Marks Electrical sees revenues rise to £53.9m

Marks Electrical Group has reported a 24.8% increase in revenues to £53.9m in H1 2024 compared with £43.1m in H1 2023.

However, for the six months ended 30 September 2023 its adjusted EBITDA decreased from £2.7m to £2.3m due to the strategic decision to introduce its own installation service, combined with inflationary pressures in distribution costs impacting H1 margins.

Despite this, the group stated that it expects this pressure to ease over H2 as it benefits from “improved operating leverage during the seasonal peak trading period”.

Sales were strong across all product lines, with particularly high growth in televisions (+71%), washer-dryers (+74%) and American fridge-freezers (+36%) as the group approaches Black Friday and the peak Christmas trading period.

Major Domestic Appliances (“MDA”) saw growth in market share from 2.4% in H1-23 to 2.9% in H1-24, with its share increasing from 4.5% to 5.4% in the online part of the market.

Meanwhile, Consumer Electronics (“CE”) also saw an increase in market share from 0.3% in H123 to 0.5% in H124, including a rise in its market share of 0.6% to 0.9% in the online sector.

The group said that continued double-digit revenue growth in October and a strong start to November leaves it “well positioned” for both the peak Christmas trading period and to achieve its full year targets.

Mark Smithson, chief executive officer, said: “We’ve made a strong start to the year with the Group’s sales up 24.8%, whilst also delivering multiple operational improvements to further enhance the customer experience. This relentless focus on operational excellence and customer service has enabled us to continue to gain share in a very competitive market, growing our share in the first half from 2.4% to 2.9% of the overall MDA market and from 4.5% to 5.4% in the online segment.

“Our strategic decision to add in-house installation services to our offering has strengthened the group’s premium service proposition, alongside the creation of our own ME Academy training facility. These additions, whilst margin dilutive in the short term, will enable the group to deliver long-term value creation and position us as the UK’s leading premium electrical retailer.”

He added: “Despite the first half margin pressure, which occurred within distribution costs, we continued to remain disciplined on marketing costs, maintained our focus on overhead cost control and are continuing to gain market share profitably, a key differentiator of our growth strategy.

“Our market-leading customer service and next day delivery, combined with in-house installation expertise through our vertically integrated operating model, provides a compelling and unique offering that sets us apart from the competition. As momentum builds going into the peak trading period, with continued double-digit revenue growth in October and a strong start to November, our focus on operational excellence and customer service, combined with our strong net cash position, provides us with a robust platform to improve profitability in the second half and achieve our full year targets.”