Gear4Music, the prominent Yorkshire-based music retailer, has successfully raised £4.2 million in funding through an oversubscribed placing. This financial boost is a pivotal step in the company’s quest to enhance its technological framework and expand internationally.
Ambitious Growth Plan
Gear4Music, a reputable entity on the AIM market, has set forth an ambitious growth plan, fuelled by the recently secured £4.2 million in funds. This strategic move is aimed at bolstering their bespoke IT platform, a key component in enhancing operational efficiency and customer experience.
The funds will also facilitate Gear4Music’s international expansion efforts. This includes focusing significantly on translation and multilingual resources, essential for penetrating non-English speaking markets. By localising content, Gear4Music seeks to build a more robust global presence, particularly in European territories.
Investment in Infrastructure
A portion of the raised capital is earmarked for infrastructural developments within the UK and abroad. Gear4Music is dedicating resources to its new UK head office. This investment is anticipated to solidify the company’s operational base, facilitating smoother business processes and administrative functions.
Further development of the company’s existing hubs in Germany and Scandinavia is also on the agenda. These enhancements are expected to support Gear4Music’s increasing volume, ensuring logistical and customer service operations keep pace with growth.
Share and Investor Strategy
In executing this financial strategy, Gear4Music issued 610,000 new shares alongside 839,000 existing ordinary shares. This issuance involved shares being sold by company directors at a modest discount.
The chief executive, Andrew Wass, played a pivotal role by selling a portion of his own shares while agreeing to a 12-month lock-in period for his remaining holdings, demonstrating confidence in the company’s future trajectory and commitment to its strategic direction.
Currently, Wass’s holding constitutes 39.1% of the issued shares, underpinning his significant influence and vested interest in Gear4Music’s sustained prosperity.
Strong Market Performance
Since its IPO in June 2015, Gear4Music has experienced robust financial performance. With revenues more than doubling from £24.2 million to £56.1 million by February 2017, the company has demonstrated consistent growth and market resilience.
This impressive revenue increase positions Gear4Music as a formidable entity in the retail sector, showcasing its ability to adapt and thrive amidst economic fluctuations. The fundraising efforts aim to continue this upward trajectory.
Corporate Partnerships and Advisory
The fundraising process was facilitated through an accelerated bookbuild, with Panmure Gordon (UK) serving as the sole bookrunner. This partnership underscores the professional networks Gear4Music has cultivated within the financial sector.
Legal advisory was provided by Walker Morris, who has a longstanding relationship with Gear4Music. John Hamer, head of corporate at Walker Morris, expressed pleasure in witnessing the company’s ongoing success and growth over the years.
Future Growth Prospects
With this capital injection, Gear4Music is well-positioned to capitalise on future growth opportunities. Their focus on expanding IT capabilities and international presence indicates a strategic foresight that aims to capture new market segments.
Gear4Music’s commitment to leveraging these funds efficiently underscores its proactive approach to sustaining and enhancing its market positioning amidst the dynamic retail landscape.
Summary and Outlook
In summary, Gear4Music’s successful fundraising marks a significant milestone in its growth journey. By strategically deploying these funds, the company is set to achieve both immediate and long-term objectives, ensuring enhanced service delivery and market expansion.
The £4.2 million fundraising undertaken by Gear4Music is crucial in advancing their comprehensive growth strategy. With a focus on technological enhancement and international expansion, the company is poised to strengthen its market position and drive future success.