Marks Electrical’s strong start to the second half

Marks Electrical (LON: MRK) has been one of the better performers on AIM since the beginning of October. Trading continued to improve in October and the early days of November. The interims were published just over one year after Marks Electrical joined AIM via a placing at 110p.

Market share is growing as brand awareness improves. Energy efficient appliances are in demand.

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The launch of in-house installation services will add to the level of service offered by Marks Electrical. Ten new installation vehicles and 12 delivery vehicles have been ordered and should be in service by next year.

The online electricals retailer has already flagged the interims. In the six months to September 2022, revenues were 15% ahead at £43.1m. Underlying pre-tax profit improved from £2.07m to £2.22m. Earnings per share fell because of the additional shares in issue following last year’s flotation.

The interim dividend is 0.3p a share. Net cash was £7.7m at the end of September 2022. That could increase to £8.5m until the end of the year.

A full year pre-tax profit of £8m is forecast, which means that, at 72.5p, the shares are trading on 13 times prospective earnings and the forecast yield is 1.5%.

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