TIDMMRK
RNS Number : 6254C
Marks Electrical Group plc
14 June 2023
Marks Electrical Group plc
Unaudited preliminary results for the year ended 31 March
2023
Continued revenue growth, robust profitability and positive
trading outlook
Marks Electrical Group plc ("Marks Electrical", "the Company" or
"the Group"), a fast-growing online electrical retailer, today
announces its unaudited preliminary results for the year ended 31
March 2023 ("the year" or "FY23").
Financial highlights
-- Record full-year revenue of GBP97.8m (FY22 GBP80.5m)
representing a growth rate of 21.5%
-- Maintained market-leading profitability despite external cost
headwinds, resulting in a full year adjusted EBITDA(1) of GBP7.5m
(FY22 GBP7.2m) at 7.7% margin and a statutory profit before tax of
GBP6.4m (FY22 GBP3.8m)
-- Free cash flow of GBP7.1m (FY22 GBP5.7m), representing a free
cash flow margin of 7.3% (FY22 7.1%)
-- Adjusted EPS of 4.82p(2) (FY22 5.01p), statutory EPS of 4.91p (FY22 3.22p)
-- Robust, debt-free balance sheet with closing net cash(3)
position of GBP10.0m (FY22 GBP3.9m), supporting a proposed final
dividend of 0.66p per share and resulting in a total FY23 dividend
payout of 0.96p (FY22: 0.67p) reflecting the Group's strong cash
position and confidence in its outlook
-- The final dividend will be paid (subject to shareholder
approval at the AGM) on 17 August 2023 to shareholders who are on
the register at the close of business on 14 July 2023, and shares
will be marked ex-dividend on 13 July 2023
Operational highlights
-- Growth in Major Domestic Appliances ("MDA") market share from
2.0% in FY22 to 2.5% in FY23, with our share in the online segment
of the market growing from 3.5% to 4.7%(4)
-- Growth in Consumer Electronics ("CE") market share from 0.2%
in FY22 to 0.3% in FY23, with our share in the online segment of
the market growing from 0.4% to 0.6%(5)
-- Strong performance driven across all categories but
particularly in A-rated energy efficient washing machines and
tumble dryers, premium range cookers and small appliances,
including air fryers and coffee machines
-- Further focus on brand awareness initiatives across key
locations, using social media, television, radio and out-of-home
advertising drove an improvement in brand awareness in England from
7.0% in May 2022 to 15.0%(6) in May 2023
-- Continued rapid growth in newly formed integrated, gas,
electric and television installation services that are now offered
on a next-day basis to over 65% of the UK population
-- Maintained industry-leading Trustpilot rating of 4.8,
demonstrating the strength of our customer proposition
Current trading and outlook
-- Strong trading momentum in the first two months of FY24, with
revenue growth exceeding 30% year-on-year
-- Disciplined approach to margin management, capital allocation
and cash conversion demonstrated in FY23, provides the Group with
solid foundations to deliver our financial targets and strategic
objectives in the year ahead, benefitting from our enhanced scale
and operating leverage
Mark Smithson Chief Executive Officer, commented:
"We delivered another strong performance over the year, with
revenue growth of 21.5%, which was particularly pleasing when
compared to a prior year comparative of 44% and a difficult
economic backdrop in which both the Major Domestic Appliances and
Consumer Electronics markets have declined year-on-year.
The market share gain we've achieved in the online MDA market
from 3.5% to 4.7% has been driven by the strength of our
high-quality business model, our people and the attractiveness of
our market-leading customer offering. More customers are
discovering Marks Electrical and our focus on stocking the right
products, at the right price, with the fastest and most convenient
delivery & installation options sets us apart from the
competition, enabling us to continue to grow, attract talent,
strengthen our operational capacity and further develop our service
offerings.
During the year we were laser-focused on customer service
excellence and maintained our market-leading 4.8 Trustpilot score,
whilst also developing our new gas, electric and television
installation offering to over 65% of the UK on a next-day basis.
This market-leading speed of service delivery is seeing very strong
demand, and we are excited about its prospects in FY24 and
beyond.
Despite some external cost headwinds in FY23, we were able to
continue to achieve a market-leading adjusted EBITDA margin of
7.7%, demonstrating our differentiated operating model and sharp
focus on all elements of our value chain, underpinned by our unique
and scalable single-site fulfilment and distribution model.
As we look to FY24, w e believe that our current market share
continues to provide significant scope and opportunity for growth,
regardless of the economic backdrop. W e have been pleased to see
continued growth of over 30% in April and May and a very strong
start to June. We are focused on maintaining our performance
management discipline on revenue, profit and cash in order continue
to demonstrate our superior proposition and become the UK's leading
premium electrical retailer."
Year ended Year ended
31 March 31 March
2023 2022
Key financial highlights: GBP000 GBP000
----------------------------------- ---------- ----------
Revenue 97,754 80,478
Revenue growth % 21.5% 43.8%
Adjusted EBITDA (1) 7,549 7,247
Adjusted EBITDA margin 7.7% 9.0%
Adjusted EBIT 6,242 6,386
Adjusted EBIT margin 6.4% 7.9%
Adjusted profit after tax 5,067 5,255
Adjusted earnings per share(2) 4.82p 5.01p
Statutory profit before tax 6,423 3,765
Statutory profit after tax 5,157 3,288
Statutory earnings per share 4.91p 3.22p
Operating cash flow for conversion 8,886 8,616
Operating cash conversion 118% 119%
Free cash flow 7,117 5,746
Free cash flow margin 7.3% 7.1%
Net cash (3) 9,972 3,872
Return on Capital Employed (7) 41% 57%
------------------------------------- ---------- ----------
(Notes)
(1) Adjusted EBITDA (is a non-statutory measure defined as
earnings before interest, tax, depreciation, and amortisation and
adjusted for exceptional items, share-based payment charges and
revaluation of investments.)
(2) Adjusted EPS is (a non-statutory measure of profit after
tax, adjusted for exceptional items, share-based payment charges
and revaluation of investments, over the total diluted ordinary
number of shares in issue.)
(3) Net cash represents cash and cash equivalents less financial
liabilities (excluding lease liabilities).
(4) Based on the Group's analysis of GfK Market Intelligence
sales tracking GB data, Major Domestic Appliances. During the year
GfK reclassified floorcare from major domestic appliances to small
domestic appliances. As such the current year 2.5% is on the new
definition and the prior year 1.6% has been restated and is now
2.0%.
(5) Based on the Group's analysis of GfK Market Intelligence
sales tracking GB data, Consumer Electronics.
(6) All figures, unless otherwise stated, are from YouGov Plc.
Total sample size was 3,475 adults. Fieldwork was undertaken
between 11 - 22 May 2023. The survey was carried out online. The
figures have been weighted and are representative of all England
adults (aged 18+).
(7) Return on Capital Employed (ROCE) is defined as Adjusted
EBIT / (Total Assets - Current liabilities)
Results presentations
An in-person presentation for sell-side analysts hosted by Mark
Smithson, CEO, and Josh Egan, CFO, will take place at 09.00am this
morning. Please contact markselectrical@dentonsglobaladvisors.com
for further information.
In addition, management will also provide a live online
presentation for investors at 2.30pm on 15 June 2023. The online
event is open to all existing and potential shareholders and
registration is free. Questions can be submitted during the
presentation and will be addressed at the end. To register, please
go to: link to sign up .
A recording of the presentation will be available shortly after
the event at this link: Marks Electrical content page and will be
posted onto the investor section of the website .
Enquiries:
Marks Electrical Group plc Via Dentons Global Advisors:
Mark Smithson (CEO) Tel: +44 (0)20 7664 5095
Josh Egan (CFO)
Dentons Global Advisors (Financial PR)
Jonathon Brill / James Styles / Fern Duncan
Tel: +44 (0)20 7664 5095
markselectrical@dentonsglobaladvisors.com
Canaccord Genuity (NOMAD and Broker)
Max Hartley / Patrick Dolaghan
Tel: +44 (0) 207 886 2500
About Marks Electrical
Marks Electrical is a fast growing, highly scalable, technology
driven e-commerce electricals retailer which sells, delivers,
installs and recycles a wide range of household electrical
products. The Group was founded in Leicester in 1987 by Mark
Smithson and has scaled into a nationwide online retailer with a
compelling growth track record, thanks to its vertically
integrated, low-cost, high-quality operating model, supported by
the ongoing structural shift of consumers to purchase online. The
Group operates within the UK Major Domestic Appliances (MDA) and
Consumer Electronics (CE) market, estimated to be worth
approximately GBP7 billion.
Primarily through its simple, clear and intuitive website -
markselectrical.co.uk - the Group offers over 4,500 products from
over 50 leading brands across its main product categories, which
include Cooking, Refrigeration, Washers & Dryers, Dishwashers
and Audio-Visual. These products are sourced from UK distributors
of the brands, with whom the Group maintains strong and direct
relationships. Marks Electrical delivers direct to customers in its
owned and branded vehicles, operated by the Group's skilled team of
delivery drivers, who are also able to offer installation and
recycling services.
For further information, visit the Marks Electrical corporate
website: https://group.markselectrical.co.uk and its retail
website: https://markselectrical.co.uk/ .
Group CEO
Following our second year as a company admitted to trading on
AIM, I am not only proud of the overall progress we have made, but
even more proud of meeting the targets we set at IPO, to grow our
market share profitably and deliver on our expectations for further
growth across revenue, profit and cash. We achieved this against a
challenging market back-drop and with the online Major Domestic
Appliances ("MDA") and Consumer Electronics ("CE") markets being
down over 6% during the year.
Our focus on operational excellence, customer service, and
improving brand awareness has enabled us to continue to gain share
in a very competitive market, where our share has grown from 2.0%
to 2.5%(1) of the overall MDA market and from 3.5% to 4.7%(1) in
the online segment.
Reflecting on the year and looking forward to the next, I am
fortunate to work with such a talented, committed and focussed team
of colleagues across all our operations. Without their dedication
and hard work, we wouldn't have achieved what we have in the last
12 months and I look forward to continuing our journey together, as
one team, in the years ahead.
We continued our growth throughout the year, being up during
every calendar month and achieving year-on-year revenue growth of
21.5% from GBP80.5m to GBP97.8m, building on the 44% growth
delivered in FY22. Our adjusted EBITDA was GBP7.5m at a 7.7% margin
and a statutory profit before tax of GBP6.4m, where we maintained
our disciplined approach to cost control, despite multiple external
cost headwinds such as wage inflation, national insurance, and fuel
and energy cost increases. We delivered a statutory EPS of 4.91p
and an adjusted EPS of 4.82p and are recommending a final dividend
of 0.66p per share representing a payout ratio of 20% for the year,
demonstrating the strength of our balance sheet.
Market share - a small share of a big opportunity
As a business we are predominantly focused on the MDA market and
have also been expanding our footprint in the CE market,
primarily in the television category.
During the year, the online market for both MDA and CE was
challenging with an overall decline of over 10% in the online MDA
market and over 3% in the online CE market. Despite the challenging
market dynamics, we have outperformed and grown consistently
throughout this period.
It's these statistics that are truly exciting; we have a very
small share of an enormous market which has allowed us to be agile
and flexible in navigating this challenging period and also
provides us with confidence for the future, given the huge runway
to grow profitably thanks to our highly efficient and scalable
operating model.
Our strategy for growth
Our approach is simple - we put the customer at the heart of
everything we do and have four key elements to our strategy for
growth:
-- Customer proposition
-- Brand awareness
-- Operational capacity
-- Financial performance
Customer proposition
Our operating model is unique across the MDA sector in that we
consistently offer free next-day delivery for in-stock items over
GBP500, throughout our wide range of products, to over 90% of the
UK population. Coupled with this, our newly launched
installation
service, now also offers integrated, gas, electric and
television installations to over 65% of the UK population on a
next-day basis.
This truly unique proposition centres around the vertical
integration of our delivery model, with our own fleet, employed
drivers and installers, and our centralised single-site
distribution centre, maximising efficiency and improving financial
returns. During the year we have made substantial progress in
developing our customer proposition, including:
-- Expanding our delivery areas to Cornwall, Glasgow, Edinburgh, and throughout all of Wales;
-- Developing our range of SKUs across MDA, CE and SDA, whilst
starting the development of our computing category;
-- Adding more third-party finance offerings to provide new
credit solutions and interest-free options for customers;
-- Developing and launching our new integrated installation
offering with our own employed team of Gas Safe installation
engineers;
-- Improving our customer service response time and options for
interaction, including live chat; and
-- Maintaining our industry-leading Trustpilot score of 4.8.
Our strong partnerships with a wide range of premium brands,
combined with our focus on high-end products and services,
enables us to deliver not only an exceptional customer offering,
but also higher average order value, in turn supporting the
superior margin profile of the business. We are committed to
providing a market-leading customer service proposition that sets
us apart from the competition and allows us to continue to gain
profitable market share.
Brand awareness
When we listed in November 2021, we outlined how one of the keys
to our success was to grow our brand awareness. During the year we
updated our brand awareness study which revealed that 15%(2) of the
population in England had heard of Marks Electrical. This was an
increase of 8(3) percentage points against the study we carried out
at the end of the previous financial year, demonstrating the
achievements we have made in broadening our awareness, but also
showing the significant opportunity for growth, as more people
across the UK come into contact with our brand for the first
time.
Our focused brand-building activities across digital,
television, out-of-home and social media channels helped us improve
awareness, and this, coupled with our expanded delivery areas and
newly formed installation offering, will continue to enable us to
grow the prominence of Marks Electrical across the UK.
To give further prominence to our brand, we took the decision
during the year to revamp our fleet with new, bright and fresh
livery, giving our delivery vehicles the true Marks Electrical
look. These eye-catching vehicles are now out on the road and
representing our brand across the country daily.
During the year, we also launched MRK1, our company mascot,
whose mission in life is to seek-out great electrical deals for
customers! We've used this creative across multiple media channels
and will continue to grow MRK1's prominence in the years ahead as
we develop our position as the UK's leading premium electrical
retailer.
Operational capacity
We made further improvements to our distribution centre to add
additional mezzanine flooring and racking, and raise ceiling
heights, allowing for a higher level of capacity. In addition, we
have improved inventory days allowing us to make better use of our
existing space as we increase throughput to achieve higher revenue
levels.
We have moved our operational warehouse teams to a four on /
four off shift pattern, allowing us to operate 24/7 and align the
shift patterns with our delivery and installation teams. Alongside
this we have continued to add roles in our Customer Services, Sales
and administrative teams and develop our training plans across the
business.
As part of our improvements across our operational capacity, we
have developed our own in-house installation team, by recruiting
experienced installation engineers, allowing us to bring in-house,
integrated, gas and electrical appliance installation services that
were historically outsourced. This service offering is now growing
rapidly and we are excited about the speed of development we are
seeing in this area of the business, which further differentiates
us from the competition.
We've expanded our delivery fleet during the year from 45 to 50
vehicles and introduced a new installation vehicle model based on
the Mercedes LWB Sprinter platform. Investing across our business
in people, processes and equipment will ensure that we retain
talent and provide them with the best tools to give customers an
excellent service.
Financial performance
The strong competitive activity we saw in pricing and marketing
during the first half eased in the second half, allowing us to
improve gross margin and this, combined with our disciplined
approach to cost control, allowed us to achieve an adjusted EBITDA
of GBP7.5m with a margin of 7.7% and a statutory profit before tax
of GBP6.4m.
Whilst this was a lower margin than in the prior year, we
maintained our focus on cost control to mitigate the impact of
external cost headwinds such as wage inflation, temporary national
insurance, and fuel and energy cost increases.
We made continued progress on working capital management,
reducing inventory days from 90 to 74 and improving terms with
suppliers, allowing us to deliver an operational cash conversion
of 118%, demonstrating the highly cash-generative nature of our
earnings model. We were also able to finish the year with a net
cash position of GBP10.0m and a return on capital employed of
41%.
This strong cash performance means we can reinvest in the growth
of the business, whilst remaining debt free, and simultaneously
provide returns for shareholders through dividends. We were proud
to meet our IPO commitments and pay our maiden dividend in August
2022, declare our first interim dividend for FY23 in December 2022,
and are recommending a final dividend of 0.66p per share
representing a payout ratio of 20% for FY23, payable in August
2023.
We believe this combination of profitable growth, high return on
capital and dividend income provides a compelling proposition to
drive attractive long-term shareholder returns.
Outlook - focused on delivering profitable market share
growth
We believe that our current share of the UK MDA market of
2.5%(1) and online share of 4.7%(1) , with an even smaller share in
consumer electronics, continues to provide significant scope and
opportunity for growth, regardless of the economic backdrop. Our
market leading customer service and free next-day delivery for
items over GBP500, combined with in-house installation expertise,
provides a compelling and unique offering, that sets us apart from
the competition.
As momentum continues to develop and our brand awareness
broadens, our focus on operational excellence and cash flow
generation, combined with our strong net cash position, provides us
with a robust platform to generate continued profitable market
share growth and become the UK's leading premium electrical
retailer.
Mark Smithson
Chief Executive Officer
(Notes)
(1) Based on the Group's analysis of GfK Market Intelligence
sales tracking GB data, Major Domestic Appliances. During the year
GfK reclassified floorcare from major domestic appliances to small
domestic appliances. As such the current year 2.5% is on the new
definition and the prior year 1.6% has been restated and is now
2.0%.
(2) All figures, unless otherwise stated, are from YouGov Plc.
Total sample size was 3,475 adults. Fieldwork was undertaken
between 11 - 22 May 2023. The survey was carried out online. The
figures have been weighted and are representative of all England
adults (aged 18+).
(3) All figures, unless otherwise stated, are from YouGov Plc.
Total sample size was 3,728 adults. Fieldwork was undertaken
between 25 October - 02 November 2022. The survey was carried out
online. The figures have been weighted and are representative of
all England adults (aged 18+).
Financial review
Following our second year as an AIM traded company, we continued
our trajectory of profitable market share growth in a declining
market, whilst also navigating the demanding backdrop of the UK
cost of living crisis. We increased salaries and
benefits throughout the workforce to reflect the higher cost of
living, with an average pay rise during the year of 9.5%. This,
compounded with higher fuel and energy costs, temporary national
insurance rises and the reintroduction of business rates, has
required a tight focus on cost control but despite all of this, we
are pleased to have achieved a market-leading adjusted EBITDA
margin for FY23.
Furthermore, we've also kept a tight control on working capital,
improving inventory turn and credit with suppliers, and
allocated
capital carefully to improve our operational effectiveness. This
cash-focussed approach resulted in a closing net cash position of
GBP10.0m and a return on capital employed of 41%.
Statutory measures
The Group's statutory revenue for the year was GBP97.8m, up
21.5% from GBP80.5m in 2022. Gross profit for the year was
GBP19.0m, up 19.3% from GBP15.9m in 2022, with a gross margin of
19.4%, down 40 bps from 2022. The key drivers of the fall in gross
margin were increased fuel costs, distribution wages and
interchange charges.
Statutory operating profit was up 63.4% from GBP3.6m in 2022 to
GBP5.9m. The primary reason for the increase in operating profit
was the exceptional costs incurred in the prior year, in relation
to the IPO.
Statutory profit before tax is up 70.6% from GBP3.8m in 2022 to
GBP6.4m, driven by the exceptional costs referenced above, as well
as finance income received, and a higher gain on the Group's
investment in Combined Independents (Holdings) Limited, the buying
group of which the Company is a member.
Year Year
ended ended
31 March 31 March
2023 2022 Change
GBP000 GBP000 %/bps
-------------------------- ---------- ---------- ---------
Revenue 97,754 80,478 21.5%
Gross profit 18,962 15,895 19.3%
Gross profit margin 19.4% 19.8% (40)bps
Operating profit 5,938 3,635 63.4%
Operating profit margin 6.1% 4.5% 160bps
Profit before tax 6,423 3,765 70.6%
Profit before tax margin 6.6% 4.7% 190bps
Profit after tax 5,157 3,288 56.8%
Profit after tax margin 5.3% 4.1% 120bps
--------------------------- ---------- ---------- ---------
Adjusted EBITDA(1) 7,549 7,247 4.2%
Adjusted EBITDA margin 7.7% 9.0% (130)bps
Adjusted EBIT(1) 6,242 6,386 (2.3)%
Adjusted EBIT margin 6.4% 7.9% (150)bps
--------------------------- ---------- ---------- ---------
Revenue and gross margin
The Group has enjoyed another strong year with revenue growth of
21.5%, taking total revenue to GBP97.8m (2022: GBP80.5m), an
impressive result considering the challenging market back-drop.
This continued revenue growth builds confidence in the Group's
ability to deliver its strategy and the strength of the business
model. Revenue growth was slightly slower in the first half of the
year at 15.1%, followed by a strong second half at 27.0%. Economic
uncertainty prevailed throughout the year, but with continued focus
on out-of-home, online and other offline advertising, the Group saw
strong improvements in website traffic and brand awareness, which
drove particularly strong growth during peak trading (October to
December).
Gross profit margin declined by 40bps against the previous
financial year ("2022"), driven by increases in fuel costs,
wage
costs and interchange charges. The general market commentary on
driver shortages continued in FY23, but despite the pressure in
this competitive market, we have expanded our driver base by 30 and
continue to successfully build this team to meet increasing
demand.
During the year, we took the decision to bring gas and
electrical installation services in-house, which was previously
outsourced
to third-party suppliers. The key driver behind this move was to
gain full control of our outbound distribution network to ensure
provide the highest level of service in all aspects of our
offering. Since launching, we have been able to offer significantly
shorter wait times for installation jobs and we now employ over 30
gas and electrical engineers. We are experiencing ever-increasing
demand for installation services and are excited about its
potential.
Year ended Year ended
31 March 31 March
2023 2022 Change
GBP000 GBP000 %/bps
-------------- ---------- ---------- -------
Revenue 97,754 80,478 21.5%
Cost of Sales (78,792) (64,583) 22.0%
---------------- ---------- ---------- -------
Gross profit 18,962 15,895 19.3%
---------------- ---------- ---------- -------
Gross margin 19.4% 19.8% (40)bps
Advertising and marketing costs
The Group continued to invest in both online and offline
advertising activity during the year, with total spend at 5.0% of
revenue in FY23 (2022: 5.0%).
Online marketing spend has been focussed on search engine
optimisation, strategic pay-per-click Google and Bing activities,
and use of affiliate programmes. We have improved online presence
across our SKUs and have improved our search result rankings. In
addition, we launched our social campaigns in a more fulsome way,
by recruiting a new agency to assist us driving awareness on
Facebook, TikTok and Instagram.
We began several out-of-home campaigns during the year to
improve brand awareness, including "mega rears" on London buses,
digital and poster adverts throughout the Transport for London
network, motorway services, major airports, and train stations. The
Group also ran several TV adverts during the year in pursuit of
increasing aided recall.
The benefits of the investments being made are coming to
fruition, with the Group's brand awareness increasing from 7%(2) in
FY22 to 15%(3) in FY23. We believe this increased brand awareness
has driven sales during the year, particularly during peak
trading.
Year ended Year ended
31 March 31 March
2023 2022 Change
GBP000 GBP000 %/bps
-------------------------- ---------- ---------- ------
Revenue 97,754 80,478 21.5%
Advertising and marketing
costs (4,906) (4,004) 22.5%
---------------------------- ---------- ---------- ------
Advertising and marketing
as % of revenue 5.0% 5.0% 0bps
---------------------------- ---------- ---------- ------
Other operating expenses (excluding depreciation)
Other operating expenses were 6.7% of revenue during FY23 versus
5.8% during FY22. The increase was anticipated and
driven by multiple factors, being a full year of plc related
costs, which are unlikely to increase significantly moving
forwards; the
Government's retraction of COVID-19 business rate relief, which
will now be largely flat other than inflationary increases; and
investment in operational and buying teams, ensuring the Group
continues to deliver exceptional service, whilst supporting the
growth of the business.
As a business, our focus on minimising other operating expenses
is key to us driving operating leverage in the future as the
business scales.
Year ended Year ended
31 March 31 March
2023 2022 Change
GBP000 GBP000 %/bps
------------------------------------ ---------- ---------- -------
Revenue 97,754 80,478 21.5%
Other operating expenses (excluding
depreciation) (6,507) (4,644) 40.1%
-------------------------------------- ---------- ---------- -------
Other operating expenses
as % of revenue 6.7% 5.8% (90)bps
-------------------------------------- ---------- ---------- -------
Adjusted earnings before Interest, tax, depreciation and
amortisation ("adjusted EBITDA")
The Group achieved adjusted EBITDA in the year of GBP7.5m,
GBP0.3m ahead of FY22. Margin decreased by 130bps to 7.7% from FY22
due to the following aforementioned points:
-- 40bps in gross margin, following an increase in fuel costs,
driver wages and interchange charges.
-- 90bps as a result of a full year of plc costs, removal of
business rate relief and investment in operational and buying
teams.
Year ended Year ended
31 March 31 March
2023 2022 Change
GBP000 GBP000 %/bps
------------------------------ ---------- ---------- --------
Statutory profit after tax 5,157 3,288 56.8%
Addback:
Exceptional items - 2,125 -
Underlying profit after tax 5,157 5,413 (4.7)%
Addback:
Underlying tax charge 1,266 1,028 23.2%
Underlying profit before tax 6,423 6,441 (0.3)%
Add back:
Finance costs 67 65 3.1%
Finance income (71) - -
Share-based payment 304 75 305.3%
Fair value gains (481) (195) 146.7%
-------------------------------- ---------- ---------- --------
Adjusted EBIT 6,242 6,386 (2.3)%
-------------------------------- ---------- ---------- --------
Depreciation and amortisation 1,307 861 51.8%
Adjusted EBITDA 7,549 7,247 4.2%
-------------------------------- ---------- ---------- --------
Adjusted EBITDA margin 7.7% 9.0% (130)bps
-------------------------------- ---------- ---------- --------
Statutory Profit after tax
During the year statutory profit after tax was GBP5.2m, up
GBP1.9m versus FY22 at GBP3.3m. This increase is primarily due
to
exceptional costs incurred in the prior year.
Share-based payments
The Group issued new awards under its long-term incentive plan
during the year to senior and junior management. This, combined
with the market value options and free shares awarded in FY22
resulted in a P&L charge of GBP0.3m (2022: GBP0.1m). This
charge and related professional fees are removed from adjusted
financial performance measures.
Depreciation and amortisation
Depreciation and amortisation increased by GBP0.5m to GBP1.3m
during the year (2022: GBP0.9m), primarily due to the addition of
13 new vans, a full year of right-of-use lease depreciation, as
well as investment in mezzanine flooring in the warehouse and
general site improvements.
Taxation
The tax charge for FY23 is GBP1.3m with an effective tax rate of
19.7%, 0.7% higher than the statutory corporation tax rate. The
difference is driven by a deferred tax charge, which was higher
than usual in the year due to the Group utilising the 130% super
deduction on capital additions, in combination with the increase in
future headline corporation tax to 25.0%.
The current tax liability held on balance sheet at the year end
is GBP0.3m (2022: GBP0.1m) with a deferred tax liability of GBP0.8m
(2022: GBP0.5m).
Earnings per share
Basic earnings per share ("EPS"), which is calculated for both
the current and comparative year based upon the weighted average
number of shares in the year, is 4.91p per share (2022: 3.22p per
share).
Adjusted EPS is 4.82p per share (2022: 5.01p per share), the key
driver for the reduction during the year being an increase in the
effective tax rate, moving from 16.0% to 19.7%. The table below
shows the reconciliation between statutory and adjusted earnings
per share. See Note 3 to the financial statements for further
details.
Year ended Year ended
31 March 31 March
2023 2022 Change
GBP000 GBP000 %/bps
--------------------------------- ---------- ---------- ------
Statutory profit after tax 5,157 3,288 56.8%
Addback:
Exceptional items - 2,676 -
Tax effect of exceptional
items - (551) -
----------------------------------- ---------- ---------- ------
Underlying profit for the
year 5,157 5,413 (4.7)%
Changes relating to share-based
payments net of tax 271 - -
Fair value gains net of tax (361) (158) 128.5%
----------------------------------- ---------- ---------- ------
Adjusted profit after tax 5,067 5,255 (3.6)%
----------------------------------- ---------- ---------- ------
Fully diluted number of ordinary
shares 105,034 104,949 0.1%
----------------------------------- ---------- ---------- ------
Adjusted earnings per share 4.82p 5.01p (3.8)%
----------------------------------- ---------- ---------- ------
Adjusted earnings per share for the year ended 31 March 2022 did
not exclude the share-based payment charge of GBP75,000, the impact
of excluding this charge would have increased adjusted earnings per
share to 5.08p. This earnings measure is consistent with other
adjusted measures and is disclosed in the definitions on page
21.
Cashflow and statement of financial position
During the year the Group achieved an adjusted cash flow from
operating activities of GBP9.9m (2022: GBP9.3m) with an adjusted
operating cash flow for conversion of GBP8.9m (2022: GBP8.6m) at
118% (2022: 119%) and free cash flow of GBP7.1m (2022: GBP5.7m),
resulting in a closing net cash position of GBP10.0m (2022:
GBP3.9m).
The Group invested GBP0.5m in a new mezzanine floor in the
distribution centre, along with general site improvements and other
equipment. These additions improve the longevity of the current
site by improving existing and future inventory capacity and
therefore revenue capacity.
Investments were made into the fleet during the year, with the
addition of 13 new vans, plus the re-branding of the existing fleet
to showcase the Marks Electrical blue and improve brand awareness.
The addition of the new vans and modernisation of the fleet
totalled GBP0.5m. The Group achieved working capital improvements
of GBP2.3m during the year, through improved credit terms with key
suppliers leading to a GBP3.5m cash inflow, plus improved inventory
days allowing inventory to remain broadly flat whilst delivering
higher revenue. This was offset by an increase in receivables
GBP1.3m, predominantly driven by increased manufacturer rebates,
due to higher revenue levels.
The Group finished the year in a net cash position of GBP10.0m
(2022: GBP3.9m) with no debt or long-term lending facilities
outside of its finance leases.
Year ended Year ended
31 March 31 March
2023 2022 Change
GBP000 GBP000 %/bps
----------------------------------- ---------- ---------- --------
Underlying profit before
tax 6,423 6,441 (0.3)%
Addback:
Finance costs 67 65 3.1%
Finance income (71) - -
Profit on disposal of fixed
assets (41) (17) 141.2%
Depreciation and amortisation 1,347 878 53.4%
Revaluation of investments (481) (195) 146.7%
LTIP costs 304 75 305.3%
Release of provision - (155) -
Decrease/(increase) in inventories 189 (2,957) (106.4)%
(Increase)/decrease in receivables (1,345) 212 (734.4)%
Increase in payables 3,461 4,926 29.7%
------------------------------------- ---------- ---------- --------
Adjusted cash flow from underlying
operating activities 9,853 9,273 6.3%
------------------------------------- ---------- ---------- --------
Less:
Outflows for lease payments (967) (657) 47.2%
------------------------------------- ---------- ---------- --------
Operating cash flow for conversion 8,886 8,616 3.1%
------------------------------------- ---------- ---------- --------
Operating cash conversion 118% 119% (100)bps
Investing activities (918) (774) 18.6%
Tax paid (784) (2,042) (61.6)%
Interest paid (67) (54) 24.1%
Underlying free cash flow 7,117 5,746 23.9%
------------------------------------- ---------- ---------- --------
Events after the reporting period
There have been no material events to report after the end of
the reporting period.
Current trading and outlook
The positive trading momentum delivered in FY23 has continued
into the new financial year, with revenue growth of over 30% in
April and May. Our disciplined approach to margin management,
capital allocation and cash conversion provides the Group with
solid foundations to deliver on our financial targets and strategic
objectives in the year ahead, as we benefit from our enhanced
scale, growing market share and operating leverage.
Dividend
We delivered an adjusted EPS of 4.82p during the year and are
recommending a final dividend of 0.66p per share, representing a
full year pay-out of 0.96p at a ratio of 20%. For further
information on dividends, see Note 5 to the financial
statements.
Josh Egan
Chief Financial Officer
(1) Adjusted EBITDA, Adjusted EBIT, operating cash conversion,
return on capital employed and adjusted earnings per share are
alternative performance measures as defined on page 21.
(2) All figures, unless otherwise stated, are from YouGov Plc.
Total sample size was 3,728 adults. Fieldwork was undertaken
between 25 October - 02 November 2022. The survey was carried out
online. The figures have been weighted and are representative of
all England adults (aged 18+).
(3) All figures, unless otherwise stated, are from YouGov Plc.
Total sample size was 3,475 adults. Fieldwork was undertaken
between 11 - 22 May 2023. The survey was carried out online. The
figures have been weighted and are representative of all England
adults (aged 18+).
Unaudited Consolidated Statement of comprehensive income
Year ended 31 March 2023
Year ended
31 March
2023 Year ended 31 March 2022
Statutory Underlying Non-underlying Statutory
Notes GBP000 GBP000 GBP000 GBP000
------------------------------ ----- ----------- ---------- -------------- -----------
Revenue 97,754 80,478 - 80,478
Cost of Sales (78,792) (64,583) - (64,583)
------------------------------ ----- ----------- ---------- -------------- -----------
Gross profit 18,962 15,895 - 15,895
------------------------------ ----- ----------- ---------- -------------- -----------
Administrative expenses (13,024) (9,584) - (9,584)
Operating exceptional charges - - (2,676) (2,676)
------------------------------ ----- ----------- ---------- -------------- -----------
Total Administrative expenses (13,024) (9,584) (2,676) (12,260)
------------------------------ ----- ----------- ---------- -------------- -----------
Operating profit 5,938 6,311 (2,676) 3,635
Finance income 71 - - -
Fair value gains 481 195 - 195
Finance expenses (67) (65) - (65)
Profit before income tax 6,423 6,441 (2,676) 3,765
Tax on profit (1,266) (1,028) 551 (477)
------------------------------ ----- ----------- ---------- -------------- -----------
Profit for the financial
year 5,157 5,413 (2,125) 3,288
------------------------------ ----- ----------- ---------- -------------- -----------
Total comprehensive income
for the period 5,157 5,413 (2,125) 3,288
------------------------------ ----- ----------- ---------- -------------- -----------
Earnings per share
Statutory basic and diluted
earnings per share 3 4.91p 3.22p
------------------------------ ----- ----------- ---------- -------------- -----------
All the results arise from continuing operations.
Unaudited Consolidated Statement of financial position
At 31 March 2023
At At
31 March 31 March
2023 2022
Notes GBP000 GBP000
--------------------------------- ----- --------- ----------
Assets
Non-current assets
Property, plant and equipment 1,559 841
Right-of-use assets 1,418 2,328
Investments 1,716 1,293
4,693 4,462
--------------------------------- ----- --------- ----------
Current assets
Inventories 14,200 14,389
Trade and other receivables 3,982 2,627
Cash and cash equivalents 9,972 3,872
28,154 20,888
--------------------------------- ----- --------- ----------
Total assets 32,847 25,350
--------------------------------- ----- --------- ----------
Liabilities
Current liabilities
Trade and other payables (16,545) (13,067)
Lease liabilities (921) (938)
Current tax liabilities (302) _(145)
(17,768) (14,150)
--------------------------------- ----- --------- ----------
Non-current liabilities
Lease liabilities (473) 1,324
Deferred tax (782) 466
Total liabilities (19,023) (15,940)
--------------------------------- ----- --------- ----------
Net assets 13,824 9,410
--------------------------------- ----- --------- ----------
Shareholders' equity
Called up share capital 6 1,049 1,049
Share premium 6 4,694 4,694
Treasury shares 6 (4) (4)
Merger reserve 6 (100,000) (100,000)
Retained earnings 6 108,085 103,671
--------------------------------- ----- --------- ----------
Total equity shareholders' funds 13,824 9,410
--------------------------------- ----- --------- ----------
Unaudited Consolidated Statement of changes in equity
Year ended 31 March 2023
Called Share Treasury Revaluation Total
up share premium shares Merger reserve Retained shareholders'
capital GBP000 GBP000 reserve GBP000 earnings equity
Notes GBP000 GBP000 GBP000 GBP000
----------------------------- ----- --------- -------- -------- --------- ----------- --------- --------------
At 31 March 2021 100,000 - - (99,994) 1,235 9,132 10,373
----------------------------- ----- --------- -------- -------- --------- ----------- --------- --------------
Total comprehensive income
for the period - - - - - 3,288 3,288
----------------------------- ----- --------- -------- -------- --------- ----------- --------- --------------
Contributions by and
distributions
to owners:
-Dividends paid 5 - - - - - (3,884) (3,884)
-Dividends in specie 5 - - - - - (5,175) (5,175)
-Issue of shares 49 4,954 (4) - - - 4,999
-Costs of share issue (260) (260)
-Capital reduction (99,000) - - - - 99,000 -
-Cancellation of E shares - - - (6) - - (6)
-Share based payment charge - - - - - 75 75
Sale of property - - - - (1,235) 1,235 -
At 31 March 2022 1,049 4,694 (4) (100,000) - 103,671 9,410
----------------------------- ----- --------- -------- -------- --------- ----------- --------- --------------
Total comprehensive income
for the period - - - - - 5,157 5,157
Contributions by and
distributions
to owners :
-Dividends paid 5 - - - - - (1,017) (1,017)
-Share based payment charge - - - - - 274 274
At 31 March 2023 1,049 4,694 (4) (100,000) - 108,085 13,824
----------------------------- ----- --------- -------- -------- --------- ----------- --------- --------------
All the results arise from continuing operations.
Unaudited Consolidated Cashflow
Year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022
Notes GBP000 GBP000
---------------------------------------------------- ----- ---------- ----------
Cash flows from operating activities
Profit for the period 5,157 3,288
Adjustments for non-cash items:
Depreciation of property, plant and equipment 326 189
Depreciation of right-of-use assets 1,021 689
Profit on disposal of property, plant and equipment (41) (17)
Fair value gains (481) (195)
Share based payment expense 304 75
Interest (income)/expense (4) 65
Taxation charged 1,266 477
Release of provisions - (155)
Movements in working capital:
Decrease/(increase) in inventories 189 (2,957)
(Increase)/decrease in receivables (1,345) 212
Increase in payables 3,461 4,927
Cash flow generated from operations 9,853 6,598
Corporation tax paid (784) (2,042)
---------------------------------------------------- ----- ---------- ----------
Net cashflow generated from operations 9,069 4,556
---------------------------------------------------- ----- ---------- ----------
Cash flows from investing activities
Purchase of property, plant and equipment (1,049) (583)
Deposits on right-of-use assets (33) (304)
Proceeds from sale of property, plant and equipment 45 65
Income from investments 58 48
Interest received 61 -
Net cash used by investing activities (918) (774)
---------------------------------------------------- ----- ---------- ----------
Cash flows from financing activities
Interest paid - (11)
Issue of ordinary share capital - 4,739
Repayment of borrowings - (1,537)
Interest paid on lease liabilities (67) (54)
Principal repayment of lease liabilities (967) (656)
Equity dividends paid 5 (1,017) (3,884)
Net cash used by financing activities (2,051) (1,403)
---------------------------------------------------- ----- ---------- ----------
Net increase in cash and cash equivalents 6,100 2,379
Cash and cash equivalents at the beginning of
the period 3,872 1,493
Cash and cash equivalents at end of the period 9,972 3,872
---------------------------------------------------- ----- ---------- ----------
Notes to the financial statements
Year ended 31 March 2023
1 General Information
The Company is a public limited company incorporated in the
United Kingdom under the Companies Act 2006 (registration number
13509635). The Company is domiciled in the United Kingdom and its
registered address is 4 Boston Road, Leicester, LE4 1AU. The
Company's ordinary shares are listed on the AIM market, of the
London Stock Exchange.
The principal activity of the Company and its subsidiaries (the
"Group") throughout the period is the supply of domestic electrical
appliances and consumer electronics in the United Kingdom.
2 Accounting policies
2.1 Basis of preparation
This consolidated financial information has been prepared in
accordance with UK adopted international accounting standards.
There are no new standards, interpretations and amendments which
are not yet effective in these financial statements, expected to
have a material effect on the Group's future financial
statements.
The financial information has been prepared on a going concern
basis under the historical cost convention. The financial
information and the notes to the financial information are
presented in thousands of pounds sterling ('GBP'000'), the
functional and presentation currency of the Group, except where
otherwise indicated.
The financial information set out in this unaudited preliminary
announcement does not constitute the Group's statutory financial
statements for the years ended 31 March 2023 or 31 March 2022 as
defined in section 435 of the Companies Act 2006 (CA 2006). The
financial information for the year ended 31 March 2023 has been
extracted from the Group's unaudited financial statements.
Statutory financial statements for the year ended 31 March 2022
have been delivered to the Registrar of Companies, the auditors
reported on those accounts; their report was unqualified and did
not contain a statement under either Section 498(2) or Section
498(3) of the Companies Act 2006.
2.2 Going concern
The Group has traded positively during the year, delivering
sales growth of 21.5%, whilst maintaining a 6.1% operating margin
and net cashflow of GBP6.1m.
Management have prepared detailed financial projections for the
period to 30 June 2024. These projections are based on the Group's
detailed annual business plan. Sensitivity analysis has been
performed to model the impact of more adverse trends compared to
those included in the financial projections in order to estimate
the impact of severe but plausible downside risks.
The key sensitivity assumptions applied include:
-- A material slow-down in e-commerce sales;
-- A significant increase in input costs, including goods sold
and distribution costs.
Mitigating actions available to the Group were applied and the
Board challenged the assumptions used. The Board of Directors has
completed a rigorous going concern assessment and taken the
following actions to test or enhance the robustness of the Group's
liquidity levels for the period to 30 June 2024. As part of its
assessment, the Board has considered:
-- The cash flow forecasts and the revenue projections for the
Group
-- Reasonably possible changes in trading performance, including
severe yet plausible downside scenarios
-- An assessment of historical forecasting accuracy by comparing
forecast cash flow to those actually achieved by the Group
-- The Group's robust policy towards liquidity and cash flow
management
-- The Group's ability to successfully manage the principal
risks outlined in this report
-- The current cost of living crisis
-- Inflation pressures facing the Group and its employees
In total, eight stress tests were performed on the base case
with varying severities and multiple combinations, the worst-case
scenario referenced above was the only scenario where mitigating
action would have been required. In the worst-case scenario revenue
was forecast to be 4.6% lower than FY23 levels with a 5.0%
reduction in gross margin and a 10% increase in distribution costs.
The mitigating responses that would be necessary are, short-term
working capital management and short-term reduction in marketing
spend, which are not considered to have any long-term impacts on
the Group's performance.
After reviewing the forecasts and risk assessments and making
other enquiries, the Board has formed the judgement at the time of
approving the financial statements that there is a reasonable
expectation that the Group has adequate resources to continue in
operational existence for at least twelve months from the date of
approval of these financial statements.
2.3 Consolidation
The Group financial statements include those of the parent
company and its subsidiaries, drawn up to 31 March 2023.
Subsidiaries are entities over which the Group obtains and
exercises control through voting rights. Income, expenditure,
unrealised gains and intra-Group balances arising from transactions
within the Group are eliminated.
At the time of the IPO, the acquisition of the trading
subsidiaries was achieved by way of share for share exchange and
the difference between the par value of the shares issued and the
fair value of the cost of investment was recorded as an addition to
the merger reserve. The parent company statement of financial
position shows a merger reserve of GBP59,999,999 and an investment
of GBP159,999,998.
On a Group basis, an accounting policy was adopted based on the
predecessor method as this is not a business combination but rather
a group re-organisation and thus falls outside the scope of IFRS 3.
IFRS does not specifically state how group re-organisations are
accounted for. Therefore, in accordance with IAS 8, the Directors
have considered the accounting for group re-organisations using
merger accounting principles, as set out in FRS 102, The Financial
Reporting Standard applicable in the UK and Republic of Ireland.
Under this method, the financial statements of the parties to the
combination are aggregated and presented as though the combining
entities had always been part of the same group. The investment by
Marks Electrical Group plc in Marks Electrical Limited was
eliminated and the difference between the fair value and nominal
value of the shares was adjusted through the merger reserve in the
Group statement of financial position.
3. Earnings per share
3.1 Statutory earnings per share
(a) Earnings
Year ended Year ended
31 March 31 March
2023 2022
GBP000 GBP000
------------------- ---------- ------------
Statutory earnings 5,157 3,288
-------------------- ---------- ------------
(b) Number of shares
Year ended Year ended
31 March 31 March
2023 2022
-------------------------------------------- ----------- ------------
Basic weighted average number of shares 104,949,050 101,979,620
Dilutive effect of share options and awards 85,183 -
Diluted weighted average number of shares 105,034,233 101,979,620
--------------------------------------------- ----------- ------------
(c) Earnings per share
Year ended Year ended
31 March 31 March
2023 2022
------------------------------------- ---------- ------------
Statutory earnings
Basic statutory earnings per share 4.91p 3.22p
Diluted statutory earnings per share 4.91p 3.22p
-------------------------------------- ---------- ------------
3. Earnings per share (continued)
3.2 Non-Statutory earnings per share
(a) Earnings
Year ended Year ended
31 March 31 March
2023 2022
GBP000 GBP000
-------------------------------- ---------- ------------
Statutory earnings 5,157 3,288
Add:
Exceptional costs net of tax - 2,125
Share based expenses net of tax 271 -
Less:
Fair value gains net of tax (361) (158)
--------------------------------- ---------- ------------
Adjusted earnings 5,067 5,255
--------------------------------- ---------- ------------
(b) Number of shares
Year ended Year ended
31 March 31 March
2023 2022
-------------------------------------------- ----------- ------------
Basic weighted average number of shares 104,949,050 104,949,050
Dilutive effect of share options and awards 85,183 -
Diluted weighted average number of shares 105,034,233 104,949,050
--------------------------------------------- ----------- ------------
(c) Earnings per share
Year ended Year ended
31 March 31 March
2022 2021
------------------------------------ ---------- ------------
Adjusted earnings
Basic adjusted earnings per share 4.83p 5.01p
Diluted adjusted earnings per share 4.82p 5.01p
------------------------------------- ---------- ------------
Adjusted earnings per share is a non-statutory measure the Group
is using to provide comparability and ease of understanding to the
users of the financial statements. This includes adjustments to the
earnings and the number of shares.
Adjusted earnings exclude all exceptional items, expenses
relating to share-based payments, plus the add back of the
revaluation in the investment of the Group's buying group. Adjusted
earnings per share for the year ended 31 March 2022 did not exclude
the share-based payment charge of GBP75,000, the impact of
excluding this charge would have increased adjusted earnings per
share to 5.08p. This earnings measure is consistent with other
adjusted measures and is disclosed in the definitions on page
21.
The number of ordinary shares as at 5 November 2021 through to
31 March 2022 have been used as the basis for the current and prior
periods adjusted earnings per share calculation. The shares in
issue since IPO represents an indication of the future weighted
average number of ordinary shares for evaluating the performance of
the Group.
The number of ordinary shares during the year ended 31 March
2023 have remained constant.
The 85,183 shares that have been treated as potentially
dilutive, relate to employee share options. The options are
dependent on contingent criteria being met and this tranche had met
the criteria at the year end. No further options had met the
performance criteria at the year end therefore no further dilution
is required.
4. Operating segments
IFRS 8 'Operating Segments' requires the Group to determine its
operating segments based on information which is provided
internally. Based on the internal reporting information and
management structures within the Group, it has been determined that
there is only one operating segment, being the Group, as the
information reported includes operating results at a consolidated
Group level only. There is also considered to be only one reporting
segment, which is the Group, the results of which are shown in the
consolidated statement of comprehensive income.
Management has determined that there is one operating and
reporting segment based on the reports reviewed by senior
management which is the chief operating decision-maker. Senior
management is made up of Executive Directors and heads of
department. Senior management is responsible for the strategic
decision-making of the Group.
5. Dividends
Year ended Year ended
31 March 31 March
2023 2022
GBP000 GBP000
-------------------------------------------------- ---------- ----------
Dividends paid during the year:
Final dividend for 2022: 0.67p (2021: 3.88p) 703 3,884
Interim dividend for 2023: 0.30p 314 -
Dividend in Specie (1) (2022: 5.18p per share) - 5,175
-------------------------------------------------- ---------- ----------
Dividends paid (2) 1,017 9,059
-------------------------------------------------- ---------- ----------
Final dividend for 2023 (3) : 0.66p (2022: 0.67p) 693 703
-------------------------------------------------- ---------- ----------
(1) The dividend in specie in the prior year related to a group
restructure prior to Admission, the consideration for the dividend
in specie was the transfer of 100% of the share capital of Mavrek
Properties Limited (previously an indirect subsidiary of the
Group).
(2) Dividends paid and issued during the period totalled
GBP1,017,277 (2022: GBP9,059,471). All dividends paid and issued in
the prior year, were done so by Marks Electrical Limited not Marks
Electrical Group plc and have been disclosed due to first year
reporting under merger accounting, refer to the accounting policies
for further details.
(3) The Board is recommending a final dividend of 0.66p per
share (GBP692,664) that will be subject to final approval by the
Board at the 2023 AGM. A dividend payout of 0.96p represents a
pay-out ratio of 20%, with the 0.66p being a typical two-third
share of the annualised amount. The dividend has not been accrued
into the consolidated statement of financial position.
6. Share capital and reserves
At 31 At 31 At 31 At 31
March March March March
Allotted, called up and fully paid 2023 2023 2022 2022
GBP Number GBP Number
-------------------------------------- ------------ ---------- ------------ ----------
Ordinary shares of GBP0.01 each 104,949,050 1,049,491 104,949,050 1,049,491
-------------------------------------- ------------ ---------- ------------ ----------
104,949,050 1,049,491 104,949,050 1,049,491
-------------------------------------- ------------ ---------- ------------ ----------
Share Capital
Share capital comprises the nominal value of the Company's
shares of GBP0.01 each.
Share premium
The share premium reserve is the premium paid on the Company's
GBP0.01 Ordinary shares. During the year 4,545,454 shares
were issued for GBP1.10 each, resulting in a net premium of
GBP4,694,000, consisting of GBP4,954,000 premium paid less
GBP260,000 placing costs.
Merger reserve
The merger reserve relates to the merger relief under section
612 of the Company's Act, on the acquisition of Marks Electrical
Limited, a 100% owned subsidiary of the Group.
On 8 October 2021, Marks Electrical Group plc acquired the 100
ordinary shares (100% of the share capital) in Marks Electrical
Limited, in return for the issue of 99,999,999 ordinary shares with
a nominal value of GBP1.00 each, at a price of GBP1.60 each,
bringing the total consideration to GBP160,000,000. This
transaction falls under section 612 of the Companies Act and merger
relief was applied. On consolidation under the predecessor method a
merger reserve of GBP100,000,000 was recognised.
6. Share capital and reserves (continued)
Treasury shares
Treasury reserve relates to shares acquired by the Group's
employee benefit trust. At the year end the Group held 403,596
treasury shares (2022: 403,596). Total consideration paid for the
treasury shares was GBP4,036.
Retained Earnings
Retained earnings are the accumulated profits and losses of the
Group net of dividends and other adjustments.
Definitions
Adjusted measures are included within the financial statements
to assist the users of the financial statements to understand
underlying performance of the Group.
Earnings per share for the financial year ended 31 March 2022 is
calculated on the number of shares in issue post the IPO on 5
November 2021 and is not representative of the number in issue 31
March 2021. See Note 3 to the financial statements for further
details.
Adjusted EBITDA is a non-statutory measure defined as earnings
before interest, tax, depreciation, and amortisation and adjusted
for exceptional items (FY22 only), share-based payment charges and
related costs, and revaluation of investments.
Adjusted EBIT is a non-statutory measure defined as earnings
before interest, tax, and adjusted for exceptional items (FY22
only), share-based payment charges and related costs, and
revaluation of investments.
Adjusted EPS is a non-statutory measure of profit after tax,
adjusted for exceptional items (FY22 only), share-based payment
charges and related costs, and revaluation of investments, over the
total diluted ordinary number of shares in issue.
For the year ended 31 March 2022, the number of ordinary shares
as at 5 November 2021 through to 31 March 2022 was used as the
basis for the adjusted earnings per share calculation. This gave a
more understandable representation of EPS as the share in issue
prior to 5 November 2021 did not give an accurate indication of the
future weighted average number of ordinary shares for evaluating
the performance of the Group.
Operating cash flow for cash conversion is defined as cash
generated from operations less outflows for lease payments and
exceptional items (FY22 only).
Net cash/(debt) represents cash and cash equivalents less
financial liabilities (excluding lease liabilities).
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END
FR NKNBNNBKBPAD
(END) Dow Jones Newswires
June 14, 2023 02:00 ET (06:00 GMT)
Marks Electrical (LSE:MRK)
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