28th Aug 2024 09:48
(Alliance News) - Focusrite PLC on Wednesday said challenging conditions hurt earnings, with rising shipping and freight costs expected to continue going forward.
The High Wycombe, England-based company provides music and audio hardware and software to the entertainment industry.
Focusrite expects to report a 12% decline in revenue to GBP157 million for financial year that ends on Saturday from GBP178.5 million a year prior. It said this is in line with market expectations.
Earnings before interest, tax, depreciation and amortisation is expected at GBP25 million, down 32% from GBP36.9 million, due to shipping and logistics challenges as well as "various pressures on product margins".
Focusrite shares were down 18% at 286.30 pence each in London on Wednesday morning. They are down 46% over the past 12 months.
"The Audio Reproduction division continues to deliver in line with expectations, bolstered by successful product launches in the previous year and the inclusion of new brands within its portfolio, including Linea and Sheriff," Focusrite commented.
"As previously reported the Content Creation division continues to face a very challenging environment with both macro-economic weakness, channel consolidation and an oversupply in the channel affecting global sales across the industry. Despite this, overall product registration data and sales rankings tracked by the larger resellers continue to show that Focusrite is comfortably outperforming the overall market."
Net debt on August 27 stood at GBP15 million, improving 45% from GBP27.3 million on February 29.
Focusrite said: "Global shipping and freight costs have increased further in the second half of 2024 due to strong global shipping demand and ongoing issues in the Red Sea. The board now expects this trend in shipping and freight costs to continue into 2025."
Looking ahead, the company said it is focused on gaining market share through the delivery of new products and targeted acquisitions.
By Elijah Dale, Alliance News reporter
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