Trading Update

Marks Electrical Group plc ("Marks Electrical" or "the Group"), a fast-growing online electrical retailer, provides the following trading update for the six months ended 30 September 2023 ("the period" or "HY24"), ahead of announcing its Half Year Results on 17 November 2023.

6 months ended 30 September

Highlights

Strong first half trading period with revenue growth of 24.8% to £53.9m (HY23 £43.1m)

Continued market share gains in the Major Domestic Appliance and Consumer Electronics markets

Rapid growth in our premium next-day service offerings with integrated, gas, electric and television installation services achieving over 7,000 installation orders in the first half, vs. 2,500 in the prior year (+180%), and over 11,000 freestanding connection services vs. 5,000 in the prior year (+120%)

Robust performance across product categories with particularly high growth in televisions (+71%), washer-dryers (+74%) and American fridge-freezers (+36%)

Strategic decision to introduce our own installation service, combined with inflationary pressures in distribution costs impacted H1 margins, but expect this pressure to ease over H2 as we benefit from improved operating leverage during the peak trading period

Invested £1.2m in our vehicle fleet and distribution centre, improving our capacity and training facilities, including the development of the Marks Electrical Academy, preparing us for future growth opportunities

Proudly maintained our industry leading Trustpilot score of 4.8, reaching over 55,000 reviews with 95% of those reviews being 4 and 5 star, demonstrating the strength of our best-in-class customer proposition

Retained our robust net cash balance sheet, carefully managing inventory levels, investing in selected capex opportunities and closing the period with a further improved net cash position of £10.9m (HY23 £7.7m)

Mark Smithson, Chief Executive Officer, commented:

"We've built on the good momentum delivered at the start FY24, with revenue growth of 24.8% against a Major Domestic Appliances & Consumer Electronics market that is broadly flat in the first half of our financial year.

Our strategic decision to add in-house installation services to our offering has strengthened the Group's premium service proposition, enabling us to develop a market leading installation offering, growing market share and driving revenue growth. The launch of this service, alongside the well documented industry-wide pressures regarding wage inflation, impacted our H1 margin, with the pressure on distribution and installation costs being higher than expected. At the same time, year on year, we remained disciplined on marketing costs, maintained our cost control on overheads and are continuing to gain market share profitably.

We remain focused on our full year targets and expect margin pressure to ease in H2 as we benefit from improved operating leverage during the peak trading period.

Our differentiated operating model, leading customer service and free next-day delivery provides a unique premium service proposition that sets us apart from the competition. I'm proud of our achievements in the first half and thank all of our colleagues for their commitment to developing and maintaining our superior customer offering, positioning us as the UK's leading premium electrical retailer.

We've exited September with order growth of over 20%, made a strong start to October, and are laser-focused on maintaining our performance management discipline on revenue, profit and cash in order to grow sustainably and achieve our full year targets."

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