REG - Marks Electrical Grp - FY25 Pre-close Trading Statement

Marks ElectricalAnnouncement

10/04/2025 07:00

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RNS Number : 3753E  Marks Electrical Group plc  10 April 2025

Marks Electrical Group plc

Pre close trading update for the 12 months ended 31 March 2025

 

Marks Electrical Group plc ("Marks Electrical" or "the Group"), the online
premium electrical retailer, today provides a pre close trading update for the
12 months ended 31 March 2025 ("the period" or "FY25"), ahead of announcing
its Full Year Results on 25 June 2025.

Financial highlights

·      Record full year revenue of £117.2m (FY24: £114.3m)
representing a growth rate of 2.6%.

·      Gross margin was maintained in the second half and improved
distribution efficiency, along with controlled marketing costs has enabled the
Group to achieve a full year Adjusted EBITDA of approximately £4.2m.

·      Further improvements in working capital, resulted in strong cash
conversion and a closing net cash position of £8.8m (FY24:£7.8m).

·      During the year, Major Domestic Appliances achieved >5% volume
growth whereas Consumer Electronics achieved >50% volume growth,
highlighting the impact on average order value decline and margin mix.

 

Operational highlights

·      Market share maintained in Major Domestic Appliances and expanded
market share in Consumer Electronics.

·      Successful implementation and switchover to new business-wide,
Enterprise Resource Planning ("ERP") system, Microsoft Dynamics 365. As
reported at our half year update, whilst this caused some operational
challenges during the peak trading period, we are pleased with the performance
of the system as we closed-out the financial year.

·      Navigated our departure from the Euronics buying group as a
full-member, successfully negotiated new contracts and established new supply
relationships with differing operational and financial trading terms.

·      Despite the significant strategic changes we have been through in
FY25, with material financial and operational investment, we have maintained
our Trustpilot score of 4.8, reaching over 95,000 reviews with 95% of those
reviews being 4 and 5 star, demonstrating the enduring strengths of our
excellent customer proposition.

Outlook

·      As predicted, our H2-25 growth rate was impacted by the ERP
switchover, resulting in a decline in revenue during the period of October to
December, but this was quickly followed by a return to growth from January to
March. This improvement in underlying growth momentum, with a strong exit rate
in March of 6.6%, provides us with the confidence to maintain our guidance for
the year ahead.

·      We are actively pivoting the business back to our historically
successful premium focus, in order to deliver an uplift in margin performance.
This strategy is on-track and margins improved in the second half of FY25,
despite a weak peak trading period. Our objective in FY26 is to continue to
drive this sustainable margin recovery and this focus may be at the expense of
revenue growth.

·      As we move forward, we expect to continue to improve our cash
position as our significant cash outflows for operational upgrades and the new
ERP system come to an end. This will provide the Group with additional capital
flexibility in the years ahead.

 

Mark Smithson Chief Executive Officer, commented:

"FY25 was a period of significant strategic change and progress and whilst the
margin and growth rates were not at the higher levels seen in recent years,
nor where I would like the business to be, I continue to be proud of the
performance the team has delivered, whilst tackling the significant
operational distractions brought about by the changes we decided to make.

These changes will position the business for long-term success and ensure that
Marks Electrical is well placed to benefit when broader market sentiment picks
up, giving us even greater vertical integration, improved visibility and
enhanced automation, further enabling us to deliver growth, returns and value
for all our stakeholders.

I am encouraged by the margin improvements we have seen in the second half of
FY25 and despite a continued tough consumer retail market with declining
average order values, we have remained profitable, highly cash generative, and
delivered revenue growth, all whilst maintaining our excellent standards of
customer service.

This improvement in the second half gives us confidence that the fundamental
strategy we have maintained over the last four years, of continued profitable
market share gains and excellent customer service, will help us in delivering
further profitable growth in the years ahead."

 

 

Enquiries:

Marks Electrical Group
plc
Via DGA Group:

Mark Smithson (CEO)
 
                              Tel: +44 (0)20 7664 5095

Josh Egan (CFO)
 
 

 

DGA Group (Financial PR)

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

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

Canaccord Genuity (NOMAD and Broker)

Max Hartley / George Grainger
 
                        Tel: +44 (0) 207 886
2500
 

About Marks Electrical

Marks Electrical is a fast growing, highly scalable, technology driven
e-commerce 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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