REG - Marks Electrical Grp - Q4-24 pre close trading update

Marks ElectricalAnnouncement

16/04/2024 07:00

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RNS Number : 7190K  Marks Electrical Group plc  16 April 2024

Marks Electrical Group plc

Pre close trading update for the twelve months ended 31 March 2024

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 2024 ("the period" or "Q4-24"), ahead of announcing its Full
Year Results for the 12 months ended 31 March 2024 on 27 June 2024.

 

          12 months ended 31 March         3 months ended 31 March

£m
£m
          FY24       FY23       YoY%       FY24      FY23      YoY%
 Revenue  114.3      97.8       16.9%      25.3      24.8      2.0%

 

 

Highlights

·      Record full year revenue of £114.3m (FY23: £97.8m) representing
a growth rate of 16.9%, and more than double the revenue we achieved in the
year prior to listing (FY21: £56.0m).

·      Increased market share in the Major Domestic Appliances and
Consumer Electronics markets.

·      Gross product margin was maintained in the second half as
expected, and the Group has achieved an adjusted EBITDA of approximately
£5.0m.

·      Further improvements in working capital and inventory turn during
the year helped the Group achieve a closing net cash position of £7.8m,
taking into account strategic investments in vehicles, equipment, facilities
and systems.

·      Improved industry-leading Trustpilot rating from 4.8 to 4.9,
demonstrating the strength of our best-in-class customer proposition.

·      As Marks Electrical continues to build its national presence and
scale, we have made the strategic decision during the period to leave the
Euronics buying group as at 31 March 2024. This will enable the Group to
establish closer, direct relationships with its manufacturer partners, which
will provide further opportunity to drive growth and margin in the future, and
is the next natural step in our growth ambitions.

 

 

Mark Smithson, Chief Executive Officer, commented:

"I am proud of the revenue growth we have achieved of 16.9%, in a flat Major
Domestic Appliances and a declining Consumer Electronics market. In addition,
the investments we have made in driver training and customer services have
resulted in us improving our Trustpilot rating from 4.8 to 4.9, further
demonstrating the strength and attractiveness of our market-leading customer
offering and the hard-work all of our colleagues throughout FY24.

As we focus on positioning our business to deliver long-term growth and value
creation, our decision to exit the Euronics buying group represents the next
logical step in that journey, further building on the direct relationships we
have with our brand partners. We anticipate that our departure will lead to
revenue and margin upside in the medium-term and in addition, once the exit
has concluded, our £1.7m balance sheet investment crystallises into cash,
expected in June 2024.

As explained in our January trading update, in the current trading environment
consumers remain highly price-conscious, which given our premium focus,
continues to have an adverse impact on our average order value, resulting in
customer order volumes growing faster than revenue. This impact will limit our
ability for margin expansion in the short-term, when taking into account the
relatively fixed cost of delivery.

Despite this, we are very pleased with the growth in our order volumes and new
customer acquisitions during the period and the strong growth we have seen in
early April, giving us confidence that our fundamental strategy of continued
profitable market share gains and excellent customer service will help us in
delivering further growth."

 

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)

Jonathan Brill / James Styles / Nishad
Sanzagiri
Tel: +44 (0)20 7664 5095

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

 

Canaccord Genuity (NOMAD and Broker)

Max Hartley / George Grainger (NOMAD) / Kit Stephenson
(Sales)
Tel: +44 (0) 207 886 2500

 

 

About Marks Electrical

Marks Electrical is a fast growing, highly scalable premium electrical
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 £7 billion.

Primarily through its simple, clear and intuitive website -
markselectrical.co.uk - the Group offers over 4,500 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 and its retail website:
https://markselectrical.co.uk/.

 

The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended. Upon the publication of this announcement
via a Regulatory Information Service, this inside information is now
considered to be in the public domain.

 

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