Marks Electrical warns on profits following weak trading

The online specialist said consumers remained “highly price conscious” during the second quarter, which has impacted its average order values and resulted in “higher relative delivery costs”.

The company reported it had continued to face cost headwinds related to increased technology and higher employee-related costs impacting its distribution and overheads.

Marks Electrical warned the “weaker” trading during its first half, coupled with a reduced operating leverage, would have a “material impact” on profits and now expects to deliver an adjusted EBITDA of £1.7m for the 12 months to March 31, 2026.

The retailer assured the market that it had taken several steps to optimise business performance in its transport operations and allocation of marketing spend to “best manage short-term market challenges”.

It said it had made a strategic decision to invest in stock ahead of the peak trading period and expects to return to revenue growth in the second half.

Marks Electrical chief executive Mark Smithson said: “Clearly, I am very disappointed that sales in Q2 FY26 continued the trend we noted in our FY25 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 costs 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.”