Trading Update

RNS Number : 4005C

Marks Electrical Group plc

11 October 2022

 

Marks Electrical Group plc

Trading update for the six months ended 30 September 2022

Continued revenue momentum, leading to market share gains and robust cash flow generation

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 2022 ("the period" or "HY23"), ahead of announcing its Half Year Results on 8 November 2022.

	6 months ended 30 September
	HY23 (£m)	HY22 (£m)	YoY%
Revenue	43.1	37.5	15.1%

Highlights

• Strong trading period, with revenue growth of 15.1% to £43.1m (HY22 £37.5m), sequentially improving against the 13.7% revenue growth in the first four months of FY23 and against a particularly challenging market back-drop
• Continued market share gains in the Major Domestic Appliance and Consumer Electronics markets
• Strong performance driven across all categories but particularly in televisions, cookers, vacuums and small appliances
• We retained our disciplined focus on profitable market share growth in the first half against a backdrop of heightened levels of competitor discounting and marketing. While this put pressure on H1 margins, we expect this to ease over H2 given reduced competitor discounting in recent months, our rigorous cost control and improved operating leverage during the peak trading period
• Maintained industry leading Trustpilot score of 4.8, demonstrating our commitment to operational delivery and customer satisfaction
• Robust, debt-free balance sheet and disciplined working capital management - maintained inventory levels, paid our maiden dividend, and achieved a closing net cash position of £7.7m (FY22 £3.9m)

Mark Smithson, Chief Executive Officer, commented:

"After a solid performance in the first four months, the Group's positive trading momentum has continued in August and September as we continued to harness our market-leading customer service proposition and build brand awareness, enabling the Group to deliver continued revenue growth and market share gains.

The strong competitive activity we saw in pricing during the first quarter has begun to ease more recently and despite the margin pressure this has had in the first half, we remain focused on controlling our overhead base and confident of achieving our full year targets.

Given the challenging economic backdrop our focus on maintaining inventory whilst improving inventory days has been key, allowing us to close the period with a net cash position of £7.7m. This puts us in a strong position for the months ahead.

Our differentiated operating model, leading customer service and free next day delivery provides a unique offering 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 focus on developing and maintaining our leading customer proposition in a very challenging market.

As momentum continues to build going into the peak trading period, our focus on operational excellence and cash flow generation, combined with our net cash position, provides us with a robust platform to generate continued profitable market share growth and achieve our full year targets."

Enquiries:

Marks Electrical Group plc  Via Dentons Global Advisors:

Mark Smithson, CEO  Tel: [phone]

Josh Egan, CFO     

Dentons Global Advisors (Financial PR)

Jonathon Brill / James Styles / Fern Duncan                                                                       Tel: [phone]

[e-mail]          

Panmure Gordon (NOMAD and Joint Broker)

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

Erik Anderson (Corporate Broking) 

Berenberg (Joint Broker)

Matthew Armitt / Michelle Wilson / Richard Bootle (UK Investment Banking)                Tel: [phone]

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 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  and its retail website:  https://markselectrical.co.uk/ .

 

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