Shares in Marks Electrical (MRK:AIM) sparked up 3% to 49p after the online electrical retailer upgraded FY26 earnings guidance for the second time in a month.
Despite the well-documented cost-of-living pressures facing consumers, Marks Electrical saw a stronger-than-expected end to the year to March 2026.
And the dishwashers-to-televisions seller enters FY27 with ‘positive’ trading momentum and a strengthened cash position.
In its latest unscheduled trading update, Marks Electrical maintained FY26 revenue guidance of £108.5 million but raised EBITDA guidance again to £2.65 million.
This is up from the company’s 26 March outlook for EBITDA ‘in excess of £2 million’, which was comfortably ahead of consensus.
Resilient Q4
The Leicester-based firm enjoyed a good peak trading period from Black Friday through Christmas and a resilient 4Q to boot. The EBITDA outcome was driven by a better margin performance.
Year-end net cash was £4.45 million, above previous guidance of £3.5 million to £4 million thanks to strong working capital management with regards to inventory. This cash cushion will allow Marks Electrical to invest in stock ahead of any more sustained upturn in business.
Led by founder and CEO Mark Smithson, the company sells, delivers, installs and recycles a wide range of household electrical products. It has plenty of growth to go for in a UK Major Domestic Appliances (MDA) and Consumer Electronics (CE) market thought to be worth around £7 billion.
Focus and efficiency
Marks Electrical said: ‘Building on the progress made during FY26, the board expects sustainable growth in both revenue and profitability in FY27 as the benefits of its disciplined focus on margin and operational efficiency continue to be realised.’
Broker Cavendish believes this summer’s FIFA World Cup should ‘helpfully drive demand for big-screen TVs which should give Marks a fast start to the year.’
Following the news, Cavendish upgraded its FY26 EPS estimate from 0.1p to 0.5p and its FY27 forecast by 80% to 0.8p. The broker also nudged up its FY28 estimate by 8% to 1.1p and increased its price target from 55p to 60p.
We see merit in the Cavendish view that said Marks Electrical remains an interesting recovery play with scope to deliver further upgrades.
In common with AO World (AO.), the retailer is showcasing its resilience in tough market conditions. It has growing brand recognition and its products are typically non-discretionary purchases such as a broken-down TV or American fridge-freezer.
That said, Marks Electrical has disappointed investors with profit warnings in the past. And an ongoing CMA investigation into potential breaches of consumer protection law is another risk factor for investors to weigh.
Read the press release here: https://group.markselectrical.co.uk/investors
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