Focusrite plc ("Focusrite" or "the Group")

Results for the six months ended 28 February 2025

 

Full year expectations unchanged despite volatile trading environment

 

Focusrite plc, the global music and audio products company supplying hardware and software used by professional and amateur musicians and the entertainment industry, today announces its interim results for the six months ended 28 February 2025 with the Group returning to revenue growth and confident of meeting full year expectations.

 

Commenting on the results and outlook, Tim Carroll CEO said:

 

"After several years of volatility across our Content Creation sales channels, we are now seeing a return to more normal inventory levels, accompanied by sustained demand for our leading brands. The Group has returned to growth, with a 9.9% increase in revenue from Content Creation. This has been driven by more consistent and predictable channel orders, successful new product launches across most of our brands, and some sales rephasing in the US to mitigate the impact of tariffs. The refresh of our flagship Scarlett range in Focusrite is now complete, with customer registrations remaining steady compared to the prior year, outperforming a declining wider market and signalling continued brand strength.  Incremental new product introductions in both ADAM and Sequential have further contributed to the overall revenue growth.

 

As previously highlighted, Audio Reproduction has normalised following 18 months of unusually high post-lockdown demand, with H1 revenues down 5.8% year-on-year. However, the pipeline for this division remains strong, reflecting the success of our expanded portfolio and broader market reach.

 

Macroeconomic uncertainties persist-particularly in our key US market- and we have responded swiftly to help mitigate these risks including inventory phasing, selective price increases and relocating manufacturing for certain product ranges. We remain vigilant with regard to any further challenges in the US business environment.  With new product launches planned for the next six months, as previously indicated we expect a greater weighting of sales in this period and will continue to focus on maximising gross margins.  Given the current 90 day pause and tariff exemption window for certain products, we believe our expectations for the first 12 months of the current financial period remain realistic."

 

 

Key financial metrics

 

	HY25	HY24
Revenue (£ million)	80.9	76.9
Gross margin %	43.9%	45.8%
Adjusted1 EBITDA2 (£ million)	10.4	12.1
Operating profit (£ million)	3.1	4.7
Adjusted1 operating profit (£ million)	5.8	7.5
Basic earnings per share (p)	3.1	4.2
Adjusted1 diluted earnings per share (p)	6.6	7.7
Interim dividend per share (p)	2.1	2.1
Net debt3  (£ million)	(17.9)	(27.3)

 

 

Financial and Operating Highlights

• Revenue up 5.2% to £80.9 million (HY24: £76.9 million), or 7.2% on an organic constant currency⁴ (OCC) basis, driven by strong growth in Content Creation, partially offset by a decline in Audio Reproduction.
• Content Creation revenue increased 9.9% (12.8% OCC⁴) to £59.4 million (HY24: £54.1 million), reflecting successful new product launches across key brands. Adjusting for US tariff-related sales rephasing underlying OCC growth was 6.5.
• Audio Reproduction revenue declined by 5.8% (5.9% OCC⁴) to £21.5 million (HY24: £22.8 million), against a particularly strong prior year comparator especially in APAC following post-COVID demand surges.
• Gross margin decreased to 43.9% (HY24: 45.8%), impacted by higher freight costs and less favourable product and regional sales mix, including lower royalty sales in China.
• Adjusted¹ EBITDA² of £10.4 million, down from £12.1 million in HY24, reflecting lower gross margin and increased costs, including normalised variable remuneration and inflationary pressures.
• Operating profit reduced to £3.1 million (HY24: £4.7 million), in line with EBITDA movements, with amortisation flat year-on-year.
• Interim dividend maintained at 2.1 pence, unchanged from HY24, reflecting confidence in the Group's long-term outlook.
• US tariff risks mitigated in part through H1 inventory build in the US and pricing action already in place. Further actions underway to take advantage of the Group's manufacturing locations and partners based outside of China.

 

¹ Adjusted for amortisation of acquired intangible assets and other adjusting items as detailed in note 4 to the Interim Statement.

² Comprising earnings adjusted for interest, taxation, depreciation and amortisation.

³ Net debt/cash defined as cash and cash equivalents, overdrafts and amounts drawn against the RCF including the costs of arranging the RCF.

⁴ Organic constant currency growth. This is calculated by comparing HY25 revenue to HY24 revenue adjusted for HY25 exchange rates and the impact of acquisitions.

 

 

Enquiries:
Focusrite plc	+44 (0) 1494 462246
Tim Carroll (CEO) / Sally McKone (CFO)
Investec Bank plc (Nominated Adviser and Broker)	+44 (0) 20 7597 5970
David Flin / Nick Prowting / James Smith
Rosewood Communications (Financial PR)	+44 (0) 20 7653 8702
John West / Llewellyn Angus / Lily Pearce

 

Notes to Editors

Focusrite plc is a global audio products group that develops and markets proprietary hardware and software products. Used by audio professionals and musicians, its solutions facilitate the high-quality production of recorded and live sound. The Focusrite Group trades under thirteen established brands: Focusrite, Focusrite Pro, Novation, Ampify, ADAM Audio, Martin Audio, Optimal Audio, Linea Research, Sequential, Oberheim, Sonnox, OutBoard and TiMax.

With a high-quality reputation and a rich heritage spanning decades, its brands are category leaders in the music-making and audio reproduction industries. Focusrite and Focusrite Pro offer audio interfaces and other products for recording musicians, producers and professional audio facilities. Novation and Ampify products are used in the creation of electronic music, from synthesizers and grooveboxes to industry-shaping controllers and inspirational music-making apps. ADAM Audio studio monitors have earned a worldwide reputation based on technological innovation in the field of studio loudspeaker technology.  Martin Audio designs and manufactures performance-ready systems across the spectrum of sound reinforcement applications. Linea Research designs, develops, manufactures and sells market innovative professional audio equipment globally. Sequential designs and manufactures high end analogue synthesizers under the Sequential and Oberheim brands. Sonnox is a leading designer of innovative, high-quality, award-winning audio processing software plug-ins for professional audio engineers. TiMax specialises in innovative immersive audio and show control technologies. OutBoard manufactures and sells industry standard rigging control products for live events, together with enterprise-level safety test, preparation and quality management for global rental companies and venues.

The Group has offices in four continents and a global customer base with a distribution network covering approximately 240 territories.

Focusrite plc is traded on the AIM market, London Stock Exchange.

 

Business and operating review 

 

Overview  

  

We are pleased to report our financial results for the six months ended 28 February 2025.  Overall, the Group's performance was in line with our expectations, reflecting the strength of our brands and the resilience of our strategy in the face of continued global economic uncertainty and industry-wide headwinds.

 

Our Content Creation brands delivered a 9.9% increase in revenue over the prior year, marking a return to growth after a prolonged period of channel correction and softer market demand, achieving growth across all major brands even after adjusting for the impact of earlier sales to mitigate tariff impacts.   Stocking levels across all major sales channels have now normalised and we are encouraged by multiple data points¹, channel feedback, and internal registration metrics -that show we have grown market share in several key categories. This is a significant achievement in what remains a highly competitive and price-sensitive environment.

 

As anticipated, the Audio Reproduction market has begun to normalise and as a result our Audio Reproduction division saw a 5.8% decline in revenue when compared to a very high prior year first half of post pandemic business. However, the breadth of our enhanced portfolio across Martin, Optimal, Linea and our more recent acquisitions of TiMax and Panlab continues to support a strong pipeline of business. 

 

Total Group revenue for HY25 increased by 5.2% compared to HY24. On an organic constant currency (OCC) basis, the Content Creation division grew by 12.8% (6.5% after adjusting for US tariff-related sales rephasing), while the Audio Reproduction division saw a 5.9% decrease, resulting in a 7.2% increase on an OCC basis overall for Group revenue. This is despite an increasingly aggressive promotional market backdrop by competitors and rising input costs across both divisions. This demonstrates the strength of our brand to attract customers despite both inflation and aggressive competition.

 

Group gross margin for the period was 43.9% (HY25: 45.8%), as a consequence of elevated freight rates and a shift in product mix, particularly in Audio Reproduction.  

 

Since the period end the international trading landscape has been severely impacted by fluctuating US tariffs on goods sold into the US.  Approximately 12% of the Group's revenue is from products made in China and sold into the US.  Of these products, one fifth fall into the announced potentially temporary tariff exemption for computers and accessories.  Remaining products for the US market are sourced from Malaysia, Germany, UK and the US.

 

Anticipating the risk of additional tariffs, the Group took action in the first six months of the period to build stock in our US channel for Content Creation and to hold more stock in our own US warehouse for Audio Reproduction.  In addition, we have moved swiftly to increase prices in Content Creation from 1 May, and are closely monitoring the situation within the Audio Reproduction market.  The majority of our products for the US market are manufactured outside of China and we are relocating further product ranges where appropriate.  Whilst we believe we are well positioned for the next six months to mitigate current risks, we have contingency plans in place to address potential further escalation.  Nonetheless the situation remains dynamic and uncertain.

 

 ¹  See Music Trades Annual Census 2024 and sales rankings on key reseller websites (Thomann and Sweetwater) 

 

Operating review 

 

Our Group's portfolio has grown substantially in recent years and now consists of thirteen leading brands, which are categorised into two divisions, Content Creation and Audio Reproduction. 

 

Content Creation consists of:  

o Focusrite Novation: Focusrite, Focusrite Pro, Novation and Ampify   

o ADAM Audio  

o Sequential: Sequential and Oberheim 

o Sonnox 

 Audio Reproduction consists of: 

o Martin Audio: Martin Audio, Optimal Audio and Panlab

o Linea Research: Linea Power amplification 

o Sheriff Technologies:  OutBoard and TiMax brands 

 

 

	Six months to 28 February 2025	Six months to 29 February 2024	Reported Growth	OCC Growth1	Year to   31 August   2024
Revenue from external customers	£'000	£'000	%	%	£'000
Focusrite	30,872	29,360	5.2%	8.0%	60,278
Novation	8,672	7,859	10.4%	13.2%	16,257
Focusrite Novation	39,544	37,219	6.2%	9.1%	76,535
ADAM Audio	13,658	11,296	20.9%	24.2%	22,610
Sequential	5,252	4,539	15.7%	18.9%	9,705
Sonnox	996	1,047	-4.9%	-2.4%	1,968
Content Creation	59,450	54,101	9.9%	12.8%	110,818
Audio Reproduction	21,457	22,783	-5.8%	-5.9%	47,706
Total	80,907	76,884	5.2%	7.2%	158,524

 

Content Creation: Revenue by region

 

	Six months to 28 February 2025	Six months to 29 February 2024	Reported Growth	OCC Growth2	Year to   31 August   2024
Content Creation	£'000	£'000	£'000	£'000	£'000
Americas1	24,483	25,144	-2.6%	0.0%	51,608
EMEA	28,694	24,014	19.5%	22.8%	48,812
APAC1	6,273	4,943	26.9%	30.0%	10,398
Total	59,450	54,101	9.9%	12.8%	110,818

 

^{1 Regions restated to reflect revised Group operating model with LATAM now part of Americas and APAC replacing Rest of World}

^{2 Organic constant currency (OCC) growth rate is calculated by comparing HY25 revenue to HY24 revenue adjusted for HY25 exchange rates and the impact of acquisitions} 

 

Our Content Creation brands offer best in class audio recording hardware technology, software, electronic music instruments and controllers, and studio reference monitors to content creators at all levels and price points.  

 

Our products are showcased in the finest recording and post-production studios in the world, as well as in the homes of millions of hobbyists and aspiring professionals.  Over the past four years, this segment has faced unprecedented challenges, providing us with both opportunities and obstacles.  During the pandemic, the Group experienced unparalleled growth in demand for our Focusrite, Novation, and ADAM brands as individuals sought advanced home content creation and streaming solutions. However, the subsequent period presented numerous hurdles, such as component shortages and price increases, elevated shipping costs, worldwide inflation and geopolitical tensions, all of which impacted the music creation industry.

 

Despite a stabilisation in prices and availability, these challenges, coupled with a softer macroeconomic landscape in the post pandemic period, led to excessive inventory levels across many product segments in our industry channels throughout FY24. The Group responded proactively, focusing on reducing channel stock, managing expenses tightly and continuing to release award-winning products into the channel to spur renewed interest and drive recovery. As a result of these efforts, the first half of this year delivered encouraging results, with Focusrite Novation, Sequential and ADAM all reporting revenue growth. 

 

Regionally, both EMEA and APAC delivered year on year growth while the Americas reported a slight decline versus the prior period.  In the Americas, which now includes LATAM, the Group focused on reducing excess channel inventory during the first half, partially offset by a strategic increase in stock of targeted products into the US ahead of recently raised tariffs. Our direct to customer E-commerce business, covering all Content Creation brands has continued to grow year over year and now represents almost 9% of Content Creation turnover.  As it continues to grow, the Group will invest more into this channel and we believe it will become an increasingly important route to market for our business.  

 

Focusrite audio interfaces, comprising our Scarlett, Clarett and Vocaster ranges, are a suite of audio interfaces designed to allow both beginners and professionals alike to create the best quality audio possible. These products are core to home recording and audio streaming, across a wide range of price points. 

 

At the start of FY24, the Group debuted the 4^th generation of the lower input/output (I/O) Scarletts, those with 1, 2 or 4 inputs (Scarlett Solo, 2i2 and 4i4). These new interfaces represent a completely re-engineered product line, with many new features designed to deliver unprecedented ease of use while offering professional-grade technical specifications.  Following this, we introduced the higher channel count Scarlett interfaces at the beginning of this fiscal year. These models build upon the innovations of the lower I/O models, adding extra features and functionality tailored to more advanced users. These additions have once again been well received, earning widespread acclaim from industry press and our global channel partners.

 

We track sales to our end user customers through our registration data, with the vast majority of purchases being registered in order to utilise our easy start process and bundle of free software tools.  This data reveals that the overall registrations of Scarlett interfaces have closely mirrored those of the previous year over the first six months. This is in contrast to industry data which shows an overall decline of approximately 2% across this product category compared to 2024.  

  

Clarett, our mid-range interface offering, performed in line with expectations during the first six months and continues to be a highly regarded solution among more experienced musicians and recording engineers.  

 

Focusrite Pro offers a suite of solutions for professionals that employ "audio over internet protocol" (AOIP) technology for scale in enterprise solutions, both in live events and in permanent installations such as recording and post-production studios. Some of the most prestigious events across the world, including the US Superbowl and the Grammys utilise our Pro products as the backbone of the audio systems deployed. Additionally, many recording and post-production studios have adopted our products to produce and deliver content in enhanced formats, such as Dolby ATMOS.  

  

Our Novation brand is an integral part of the Focusrite business unit, dedicated to empowering electronic musicians.  It offers a range of solutions including groove boxes, controllers, synthesizers and desktop and iOS creation apps. During the first six months, we introduced an update to the popular Launchkey family (version MK4). These products set a new benchmark for keyboard controllers owing to their ability to integrate with a multitude of software platforms for creating music.  The new Launchkey range has performed strongly in HY25, with end-user registrations showing significant growth versus HY24.

 

ADAM Audio, based in Berlin and acquired in July 2019, is a globally recognised brand with a passionate team dedicated to delivering exceptional monitor speakers and headphones for audio content creators. ADAM Audio's portfolio of reference monitors encompasses the T-Series, A-Series, S-Series and recently introduced D-series.  The T-Series speakers are award winning reference monitors designed for the home studio market. The A-Series are used in both high-end home studios and professional facilities, while the enterprise level S-Series are installed in some of the most prestigious audio production facilities in the world. Both the A-series and S-Series speakers are seeing growing adoption in upgraded facilities to integrate mixing in an immersive sound environment.  

 

ADAM launched their first desktop monitors, the D3Vs, at the start of this financial year. These speakers have received numerous awards and accolades across the industry, setting a new performance mark for a 3 inch, compact solution for the desktop. We are also seeing the D3Vs gain traction with a number of Hi-Fi companies who sell into the more mainstream consumer audio market.

 

ADAM's new headphones, the H200, was also launched in the first six months. Initial response has been very positive and we expect this segment to grow as we expand the product line to offer a full headphone portfolio.

 

Overall, ADAM delivered a strong first period, with continued robust sales of the T-Series, renewed momentum in the high-end S-Series, and strong demand for the new desktop D3Vs.  

 

Sequential, based in San Francisco and acquired in April 2021, is a legendary brand in the industry - synonymous with iconic analogue synthesizers. It has been at the forefront of electronic music innovation for over 40 years.  In May 2023, the Group acquired the exclusive rights to another prestigious synthesizer brand, Oberheim, which now operates under the Sequential entity as a separate brand. 

 

The majority of Sequential and Oberheim products are positioned at the US$3,000 and upwards price points, catering primarily to professional and aspiring musicians and composers. This segment has faced significant challenges over the past year, on account of the overall industry softness exacerbated by global cost-of-living pressures.  To that end, Oberheim launched a new, low cost synth, the TEO-5, which began shipping at the start the first half, adding to the more affordably priced Sequential products successfully launched in FY24.  Sales have been strong, with continued demand beyond the initial channel fulfilment.  

 

Sonnox, based outside of Oxford and acquired in December 2022, develops industry leading software plug-ins for audio production. These plug-ins, normally residing inside a DAW (Digital Audio Workstation) enable users to refine their audio and produce professional quality recordings.  

 

Sonnox revenue declined by 4.9% in the first half, primarily due to lower royalties from a third-party hardware partner experiencing softness in its market.  Beyond that, Sonnox's core plug-ins continue to sell well and several new releases are planned, which are expected to be well received by its dedicated customer base.  In addition, the Sonnox team's exceptional engineering skills have contributed to the further development of new products across the Focusrite and ADAM brands, forming an integral part of the Group's overall Research and Development talent base.

 

Audio Reproduction: Revenue by region

 

	Six months to 28 February 2025	Six months to 29 February 2024	Reported Growth	OCC Growth2	Year to   31 August   2024
Audio Reproduction	£'000	£'000	£'000	£'000	£'000
Americas1	5,873	5,944	-1.2%	1.4%	13,554
EMEA	8,577	8,848	-3.1%	-5.6%	19,062
APAC1	7,007	7,991	-12.3%	-11.7%	15,089
Total	21,457	22,783	-5.8%	-5.9%	47,706

 

^{1 Regions restated to reflect revised Group operating model with LATAM now part of Americas and APAC replacing "Rest of World"}

^{2 Organic constant currency (OCC) growth rate is calculated by comparing HY25 revenue to HY24 revenue adjusted for HY25 exchange rates and the impact of acquisitions} 

 

The Audio Reproduction brands provide high quality, professional grade solutions for both permanent installations and live sound events. The Group first invested in this segment with the acquisition of Martin Audio in December 2019. Since then, the portfolio has grown significantly, both organically and through strategic acquisitions, resulting in a strong lineup of solutions tailored for the touring, theatre, and installation markets.

 

With the additions of amplifiers, through the acquisition of Linea Research in March 2022, and further immersive sound capabilities and with the acquisitions of Sheriff Technology in December 2023 and then Innovate in April 2024, the division can now provide a complete offering across the dynamic field of Audio Reproduction and immersive sound.  

 

The first six months of the year have seen the teams further integrate the different products and brands resulting in a strong project pipeline that is expected to grow throughout the year. 

 

Martin Audio was founded in 1972 to deliver world class touring systems for the supergroups of the day.  The ethos of "Uniting the Audience" has remained core to the company's mission and success.  Martin's market stature is built on the meticulous detail of its loudspeakers sonic performance, further enhanced through software and digital signal processing (DSP) which allows precise shaping and control of overall sound performance.

 

Martin's product portfolio is best understood in terms of "throw" (the distance sound must travel to create the ideal listening experience). Martin offers solutions across its Flexpoint, TORUS, Wavefront Precision, Blackline X and CDD Live ranges to address any size requirement for either a permanent installation or live event.  

 

Optimal Audio, the commercial audio brand which has been organically developed over the last four years has benefitted from increased product availability and continues to grow steadily in a large and competitive market.   

 

Linea Research has established itself as a trusted and innovative industry leader in high quality power amplification. Linea Research's portfolio includes integrated digital signal processing, a unique combination of high-quality sound and power that professional installations and events require.

 

Linea Research has integrated well into the wider Group since being acquired in March 2022 providing a reliable source of amplification technology for Martin Audio's products, whilst also continuing to serve a broad base of third party customers through its own product lines.  Linea Research was honoured with a King's Award for Innovation in 2024, reflecting its ongoing commitment to excellence in engineering.

 

Sheriff Technologies, comprises two brands serving the Audio Reproduction market: TiMax and OutBoard. 

 

TiMax is a pioneer in the rapidly growing field of immersive audio experiences, specialising in innovative sound and show control solutions through their SoundHub and TrackerD4 products. These technologies support a wide range of applications including entertainment, events, branding, themed environments and exhibition spaces

 

OutBoard, built on extensive experience from the touring and rigging industries, offers a comprehensive suite of compact, robust chain-hoist motor controllers, as well as systems for safety testing, preparation, and quality management, all designed for use by global rental companies and large-scale venues.

 

As previously reported, the Audio Reproduction segment experienced exceptional growth across 2023 and 2024, following a period of very low demand during the pandemic and a subsequent reinvestment of capital into the industry during the return of live events.  As expected, market demand is now normalising toward pre-pandemic levels. For Martin Audio, this trend was especially evident in China, which delivered a notably strong first half in the prior as the region emerged from a prolonged lockdown. This has contributed to a 5.8% year on year decline.  However, with a significantly broader product offering and increased market presence, the Group's pipeline supports our expectation of a stronger second six months for the Audio Reproduction division, in line with the typical seasonality of its market.

 

 

Research and development  

 

R&D remains a cornerstone of our Group's strategy.  During the period, the Group successfully launched three new products to market, alongside 56 software upgrades (FY24: 57 upgrades). Our R&D teams are based in each of the business units, working across the technical, design and manufacturing disciplines of all our products.  The Group holds three Queen's and King's Awards for innovation, and this focus on innovation has resulted in cashflow benefits of over £1 million per year from tax credits due to the  RDEC scheme and patent box benefits.

 

All our development projects follow a rigorous product lifecycle analysis, assessing market competition and technical challenges as well as their anticipated economic return, to deliver either range refreshes or incremental new products.  Looking ahead, product introductions are planned across many of our brands in the second six months of the financial period and beyond, comprising a mix of product refreshes and entirely new innovations.

 

 

Financial Review

Overview

 

The Group reported revenues of £80.9 million, representing a 5.2% increase compared to the six months ended 29 February 2024. On an organic constant currency ("OCC") basis, the underlying increase was 7.2%.

 

Adjusted EBITDA² of £10.4 million was 14.0% lower than the prior year, reflecting the impact of a lower gross margin and an anticipated increases in costs including normalised variable remuneration and inflationary pressures.

 

Reported operating profit declined to £3.1 million (HY24: £4.7 million), driven by the same factors impacting overall financial performance.  Adjusted diluted EPS¹ was also lower than the prior year's 7.7 pence, at 6.6 pence.

 

Income statement

	HY25 £m	HY25 £m	HY25 £m		HY24 £m	HY24 £m	HY24 £m
	Adjusted	Adjusting items1	Reported		Adjusted	Adjusting items1	Reported
Revenue	80.9	-	80.9		76.9	-	76.9
Cost of sales	(45.4)	-	(45.4)		(41.7)	-	(41.7)
Gross profit	35.5	-	35.5		35.2	-	35.2
Administrative overheads	(25.1)	-	(25.1)		(23.1)	(0.1)	(23.2)
EBITDA2	10.4	-	10.4		12.1	(0.1)	12.0
Amortisation of intangible assets	(3.2)	(2.7)	(5.9)		(3.1)	(2.7)	(5.8)
Depreciation of tangible assets	(1.4)	-	(1.4)		(1.5)	-	(1.5)
Operating profit	5.8	(2.7)	3.1		7.5	(2.8)	4.7
Net finance expense	(1.0)	-	(1.0)		(1.3)	-	(1.3)
Profit before tax	4.8	(2.7)	2.1		6.2	(2.8)	3.4
Income tax expense	(0.9)	0.6	(0.3)		(1.6)	0.7	(0.9)
Profit for the period	3.9	(2.1)	1.8		4.6	2.1	2.5
Memo: Total administrative expenses	(29.7)	(2.7)	(32.4)		(27.7)	(2.8)	(30.5)

1 Adjusted for amortisation of acquired intangible assets and other adjusting items detailed in note 4 to the Interim Financial Statements.

2 Earnings (Profit after tax) before Interest, Tax, Depreciation and Amortisation

 

 

Revenue analysis

	HY25 Reported	Acquisition Adjustment	HY25 Adjusted	HY24 Reported	HY24 Currency	HY24 adjusted	Reported Growth	OCC Growth1
Focusrite	30.9	-	30.9	29.4	(0.8)	28.6	5.2%	8.0%
Novation	8.7	-	8.7	7.9	(0.2)	7.7	10.4%	13.2%
Focusrite Novation2	39.6	-	39.6	37.3	(1.0)	36.3	6.2%	9.1%
ADAM	13.6	-	13.6	11.3	(0.3)	11.0	20.9%	24.2%
Sequential	5.2	-	5.2	4.5	(0.1)	4.4	15.7%	18.9%
Sonnox	1.0	-	1.0	1.0	-	1.0	-4.9%	-2.4%
Content Creation	59.4	-	59.4	54.1	(1.4)	52.7	9.9%	12.8%
Audio Reproduction	21.5	(0.4)	21.1	22.8	(0.4)	22.4	-5.8%	-5.9%
Total	80.9	(0.4)	80.5	76.9	(1.8)	75.1	5.2%	7.2%

 

[1] Organic constant currency (OCC) growth rate is calculated by comparing FY25 revenue to FY24 revenue adjusted for FY25 exchange rates and the impact of acquisitions

2 This period Focusrite and Novation brands have been merged into one operating segment within the financial statements following the reorganisation of the relevant  R&D  teams, resulting in  Novation no longer meeting the criteria for separate disclosure as a cash generating unit.  The brands are shown here separately for reference and to provide added clarity in the comments below.

 

Group revenue increased by 5.2% to £80.9 million (HY24: £76.9 million). When adjusted for acquisitions and constant currency effects, this equates to an organic constant currency (OCC) growth of 7.2%.  Sheriff Technology, acquired in December 2023, contributed two months of revenue in the prior half year.

 

Currency movements resulted in headwinds, reducing reported revenue by approximately £1.8 million, primarily due to the weakening of the US dollar.

 

After a turbulent four years across our Content Creation sales channels, stock levels have now largely normalised across our partner network, with the division returning to growth at 9.9% (OCC: 12.8%).  This was helped in part by stock build in the US ahead of anticipated tariff increases.  After adjusting for this phasing effect underlying OCC growth for the division would have been approximately 6.5% for the period.

 

The Audio Reproduction division has benefitted from strong market demand over the last two years, since the lifting of COVID restrictions.  As expected, the market has now begun to stabilise, resulting in a decline of 5.8% (OCC: -5.9%) compared to an exceptionally strong first half last year.

 

Focusrite Novation achieved revenue of £39.6 million an increase of 6.2% (OCC: 9.1%) compared to the prior year.  Both brands reported growth in the period, with Novation performing particularly well, up 10.4%, and Focusrite up 5.2% year on year.

 

Adjusting for US tariff related sales rephasing, Novation, where the majority of products are manufactured in China, would have been slightly positive and Focusrite would have reported underlying growth of approximately 5.0%.

 

As highlighted at the end of FY24, some destocking was anticipated in the US for several high volume Focusrite products and this has progressed as expected. Focusrite revenue was supported by the launch of the high input/output range of Scarlett products at the end of FY24, which have continued to sell well and now lead their category rankings with many resellers.

 

Novation also benefitted from new products, including the fourth iteration of the Group's successful Launchkey controller range supported by seeded launches with selected influencers on social media.

 

ADAM Audio continues to grow with an expanded range now including desktop speakers and headphones.  Revenue grew by 20.9% (OCC: 24.2%) to £13.6 million, with a tailwind from the phasing of sales due to inventory build to mitigate tariffs in the US.  After adjusting for this effect, underlying growth was approximately 10.6%, despite a particularly strong comparator in the first half of FY24.

 

After two difficult years Sequential has returned to growth with revenue of £5.2 million, up 15.7% year on year (OCC: 18.9%).  The introduction of a new lower price point synthesizer, the TEO-5, drove much of this growth and continues to sell well in all regions.  As Sequential is almost entirely manufactured in the US there was no impact from tariff rephasing in the half year.

 

Audio Reproduction had a particularly strong result in the first half of last year, driven by high demand in APAC, particularly China, following the delayed removal of COVID restrictions.  As expected, the market has now started to normalise, and as a result revenue for this division reduced to £21.5 million from £22.8 million in HY24 a decline of 5.8% (OCC: 5.9%).  There was no tariff rephasing impact on revenue, as the Group holds stock in the US for Audio Reproduction and so the rephasing is reflected in higher inventory levels at the period end rather than higher sales levels during the first half.

 

The strength of the Group's expanded Audio Reproduction portfolio is evident in the robustness of the sales pipeline of orders, which remains at levels consistent with the prior year and indicates that the second six months period should be stronger than the first six months.

 

Currency impact

 

The US Dollar weakened during the period (with detailed exchange rate movements provided below), resulting in the majority of the £1.8 million negative translation impact on Group revenue for HY25 relative to HY24. However, the impact at the profit level was minimal as purchases of inventory from manufacturers in China and Malaysia are also denominated in USD, creating a natural hedge that offsets much of the currency fluctuation.

 

Segment Profit

Segment profit is disclosed in more detail in note 3 to the Interim Financial Statements named, 'Operating Segments'.  These segments compare the revenue of the products of the relevant brands with the directly attributable costs to create segment profit.

 

Gross Profit analysis

The Group's gross margin percentage for the first six months was 43.9%, broadly consistent with the underlying margin reported in the second half of the prior year, but down from 45.8% in HY24. This decline was primarily driven by changes in product and regional sales mix across our brands.

 

The most significant impact on Group's gross margin came from the Audio Reproduction division.  This division, which delivered particularly strong gross margins of 49.7% in the prior year, reported a gross margin of 44.0% in HY25, which reflects a return to a level in line with the three year average of 43.5%.  The key driver was a sharp reduction in sales to the Chinese market, where a portion of sales are recognised on a royalty basis via our contract manufacturers.  This market weakness in China significantly impacted both revenue and gross profit in the division.

 

In the Content Creation division, reported gross margin declined slightly by 0.2 percentage points from 44.1% to 43.9% in the first six months compared to the prior first half.  However, HY24 included a £1 million provision for Vocaster stock, which impacted gross margins by 1.3 percentage points, therefore the underlying decline for the division was 1.5 percentage points.  Stronger sales of lower margin Novation products, alongside a reduction in sales of higher margin Pro range products, contributed to this decline.

 

Additionally, pricing adjustments made in EMEA to align pricing across ADAM sales channels resulted in a 2.6 percentage point decrease in gross margin for this brand.  This strategy has helped drive incremental volume and revenue, resulting in a £0.8 million increase in gross profit. 

 

Sequential's gross margins improved by 5.3 percentage points to 43.3%, reflecting reduced pricing pressure and stabilisation of promotional activity.

 

Freight rates remained elevated across both divisions relative to the first half of the prior year, and some one-off rework costs relating to new product launches had a further 0.6 percentage point negative impact on Group gross margin.

 

Looking ahead, the outlook remains uncertain due to the constantly evolving tariff regulations.  However we expect an ongoing improvement in margins in regions outside the US.  For the US we will continue to focus on maximising gross profits.  We have taken swift action in the US to increase prices from May 1 to offset tariff increases and have increased inventory to provide some level of protection before these tariff increases take effect.

 

Administrative expenses

 

Administrative expenses include sales, marketing, operations, the uncapitalised element of R&D (partially offset by the Research and Development Expenditure Credit regime ('RDEC') tax credit of £0.2 million), as well as central functions such as legal, finance and the Group Board.  Total expenses were £25.1 million, up from £23.2 million in the prior year. There were no adjusting costs in the period (HY24: £0.1 million).

 

The £2.0 million increase in adjusted administrative expenses was primarily driven by the normalisation of variable remuneration totalling £1.0 million, and £0.7 million of labour cost inflation. The remaining increase relates to the annualisation of costs associated with the acquisition of Sheriff Technology in the prior year.

 

Adjusted EBITDA

 

Adjusted EBITDA is an alternative performance measure widely used by securities analysts, investors and other stakeholders to assess a company's underlying profitability.  Within the Group, it also forms the basis for elements of senior management incentivisation, both at the operating company and Group level.

 

Adjusted EBITDA decreased from £12.1 million in HY24 to £10.4 million in HY25, a decrease of 14.0%.  The reduction was primarily due to the lower gross margin and higher operating costs, as discussed above.

 

A reconciliation of adjusted EBITDA to operating profit can be found in Note 1.9 to the Interim Financial Statements.

 

Depreciation and amortisation

 

Depreciation is charged on tangible fixed assets using the straight-line method over the assets' estimated useful lives, typically ranging between two and five years.

 

Amortisation is primarily applied to capitalised development costs, with charges spread over the expected lifecycle of the related product. Product lifespans vary across the Group's brands, from approximately three years for Focusrite and Novation, up to 11 years for Martin Audio and 15 years for Sequential.

 

During the period, £4.8 million of development costs were capitalised (HY24: £4.5 million), while £3.2 million of previously capitalised development costs were amortised (HY24: £3.1 million).   Further details are provided in Note 8.

 

The amortisation of the acquired intangible assets totalled £2.7 million during the period (HY24: £2.7 million) and has been disclosed within adjusting items. 

 

Adjusting items

 

In HY25 there were no adjusting items.  In HY24 adjusting items totalled £0.1 million which related to the due diligence costs for the acquisition of Sheriff Technology that was completed on 19 December 2023. £2.7 million relating to amortisation of acquired intangible assets is also shown as an adjusting item in both reporting periods.

 

 

Foreign exchange and hedging

The exchange rates were as follows: 

 

Exchange rates	HY25	HY24	FY24
Average
USD:GBP	1.28	1.25	1.26
EUR:GBP	1.19	1.16	1.17
Period end
USD:GBP	1.26	1.26	1.31
EUR:GBP	1.21	1.17	1.19

 

The average USD rate has weakened to $1.28 for HY25 (HY24: $1.25).  The USD accounts for over half of Group revenue but nearly all of the cost of sales, so there is a useful natural hedge against currency fluctuations.

 

The Group enters into forward contracts to convert Euro to GBP.  The policy adopted by the Group is to hedge approximately 75% of the Euro flows for the current financial period (ending February 2026) and approximately 50% of the Euro flows for the following financial year (year ending February 2027). 

 

Corporation tax

The effective tax rate for the period has decreased to 13.0% (HY24: 27.7%).  This is largely due to the benefit attributable to Patent Box claims, including in respect of a new patent granted in January 2025.  The underlying effective rate excluding the impact of the catch up for attributable profits prior to the grant date of the new patent is 23.0%. The headline effective tax rate is expected to remain around the UK corporate tax rate in future years due to the ongoing permitted deductions under the Patent Box scheme offsetting the impact of higher tax rates on profits from non-UK entities.

 

Earnings per share ('EPS')

 

The basic EPS for the half year was 3.1 pence, down 26.2% from 4.2 pence in HY24.  This decrease has largely resulted from the change in reported profit after tax, which was impacted by a lower gross margin and an anticipated increase in administrative costs.  The weighted average number of shares used for the calculation has decreased marginally compared to the prior year at 58,628,000 shares (HY24: 58,872,000 shares). The more comparable measure, excluding adjusting items and including the dilutive effect of share options, is the adjusted diluted EPS.  This decreased to 6.6 pence, from 7.7 pence in HY24, a decrease of 14.3%.

 

	HY25	HY24	FY24
	Pence	Pence	Pence
Basic	3.1	4.2	4.5
Diluted	3.1	4.1	4.4
Adjusted basic	6.7	7.8	18.3
Adjusted diluted	6.6	7.7	18.0

 

Balance sheet

	HY25	HY24	FY24
	£m	£m	£m
Non-current assets	93.6	98.9	94.0
Current assets
Inventories	48.6	55.3	49.3
Trade and other receivables	38.8	37.5	37.6
Cash	15.6	8.9	22.0
Current liabilities
Trade, other payables and provisions	(31.7)	(30.2)	(34.8)
Non-current liabilities
Bank loan	(33.5)	(36.2)	(34.5)
Deferred tax	(10.2)	(10.3)	(10.8)
Other non-current liabilities	(6.3)	(5.6)	(6.8)
Net assets	114.9	118.3	116.0
Working capital1	55.7	62.6	52.1

 

¹ Working capital is defined as inventories plus trade and other receivables less trade and other payables and provisions

 

Non-current assets

The non-current assets comprise: goodwill, brands, patents and capitalised development costs; property, plant and equipment; and software.

 

The goodwill totals £14.1 million (HY24: £16.9 million).  The decrease is largely due to the impairment of goodwill of £2.6 million made at the end of FY24 relating to the Sequential with the remaining movement due to foreign exchange. 

 

The total cost of the brands is £25.5 million (HY24: £25.7 million).  The majority of brands are being amortised over 10 and 15 years with Martin over a 20 year period.  As at 28 February 2025 the brands had carrying value, net of amortisation, of £15.8 million compared to £19.2 million as at 29 February 2024, with £2.1 million of the reduction resulting from the prior year Sequential impairment.

 

Acquired technology and patent costs comprise developments now in use and brought into the Group as part of an acquisition.  These are amortised over similar periods to internally generated assets and as at 28 February 2025 comprised £37.8 million at cost (HY24: £37.3 million).  The net book value of these assets at the period end was £21.0 million (HY24: £24.9 million), with £0.7 million of the reduction resulting from the Sequential impairment.

 

The internally generated technology and patent costs comprise capitalised research and development costs for products currently in use.  The amortisation periods range from three years to fifteen years depending on the expected life of the products.  The shorter amortisation periods are more usual for Focusrite and Novation products and the longer periods for the ADAM Audio monitors, Martin Audio live speakers and Sequential synthesisers. The capitalised technology and patent costs as at 28 February 2025 had a carrying value, net of amortisation, of £14.8 million (HY24: £10.7 million). 

 

Capitalised technology and patent costs still under development comprise acquired and internally generated technology and patent costs for products currently still in development.  The cost of these items has increased from £7.1 million at 1 September 2024 to £8.4 million as at 28 February 2025 (HY24: £9.4 million), as a result of our £3.9 million ongoing investment in new products, net of the transfer of £2.6 million of costs to products now in use. 

 

Overall, amortisation of the intangible assets totals £5.9 million (HY24: £5.8 million).  This is split between amortisation of intangible assets acquired as part of the acquisitions of £2.7 million (HY24: £2.7 million), and other amortisation of £3.2 million (HY24: £3.1 million). The amortisation of acquired intangible assets has been treated as an adjusting item. 

 

Based on current trading and management forecasts, we have conducted impairment reviews for those subsidiaries impacted by difficult markets with no impairments to the carrying value of the intangible assets being deemed necessary. This will be reassessed at the next reporting period for any evidence of any permanent diminution in value.

 

The remaining £6.4 million net book value of intangible assets (HY24: £6.0 million) is in respect of purchased licences, software and trademarks. 

 

Tangible non-current assets consist mainly of right of use assets relating to the Group's leased offices and warehouses, and tooling equipment for the manufacture of products. This has increased since February 2024 due the addition of tooling for manufacture and a new lease for the Group's office in Hong Kong.

 

Working Capital Analysis

As of 28 February 2025, working capital represented 34.2% of the last 12 months' revenue, a decrease from 37.0% in the comparable period of the previous year (HY24), although still above the Group's historic average of around 25%.

 

Working capital has decreased from the same point in the prior year, but, as planned, has increased slightly since year end.  Inventory has reduced significantly over the last 12 months due to the reduction in Scarlett stocks, particularly of the Gen 3 products, and is lower than at the end of the last financial year, despite a £2 million increase for our Audio Reproduction stock in the US to mitigate the impact of tariffs. Trade debtors and creditors are both higher than at the year end, reflecting the high sales towards the end of the period into the US to manage tariff impacts.

 

We expect working capital to improve in the second six months resulting in a small cash inflow in the period.

 

Cash Flow Analysis

	HY25	HY24	FY24
	£m	£m	£m
Cash and cash equivalents at the beginning of the year	22.0	26.8	26.8
Foreign exchange movements	0.2	(0.2)	(0.4)
Cash and cash equivalents at the end of the year	15.6	8.9	22.0
Net decrease in cash and cash equivalents (per Cash Flow Statement)	(6.6)	(17.7)	(4.4)
Change in bank loan	1.7	(8.1)	(6.6)
Increase in net debt	(4.9)	(25.8)	(11.0)
Add back equity dividend paid	2.6	2.6	3.9
Add back acquisition of subsidiary (net of cash acquired)	-	2.3	2.5
Free cash outflow	(2.3)	(20.9)	(4.6)
Add back non underlying items (cash outflow)	-	0.1	0.1
Underlying free cash outflow 1	(2.3)	(20.8)	(4.5)

 

¹Defined as cashflow before equity dividends, acquisition of subsidiary (net of cash acquired) and adjusting items.

 

The underlying free cash outflow in HY25 was £2.3 million, compared to a cash outflow of £20.8 million in HY24.  We expect underlying free cashflow for the six month period to 31 August 2025 to be a small inflow, with the rephasing of inventory due to tariffs to reverse.  The Group remains inherently cash generative, and the aim is to return to the historic norm of consistent free cashflow generation in future years.

 

The net debt balance at the period end was £17.9 million (HY24: net debt of £27.3 million and FY24: net debt of £12.5 million).  The net debt includes the arrangement fee for the revolving credit facility (RCF) of £0.6 million which is being amortised across the period of the facility.   

 

Following an update to IAS 1: Presentation of Financial Statements the Group has reclassified the outstanding bank loan of £34.1 million to creditors due in more than one year, and restated prior periods to reflect this classification.  This is based on the right to defer payment of the loans for longer than 12 months from the Balance Sheet date.

 

The Group has a £50 million RCF facility split evenly between HSBC and NatWest which was renewed in September 2023 and is due to expire in September 2028, together with an uncommitted facility for a further £50 million.  As at the balance sheet date £34.1 million was drawn down from the facility (HY24: £36.9 million, FY24: £35.1 million).

 

Dividend

The Board has approved an interim dividend of 2.1p (HY24: 2.1p) which is in line with the previous year, despite the reduction in profits and reflects the Board's confidence in the future profit and cash generation prospects of the Group.  

 

Change in year end

 

As announced on 29 October 2024, the Group's year end has been changed from 31 August to 28 February.  As a result, the Group will next be reporting unaudited interim results for the 12 month period to 31 August 2025 to be followed by audited full period results for the 18 month period to 28 February 2026.

 

Summary and Outlook

 

After several years of volatility across our Content Creation sales channels, we are now seeing a return to more normal inventory levels, accompanied by sustained demand for our leading brands. The Group has returned to growth, with a 9.9% increase in revenue from Content Creation. This has been driven by more consistent and predictable channel orders, successful new product launches across most of our brands, and some sales rephasing in the US to mitigate the impact of tariffs. The refresh of our flagship Scarlett range in Focusrite is now complete, with customer registrations remaining steady compared to the prior year, outperforming a declining wider market and signalling continued brand strength.  Incremental new product introductions in both ADAM and Sequential have further contributed to the overall revenue growth.

 

As previously highlighted, Audio Reproduction has normalised following 18 months of unusually high post-lockdown demand, with H1 revenues down 5.8% year-on-year. However, the pipeline for this division remains strong, reflecting the success of our expanded portfolio and broader market reach.

 

Macroeconomic uncertainties persist-particularly in our key US market- and we have responded swiftly to help mitigate these risks including inventory phasing, selective price increases and relocating manufacturing for certain product ranges. We remain vigilant with regard to any further challenges in the US business environment.  With new product launches planned for the next six months, as previously indicated we expect a greater weighting of sales in this period and will continue to focus on maximising gross margins.  Given the current 90 day pause and tariff exemption window for certain products, we believe our expectations for the first 12 months of the current financial period remain realistic.

 

Tim Carroll	Sally McKone
Chief Executive Officer	Chief Financial Officer
28 April 2025

 

 

Risks and Uncertainties

 

The principal risks affecting the Group are described on pages 34 to 39 of the Group's Annual Report for the year ended 31 August 2024 (a copy of which is available on the Group's website at https://focusriteplc.com/investors/reports-and-presentations/) The Board has considered the principal risks and uncertainties as presented in that Annual Report and has determined that they broadly remain relevant to the rest of this financial year, with the updates as set out below.

 

Adverse changes in macroeconomic conditions

 

Tariffs introduced by the USA government on goods imported from China and at a lower level on goods produced in other countries will ultimately result in higher prices for US consumers. The situation remains volatile and uncertain.  The Group is monitoring the situation closely and has taken action to mitigate the impact through increasing inventory in the US and taking swift action to increase prices where relevant, whilst remaining mindful of our competitive position. 

 

We continue to explore options regarding the sourcing location of our products across all our brands.  We have existing manufacturing locations in Germany and the UK, work with our long-term contract manufacturers in the UK, US and Malaysia, and in addition several of our Chinese based partners have factories outside of China.  We constantly review options to ensure that we can provide products which meet our high levels of quality at the most cost-effective price for our customers.

 

In addition, the Group's business is subject to the political, economic and other risks that are currently at play in the changing global environment, with sales to certain markets continuing to be impacted by ongoing conflicts.

 

Cyber threat

 

As a Group we monitor attempts to infiltrate our information systems and since our Annual Report 2024 was published, we have seen increasingly sophisticated and more personalised attacks using generative AI which makes it more difficult to spot threats. The Group has invested in AI driven tools in order to block these threats as they evolve and we continue to explore further options to strengthen our 24/7 monitoring of our systems.

 

Forward looking statements

The risks and uncertainties facing the Group were reported in detail in the 2024 Annual Report and are monitored closely by the Group. The forward-looking statements in this Interim Report cannot be relied upon as a guarantee or prediction of future performance. We, like all businesses, continue to face known and unknown risks, uncertainties and other factors, many of which are beyond our control, which may mean our actual results differ from those expressed in this first half year report.

 

 

Condensed Consolidated Income Statement

For the six months ended 28 February 2025

	Note	Six months to  28 February 2025	Six months to  29 February 2024	Year to 31 August 2024
		£'000	£'000	£'000
Revenue	2	80,907	76,884	158,254
Cost of sales		(45,374)	(41,683)	(88,031)
Gross profit		35,533	35,201	70,493
Administrative expenses		(32,450)	(30,544)	(64,797)
Adjusted EBITDA (non-GAAP measure)		10,431	12,098	25,219
Depreciation and amortisation		(4,666)	(4,609)	(8,574)
Adjusting items for Adjusted EBITDA:
Amortisation of acquired intangible assets	8	(2,682)	(2,734)	(5,510)
Impairment of acquired intangible assets		-	-	(5,355)
Adjusting items	4	-	(98)	(84)
Operating profit		3,083	4,657	5,696
Finance income		98	83	100
Finance costs		(1,064)	(1,318)	(3,292)
Profit before tax		2,117	3,422	2,504
Income tax (expense)/income	5	(275)	(949)	104
Profit for the period from continuing operations		1,842	2,473	2,608
Earnings per share
From continuing operations
Basic (pence per share)	7	3.1	4.2	4.5
Diluted (pence per share)	7	3.1	4.1	4.4

 

Condensed Consolidated Statement of Other Comprehensive Income

		Six months to  28 February 2025		Six months to  29 February 2024		Year to 31 August 2024
		£'000		£'000		£'000
Profit for the period		1,842		2,473		2,608
Items that may be reclassified subsequently to the income statement
Exchange differences on translation of foreign operations		(458)		(77)		(856)
Loss on forward foreign exchange contracts designated and effective as a hedging instrument		(16)		(190)		(491)
Tax on hedging instrument		-		47		123
Total comprehensive income for the period		1,368		2,253		1,384
Profit attributable to:
Equity holders of the Company		1,368		2,253		1,384