Gear4Music said its first-half sales have risen ahead of expectations, but investment has increased operational costs and “restricted margins”.

In a trading update for the six months to August 31, the online musical instrument specialist said total sales grew 44%, with “continued strong growth” in the UK and across its 19 international markets.

The etailer, which floated in 2015, attributed buoyant trade to the recent launch of new distribution centres in Sweden and Germany.

However, Gear4Music said margins had been restricted in the short term and operational costs driven up following a period of significant investment, during which the company ploughed cash into its infrastructure and proposition.

The etailer, which has physical showrooms in York and Sweden, said active customer numbers jumped 44% to 390,000 during the period.

Gear4Music chief executive officer Andrew Wass said: “Encouragingly, revenue growth over the last six weeks supports our expectation that, as previously stated, revenue and profitability is likely to be more H2 weighted in FY18 than in FY17.

“We remain focused on delivering long-term sustainable growth through investment in our people, products, websites and operational capabilities, and raising £4.2m growth capital in May 2017 has enabled us to start accelerating investment in these key areas.”

He added that the group continues to trade in line with its expectations and is “well prepared” for a busy seasonal period.