Focusrite plc (LSE:TUNE) reported a 14.7% increase in adjusted operating profit to £11.1 million for the six months ended 31 August 2026, supported by higher revenue, improved gross margins and tighter cost management.
The music and audio equipment group generated revenue of £90.3 million, up 2.7% from £88.0 million in the corresponding period last year. Organic constant currency revenue growth was 2.5%.
Statutory operating profit increased by 67.6% to £10.9 million, while adjusted EBITDA rose 10.9% to £15.8 million.
The company maintained its full-year expectations, citing encouraging trading since the period end and continued demand across its two operating divisions.
Revenue Growth and Margin Improvement Support Profitability
Focusrite’s gross margin increased to 46.6% from 44.9%, representing an improvement of 1.7 percentage points.
The increase reflected targeted price adjustments, lower manufacturing costs, changes to distribution arrangements and a greater emphasis on higher-margin sales channels.
Adjusted operating profit rose to £11.1 million from £9.7 million, while statutory operating profit increased from £6.5 million to £10.9 million.
Basic earnings per share more than doubled to 12.8p from 6.2p, representing growth of 106.5%.
Adjusted diluted earnings per share increased by 25.5% to 12.8p, compared with 10.2p a year earlier, benefiting from improved profitability and lower finance costs.
The board declared an interim dividend of 2.16p per share, up 3% from 2.10p.
Content Creation Division Delivers 5.2% Revenue Growth
Focusrite’s Content Creation division recorded revenue growth of 5.2%, equivalent to 5.0% on an organic constant currency basis.
Performance was supported by new product introductions, including an updated Focusrite audio interface and additional controller products within the Novation range.
The division also benefited from changes to its distribution model and continued growth in direct-to-consumer sales.
In Japan, the introduction of a direct-to-reseller distribution approach contributed to a 20% year-on-year increase in revenue.
Focusrite reported more than £1 million in product cost reductions through closer cooperation with contract manufacturers and improvements in sourcing arrangements.
These initiatives contributed to the group’s wider gross margin improvement during the period.
Audio Reproduction Revenue Declines Despite Stronger Orders
Revenue in the Audio Reproduction division declined by 3.9%, or 4.0% on an organic constant currency basis.
The division experienced double-digit revenue growth in the United States, but this was offset by weaker demand in China.
Despite the revenue decline, orders increased by 12% compared with the corresponding six-month period last year.
The company reported a positive book-to-bill ratio, indicating that orders received exceeded revenue recognised during the period.
Management said the improvement in orders provided an encouraging indication of underlying demand, although regional trading conditions remained mixed.
Proprietary Audio Chip Technology Moves into Production
Focusrite reported further progress in developing its proprietary audio silicon chip technology, which has now entered production.
The first commercial product incorporating the technology is expected to begin shipping in early 2027.
The company expects the platform to support future product development, improve functionality and provide opportunities for margin enhancement.
Chief Executive Officer Tim Carroll said the technology represented an important element of the group’s longer-term innovation strategy.
He also highlighted the contribution of new product launches, operational improvements and changes to distribution channels.
“We have delivered a strong first-half performance, with revenue growth, improved margins and double-digit growth in adjusted operating profit, alongside a significant strengthening of our balance sheet,” Carroll said.
Net Debt Falls to £1.5 Million
Focusrite reduced net debt to £1.5 million at 31 August 2026, compared with £10.8 million a year earlier.
The £9.3 million reduction was primarily attributable to improved working capital management and refunds relating to US tariffs.
The group received £2.8 million in US tariff refunds during the period, of which £2.4 million was recognised as an adjusting item.
The improvement in the balance sheet provides the company with additional financial flexibility as it continues investing in product development and operational efficiency.
Full-Year Market Expectations Reaffirmed
Focusrite said trading since the end of August had been encouraging, with healthy underlying demand across both Content Creation and Audio Reproduction.
The company reiterated that revenue and profitability are expected to be more heavily weighted towards the first half of the financial year, reflecting the timing of sales into distribution channels ahead of the winter holiday season.
Nevertheless, the board remains confident in meeting market expectations for the financial year ending 28 February 2027.
As of 2 November 2026, published analyst forecasts indicated full-year revenue expectations of between £170.1 million and £173.7 million.
Adjusted EBITDA forecasts ranged from £25.2 million to £27.4 million, while adjusted operating profit expectations stood between £15.6 million and £17.5 million.
Capital Markets Event Scheduled for 25 November
Focusrite will host a Capital Markets Event for institutional investors and analysts on 25 November 2026.
The event will provide further information on the company’s strategy, growth opportunities and financial framework.
The company confirmed that no new material trading information will be disclosed during the event.
Outlook
Focusrite enters the second half of its financial year following improvements in profitability, gross margins and its net debt position.
Continued product innovation, distribution improvements and manufacturing cost reductions remain central to the group’s strategy.
The planned introduction of products incorporating its proprietary audio silicon technology in early 2027 represents a further development milestone.
Although revenue and profitability are expected to be weighted towards the first half, management remains confident in achieving current full-year market expectations.
Leave a Reply