REG - Marks Electrical Grp - Trading Update

Marks ElectricalAnnouncement

12/10/2023 07:00

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RNS Number : 8456P  Marks Electrical Group plc  12 October 2023

Marks Electrical Group plc

Trading update for the six months ended 30 September 2023

Continued trading momentum driven by premium next-day service offerings

Marks Electrical Group plc ("Marks Electrical" or "the Group"), a fast-growing
online electrical retailer, provides the following trading update for the six
months ended 30 September 2023 ("the period" or "HY24"), ahead of announcing
its Half Year Results on 17 November 2023.

          6 months ended 30 September
          HY24 (£m)   HY23 (£m)   YoY%
 Revenue  53.9        43.1        24.8%

 

Highlights

 * Strong first half trading period with revenue growth of 24.8% to £53.9m (HY23
£43.1m)

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

 * Rapid growth in our premium next-day service offerings with integrated, gas,
electric and television installation services achieving over 7,000
installation orders in the first half, vs. 2,500 in the prior year (+180%),
and over 11,000 freestanding connection services vs. 5,000 in the prior year
(+120%)

 * Robust performance across product categories with particularly high growth in
televisions (+71%), washer-dryers (+74%) and American fridge-freezers (+36%)

 * Strategic decision to introduce our own installation service, combined with
inflationary pressures in distribution costs impacted H1 margins, but expect
this pressure to ease over H2 as we benefit from improved operating leverage
during the peak trading period

 * Invested £1.2m in our vehicle fleet and distribution centre, improving our
capacity and training facilities, including the development of the Marks
Electrical Academy, preparing us for future growth opportunities

 * Proudly maintained our industry leading Trustpilot score of 4.8, reaching over
55,000 reviews with 95% of those reviews being 4 and 5 star, demonstrating
the strength of our best-in-class customer proposition

 * Retained our robust net cash balance sheet, carefully managing inventory
levels, investing in selected capex opportunities and closing the period with
a further improved net cash position of £10.9m (HY23 £7.7m)

 

Mark Smithson, Chief Executive Officer, commented:

"We've built on the good momentum delivered at the start FY24, with revenue
growth of 24.8% against a Major Domestic Appliances & Consumer Electronics
market that is broadly flat in the first half of our financial year.

Our strategic decision to add in-house installation services to our offering
has strengthened the Group's premium service proposition, enabling us to
develop a market leading installation offering, growing market share and
driving revenue growth. The launch of this service, alongside the well
documented industry-wide pressures regarding wage inflation, impacted our H1
margin, with the pressure on distribution and installation costs being higher
than expected. At the same time, year on year, we remained disciplined on
marketing costs, maintained our cost control on overheads and are continuing
to gain market share profitably.

We remain focused on our full year targets and expect margin pressure to ease
in H2 as we benefit from improved operating leverage during the peak trading
period.

Our differentiated operating model, leading customer service and free next-day
delivery provides a unique premium service proposition that sets us apart from
the competition. I'm proud of our achievements in the first half and thank all
of our colleagues for their commitment to developing and maintaining our
superior customer offering, positioning us as the UK's leading premium
electrical retailer.

We've exited September with order growth of over 20%, made a strong start to
October, and are laser-focused on maintaining our performance management
discipline on revenue, profit and cash in order to grow sustainably and
achieve our full year targets."

 

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 / Nishad Sanzagiri
 
         Tel: +44 (0)20 7664 5095

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

Canaccord Genuity (NOMAD and Broker)

Max Hartley (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
(https://group.markselectrical.co.uk/)  and its retail
website: https://markselectrical.co.uk/ (https://markselectrical.co.uk/) .

 

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