musicMagpie’s AIM float

Music Magpie, founded in Macclesfield in 2007 by Steve Oliver and Walter Gleeson – as a way for people to sell their unwanted CD’s, DVD’s and electronics – is to raise £110m when it lists on the Alternative Investment Market next week.

With technology moving on, the business has evolved to focus on re-selling smartphones, tablets and game consoles and the online retailer is set to become the latest company to join the rush of stock market listings with a float that values the business at between £200 million and £250 million.

The business, which announced its intention to float in October, has grown to employ more than 1,000 people and expanded from its Stockport headquarters with operations in Atlanta, Georgia, in the USA.

Its share placing will see selling shareholders receive £95m and the company £15m.

The company will have a market value of £208m when it launches at 193p-per-share next Thursday. It will have a free float of 53% with directors and senior management owning approximately 11.5%.

Revenue has increased from £115.5m in the year to November 2018, to £153.4m two years later. Earnings, as measured by EBITDA, has grown at a much faster rate, from £2.6m in its 2018 financial year to £13.9m last year.

In addition to its growing core business, the group recently launched three initiatives for which it sees significant potential:
An innovative smartphone subscription/rental service, providing customers with a more affordable and flexible option than an outright purchase;
the SMARTDrop kiosk concept – a fast, easy and free way for sellers to recycle phones for instant cash – with kiosks now being rolled-out in ASDA and Co-op branches;
and Magpie Circular – a new corporate technology recycling service for businesses looking to increase their sustainability efforts whilst also generating income.