Focusrite (TUNE) Dividend

Focusrite is a global music and audio products company that develops and markets proprietary hardware and software products used in recording studios by professional and amateur musicians.

In particular they create the audio interface software and hardware which help with the creation of electronic music (think: huge boards of controls and sliders in studios and studio loudspeaker technology). Its first contracts included a commission to work on Beatles Producer George Martin's recording studio.

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Mike - six-figure dividend earner

Focusrite (TUNE) Business Factfile:

  • Traded on: LSE AIM market
  • Founded in 1985
  • Went public in 2014
  • Number of employees: 449
  • Headquartered in: High Wycombe, United Kingdom.
  • Directors: Philip Dudderidge (Non-Exec Chair) and Timothy Carroll (CEO) leads a team of 8 further executive and 3 independent non-exec directors. In total 4 of the 13 directors are female.
  • Awards: Won prestigious Queen's award for Enterprise in 2022, the third time it as been recognised for strong overseas sales growth.


Focusrite performance:

Total revenue up from £54.3m to £174m from 2016-2021 although rate slowing dramatically in recent years.

Net profit up from £6.26m to £28.3m from 2016-2021 although increase slowing dramatically and may fall in 2022.

Earnings per share up from 10.7p to 48.2p (2016-2021), although earnings report for H1 announced a fall in April 2022.

Rapid growth in stock price from first listing peaking in 2021 falling approximately 40% by late Spring 2022.

Consistent dividend growth, although dividend yield low (0.6% at time writing).

Dividend cover in 2021: 9.26.

How does Focusrite generate income?

Focusrite is a global music and audio products company that develops and markets proprietary hardware and software products used in recording studios by professional and amateur musicians.

In particular they create the audio interface software and hardware which help with the creation of electronic music (think: huge boards of controls and sliders in studios and studio loudspeaker technology). Its first contracts included a commission to work on Beatles Producer George Martin's recording studio.


They generate cash flow from:

  • development of products
  • sale of products
  • provision of support services
  • licensing of its technologies to third-party manufacturers

Focusrite PLC (TUNE) trades under 9 established brands, some of which have long and prestigious histories in this industry: Focusrite, Focusrite Pro, Martin Audio, Optimal Audio, ADAM Audio, Sequential, Linea Research, Novation and Ampify Music.

In short, Focusrite pro brands are among the market leaders delivering audio professionals both products and services which generate a mix of income streams (one-offs and recurring). They are commercial audio brand which provides for a broad market, ranging from medium-sized commercial installations to stadium concert audio, the latter especially following their 2019 acquisition of Martin Audio designs.


Prospects for Growth / Headwinds for Focusrite:

The company is clearly implementing a growth-by-acquisitions policy. In addition to Martin Audio, they bought Adam Audio studio speaker brand in 2019, Sequential design in 2021 who specialize in analogue synthesizers and Linea Research Holdings in 2022. It continues to have cash reserves and company forecasts for 2022 and 2023 are for c. 8% dividend growth.


That said, Focusrite announced on April 26 2022 that H1 revenue fell 2.5% and basic earnings per share were also down (23.1p). They did however announce an interim dividend of 1.85p.


Link to Focusrite investor relations: https://focusriteplc.com/investors/reports-presentations


Mike - six-figure dividend earner

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