Trading Update and Change of Year End

7 September 2018

Gear4music (Holdings) plc

Trading Update and Change of Accounting Reference Date

Gear4music (Holdings) plc ("Gear4music" or "the Group"), the largest UK based online retailer of musical instruments and music equipment, today announces a trading update for the six months to 31 August 2018 and its decision to change its accounting reference date from 28 February to 31 March.

Highlights

·     Total sales growth of 36% to £42.5m (FY18: £31.2m)

·     Active customer numbers increased by 40% to 547,000

·     Good progress made with European distribution:

o  German distribution centre orders fulfilled up by 230%

o  New Swedish distribution centre on track to be operational by the end of October 2018

Gear4music's Chief Executive Officer, Andrew Wass, said:

 "We have continued to make good progress over the last six months, with sales growth during the period of 36% being ahead of our expectations.

Our core UK market continues to perform well and with the UK distribution centre upgrades we announced in May progressing to plan, we are well positioned to deliver further strong sales growth during the busier second half of the year.

Whilst still strong, European sales growth reflects a slower than anticipated build-up of inventory at our European distribution hubs, particularly in Sweden. Completion of the move into our new higher capacity Swedish distribution centre by the end of October, combined with the recent expansion of our European purchasing team will mean that the range and depth of inventory at both of our European locations will be increased ahead of peak season. We expect European sales growth will accelerate during the second half of the year.

As noted in our AGM statement, we have seen an increase in competitive pressures across our industry which is having an impact on short term gross margins. At this stage in our growth cycle we remain focused on best serving our customers, and see opportunities to rapidly increase our market share as the industry continues to consolidate and shift from traditional retail to agile e-commerce. We are confident that strong sales growth alongside a controlled overhead cost base will compensate for short term gross margin compromise. The Board expects EBITDA for the full financial year to be in line with our expectation."

The Group will report interim results for the six months ending 31 August 2018 on 16 October 2018.

Change of Accounting Reference Date

The Group today announces that it has agreed to change its accounting reference date, with immediate effect, from 28 February to 31 March. This will result in a reporting cycle that is more compatible with the Group's seasonal trading pattern and will avoid timetable conflicts with attendance at trade events that are important to the Group.

Consequently, the Group will prepare audited accounts for the 13-month period from 1 March 2018 to 31 March 2019. These accounts will be notified to the market and published by 31 August 2019.

- Ends -

Enquiries:

About Gear4music.com

Operating from a Head Office in York, and Distribution Centres and showrooms in York, Sweden and Germany, the Group sells own-brand musical instruments and music equipment alongside premium third-party brands including Fender, Yamaha and Roland, to customers ranging from beginners to musical enthusiasts and professionals, in the UK, Europe and, more recently, into the Rest of the World.

Having developed its own e-commerce platform, with multilingual, multicurrency and fully responsive design websites delivering to over 190 countries, the Group has rapidly expanded its database and continues to build its overseas presence.

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.