Demand boom continues for Focusrite and its shares
Focusrite (TUNE:AIM) 819p
Gain to date: 19.2%
Original entry point: Buy at 687p, 23 July 2020
While we flagged audio technology specialist Focusrite (TUNE:AIM) as very much a long-term investment opportunity we are still pleased to see our faith rewarded early.
A 14 September trading update reported that revenue and profit for the 12 months would be ahead of market expectations.
The core Focusrite engineering business grew approximately 23% while a full-year contribution from ADAM audio and eight months from Martin Audio, acquired in December 2019, helped to push revenues up by half from £84.7 million last year to around £129 million.
Gross profits and earnings before interest, tax, depreciation and amortisation (EBITDA) also improved and are expected to be ahead of analysts’ projections before the announcement.
Earnings have been boosted by demand from both professional and amateur musicians ordering products through the internet, with the company’s tech also in demand for voice-over work and in the production of TV shows like The Voice. Longer term we think the company can tap more into fast growing areas such as podcasts.
The company also joined the growing list of names paying back funds received under the UK’s job retention scheme.
SHARES SAYS: We believe there is lot more growth to come. Keep buying.