7:59 cut – G4M

Gear4Music H1 update

In my last update I wrote that if they could return to 2017 operating margins / ROCE and continue to grow at even a third of their recent rate then the shares would begin to look good value.

Today’s statement is good progress towards this situation – gross margin have improved to 2018 levels, overall growth is 16% (exactly a third of 2019 levels) and the costs of the European distribution centre are being rapidly diluted with 33% revenue growth there.

I continue to hold, but perhaps a small bounce would be justified this morning.

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