Listed re-commerce business musicMagpie, which specialises in refurbishing consumer technology, has reported an adjusted EBITDA increase of 7.7 per cent.

The figures relate to the six months to the end of May 2023 and follow a strategy of focusing on cost control and increasing gross margins rather than growing revenues on lower margin products.

Steve Oliver, chief executive officer and co-founder of Stockport-based musicMagpie, said: “We are pleased with our performance in what is always the seasonally quieter half of the year for musicMagpie.

“It is especially gratifying to see that our profit improvement has been driven by an increased margin.

“This has been achieved both by focusing on higher margin sales through our own musicMagpie online store, as well as the continued strong growth of our rental offering.

“While we remain very mindful of the current tough consumer environment, the momentum in our business as we head into H2 means that we are confident of achieving our full year expectations.”

The results are all  the more impressive as they had a challenging start H1 2023, with postal strikes and low consumer confidence impacting December and January.

Trading performance strengthened from February onwards, driving a strong Q2 2023 that delivered EBITDA of £2m, up 42 per cent on Q2 2022.

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Overall EBITDA for the traditionally quieter first six months of the year was £2.8m, up 7.7 per cent on H1 2022 and in line with the board’s expectations.

Consumer technology revenue for H1 2023 was £41.2m, comprising two thirds of total revenue (H1 2022: £46m).

Sales of disc media and books continued their anticipated decline, falling to £20.8m (H1 2022: £25.3m).

Gross margin increased strongly by around 3.1 per cent year-on-year.

The improvement was driven by: a combination of a higher proportion of product sourced directly from consumers; an increase in the proportion of sales made through the musicMagpie store; and the increasing contribution from rental subscriptions.

These factors, combined with cost control measures delivering lower overheads, contributed positively to the strong Q2 2023 performance.

Active customers to the rental service for consumer technology products increased to around 39,000, up from  30,500 in November 2023.

musicMagpie launches subscriptions for businesses

The second half of 2023 will see the launch of an enhanced buy now pay later option which will benefit consumer technology sales and increase choice for consumers.

It will sit alongside the group’s evolving rental offer which will focus on more profitable, higher credit quality customers.

This will help support long-term profit growth whilst managing working capital, and thus debt utilisation, more effectively.

The group has extended its £30m revolving credit facility by one year to provide committed facilities through to July 2026. Net debt on May 31, 2023 was £13.7m.

As evidenced in previous years, the group has a much stronger second half weighting to its financial year, owing in part to seasonal peak trading around the Black Friday weekend in November.

This seasonality, combined with the continued focus on own store sales and the strong performance achieved in Q2 2023, means that the board is confident in the group achieving its full year expectations, whilst remaining cognisant of the current tough consumer market.

The group will announce its interim results for the six months ended May 31, 2023 on Thursday July 13, 2023.

MusicMagpie was founded by Oliver and Walter Gleeson from a garage in Hazel Grove in 2007 and underwent an IPO in London in 2021.