REG - Marks Electrical Grp - FY23 Trading Update

Marks ElectricalAnnouncement

12/04/2023 07:00

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RNS Number : 8874V  Marks Electrical Group plc  12 April 2023

Marks Electrical Group plc

Pre close trading update for the twelve months ended 31 March 2023

Continued revenue growth, with margin expansion and strong cash conversion

 

Marks Electrical Group plc ("Marks Electrical" or "the Group"), a fast-growing
online electrical retailer, provides a trading update for its fourth quarter
ended 31 March 2023 ("the period" or "Q4-23"), ahead of announcing its Full
Year Results for the 12 months ended 31 March 2023 on 14 June 2023.

          12 months ended 31 March         3 months ended 31 March

£m
£m
          FY23       FY22       YoY%       FY23      FY22      YoY%
 Revenue  97.8       80.5       21.5%      24.8      20.7      20.0%

 

Financial highlights

 * Record full year revenue of £97.8m (FY22: £80.5m) representing a growth rate
of 21.5%

 * Gross margin improved in the second half as expected, and higher revenue
levels combined with the Group's cost discipline drove EBITDA margin
expansion, with the Group now expecting to achieve a full year Adjusted EBITDA
exceeding £7.5m

 * Strong trading period in Q4-23 with 20.0% revenue growth to £24.8m (Q4-22:
£20.7m)

 * Positive trading momentum in March 2023, with an exit growth rate in the final
month of 21.2% year on year

 * Further improvements in working capital and inventory turn, resulting in
strong cash conversion and a closing net cash position of £10.0m

 

Operational highlights

 * Continued market share gains in the Major Domestic Appliance and Consumer
Electronics markets

 * Strong performance driven across product categories but particularly in
A-rated energy efficient washing machines and tumble dryers, and small
domestic appliances including air fryers, coffee machines and vacuum cleaners

 * Further focus on brand awareness initiatives across key locations, using
social media, television, radio and out-of-home advertising

 * Rapid growth in newly formed integrated, gas, electric and television
installation services, with over 80% growth year on year in Q4-23

 * Investment into further delivery vehicles during the period and additional
warehouse mezzanine floors, increasing capacity and broadening our next day
delivery capability across the UK

 * Maintained industry-leading Trustpilot rating of 4.8

 

Mark Smithson, Chief Executive Officer, commented:

"We are delighted to finish the year with revenue growth of 21.5% to a record
£97.8m, especially against the prevailing economic back-drop. This further
demonstrates the strength of our business model and the attractiveness and
advantage of our market-leading customer offering, as more people continue to
discover our brand up and down the country.

During the final quarter, we remained focused on customer service excellence
and were proud to have received over 4,500 5-star Trustpilot reviews. This,
combined with our operational capacity improvements and the strengths of our
unique single-site fulfilment and distribution model, enabled us to continue
to offer an industry-leading next day delivery and installation service for
Major Domestic Appliances and Consumer Electronics across the country.

Our newly launched integrated, gas, electric and television installation
service continues to grow strongly, with over 80% growth in bookings year on
year, demonstrating the demand for this premium offering when buying an
appliance. We expect to see further growth in this service during FY24 and are
excited about its potential.

After an improvement in profitability in the third quarter, we continued this
trajectory with improvements in gross margin and operational leverage,
allowing us to exceed our full year targets on profit and cash conversion,
even as we grow market share.

I would like to take this opportunity to personally thank all our colleagues
and brand partners for helping us achieve a strong year of growth, despite the
challenging market environment. Working closely together has enabled us to
build our position as a growing but agile and profitable national electrical
retailer.

As we look to FY24, following a strong exit in March and a positive start to
April, we are wholly focused on maintaining our performance management
discipline on revenue, profit and cash in order to continue to demonstrate our
differentiated proposition."

Market abuse regulations

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication
of this announcement, this information is now considered to be in the public
domain.

Enquiries:

Marks Electrical Group
plc
Via Dentons Global Advisors:

Mark Smithson (CEO)
 
                              Tel: +44 (0)20 7664 5095

Josh Egan (CFO)
 
 

 

Dentons Global Advisors (Financial PR)

Jonathon Brill / James Styles / Fern Duncan
 
           Tel: +44 (0)20 7664 5095

markselectrical@dentonsglobaladvisors.com
(mailto:markselectrical@dentonsglobaladvisors.com)
 
 
 
 
 

Canaccord Genuity (NOMAD and Broker)

Max Hartley / Patrick Dolaghan
 
                        Tel: +44 (0) 207 886 2500
 
 

About Marks Electrical

Marks Electrical is a fast growing, highly scalable, technology driven
e-commerce electricals retailer which sells, delivers, installs and recycles a
wide range of household electrical products. The Group was founded in
Leicester in 1987 by Mark Smithson and has scaled into a nationwide online
retailer with a compelling growth track record, thanks to its vertically
integrated, low-cost, high-quality operating model, supported by the ongoing
structural shift of consumers to purchase online. The Group operates within
the UK Major Domestic Appliances (MDA) and Consumer Electronics (CE) market,
estimated to be worth approximately £8.0 billion.

Primarily through its simple, clear and intuitive website -
markselectrical.co.uk - the Group offers over 4,000 products from over 50
leading brands across its main product categories, which include Cooking,
Refrigeration, Washers & Dryers, Dishwashers and Audio-Visual. These
products are sourced from UK distributors of the brands, with whom the Group
maintains strong and direct relationships. Marks Electrical delivers direct to
customers in its owned and branded vehicles, operated by the Group's skilled
team of delivery drivers, who are also able to offer installation and
recycling services.

For further information, visit the Marks Electrical corporate
website: https://group.markselectrical.co.uk
(https://group.markselectrical.co.uk/)  and its retail
website: https://markselectrical.co.uk/ (https://markselectrical.co.uk/) .

 

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