Marks Electrical tumbles after profit warning
By Michele Maatouk
Date: Thursday 25 Sep 2025
(Sharecast News) - Online electrical retailer Marks Electrical tumbled on Thursday as it warned on profits, citing continued weaker trading and cost headwinds, and delayed its interim dividend.
It said the lower revenue experienced in the first quarter - noted in the full-year results in June - has continued into the second quarter, with both Major Domestic Appliances (MDA) and Consumer Electronics (CE) markets down year on year.
In addition, Marks said consumers remain "highly price conscious" and continue to scale back on discretionary spending. This has dented average order values and resulted in higher relative delivery costs.
The retailer also pointed to cost headwinds, with increased technology and ongoing costs of its new ERP system, as well as higher employee-related costs, impacting its distribution costs and overheads.
Marks said that while it expects to see a return to revenue growth in the second half, the weaker trading in H1, coupled with reduced operating leverage, is expected to have a "material" impact on its full-year profit guidance.
As a result, it now expects adjusted earnings before interest, tax, depreciation and amortisation for FY26 to be about £1.7 million, down from £4.2m a year earlier.
"In light of this performance, the board has decided to delay any decision on the interim dividend at the time of the interim results and will re-consider this and the quantum of any final dividend at the time of the group's full year results," it said.
Chief executive Mark Smithson said: "Clearly, I am very disappointed that sales in Q2-FY26 continued the trend we noted in our FY-25 preliminary announcement. That said, we have built a strong business over the last few years, with growing brand recognition, nationwide distribution and installation capability.
"We continue to focus on margin but with increasing employee costs and increased technology cost for our new ERP system, we have not yet been able to exploit the operating leverage effectively. With a more balanced product mix as we enter the peak period of our trading, we remain confident in a stronger H2 performance.
"Long term, as the economic environment and market backdrop improve, our vertically integrated business model and commitment to delivering an exceptional service for our customers will enable us to leverage higher average order values and drive improved margins."
At 0812 BST, the shares were down 21% at 49.0p.
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