MusicMagpie cheers record Black Friday as more consumers rent phones
Shares in the refurbished technology platform soared by more than a fifth on Thursday afternoon.
MusicMagpie has revealed it enjoyed a record Black Friday sales season, delivering a boost to its share price after BT pulled out of takeover talks.
Shares in the company soared by more than a fifth on Thursday after the firm gave an update on its trading performance.
The platform, through which people can buy and sell used mobile phones and other technology, as well as books, games and CDs, said a record Black Friday period helped offset a slower start to the year in terms of sales.
Consumer technology revenues were 7.5% higher over the latest six months, compared with the same period in 2022, it said.
And revenues from its rental service – where people can rent a phone, iPad or Apple watch for a year with monthly payments, and upgrade free of charge at the end of the year – surged by 57% year on year.
The number of rental subscribers grew by more than a fifth during the year, with the firm focusing on shoppers with higher credit ratings and who are more likely to renew their plans.
Yearly sales however were about £1 million lower than last year, totalling £95.4 million.
A stronger end to the year and tighter control of costs across the business means it expects to see earnings grow by more than 15% to £7.5 million for the full year, it said.
The trading update comes after telecoms giant BT pulled out of talks to take over musicMagpie last month.
BT said it was not planning to make an offer for the group, just days after private equity firm Aurelius Group, which owns Footasylum and The Body Shop, also backed out of discussions.
Shares in the retailer tumbled after the announcement, although it confirmed it was continuing to seek possible buyers for the group.
Steve Oliver, co-founder and chief executive of musicMagpie, said: “We are pleased with the performance of the group in the second half of the year, and are delighted that our focus on profits and cash has delivered significant EBITDA (earnings before interest, taxes, depreciation and amortisation) growth.
“Our strategy of proactively managing the number of active rental subscribers has also helped in this regard and will support our short-term objectives on profits and cash into 2024, bolstered by an enhanced buy-now-pay-later offering.”
