Marks Electrical working to lift margins after FY profit decline

(Sharecast News) - Electricals and white goods online retailer Marks Electrical saw minimal revenue growth and a big decline in earnings over the 12 months to 31 March after replacing its business-wide legacy enterprise resource planning (ERP) system, and said it had a weak peak trading period. Revenues rose 2.6% year-on-year to £117.2m, as sales declines in the third quarter - impacted by the ERP switchover - were followed by a return to growth in the fourth.

"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," the company said.

Full-year adjusted EBITDA totalled £4.2m, down from £5.2m the previous year though in line with guidance for a figure "in excess of £4.0m".

"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," said chief executive Mark Smithson.

Looking ahead, the company said it is pivoting the business back to its "historically successful premium focus" in order to improve margins.

"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," the company said.