TIDMMRK
RNS Number : 8874V
Marks Electrical Group plc
12 April 2023
Marks Electrical Group plc
Pre close trading update for the twelve months ended 31 March
2023
Continued revenue growth, with margin expansion and strong cash
conversion
Marks Electrical Group plc ("Marks Electrical" or "the Group"),
a fast-growing online electrical retailer, provides a trading
update for its fourth quarter ended 31 March 2023 ("the period" or
"Q4-23"), ahead of announcing its Full Year Results for the 12
months ended 31 March 2023 on 14 June 2023.
12 months ended 31 March 3 months ended 31 March
GBPm GBPm
FY23 FY22 YoY% FY23 FY22 YoY%
--------- -------- -------- --------- -------- ------- ---------
Revenue 97.8 80.5 21.5% 24.8 20.7 20.0%
--------- -------- -------- --------- -------- ------- ---------
Financial highlights
-- Record full year revenue of GBP97.8m (FY22: GBP80.5m) representing a growth rate of 21.5%
-- Gross margin improved in the second half as expected, and higher revenue levels combined with the Group's cost
discipline drove EBITDA margin expansion, with the Group now expecting to achieve a full year Adjusted EBITDA
exceeding GBP7.5m
-- Strong trading period in Q4-23 with 20.0% revenue growth to GBP24.8m (Q4-22: GBP20.7m)
-- Positive trading momentum in March 2023, with an exit growth rate in the final month of 21.2% year on year
-- Further improvements in working capital and inventory turn, resulting in strong cash conversion and a closing net
cash position of GBP10.0m
Operational highlights
-- Continued market share gains in the Major Domestic Appliance and Consumer Electronics markets
-- Strong performance driven across product categories but particularly in A-rated energy efficient washing machines
and tumble dryers, and small domestic appliances including air fryers, coffee machines and vacuum cleaners
-- Further focus on brand awareness initiatives across key locations, using social media, television, radio and
out-of-home advertising
-- Rapid growth in newly formed integrated, gas, electric and television installation services, with over 80% growth
year on year in Q4-23
-- Investment into further delivery vehicles during the period and additional warehouse mezzanine floors, increasing
capacity and broadening our next day delivery capability across the UK
-- Maintained industry-leading Trustpilot rating of 4.8
Mark Smithson, Chief Executive Officer, commented:
"We are delighted to finish the year with revenue growth of
21.5% to a record GBP97.8m, especially against the prevailing
economic back-drop. This further demonstrates the strength of our
business model and the attractiveness and advantage of our
market-leading customer offering, as more people continue to
discover our brand up and down the country.
During the final quarter, we remained focused on customer
service excellence and were proud to have received over 4,500
5-star Trustpilot reviews. This, combined with our operational
capacity improvements and the strengths of our unique single-site
fulfilment and distribution model, enabled us to continue to offer
an industry-leading next day delivery and installation service for
Major Domestic Appliances and Consumer Electronics across the
country.
Our newly launched integrated, gas, electric and television
installation service continues to grow strongly, with over 80%
growth in bookings year on year, demonstrating the demand for this
premium offering when buying an appliance. We expect to see further
growth in this service during FY24 and are excited about its
potential.
After an improvement in profitability in the third quarter, we
continued this trajectory with improvements in gross margin and
operational leverage, allowing us to exceed our full year targets
on profit and cash conversion, even as we grow market share.
I would like to take this opportunity to personally thank all
our colleagues and brand partners for helping us achieve a strong
year of growth, despite the challenging market environment. Working
closely together has enabled us to build our position as a growing
but agile and profitable national electrical retailer.
As we look to FY24, following a strong exit in March and a
positive start to April, we are wholly focused on maintaining our
performance management discipline on revenue, profit and cash in
order to continue to demonstrate our differentiated
proposition."
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 / Fern Duncan
Tel: +44 (0)20 7664 5095
markselectrical@dentonsglobaladvisors.com
Canaccord Genuity (NOMAD and Broker)
Max Hartley / Patrick Dolaghan
Tel: +44 (0) 207 886 2500
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 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 GBP8.0 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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