Focusrite (TUNE) Trading Update summary

Trading performance

• Revenue for HY25 expected to be at least £80 million, up from £76.9 million in the prior year period.

• Content Creation division grew approximately 5% on an underlying basis, offset by a 6% decrease in Audio Reproduction.

• Audio Reproduction division anticipates improved revenue in H2 due to seasonal factors.

• Gross margins compressed slightly due to elevated freight costs and product mix, but pricing adjustments and new products are expected to improve margins.

• H1 EBITDA will be lower than the prior year and more weighted to the second half of the period.

Financial position and outlook

• Net debt at 28 February 2025 was approximately £18 million, up from £12.5 million at 31 August 2024, reflecting dividend payment and increased stock for anticipated US tariffs.

• Net debt is expected to improve in H2, with an overall cash inflow projected for the full year.

• £50 million in committed credit facilities provide flexibility for strategic initiatives and growth.

• Board expectations for the 12 months to 31 August 2025 remain unchanged, with EBITDA expected between £24.5 million and £26.0 million.

Market and operational highlights

• Content Creation market is normalising after volatility, with Focusrite maintaining a leading position and robust end-user registrations.

• Price increases due to US tariffs communicated to customers, effective 1 May 2025.

• Overheads increased as expected, mainly due to variable remuneration resets.

• Plans in place to navigate ongoing economic uncertainty.