🎯 WATCHLIST — Focusrite (AIM: TUNE) — Tier 2

Sector: Audio hardware / live sound equipment (Content Creation + Audio Reproduction divisions)

Status: Watching, not trading yet

The Story: Pandemic winner that crashed hard (£18 → £1.30), now clawing its way back. Debt falling, margins improving, and a proprietary chip/software platform launching later this year that could change the growth story — but earnings actually dipped last year, so it’s a recovery, not a breakout yet.

Key Levels:

  • 52-week range: 150p – 255p
  • Current: ~240p (26th July 2026)
  • 🔑 Trigger zone: 255-260p (52-week high / resistance) — a confirmed close above this on strong volume is the signal
  • Below 150p invalidates the recovery thesis

Why It’s Tier 2, Not Tier 1:

  • ✅ Fundamentals improving (debt, margins, EBITDA)
  • ✅ Analyst support (4 covering, all Buy/Outperform)
  • ❌ EPS fell 7.7% last year — earnings haven’t caught up yet
  • ❌ Chart hasn’t broken resistance — no confirmed trend yet

Catalyst to watch: First product from the new chip/software platform, expected later 2026.

The Growth Story: £6m spent over 4 years building a cross-brand tech platform + their own proprietary silicon chip — aim is faster product development, shared tech across all their brands (Focusrite, Novation, ADAM Audio, Martin Audio etc.), and better margins. First product lands later this year, more to follow over the next few years.

My own read (not company guidance): this has shades of Apple’s own-chips-plus-own-software playbook — the kind of setup that could eventually make the ecosystem stickier and less “buy once, gone for 5 years.” If it plays out, that’s a re-rating story on top of the debt/margin recovery already underway. But nothing’s launched yet, no subscription model’s been announced, and a ~£140m company running an Apple-style playbook is a genuinely harder road than the comparison makes it sound. Treat this as upside optionality, not a reason to buy in before the chart confirms anything.

Move to Tier 1 if: Clean breakout above 255-260p on volume.

Drop from list if: Breaks back below 150p, or EPS decline continues into next report.