12th Nov 2024 14:27
(Alliance News) - Marks Electrical Group PLC on Tuesday said it aims to harness its approach to cost control as it grapples with higher employer national insurance and the national minimum wage in the UK, and announced a half-year loss.
The Leicester, England-based electrical products retailer said it swung to a pretax loss of GBP1.1 million in the six months to September 30, from a profit of GBP1.2 million a year ago.
Revenue rose 8.5% to GBP58.4 million from GBP53.9 million.
Pertinently, costs increased at a faster pace than revenue. Cost of sales increased 10% to GBP44.3 million from GBP40.3 million.
Administrative expenses came in 30% higher, at GBP9.9 million from GBP7.6 million. Distribution costs increased 19% to GBP5.8 million from GBP4.9 million.
Chief Executive Officer Mark Smithson said: "As the consumer has continued to trade-down, we have evolved our business to meet those needs, perhaps leaning too much into non-premium products, which has led to erosion in our premium average order value. The knock-on implications of this on our distribution costs are something that we need to actively address moving forward by pivoting back to our historically premium focussed operating model."
Marks Electrical proposed an interim dividend of 0.30 pence per share, unchanged from a year ago.
Looking ahead, the company said: "Looking beyond FY25, we will also harness our disciplined approach to cost control to best manage the significant increases brought about by the recently announced rises to employer national insurance and the national minimum wage, following the UK government's autumn budget. We estimate the changes to cost the business in the region of GBP750,000 per annum."
The company's financial year ends on March 31.
Marks Electrical shares fell 14% to 50.30 pence each on Tuesday afternoon in London.
By Tom Budszus, Alliance News slot editor
Comments and questions to [email protected]
Copyright 2024 Alliance News Ltd. All Rights Reserved.