Consumer electronic and electrical appliances retailer Marks Electrical (LON: MRK) has beaten expectations in the fourth quarter and the full year forecast has been upgraded along with those for the following two years. The AIM-quoted online retailer is undoubtedly taking market share from its rivals.
Revenues in the fourth quarter to March 2023 were one-fifth higher at £24.8m and this means that full year revenues are 21% ahead at £97.8m. This has led to a 2022-23 pre-tax profit upgrade from £5.8m to £6.2m, which is still below the £6.4m reported for the previous year. Net cash is £10m and a 1p a share dividend is expected for the year.
There was additional marketing in London and south east England. The installation service was launched in the second half, and this should help growth to continue to be at high rates, although it is unlikely to be as strong as last year.
The cash pile enables investment in warehouse space and delivery vehicles. Dividends will also grow steadily. Even so, cash should continue to build up.
Market share remains modest at around 2%. This year, revenues of £112m and pre-tax profit of £7.1m is forecast.
The share price increased by 6p to 89.5p and the prospective 2023-24 multiple is less than 18. As momentum continues, this multiple should come down significantly over the coming years.