Shares in Focusrite (LON:TUNE) rallied after the audio products group delivered resilient FY26 results. Focusrite said trading in Q1 FY27 has been ahead of the prior year. This reflects positive progress across both its Content Creation and Audio Reproduction divisions.
Price increases to offset tariffs and cost discipline are supporting margins. And investors applauded Focusrite’s strong cash generation, which helped to drive a £9.3 million year-on-year reduction in net debt.
Amping up growth
Focusrite develops hardware and software products used by audio professionals and musicians. Products range from audio interfaces and preamps to speakers. And the firm’s solutions facilitate the high-quality production of recorded and live sound.
The company’s brands include the eponymous Focusrite as well as Novation, Martin Audio and TiMax to name a few.
Revenue edged up 1.3% to £164.6 million in the 12 months to 28 February 2026. And adjusted EBITDA increased 5.7% to £24.7 million.
CEO Tim Carroll said this demonstrated Focusrite’s ability to ‘grow profitability despite a challenging macro-economic backdrop characterised by tariff instability, geopolitical pressures and subdued consumer confidence in several key markets.’
Improving momentum
Both divisions contributed to Focusrite’s robust performance. Content Creation returned to organic constant currency growth of 3.6%. This was driven by new product releases and price hikes, which helped to support margins and offset US tariff increases.
Audio Reproduction delivered modest organic growth of 0.5%, with strong growth in the key US market offsetting a ‘normalising’ APAC market. The US is a huge opportunity where the Martin Audio brand is underrepresented.
Focusrite left its FY27 guidance unchanged for now. Yet Carroll insisted his charge enters the new financial year with ‘improving operational momentum’. He also called out a ‘strengthened product portfolio and a growing direct-to-consumer presence that continues to support both revenue growth and margin progression.’
Return to stardom incoming?
Cavendish maintained its ‘buy’ rating on the stock: ‘A resilient set of results for Focusrite,’ said the broker, ‘and we would expect the market to be reassured that current trading has started positively. It is an operationally geared model and as such the return to volumes should be accretive to margins.’
Investec’s estimates place Focusrite on a lowly forward price-to-earnings (PE) ratio of around 10 times. The broker reiterated its buy rating and 300p price target on the stock. Investec insisted: ‘In a widely depressed UK market, Focusrite has a strong argument to be most undervalued stock we have seen anywhere; the return to stardom is coming, in our view.’
Focusrite struggled after the pandemic-inspired boom in demand for its products faded. But the company has emerged from this period of normalisation. It is back on the front foot with a strengthened balance sheet and a focus on growth.
The company has developed a new proprietary platform which utilises its own custom design silicon, which should bolster future product development. Given the improving momentum in this operationally-geared business, we believe FY27 estimates could prove conservative.
Focusrite plans to host a Capital Markets Day before the end of the year where management will set out its strategic priorities, growth drivers and the value creation opportunity ahead. This event could be a catalyst to stoke greater interest in the stock.
Read the press release here: https://focusriteplc.com/investors/
