Consumer appliances retailer Marks Electrical (LON: MRK) has gone through tough trading times, but it appears to have stabilised and be ready to resume growth. After a poor third quarter, there has been recovery in trading that has continued into the new financial year.
A full year trading statement shows revenues growing by nearly 3% to £117.2m, which was slightly lower than forecast. Pre-tax profit is set to fall from £3.3m to around £2.1m. Net cash was £8.8m at the end of March 2025.
There are increasing consumer electronics sales and this helped fourth quarter revenues grow by nearly 7%. This is despite the continued weak consumer market.
There were problems with a new ERP system, but this has been fully installed, and it is working as expected. The benefits of the IT investment include being able to scale up the business more efficiently. Marks Electrical is building up direct relationships with suppliers. The completion of these changes means that management can focus on the business.
Canaccord Genuity is maintaining its 2025-26 pre-tax profit of £2.6m and net cash could be more than £10m by the end of March 2026. Marks Electrical is refocusing on the premium end of the market. The share price edged up 0.5p to 58p, which is 31 times prospective earnings with potential for this to come down more quickly if there is a recovery in the consumer market.