Focusrite says its content creation business still faces challenges
Buckinghamshire-based audio product specialist Focusrite told investors that it expected revenue for the year to end-August to be in line with market expectations at around £157 million but that it still faced challenges in its content creation division.
The AIM-listed company said in a trading update that the content side of its business continued to face macro-economic weakness, channel consolidation and oversupply, which was affecting global sales.
READ MORE: Focusrite reports resilient fiscal 2023 despite profit drop
Despite that, product registration data and sales rankings continued to show the firm was "comfortably outperforming" the overall market, it noted.
The High Wycombe-based firm comprises broadly two divisions - content creation, which makes and distributes audio content, and audio reproduction, which provides solutions to do just that.
The latter business continues to deliver in line with expectations, bolstered by successful product launches and new brands within its portfolio, including Linea and Sheriff, it said.
But the group noted that global shipping and freight costs had increased further in the second half of 2024 due to strong demand and ongoing issues in the Red Sea. This trend is expected to continue into 2025.
Focusrite said it expected full-year (FY24) earnings before interest, tax, depreciation and amortisation to be around £25 million due to the impact of these shipping and logistics challenges as well as pressures on product margins.
It added that it remained "well-positioned" for future growth, particularly when market conditions in the content creation market improve.
As at August 27 this year, its net debt had improved to around £15 million (February 29 this year: net debt of £27.3 million) and it has £50 million of committed credit facilities, which provide strong liquidity for ongoing operations and any potential merger and acquisition (M&A) activity.
Focusrite has offices in four continents and a global customer base with a distribution network covering around 240 territories.
It trades under 13 established brands: Focusrite, Focusrite Pro, Novation, Ampify, ADAM Audio, Martin Audio, Optimal Audio, Linea Research Sequential, Oberheim, Sonnox, OutBoard and TiMax.
