Momentum builds at electrical retailer as revenue jumps by 15%

Online retailer Marks Electrical has increased its revenue by 15.1% against a competitive market backdrop which put its margins under pressure earlier in the year, the firm has revealed.

In a trading update this morning (11 October), Leicester-based Marks told the London Stock Exchange it had performed strongly in the six months to 30 September, growing its share of the major domestic appliance and consumer electronics markets after selling more televisions, cookers, vacuums and small appliances.

Heightened levels of competitor discounting and marketing had put the business under pressure during H1, but despite this, Marks has now achieved revenues of £43.1m – a significant improvement on the £37.5m it notched up during the previous period.

The company said a reduction in competitor discounting in recent months and its improved operating leverage during the peak trading period would further ease any pressure on its margins.

Marks CEO Mark Smithson said: “After a solid performance in the first four months, the Group’s positive trading momentum has continued in August and September as we continued to harness our market-leading customer service proposition and build brand awareness, enabling the Group to deliver continued revenue growth and market share gains.

“The strong competitive activity we saw in pricing during the first quarter has begun to ease more recently and despite the margin pressure this has had in the first half, we remain focused on controlling our overhead base and confident of achieving our full year targets.

“Given the challenging economic backdrop our focus on maintaining inventory whilst improving inventory days has been key, allowing us to close the period with a net cash position of £7.7m. This puts us in a strong position for the months ahead.

“Our differentiated operating model, leading customer service and free next day delivery provides a unique offering 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 focus on developing and maintaining our leading customer proposition in a very challenging market.

“As momentum continues to build going into the peak trading period, our focus on operational excellence and cash flow generation, combined with our net cash position, provides us with a robust platform to generate continued profitable market share growth and achieve our full year targets.”

Marks is expected to announce its half year results on 8 November.