Focusrite, the High Wycombe-based global music and audio products group which markets proprietary hardware and software products, has reported a rise in revenue for the year ended August 31, 2019 of more than 12 per cent.
The company also bought German loudspeaker manufacturer ADAM Audio during the summer and grew sales in all major geographical regions. North America was up by 11.1 per cent; Europe, Middle East and Africa by 14.6 per cent; and the Rest of World by 12.5 per cent.
Chief Executive, Tim Carroll, said: “I am very proud to present another set of positive results, following an extremely busy year for the Group, with both top line revenue and profit growing and the successful completion of our first major acquisition. We have remained focused on executing our growth strategy whilst ensuring the Group was taking the correct and necessary measures to mitigate any potential disruption from the numerous macro-economic issues at hand.
“This positive performance has been driven by a number of factors. Most notably new product introductions this year, including our third generation of Scarlett audio interfaces, which have resonated well with customers and provided an incremental lift. We are also witnessing positive results from many of our IT-based initiatives that were implemented and funded over the past few years. These include enhanced websites, modernised social media demand generation, localised online experiences and new technologies focused on simplifying the ‘out of box’ experience. All of these have resulted in increased customer and sales channel satisfaction illustrated by our top net promoter scores (‘NPS’) for individual products.”
The Focusrite brand was established in 1985 to serve high end professional recording studios. Initially, its products were focused on high quality recording and production equipment for professionals. Phil Dudderidge acquired the assets of Focusrite Limited in 1989 and began to broaden the range of products to serve a wider customer base of professional, commercial and hobbyist musicians.
In 2004, Focusrite Audio Engineering Limited acquired the Novation Electronic Music Systems Limited business, a market-leading British producer of keyboards, synthesisers and controllers with products used by musicians globally. The addition of the Novation brand has further expanded the range of products and customers of Focusrite into the electronic dance music segment of the market, the fastest growing music making segment according to 2014 International Music Summit Business Report.
Tim added: “Since the year end, ADAM Audio has continued to grow ahead of both prior year and our initial expectations. Within the Focusrite and Novation businesses, first quarter revenue is likely to be lower than the same period last year. However, this is not unexpected: revenue in the first quarter of last year benefited from the initial effect of the price increases in the US, introduced as a consequence of US tariffs, and revenue in the first quarter of this year has been impacted by the increased strength of GBP.”
Tim warned that there is much change in the trading environment, causing risk but also providing many opportunities. “Changes in technology and new customer requirements can emerge quickly; macroeconomic and political factors affect our end customers and distributors alike and competitive pressures remain. We have shown over the course of this past year that we are capable of navigating these risk factors, reacting in a methodical and measured way and ultimately protecting our revenue and gross margin; all the while staying focused on the execution of our growth strategy. I am very pleased with our FY19 results, as a continuation of our impressive and consistent growth story. We look forward to another productive year with many new products and solutions coming to fruition.”
Commenting on the acquisition of ADAM Audio, Executive Chairman Phil Dudderidge said: “In July 2019 we made our first major acquisition since the IPO acquiring the Berlin-based ADAM Audio brand of monitor loudspeakers, used by the very same kind of purchaser of Focusrite and Novation products. With a twenty-year history of recording studio use by professional recording engineers and producers the brand has a well-deserved global reputation for quality. Recent years have seen the product range extended to meet the affordability-with-quality criteria sought by the wider market (similarly addressed by the Focusrite Scarlett interface range), while maintaining its market share with professional products at higher price points. Notably this profitable acquisition was achieved from cash generated since the IPO.
“On that note, the Group continues to be highly cash generative, with net cash of £14.9 million at the year end, after the acquisition of ADAM Audio. Our business successes are predicated on the commitment, dedication and hard work of over 300 people around the world and I would like to thank them and our commercial partners for their continued support.”