Marks Electrical Group Plc

0.00 (0.0%)
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 0.0% 87.00 0.00 08:00:00
Bid Price Offer Price High Price Low Price Open Price
86.00 88.00 87.00 87.00 87.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Elec Appliance,tv,radio-whsl 80.48 3.29 3.10 29.00 91.31
Last Trade Time Trade Type Trade Size Trade Price Currency
- O 0 87.00 GBX

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Date Time Title Posts
25/5/202311:21Marks Electrical: Online Electrical Retailer65
05/11/202110:58MERCK,ACTELION and others285
19/8/200523:02Merck - Creative accounting or Journalism?2

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Posted at 12/4/2023 14:00 by kalai1
Marks Electrical Group plc issued a FY 23 trading update for the 12 months ended 31 March 2023 this morning. The Group posted record full year revenue of £97.8m, up 21.5%, adjusted EBITDA is expected to exceed £7.5m. The Group saw particularly strong trading in Q4-23 with 20.0% revenue growth to £24.8m. The performance extends the Group’s trajectory of robust and profitable growth. The balance sheet remains solid with a closing net cash position of £10.0m. Valuation is reasonable with forward PE ratio around 15x, PS ratio around 1x. The share price even has some decent near-term momentum having rallied solidly off Q4 2022 lows. The weak UK macro-economic environment is the main potential cloud to business and share price performance. The rest of the investment case looks attractive and points to a solid BUY...

...from WealthOracle


Posted at 12/4/2023 07:54 by edmonda
New research report here (free & accessible):

A better than-expected 21.5% increase in sales revenue to £97.8m, higher EBITDA margins and strong cash conversion were the key features of today’s Marks Electrical Group (MRK) FY2023 trading update. In addition, a positive start to April augurs well for FY2024, a year in which we expect to see further market share gains and expansion of the product and service offering.

The central investment case for the shares remains firmly in place, in our view. The company is well invested to meet demand growth in its business operationally as well as enjoying significant scope to generate this demand growth through increased brand awareness. Furthermore, market share is comparatively small at around 3% despite three consecutive years of exponential progress in sales.

With a trailing EV/sales ratio of only 0.8x we continue to argue that the shares appear undervalued and reiterate our fair value of 150p for the shares.

Posted at 15/2/2023 11:08 by darrin1471
Mark Smithson * 77,278,181. 73.6%
Canaccord Genuity Limited. 5,750,000. 5.5%
Stancroft Trust Limited. 5,454,545. 5.2%
Octopus Investments Limited. 4,090,909. 3.9%
Total 88.2%

That only leaves £10m of shares for everyone else. To little liquidity for an institutional to add or sell.

Results were on track. Good but what they predicted.
If buying for the long term, then reassuring.
Someone taking a shorter term approach may have seen a 75% rise in 3 months and decided to take some profits.
Today MRK are down 17% in a month so a buyer may decide to wait to see if the trend continues and somebody sitting on a profit may want to bank the profit.
Personally I thought MKS were good long term value at at 90p in June but I was not going to buy while the price was falling. Ended up buying between 70p & 80p then selling half at 96p. I'm keeping the balance long term and will add on any further weakness.

Posted at 02/2/2023 14:12 by darrin1471
Competition making Marks offer look even better.

Currys boss Alex Baldock says: “We’re leading more boldly on price rises, and we’re charging for services more now as well.”
The retailer has recently introduced delivery charges on major appliances and TVs.
He adds: “We’re doing fewer promotions – the promotional intensity significantly declined – and we’re especially doing none of the less profitable ones.”

Posted at 11/1/2023 12:09 by darrin1471

Marks Electrical (LON: MRK) continues to outperform its electrical retail rivals and is taking market share. The share price has been on an upward trajectory since last October.

Revenues in the third quarter to December 2022 were one-third ahead at £29.8m and margins are improving. More customers are taking advantage of the installation service offered by the company. Nine-month revenues are 22% higher at £72.9m. The interim growth rate was 15%.

Profit is still likely to be lower this year and earnings certainly will because of the additional shares in issue after the 2021 flotation. Marks Electrical raised £5m at 110p a share when it joined AIM in November 2021. However, Marks Electrical has been able to maintain a good level of profitability even in tougher times.

Full year pre-tax profit is expected to decline from £6.44m to £5.67m, but the strength of the third quarter revenues means that there I a chance that this figure could be beaten. A pre-tax profit of £8m is expected next year.

Although inventories levels are higher, net cash is forecast to improve to £3.87m by the end of March 2023. A full year dividend of 0.67p a share is forecast.

Posted at 08/11/2022 08:08 by brummy_git
Commentary & CEO/CFO interview here

Posted at 08/11/2022 07:25 by edmonda
Connecting the growth drivers - new research report - full link here:

Marks Electrical’s 15.1% first half sales growth was announced in last month's trading update, driven by market share gains. Today’s interim results release evaluates those share gains in more detail, as well as including three important indicators of ongoing and sustainable progress within the business – margin resilience, a strong return profile and the company’s net cash position. The company is well placed to make further share gains in H2. Despite a competitive market, the company continued to invest in its brand and customer service levels. Moreover, MRK expects to meet current market expectations of profit growth for the full year.

The company’s intrinsic value incorporates its industry-leading 4.8 Trustpilot score and significant headroom in terms of both market share and brand awareness levels. A positive cash position was reflected in the announcement of a 0.30p interim dividend. We maintain our fair value of 150p per share.

Posted at 11/10/2022 08:03 by edmonda
Market share gains drive strong sales growth in H1 - link to full new research report here:

Continued and sizeable market share gains drove a 15.1% increase in first half sales for Marks Electrical Group (MRK), particularly impressive in a market that was contracting overall. The company made gains in both Major Domestic Appliances (MDAs) and Consumer Electronics (CE), despite both categories being weak for online business in the period. Moreover, the MRK cash position remains strong, outperforming expectations.

These inherent business qualities are not captured in the current share price, in our view, and we reiterate a 150p fair value. MRK is not only comfortably delivering double-digit sales growth but also enjoys significant geographic and category headroom for further expansion. In addition, it operates on a cash positive basis which implies scope for incremental dividend growth as earnings advance. We base our fair value on 1.7x FY2023 sales revenue and 21.5x FY2023 EV/EBITDA.

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.

Posted at 08/6/2022 09:35 by edmonda
#MRK A better than expected EPS outcome, strong cash conversion and an unusually high return on capital were pleasing financial features of Marks Electrical Group’s (MRK) FY2022 results statement, published today. The company also reports an upbeat start to FY2023 while articulating a clear path to sustainable growth through its customer proposition, increasing brand awareness, higher operational capacity and favourable financial dynamics. Expecting further meaningful progress this year, we reiterate our 150p / share fair value.

Marks Electrical’s FY2022 results follow a trading statement released on 11 April in which the company reported 44% net sales revenue growth and guided towards 9.0% EBITDA margins. Today’s announcement incorporates a pleasing 5.01p adjusted EPS outcome, a 57% ROCE and 119% cash conversion, as well as a 0.67p final dividend. End-year net cash was £3.9m.

The group’s invigorated customer proposition implies an ability to deliver both to a wider UK geographic footprint while maintaining service levels. Moreover, the company expects to broaden its product offering both within major domestic appliances (MDAs) and consumer electronics (CE).

Given the company’s still relatively low 1.6% share of a sizable market (up from 1.2% in FY2021), there should be significant revenue gains available from its improved brand awareness programme. Currently, recognition of MRK is estimated to be 7% in England. Encouragingly, progress was made in FY2022 with an increase in London (the UK’s largest next day delivery market) from 3% to 4%.

Expansion of operational capacity at the company’s single headquarters site in Leicester gives headroom to match increased demand. MRK continues to add to both warehouse capacity and increase the size of its branded van delivery fleet while making important additions to hiring. A strong people culture remains an important component of the growth story. Furthermore, the company’s ability to finance growth should benefit from being a debt-free business with strong cash conversion.

Valuation does not reflect the clarity of MRK’s growth outlook in our view. In particular, we argue that the company’s well defined growth strategy - and ability to implement it - is superior to its peer group: much of which is not profitable. At our 150p fair value level, implied valuation ratings are an FY2023 EV/sales ratio of 1.6x and 18.6x EV/EBITDA.

Marks Electrical share price data is direct from the London Stock Exchange
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