Morning Brief – 5-Jan-2018

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Morning Brief Images 5-Jan-2018

Morning All!

Back to just the one update today, perhaps next week will see us a little busier…

Gear4music Holdings (G4M) – 770p – £160.7m – PER 59.3

Trading Update For The 4 Months September 2017 To December 2017 – Revenues up 42% to £34.564m, reflecting same (42%) increase in own brand and other brand. Trading is “in line with the board’s expectations”. The group is confident it “will continue to grow rapidly over the medium and longer term, as we continue our mission to become the best musical instrument and equipment retailer in Europe”.

This is impressive growth indeed but I have my reservations. The Operating Margin is very small (2.67%), the ROCE is not particularly impressive (7.97%) and the PER is 59.3. Comparing 2018 forecasts and 2019 forecasts, Revenue £81.3 vs £102.1 (+25%), Profit £2.14m vs £2.8m (+30%). On a PER of 59.3 they’re going to have to surprise on the upside here.

A great weekend to all!

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