Gear4music has seen its adjusted EBITDA increase by 34% in the year to 31 March to £9.9m, in line with market expectations.

The music equipment store also saw its adjusted profit before tax increase by £1.5m to £1.1m, having recorded a loss of £400,000 in the previous financial year.

Furthermore, Gear4music’s gross margin increased from 25.7% in FY23 to 27.3%.

Although the firm’s revenue dropped by 5% in the year to 31 March, the company said that this was in line with market expectations, as it looked to prioritise of increasing gross margins and cost base reductions to improve profitability.

Gear4music also saw its net debt reduce from £24.2m and £14.5m in 2022 and 2023 respectively to £7.3m in the latest financial year, which is ahead of expectations.

Looking ahead, the firm said it is "confident" of its customer proposition, operational infrastructure and balance sheet, which it says will enable it to achieve its long-term business objectives, which includes "delivering profitable growth and maintaining its market leading position in the UK and Europe".

Chief executive officer at Gear4Music, Andrew Wass, said: "Having delivered the key objectives we set ourselves at the beginning of FY24, the group is well positioned to relaunch its profitable growth strategy for FY25. This will focus on expanding sales verticals and channels to market whilst further enhancing and leveraging our unique bespoke e-commerce platform and product offering.

“International revenue growth faced some localised challenges in FY24; however, the board is confident that, through our ongoing actions and new initiatives, such as our second-hand proposition, European sales are set to start recovering in FY25.

“The cost reductions implemented through FY24 are now delivering full-year benefits as we commence FY25. Alongside this, based on trading performance since our last update in April, the board remains confident in delivering further improvements in financial performance during FY25 in line with market expectations."

Investment director at AJ Bell, Russ Mould, added: “Gear4music has been singing the wrong notes for investors in recent years, joining the brigade of companies suffering from a post-pandemic growth splutter.

"While sales dipped in its latest results, there was an improvement in earnings, helped by margin gains and cost base reductions. That’s put the company on a stronger footing and investors raced to buy the shares in response, a big change of fortunes given the stock has been trading at a bombed-out level for a couple of years.

"This shift in fortunes coincides with a changing of the guard, with some directors leaving and others switching roles. It appears that the results are strong enough to stick Gear4music on the list of turnaround candidates so don’t be surprised to see more people singing its praises going forward. That’s as long as the latest stroke of good luck is not a one-off."

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