FY25 Pre-close Trading Statement

Marks Electrical Group plc ("Marks Electrical" or "the Group"), the online premium electrical retailer, today provides a pre close trading update for the 12 months ended 31 March 2025 ("the period" or "FY25"), ahead of announcing its Full Year Results on 25 June 2025.

Financial highlights

• Record full year revenue of £117.2m (FY24: £114.3m) representing a growth rate of 2.6%.
• Gross margin was maintained in the second half and improved distribution efficiency, along with controlled marketing costs has enabled the Group to achieve a full year Adjusted EBITDA of approximately £4.2m.
• Further improvements in working capital, resulted in strong cash conversion and a closing net cash position of £8.8m (FY24:£7.8m).
• During the year, Major Domestic Appliances achieved >5% volume growth whereas Consumer Electronics achieved >50% volume growth, highlighting the impact on average order value decline and margin mix.

Operational highlights

• Market share maintained in Major Domestic Appliances and expanded market share in Consumer Electronics.
• Successful implementation and switchover to new business-wide, Enterprise Resource Planning ("ERP") system, Microsoft Dynamics 365. As reported at our half year update, whilst this caused some operational challenges during the peak trading period, we are pleased with the performance of the system as we closed-out the financial year.
• Navigated our departure from the Euronics buying group as a full-member, successfully negotiated new contracts and established new supply relationships with differing operational and financial trading terms.
• Despite the significant strategic changes we have been through in FY25, with material financial and operational investment, we have maintained our Trustpilot score of 4.8, reaching over 95,000 reviews with 95% of those reviews being 4 and 5 star, demonstrating the enduring strengths of our excellent customer proposition.

Outlook

• As predicted, our H2-25 growth rate was impacted by the ERP switchover, resulting in a decline in revenue during the period of October to December, but this was quickly followed by a return to growth from January to March. This improvement in underlying growth momentum, with a strong exit rate in March of 6.6%, provides us with the confidence to maintain our guidance for the year ahead.
• We are actively pivoting the business back to our historically successful premium focus, in order to deliver an uplift in margin performance. This strategy is on-track and margins improved in the second half of FY25, despite a weak peak trading period. Our objective in FY26 is to continue to drive this sustainable margin recovery and this focus may be at the expense of revenue growth.
• As we move forward, we expect to continue to improve our cash position as our significant cash outflows for operational upgrades and the new ERP system come to an end. This will provide the Group with additional capital flexibility in the years ahead.

Mark Smithson Chief Executive Officer, commented:

"FY25 was a period of significant strategic change and progress and whilst the margin and growth rates were not at the higher levels seen in recent years, nor where I would like the business to be, I continue to be proud of the performance the team has delivered, whilst tackling the significant operational distractions brought about by the changes we decided to make.

These changes will position the business for long-term success and ensure that Marks Electrical is well placed to benefit when broader market sentiment picks up, giving us even greater vertical integration, improved visibility and enhanced automation, further enabling us to deliver growth, returns and value for all our stakeholders.

I am encouraged by the margin improvements we have seen in the second half of FY25 and despite a continued tough consumer retail market with declining average order values, we have remained profitable, highly cash generative, and delivered revenue growth, all whilst maintaining our excellent standards of customer service.

This improvement in the second half gives us confidence that the fundamental strategy we have maintained over the last four years, of continued profitable market share gains and excellent customer service, will help us in delivering further profitable growth in the years ahead."