Pre Close Trading Update

RNS Number : 8701H

Marks Electrical Group plc

11 April 2022

 

Marks Electrical Group plc

Pre close trading update for the twelve months ended 31 March 2022

Record annual revenue with continued strong trading momentum

Marks Electrical Group plc ("Marks Electrical" or "the Group"), a fast-growing online electrical retailer, today announces the following trading update for its fourth quarter ended 31 March 2022 ("the period" or "Q4-22"), ahead of announcing its Full Year Results for the 12 months ended 31 March 2022 on 7 June 2022.  

	12 months ended 31 March £m			3 months ended 31 March £m
	FY22	FY21	YoY%	FY22	FY21	YoY%
Revenue	80.5	56.0	44%	20.7	17.4	19%

Financial highlights

· Record full year revenue with growth of 44% to £80.5m (2021: £56.0m)

· Operational leverage continued during the period, driving margin expansion in the second half, with the Group expected to achieve its full year Adjusted EBITDA margin target of 9.0% in line with market expectations

· Strong trading period in Q4-22 with 19% revenue growth to £20.7m (Q4-21 £17.4m)

· Continued positive trading momentum in March 2022, with an exit growth rate in the final month of over 25% year on year

· Robust balance sheet, with closing net cash position of £3.9m

Operational highlights

· Continued strong market share gains in the Major Domestic Appliance and Television markets

· Further focus on brand awareness initiatives driving sequential improvement in organic and direct website traffic

· Added further delivery vehicles during the period, increasing owned fleet capacity and strengthening free next day delivery capability across the UK

· Further improvements made in warehouse efficiency, to maximise facility utilisation

· Maintained market-leading Trustpilot rating of 4.8

Mark Smithson, Chief Executive Officer, commented:

"The fourth quarter was another excellent trading period for us, with 19% revenue growth vs. a particularly strong comparative of 127% in the prior year. Our disciplined focus on margin management, capital allocation and cash generation has also led to a strong returns profile from our asset light operating model.

During the period we have continued to enhance our operational capacity and have added additional resources in our customer services and driver-installation teams, helping us to maintain our market-leading customer service score of 4.8 on Trustpilot. Our USP of free next day delivery with our own fleet of vehicles, combined with our capacity unconstrained single site location, is helping us deliver operational excellence and gain market share in a highly competitive market.

We continued our focus on improving brand awareness with our offline marketing campaigns, coupled with our search engine optimisation improvements, driving higher levels of organic and direct traffic.

With face to face meetings back on the agenda, we have met with multiple suppliers during the period and discussed our expansion plans and ways in which we can support each other's growth objectives. This, coupled with inventory expansion in the second half, as supply constraints start to ease, is making Marks Electrical a more prominent retailer for our brand partners.

I would like to take this opportunity to thank our colleagues and brand partners for helping us achieve a record year, despite a challenging market environment. We are well placed to seize the opportunities ahead thanks to our compelling customer proposition, low-cost operating model and continued focus on profitable market share growth, with more and more people from across the UK coming into contact with the Marks brand for the first time. As we look forward to FY23, our trading momentum has continued during the start of April, setting us up well for our FY23 financial targets."

 

Enquiries:

Marks Electrical Group plc Via Dentons Global Advisors:

Mark Smithson, CEO Tel: [phone]

Josh Egan, CFO     

Dentons Global Advisors (Financial PR)

James Styles   [e-mail]

Fern Duncan                                                                                                                   Tel: [phone]

Panmure Gordon (NOMAD and Broker)

Oliver Cardigan, Ailsa Macmaster (Corporate Finance)  Tel: [phone]

Erik Anderson (Corporate Broking) 

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 up 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 Company operates within the UK Major Domestic Appliances (MDA) market, estimated to be worth approximately £5.3 billion.  

Primarily through its simple, clear and intuitive website - markselectrical.co.uk - the Company offers over 3,000 products from over fifty 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. Delivery to customers is operated by its own skilled team of delivery drivers in its owned and branded vehicles, who are also able to offer installation and recycling services.

For further information, visit: https://group.markselectrical.co.uk and https://markselectrical.co.uk/.

 

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