Shares in online musical instruments retailer Gear4music (G4M:AIM) rallied 21.1% to 387.5p after the York-headquartered company reported (23 June) a ‘strong return to profitability’ for the year to March 2020.

This expunged doubts that Gear4music couldn’t achieve the operational improvements promised in 2019 and also provided a rare bit of upbeat news for the hard-pressed retail sector.

Boosted by increased interest in music during lockdown, Gear4music’s revenue grew 9% to £120 million last year and the online specialist swung from a loss to a better than expected profit thanks to strong gross margin gains and cost efficiencies.

N+1 Singer’s retail analyst Matthew McEachran also highlighted a welcome pivot from cash burn to cash generation and upgraded his March 2021 earnings estimates following the well-received numbers.

‘With an increasing number of people throughout the Covid-19 lockdown recognising the benefits that playing, creating and
recording music can bring, we have seen a significant increase in demand during this exceptional period,’ enthused chief executive Andrew Wass.

He added that the company has also witnessed an ‘exceptional and sustained increase in demand’ for its products over the first quarter of its new financial year.

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