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MRK Marks Electrical Group Plc

67.50
0.00 (0.00%)
24 May 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Marks Electrical Group Plc LSE:MRK London Ordinary Share GB00BM8Q5G47 ORD GBP0.01
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.00% 67.50 245 08:00:00
Bid Price Offer Price High Price Low Price Open Price
66.00 69.00 67.50 67.50 67.50
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Elec Appliance,tv,radio-whsl 97.75M 5.16M 0.0491 13.75 70.84M
Last Trade Time Trade Type Trade Size Trade Price Currency
14:53:06 O 1 69.00 GBX

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Date Time Title Posts
18/4/202415:01Marks Electrical: Online Electrical Retailer118
05/11/202110:58MERCK,ACTELION and others285
19/8/200523:02Merck - Creative accounting or Journalism?2

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Posted at 25/5/2024 09:20 by Marks Electrical Daily Update
Marks Electrical Group Plc is listed in the Elec Appliance,tv,radio-whsl sector of the London Stock Exchange with ticker MRK. The last closing price for Marks Electrical was 67.50p.
Marks Electrical currently has 104,949,050 shares in issue. The market capitalisation of Marks Electrical is £70,840,609.
Marks Electrical has a price to earnings ratio (PE ratio) of 13.75.
This morning MRK shares opened at 67.50p
Posted at 18/4/2024 15:01 by debsdowner
darrin,

"I'm surprised MRK held up so well today.
Sales growth crashed in Q4 to 2%
"

Yes that was the highlight to me.

If they are that competitive sales should not have crashed as much imo.

But big ticket items have slowed somewhat.

There is another play here which could affect future performance ansd that is products are lasting longer due to a new europeam law.
Posted at 16/4/2024 19:24 by darrin1471
I'm surprised MRK held up so well today.
Sales growth crashed in Q4 to 2%

Q4 2023 20%
First 2 months of Q1 30%+
First 4 months of H1 30.7%
H1 24.8%
Q3 17.8%
Q4 2%

31 March 2024 closing net cash position of £7.8m(ahead of lowered forecasts of £7.05m)
Last year closing net cash position of GBP10.0m

EBITDA of approximately £5.0m is inline with lowered forecasts but down from £7.5m last year

Leaving Euronics "will lead to revenue and margin upside in the medium-term". But not the short term?

Falling "average order value, resulting in customer order volumes growing faster than revenue. This impact will limit our ability for margin expansion in the short-term".
No recovery in margin.

Most of the above has already been priced in with previous trading updates. The 2% sales growth in Q4 has not.
The p/e was better than many shares and could be justified by the growth prospects. With margins under pressure and now growth suffering the share price has to be at risk with little margin for error.
I wonder if margin pressures in Q3 resulted in lower marketing spend, leading to lower growth.

It will be interesting to hear what Mark has to say. In the short term it appears there may need to be a choice between margins and growth.

I'm not currently holding MRK but will be watching closely for a re-entry point
Posted at 10/1/2024 10:18 by darrin1471
"revenue growth of 17.8%" in Q3-24 (October to December)is not the problem.
Its the gross margins in H1 and now in the golden quarter of Q3 which has kicked the share price.
This was initially a value/growth share for me. I reduced as the price rose and it became just a growth share. Its very much a value/growth share again for me at the current price. All time low is about 56p, so we may test that level again.
Posted at 10/1/2024 09:37 by debsdowner
Shock expected fall in profits, risk has increased hence fall of 25% in share price.

There is certainly going to be less discretionary spend and more retailers will find it difficult to make headway on profits.

White goods always risky.
Posted at 10/1/2024 08:31 by eigthwonder
In the market for a new freezer I thought I would give them a shot, helped by the competitive price and promise of “free delivery “. But when I came to look at the basket they had added in all the unnecessary extras, which I had to untick and I was still left with a “shipping charge”. Turns out free delivery only for £1,000 orders, so they were no better than the competitors. The use of default extras and disingenuous use of “free delivery “ all felt a bit yesteryear and I took my business elsewhere
Posted at 12/10/2023 14:01 by kalai1
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
Posted at 05/9/2023 10:40 by darrin1471
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.
Posted at 17/6/2023 09:53 by cf456
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.
Posted at 14/6/2023 07:33 by edmonda
Preliminary FY Results - "Built-in installations enhance growth outlook"

Link to new research report:

Marks Electrical’s preliminary FY2023 results confirmed the 21.5% sales growth and £7.5m EBITDA announced in the April trading update. The company generated £7.1m of free cash flow in FY2023 (vs. £5.7m a year earlier), to end the year with a £10.0m positive net cash balance. Moreover, sales gains were 30% in the first two months of the current financial year.

An upgraded built-in installations programme represents an important addition to MRK’s service offering. This activity is now managed in-house and enables the company to install appliances into fitted areas within dwellings – notably kitchens – using a specially trained team of installers including gas safe registered engineers. Built-in installations suit MRK’s focus on premium branded products.

MRK’s raised awareness levels were notable in London, where they increased from 12% to 22% between October 2022 and May 2023. Indeed, London now has the highest awareness rate for MRK in the UK, surpassing even the company’s East Midlands home region - a reinforced presence in the nation’s capital should be seen as a clear route to growth.

The key drivers of MRK’s investment case remain in place (see our initiation report: "Lighting the touch paper"). However, the consistency of overall approach should not mask significant ongoing changes and continuing improvements within the group as it enlarges the business overall. MRK’s delivery against service level, brand awareness, growth and cash generation objectives are not currently reflected in MRK’s share price, in our view. As a result we maintain our 150p fair value which implies FY2024 EV/sales of 1.3x and 16.2x FY2024 EV/EBITDA based on our current forecasts.
Posted at 21/8/2022 14:05 by darrin1471
I took a look at MRK last week. I read this thread, investor information and the online interviews with Mark and Josh.
My thoughts, are a little jumbled

Mark Smithson is an entrepreneur, a salesman and somebody who cares about his business. Not necessary somebody who I would want running a more complicated business.
In FY22 MRK had 1.6% market share of a £5.3 billion major domestic appliances market (MDA)and they are targeting a 10% market share. John Lewis have a 15% market share. MRK are starting to sell into the £3b UK consumer electronics market (CE) and currently have a 0.21% market share.
After rapid growth
2020 £31m
2021 £56m
2022 £80m
growth is forecast to rise at more sustainable levels
2023 £94m
2024 £112m
MRK are targeting £500m. Current warehouse site capacity is £250m
MRK are not targeting the whole of the MDA market. MRK target the ABC1 customer with higher average selling prices and fewer after sales issues. Premium brands. Top 5 by sales are Bosch, Samsung, Rangemaster, Neff & LG. MRK do not sell own brands imported direct from China
MRK are price competitive offering next day delivery from Newcastle to Exeter with a new biweekly delivery to Cornwall, Cumbria, Glasgow and Edinburgh.
MRK USP is their next day delivery using their own vans from a single warehouse in Leicestershire. Long term expansion will not include multiple warehouse locations.
Customer service is very important to Mark Smithson and results in a 4.8 Trustpilot score. A score he is very proud of and which MRK follows up on every negative review where possible.
Current adjusted EBITDA of 9% is maintainable.
FY22 adjusted eps 5.01p. Dividend 0.67p. "with the 0.67p being a typical two-third share of the annualised amount"
"it is the Board’s intention to pursue a progressive dividend policy and target a pay-out ratio, being the annual total dividend per share divided by earnings per share for the year, of up to 20 per cent."
IPO placed 27.3m at £1.10. Mark Smithson retains 73.6%. Octopus bought 3.9% and Canaccord took 5.24% leaving 18m in circulation which may result in an illiquid share and volatile movements if somebody wants to add/sell stock.
Mark Smithson retains ownership of warehouse and it is leased to MRK for £600k pa for 52 months ending 30/09/2024
Mkt cap at IPO was £115m and is currently £71m
IPO was well timed and valued as a company with good growth potential. 20% annual growth would be £250m year 5 and £500m year 9
Retail has been trashed ytd and MRK has followed the market. Group’s sales for the recent trading update. Revenue "first four months up 13.7% compared with the online MDA and CE markets being down over 20% in the first months of our FY23."
More of the growth came from volume increases than price increases.
"80% of Marks Electrical revenue is from distressed purchases" i.e. broken and needs replacing.
Stock shortages eased from April/May. Peak prices reached. Offers now being given as manufacturers need to clear.
Increased fuel costs not material. Other additional costs include NI, PLC costs and normal business rates environment.
"lean keen business model"
"not growth at all costs"
Marketing budget is 5% of sales to improve sales and brand awareness. Suppliers for the first time are looking to share marketing costs with MRK. MRK brand awareness is still only 7%.
Future costs of new larger semi automated warehouse could be a drain on cash.
Competitor AO could improve customer service and delivery times.
Retail stores can not compete with online costs.
MRK sees inhouse IT as a competitive advantage but does this increase risk to cyber security.
Part of buying group.
Marks Electrical share price data is direct from the London Stock Exchange

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