PROFITS at York-based Gear4Music have been hit by rising operational costs as the enlarged music retailer welcomes a 43 per cent rise in revenues.

The year-on-year growth in turnover from £56 million to £80 million has been attributed to the business’s “dedicated and talented team” who were moved to a new HQ in Holgate Business Park during the accounting period.

However for the year ending February 28, 2018, Gear4Music saw a 43 per cent fall in pre-tax profits to £1.5 million, following 220 per cent rise in European distribution centre costs.

Group chief executive Andrew Wass explained: “This has been a transformational year of investment for Gear4music.

“During the year we raised an additional £4.2 million of growth capital, our European distribution centres became fully operational, and we moved into our new head office.

“We accelerated investment in our employees, systems, marketing and customer proposition, to firmly establish ourselves as one of Europe’s leading online retailers of musical instruments and music equipment.

“In my report last year, I explained that FY18 would be a period of targeted investment, and that would have short-term profitability implications.

“FY19 will be focused on achieving returns resulting from these investments, with the objective of delivering strong and sustainable revenue and profitability growth.

“As a result of the significant efforts of our team, and the investments we have made during FY18, we move into the new financial year with a market leading e-commerce platform, infrastructure and customer proposition.

“While still early in the financial year, I am pleased to say that trading to date is in line with expectations and we are confident of achieving our objectives and hitting expectations forFY19.”

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.