musicMagpie plc

("musicMagpie", or “the Group”)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MAY 2023

EBITDA up 7.7% with good momentum into the seasonally important H2; trading in line with Board expectations

musicMagpie, a circular economy pioneer specialising in refurbished consumer technology, follows its half year trading update of 19 June 2023 with the announcement of its unaudited interim results for the six months ended 31 May 2023.

Financial highlights

• Following a challenging start to H1, with postal strikes and low consumer confidence impacting December and January, trading performance strengthened from February onwards, driving a strong Q2 EBITDA which was up 42% on Q2 2022
• Group H1 2023 revenue of £61.9m (H1 2022: £71.3m
  • Consumer Technology revenue of £41.1m (H1 2022: £46.0m), as the Group prioritised higher margin sales
  • Disc Media and Books revenue of £20.9m (H1 2022: £25.3m)
• Consumer Technology gross profit increased 13.5% to £10.9m (H1 2022: £9.6m), contributing 59% (H1 2022: 50%) of total Group gross profit
• Gross margin increased 3.1% to 29.7% (H1 2022: 26.6%) driven by a combination of direct from consumer product sourcing, a higher proportion of sales through the musicMagpie store and an increasing contribution from rental subscriptions
• Adjusted EBITDA¹ of £2.8m, up 7.7% (H1 2022: £2.6m)
• Diluted loss per share of 2.8 pence (H1 2022: loss per share 3.2 pence)
• Net debt of £13.6m (30 Nov 2022: £7.8m), consistent with Board expectations, with £4.5m invested into Consumer Technology rental assets during the period (H1 2022: £3.6m)
• Post period end, extended the committed £30m Revolving Credit Facility by 12 months to July 2026

Operational highlights

• Percentage of UK Consumer Technology sales on the musicMagpie store, versus third party marketplaces, increased to 79%, up from 72% in FY22
• Strong progress from the Group’s device rental subscription service, increasing to c39,000 active subscriptions as at 31 May 2023 (31 May 2022: 24,000)
  • Near-term corporate customer pipeline building and 2,200 devices currently under rental to businesses
  • Entered H2 2023 with c£4.0m contractually committed forward revenue, before renewals or growth in new subscriptions
• SMARTDrop Kiosks now account for 45% of musicMagpie’s Consumer Technology sourcing in the UK
• Cost reduction measures reduced overheads by £0.8m in H1 2023 versus H1 2022

Outlook

As usual, the majority of the Group’s full year profits are expected in the seasonally important second half. Current trading conditions remain challenging due to the prevailing macro-economic factors in the market, but the strong momentum seen in Q2 has thus far been carried into the early part of Q3 of our 2023 financial year and this combined with the focus on gross margin by continuing to buy for less and sell for more, and cost savings introduced, mean the Board is confident of the Group meeting its full year expectations.

Commenting on the results, Steve Oliver, Chief Executive Officer of musicMagpie, said:

“After a challenging first quarter, I am pleased with the performance of the business during Q2 and the momentum that has been carried over into H2, which is traditionally the seasonally more important half for musicMagpie. By focusing on ‘buying and selling for more margin’, which includes sourcing more products directly from consumers and increasing the proportion of sales made through the musicMagpie store, we have delivered a strong improvement in Consumer Technology gross profit.

Looking ahead, we have a clear plan for our rental business and for our enhanced Buy Now Pay Later offering, which should drive sales and make our offering even more attractive to consumers looking to save cash.

Despite the tough consumer environment, we expect consumers to increasingly look to the refurbished tech market and are confident that the business has the right strategy in place for future profit growth.”

Notes

1 Adjusted EBITDA is a non-GAAP measure and has been calculated as earnings before interest, taxation, depreciation, amortisation, equity-settled share-based payments and other non-underlying items

Analyst conference call

Steve Oliver (CEO and co-founder) and Matthew Fowler (CFO) will host an analyst presentation at 9:15am GMT today, Thursday 13 July 2023, to talk through the Group’s operational and financial performance.

Please advise whether you and/ or a colleague would like to attend to Powerscourt, either by phone on +44 (0) 20 7250 1446 or by email to [email protected].

Enquiries

musicMagpie plc Steve Oliver, CEO Ian Storey, COO Matthew Fowler, CFO	Tel: +44 (0) 870 479 2705
Shore Capital (Nominated Adviser and Broker) Mark Percy Malachy McEntyre Daniel Bush	Tel: +44 (0) 20 7408 4090
Powerscourt (Financial Public Relations) Rob Greening Genevieve Ryan Sam Austrums	Tel: +44 (0) 20 7250 1446

About musicMagpie

Operating through two trusted brands – musicMagpie in the UK and decluttr in the US – musicMagpie’s core strategy is simple: to provide consumers with a smart, sustainable and trusted way to buy, rent and sell refurbished consumer technology and physical media products with sustainability running to the very heart of its operations. Founded in 2007, the Group has an established presence in the UK, with operations in Stockport, Greater Manchester, and in the US in Atlanta, Georgia.

musicMagpie has a strong environmental and social focus, as demonstrated by its trademarked ‘smart for you, smart for the planet’ ethos. Nearly 400,000 consumer technology products were resold in FY22. In addition, the Group re-sells approximately 10m books and disc media each year that could have ended up as waste. During 2022, musicMagpie's UK consumer tech and disc media customers, along with its trade partners, helped to save over 43,000 tonnes of CO2 by buying, selling and renting with the Group - an amount equivalent to providing heating for over 16,000 homes, or powering more than 50,000 flights from London to New York. The Group has been given the London Stock Exchange’s Green Economy Mark in recognition of its contribution to the global green economy.

When selling to musicMagpie, the customer is offered a fixed valuation via the website, provided with free logistics to ship the products and (subject to it being ‘as described’) receives payment for their product on the day of arrival at the Group’s warehouse. The Group also recently partnered with Asda to give customers the option of using its SMARTDrop Kiosks in store for a fast and easy way to recycle phones for instant cash. Customers purchasing from musicMagpie receive branded refurbished product for a fraction of the price of buying new.

The Group has the highest number of seller reviews on both Amazon and eBay and has consistently achieved extremely positive feedback scores. The Group also has a 4.4* rating on UK Trustpilot with over 260,000 reviews, and is honoured to have won Best Refurbished in the Uswitch Telecoms Awards 2023 as well as Best Online Retailer and Best Secondary Market Provider at the Mobile News Awards 2023.

For further information please visit www.musicmagpieplc.com