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Marks Electrical ups market share but gross margins rise disappointing

10th Jan 2024 10:46

(Alliance News) - Marks Electrical Group PLC on Wednesday said it increased its market share in the major domestic appliances and consumer electronics markets despite a challenging trading environment.

Shares in the Leicester, England-based electrical products retailer fell 25% to 68.44 pence each on Wednesday morning in London.

Marks Electrical said revenue in the three months to December 31 rose 18% to GBP35.1 million from GBP29.8 million a year prior.

However, the firm said that its gross margins did not see the rise it had expected.

"In a challenging trading environment where consumers remain highly price-conscious, our gross product margin did not increase to the levels we expected, and despite proactive action on other controllable costs, the impact of this in the peak trading period has had a material impact on our full year profit guidance," Marks Electrical said.

For the financial year ending March 31, Marks Electrical expects revenue of GBP115 million to GBP118 million, at least 18% higher than GBP97.8 million in financial 2023.

Marks Electrical anticipates annual earnings before interest, tax, depreciation and amortisation of GBP5 million to GBP6 million, at least 21% lower than GBP7.5 million it reported for adjusted Ebitda a year prior.

Chief Executive Officer Mark Smithson said: "Whilst I am personally frustrated about our expected margin progression in the second half, I remain confident about our long-term growth prospects and continue to be impressed by our ability to deliver market share gains profitably, against a fiercely competitive backdrop, whilst maintaining the highest levels of customer service standards in the industry."

By Tom Budszus, Alliance News slot editor

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