REG - Marks Electrical Grp - Trading Update

Marks ElectricalAnnouncement

10/01/2024 07:00

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RNS Number : 1470Z  Marks Electrical Group plc  10 January 2024

Marks Electrical Group plc

Trading update for the nine months ended 31 December 2023

Marks Electrical Group plc ("Marks Electrical" or "The Group"), a fast-growing
online electrical retailer, provides a trading update for the nine months
ended 31 December 2023 ("the period").

 

          9 months ended 31 December       3 months ended 31 December

£m
£m
          FY24       FY23       YoY%       FY24       FY23       YoY%
 Revenue  88.9       72.9       22.0%      35.1       29.8       17.8%

 

Highlights

·      Strong growth in revenue during Q3-24 (October to December) with
revenue growth of 17.8% to £35.1m (Q3-23 £29.8m).

·      Year to date (YTD) revenue growth of 22.0% to £88.9m (2022 YTD:
£72.9m).

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

·      In a challenging trading environment where consumers remain
highly price-conscious, our gross product margin did not increase to the
levels we expected, and despite proactive action on other controllable costs,
the impact of this in the peak trading period has had a material impact on our
full year profit guidance.

·      As a result, we now expect our full year revenue to be in the
range of £115-118m with EBITDA in the range of £5-6m. Going forward, we
expect to see continued revenue growth in-line with our expectations, but
remain cautious on the speed of recovery in consumer buying patterns, which we
expect to temporarily impact the recovery of our gross product margin.

·      Our strategic decision to maintain our delivery &
installation services in-house allowed us to achieve record volumes during
peak trading, whilst maintaining our industry leading Trustpilot score of 4.8.
Furthermore, we have now reached over 60,000 reviews with 95% of those reviews
being 4 and 5 star, demonstrating the strength of our best-in-class customer
proposition.

·      Despite significant product margin challenges, we gained market
share whilst remaining profitable, provided industry leading services to
customers, maintained our continued focus on tight overhead cost control and
disciplined working capital and retained our net cash balance sheet.

 

 

Mark Smithson, Chief Executive Officer, commented:

"I continue to remain proud of the entire team at Marks Electrical for
delivering a record peak trading period whilst gaining market share and
maintaining our industry leading Trustpilot score of 4.8. This further
demonstrates the strength and attractiveness of our market-leading customer
offering and as brand awareness improves, we continue to see a strong repeat
customer rate.

Whilst I am personally frustrated about our expected margin progression in the
second half, I remain  confident about our long-term growth prospects and
continue to be impressed by our ability to deliver market share gains
profitably, against a fiercely competitive backdrop, whilst maintaining the
highest levels of customer service standards in the industry.

As we work tirelessly as a team to enhance our gross product margin in the
remaining months of FY24 and into FY25, I also know from 37 years of trading
that margin fluctuations are inevitable, they present us with an opportunity
to learn, and will ultimately enable the Group to deliver long-term value
creation and position us as the UK's leading premium electrical retailer."

 

 

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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