Marks Electrical reports “robust” first half trading
Marks Electrical has reported “robust” first half trading with revenue increasing by 9.3% to £58.8 million.
The electricals retailer said there was particularly strong volume growth in its major domestic appliances and consumer electronics categories as it continued to gain market share.
However, there was a 9% reduction in average order values which meant that volume growth outstripped growth in revenue.
Meanwhile, adjusted EBITDA came in at £2 million compared to £2.3 million in the first half of the prior year after customers traded down to less premium products which impacted margins.
During the period, the retailer switched to a new business-wide Enterprise Resource Planning system and completed its transition away from the Euronics buying group.
Mark Smithson, chief executive of Marks Electrical, said: “The first half has included two of the largest structural changes the business has seen, the departure from Euronics and the implementation of our new ERP system, but despite these, we continued to remain profitable and cash generative and grew revenue by 9.3% to £58.8 million.
“These investments, while involving short-term challenges, have been made to position the business for long-term success.
“They will ensure that Marks Electrical is well placed to benefit when broader market sentiment picks up and will give us even greater vertical integration, visibility and control, enabling us to deliver growth, returns and value for all our stakeholders.”
Looking ahead, the retailer said it will be actively return to its historically successful premium focus to deliver an uplift in margin performance.
It now expects full year revenue to be around £120 million with EBITDA in excess of £4 million.
Smithson said: “Whilst this pivot back to premium is likely to have an impact on the speed of our revenue growth, we are focused on continuing to execute our strategy of driving profitable market share gains, ultimately enabling the group to deliver long-term value creation and become the UK’s leading premium electrical retailer.”
