14th Sep 2022 10:36
(Alliance News) - Focusrite PLC on Wednesday said it expects report annual earnings below prior company expectations, but revenue in line.
Shares in the High Wycombe, Buckinghamshire-based music and audio products company were down 8.1% to 735.00 pence each in London on Wednesday morning.
Focusrite said it expects revenue for its financial year that ended August 31 to be in line with expectations at around GBP180 million, up from GBP173.9 million the year prior.
It explained that underlying demand for products has remained "strong", with end-user registrations for its content creation and audio interface solutions continuing at rates experienced ahead of the Covid-19 pandemic.
Also it said it continues to see strength in its live and installed sound markets.
However, Focusrite said it now expects earnings before interest, tax, depreciation and amortisation for financial year 2022 to be slightly below its board's prior expectations, due to increased costs and investment.
It said that scarcity of semiconductors and high freight costs have drove up costs, as well as increased investment in systems, people and direct sales channels. Combined, these have had put downward pressure on gross margins.
At August 31, the company has a net cash balance of zero, compared to GBP17.6 million in financial year 2021.
This reflects the acquisition of Linea Research in May for GBP12.1 million, it noted, as well as the planned rebuilding of inventory from the extremely low levels at the end of the prior year.
Focusrite expects to announce results for the year that ended August 31 in late November.
Chief Executive Tim Carroll said: "We are optimistic about our future prospects, but mindful of the current global economic and political challenges and uncertainties, as well as the ongoing cost pressures in the supply chain.
"Over this past financial year, we have successfully built back our inventory position to provide greater resilience against supply chain volatility and ensure we are able to adequately meet demand as we head into the key holiday season," Carroll added.
By Sophie Rose; [email protected]
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