Marks Electrical Share Discussion Threads

[darrin1471] 23/10/2023 18:48

Welcome aboard tiger.

There is not much history to go on but margins do appear to be squeezed in H1. Twelve months ago MRK said H2 margins would be improved by "operating leverage during the peak trading period" and they did. This year they said "pressure to ease over H2 as we benefit from improved operating leverage during the peak trading period"

Recent price fall may offer a buying opportunity but uptrend has been broken by the fall bellow the 50/100/200ma

[thorpematt] 16/10/2023 11:44

ST,
It is due to the brokers change in forecasts. It is not that the results are bad per se. It is simply that the market was forecasting one thing and the reality is lower than expected.

Both ED and Cavendish have reduced forecasts to name 2 I have access to. Cavendish have reduced from buy to hold also.

The reductions are not in the headline revenue forecasts, but in the operating margins. This is largely due to incrmental wage increases for existing staff and investment into installations. But also there was a discrepency between order growth and actual revenue.

All of this means that the diluted EPS is now a bit lower than it was forecast to be.

So the longer term story is intact but the short to mid term profitablity a little less rosy. Patience is required here. I am still wathing from the sidleine because this sector in a this economic climate is going to be under pressure for a little while longer (I think).

[silver tortoise] 16/10/2023 07:21

Just don't get it good results and the share price has been dropping?

[castleford tiger] 14/10/2023 16:46

the ut trade was a buy as it was my first in this company.

Hoping to build a position under 100p

tiger

[kalai1] 12/10/2023 13:01

Marks Electrical Group plc issued a trading update for the HY ended 30th September this morning. H1 Group revenue was up by 24.8% to £53.9m. The Strategic decision to introduce the Group’s own installation service, combined with inflationary pressures in distribution costs impacted H1 margins, but this pressure is expected to ease over H2. The balance sheet remains strong with net cash of £10.9m. Valuation is average with forward PE ratio up to 17.7x, the share price also remains in a 12- month uptrend and has some positive momentum. The fragile macro environment is the main cloud, but there is a lot to like here, not least longer run growth potential. BUY...

...from WealthOracle

[edmonda] 12/10/2023 06:49

Service uplift sparks 25% sales growth - new note & audio summary here:

Marks Electrical Group’s sales revenue advanced by 24.8% in the first half of its 2024 financial year, according to a trading update released today, as the company made further market share gains in its core categories. Notably strong advances by category included +71% for televisions, +74% for washer-dryers and +36% for American fridge-freezers. These gains were achieved against relatively flat domestic markets for both Major Domestic Appliances (MDAs) and Consumer Electronics (CEs). An improved service offering, which now includes integrated installation services, made a notable impact: not only in a strong sales growth rate, but also a best-in-class 4.8 Trustpilot score.

Due to first half sales growth strength, we have revised upwards our sales forecast for FY2024 from £114.5m to £116.0m. However, we reduce our EBITDA forecast from £8.9m to £8.0m as well as making downward adjustments to FY2025. Margins are expected to contract as a result of order growth being faster than revenue, higher driver wages and the integrated installation service addition. Importantly, the company is not willing to make reductions in marketing spend to offset these items. Rather, it continues to invest in brand recognition with a view to sustainable growth.

Given MRK’s strong cash position and clearly articulated strategy for sustainable business expansion, we maintain our 150p fair value for the shares.

[cf456] 18/9/2023 14:55

Finally breaking out?

[sammy aftal] 08/9/2023 06:37

These guys should have a good qtr

[darrin1471] 05/9/2023 09:40

Increasing volumes were noted on this thread at the end of June.
Also worth noting post 76 where I reported that Mark had said he was willing to sell some of his 73.6% once the share price was above the IPO.

Speculation: If I was trying to build a stake in MKS I would have been in contact with Mark or MKS's broker to register my interest and a price. I would then be trying to add as much as I could at a price below the IPO. We may be stuck below IPO price until a buyer has got near a disclosable stake. If Mark sells a chunk of his 73.6% then that is when I think we could see a pop.

What percentage will Mark sell? Taking it below 50% may be seen as a positive. When I have spoken to other small investors, the most common concern about MKS is that Mark could delist and take it private again as he has such a large holding.

[74tom] 04/9/2023 20:16

The chart is starting to look really good here, should see a very strong move on the break of £1.

It's worth noting that volume has been on an upward trend for the last few quarters;

Q3 2022 1.6m
Q4 2022 1.9m
Q1 2023 2.8m
Q2 2023 4m
Q3 2023 to date; 4m

Likely this Q will comfortably break 5m given the first 2 days of September have seen 800k shares traded...

Why is this relevant? With the CEO owning 73.6%, there are only 27.6m shares to go around. Some 29% of that free float has been traded since the start of Q2 alone.

There are only 3 II holders; Cannacord, Stancord & Octopus. One of them is selling right now & cleared another 100k today to another II buyer. When they stop, this pops.

[darrin1471] 14/8/2023 08:22

There appears to be a seller at 100p.
Higher than normal volumes for the last 3 weeks. 1.5m extra traded over last 3 weeks above normal.
I would of thought the IPO price of 120p was the next step. Mark has said he was willing to sell more stock above the IPO price.

[cf456] 14/8/2023 08:02

Potential breakout above 100p.

Could lead to a decent move up, especially given the recent strong news.

[edmonda] 10/8/2023 06:48

New research note post the AGM trading update here:

Summary: Marks Electrical Group (MRK) released a trading update ahead of its AGM. The company enjoyed strong trading in the first four months of its FY2024 financial year as enhanced delivery options, sustained high service quality levels and more widespread brand awareness helped the company to over 30% sales revenue growth in the period, compared with nearly 14% a year earlier. With further benefits of strong cash conversion – consistent with a proposed 0.66p final FY2023 dividend – we reiterate our fair value of 150p for the shares.

[darrin1471] 10/8/2023 06:46

AGM trading update for the four months ended 31 July 2023

Highlights

-- Strong trading period in the first four months of FY24 (April to July), with revenue growth of 30.7% to GBP36.2m (4 months FY23 GBP27.7m)

-- Increased market share in Major Domestic Appliances ("MDA") from 2.4% in Q1-23 to 3.0% in Q1-24, with Marks Electrical share in the online segment of the market growing from 4.5% to 5.7%(1)

-- Increased market share in Consumer Electronics ("CE") from 0.3% in Q1-23 to 0.6% in Q1-24, with Marks Electrical share in the online segment of the market growing from 0.6% to 1.0%(1)

-- Strong performance across categories with a particular stand-out performance in televisions (+84%), washer-dryers (+83%), and cordless vacuum cleaners (+62%)

-- Continued growth in next-day integrated, gas, electric and television installation services, with over 4,500 installation orders in the period, vs 1,500 in the prior year, a growth rate of 200%

-- Investment in distribution centre, vehicles and processes, preparing us for peak autumn trading and our future growth ambitions

-- Maintained industry leading Trustpilot score of 4.8 and reached over 50,000 reviews with 95% of those reviews being 4 and 5 star, demonstrating the strength of our best-in-class customer proposition

-- Robust balance sheet and net cash position, supporting the proposed final dividend of 0.66p per share, subject to shareholder approval at today's AGM

Mark Smithson, Chief Executive Officer, commented:

"We've made a fast start to FY24 with revenue growth of over 30% against an MDA & CE market that is marginally down in the first months of our financial year.

We've maintained our industry leading Trustpilot score of 4.8, and reached over 50,000 reviews on Trustpilot, which I am particularly proud of as it takes a combined effort from all our excellent team members, from sales ordering, through to picking, logistics, delivery, and customer aftercare, to deliver an exceptional customer service.

Our focus and attention on growing our installation offering is enabling us to create a truly differentiated, market-leading proposition for customers, further enhancing the strengths of our operating model. We have been very encouraged by the take-up of this service, which is now available to over 65% of the UK population on a next-day basis, and are excited about its potential.

Despite a challenging market backdrop, including wage inflation and strong competitor activity on gross margin, we have maintained our tight control on inventory, overhead cost management and disciplined capital allocation, ensuring we have a healthy cash position and remaining focused on profitable market share gains as our brand awareness continues to grow.

We've started August well and are laser-focused on maintaining our performance management discipline on revenue, profit and cash in order to continue to demonstrate our superior proposition and become the UK's leading premium electrical retailer."

[darrin1471] 31/7/2023 12:40

A few chunky trades in Marks Electrical last week on Wednesday and Thursday totalling around 700k at 93p.
Above normal number of trades on Thursday, Friday and today has moved the price up close to year highs.

[darrin1471] 03/7/2023 08:13

Director Buy
MRK FD Josh Egan buys 25,569 @ 98.537p
Holding now 90,000.
Josh's buy does not match up with any of the trades I can see on the LSE

[darrin1471] 26/6/2023 18:19

Last two weeks have seen the biggest and 3rd biggest trading volumes since IPO.
It continued today with 2 x 100k at 100p and 99.9p.
A happy buyer and seller at this level.
I'm hoping the buyer wants a lot more including some of Mark's at 110 or above.

[cf456] 19/6/2023 10:11

Yes, highest volume since listing by the looks of it.

Price rising too.

[darrin1471] 19/6/2023 10:06

2x 275k trades at 96p this morning.
and another 275k @ 95.904
1.2m+ in two trading days.
It should be an interesting week.

[cf456] 17/6/2023 08:53

If investors are keen to buy after the recent results (and the initial upwards move in price would seem to suggest that they are), then the continued tight free float is a good thing in that there is limited supply around and the price will move up quickly with even a small level of demand.

Instis buying a portion of the CEO’s holding above the 110p IPO price would help with future liquidity.

The share price has started moving again after a multi month sideways base. 120p looks to be a reasonable short term target. Of course over the longer term the CEO has stated that he’s looking for revenues of £500m, more than 5x current revs, so a lot of share price upside potential if that comes to pass.

[darrin1471] 16/6/2023 16:31

I asked Mark on the "online presentation for investors" if he would be willing to sell some of his holding which is currently 73.6%.
He answered without hesitation which implied he had already given it some thought. Mark said he knows he needs to reduce but would not do so below IPO price in fairness to IPO shareholders.
There is only 12m shares available outside of major shareholders, so anyone wanting a decent stake will need to buy up to the IPO price of 110p.
Not sure if 110p will act as a ceiling or a catalyst to kick on

[cf456] 16/6/2023 14:28

One insti buying from another perhaps.

[darrin1471] 16/6/2023 14:24

Some larger than normal trades today.
Largest daily volume since 24/08/2022