Gear4Music raises £4.2m to accelerate growth as Directors crystallise gains

AIM-listed musical instrument retailer Gear4music has raised £4.2m through the placing of 1.4m shares, it announced on Friday, saying the move would help it fund the execution and acceleration of growth plans.

The placing saw G4M issue 610k new shares and place 839k sale shares through Panmure Gordon at 690p, raising £4.2m for the Group which will be used to help execute and accelerate its growth strategy.

CEO Andrew Wass sold 725,000 shares, reducing his holding to just over 7.2m shares (34.3%), while CFO Christopher Scott sold 30,000 shares, reducing his holding to 90k (0.4%). There were also sales by CCO Gareth Bevan and Non-Exec Director Dean Murray.

Despite the 690p, shares in G4M jumped 3% shortly after opening on Friday, hitting all-time highs in excess of 720p. CEO Andrew Wass, who said he wouldn't sell any more shares for the next 12 months, said he was delighted with the level of support for the raise:

"We look forward to putting the funds raised to work in the Group in executing our organic growth strategy for the business."

Today's placing follows the Group's recently reported record profits, which were driven by improved margin performance and a dramatic increase in active customers. G4M's share price has risen 465% in the past year following a series of earnings upgrades, and we would be inclined to take today's news as a sign of the Directors crystallising some of their gains, rather than indicating anything more concerning.