CEO reveals ‘frustration’ as electrical retailer issues profit warning
Marks Electrical, the Leicester-based online electrical retailer, has posted a profit warning after revealing this morning (January 10) that margins were below levels forecasted.
In a trading update for the nine months to the end of 2023, Marks reported strong growth of 22% to £88.9m for the period.
However, it warned against a “challenging” trading environment where customers remain “highly price-conscious”. The company added: “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 now expects full year revenue to be between £115m and £118m, with EBITDA in the range of £5-6m.
It is the second downgrade in a matter of months; in October, the company reduced its EBITDA forecast from £8.9m to £8m.
Mark Smithson, CEO, said: “I continue to remain proud of the entire team at Marks Electrical for delivering a record peak trading period whilst gaining market share and maintaining our industry leading Trustpilot score of 4.8. This further demonstrates the strength and attractiveness of our market-leading customer offering and as brand awareness improves, we continue to see a strong repeat customer rate.
“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.
“As we work tirelessly as a team to enhance our gross product margin in the remaining months of FY24 and into FY25, I also know from 37 years of trading that margin fluctuations are inevitable, they present us with an opportunity to learn, and will ultimately enable the group to deliver long-term value creation and position us as the UK’s leading premium electrical retailer.”
