Marks Electrical reports record full-year revenue

26th Jun 2024 08:46

(Sharecast News) - Marks Electrical Group reported record full-year revenue of £114.3m in its final results on Wednesday, marking a 16.9% increase from £97.8m in 2023, and a significant doubling of revenue since the £56m it recorded in 2021, the year prior to its listing.

The AIM-traded firm said that despite experiencing downward margin pressure due to consumers trading down, it maintained robust cost control, resulting in an adjusted EBITDA of £5m, in line with prior guidance.

Adjusted earnings per share (EPS) were 2.45p, compared to 4.82p a year earlier, while statutory earnings per share came in at 0.41p, down from 4.91p in 2023.

The group achieved notable improvements in working capital, reducing inventory days from 74 in 2023 to 56 in 2024, and closed the year with a net cash position of £7.8m.

Marks Electrical proposed a final dividend of 0.66p per share, maintaining a total 2024 dividend payout of 0.96p, reflecting confidence in its future outlook despite lower profitability.

Operationally, Marks Electrical increased its market share in major domestic appliances (MDA) from 2.5% to 2.8% and in consumer electronics (CE) from 0.3% to 0.5%.

The company's share in the online segments of those markets also grew, with MDA rising from 4.7% to 5.3% and CE from 0.6% to 0.8%.

It successfully launched the Marks Electrical Academy, a dedicated training facility for drivers and installers, and transitioned away from the Euronics buying group, enhancing relationships with manufacturer brand partners.

Looking ahead, Marks Electrical reported strong trading performance in April, May, and June, with double-digit revenue growth, indicating positive momentum for the coming year.

"During what was a more challenging year for the group, in an environment where consumers remained highly price-conscious, we continued to make good strategic progress across multiple fronts as a business," said chief executive officer Mark Smithson.

"Over the past year we invested in our operations and systems to position the business for long-term success, navigated a trade-down in customer buying preferences, managed the inflation increases impacting our cost base and continued to make a profit.

"Having doubled revenue since IPO, we've also managed to grow our market share profitably, and thanks to our disciplined approach to capital allocation, we've consistently returned a dividend to our shareholders, whilst retaining a net cash position."

Smithson said the company's strategy and approach left it "very well positioned" for a market recovery when it occurs.

"Our relentless focus on operational excellence and customer service has enabled us to continue to gain share in a very competitive market, growing our share from 2.5% to 2.8% of the overall major domestic appliances (MDA) market and from 4.7% to 5.3% in the online segment, with huge opportunities ahead, both in MDA and in other segments of consumer electronics and small domestic appliances.

"Whilst I continue to be personally frustrated about our margin progression during the year, I remain confident in 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.

"The first three months of the 2025 financial year have been encouraging and we have been pleased to see a return to double-digit growth during the period, providing us with a robust platform to continue driving profitable market share gains, and ultimately enabling the group to deliver long-term value creation and become the UK's leading premium electrical retailer."

At 0926 BST, shares in Marks Electrical Group were up 2.13% at 72p.

Reporting by Josh White for Sharecast.com.