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Half year results show strong growth in revenue, profit, cash flow and the dividend

Focusrite (TUNE:AIM) 437.5p

Gain to date: 35%

Original entry price: Buy at 324p, 30 Nov 2017

Having lost a bit of momentum in recent weeks music and audio products firm Focusrite (TUNE:AIM) is back on the front foot as it unveils stellar first half results for the six months to 28 February 2018.

Revenue growth of 26% at constant currencies is double the pace achieved in the August 2017 financial year and operating profit is up 36%. The company is generating plenty of cash, with its net cash position advancing to £19.7m from £9.4m a year earlier.

This helps underpin a 33% year-on-year increase in the dividend to 1p and also leaves management well positioned for future growth.

This is a genuinely international business, generating 85% of its revenue outside the UK. Investors need to take a view on whether this has simply been an exceptionally strong first half, encompassing the important Christmas period, or whether it is a sustainable trend and can be replicated in the second half of the year.

Chief executive Tim Carroll cautions that while revenue and cash have continued to grow since the half year end, they have done so at a slower rate.


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