31. The company said this reflected increased inventory to support new product launches in the second half, the payment of the final GBP1.2 million earn-out relating to the acquisition of Sequential, and the GBP7 million consideration paid for Sonnox in December.
Focusrite said it expects its net debt position to improve going forward as the underlying cash generation of the business comes through in the second half.
By Heather Rydings, Alliance News senior economics reporter
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