Marks Electrical Group PLC said its revenue for fiscal year 2026 fell 8% after the UK online electrical retailer reduced its marketplace operations and re-focused on direct sales channels.
The company reported adjusted earnings per share of 0.67 pence for FY26, down from 1.54 pence in the prior year. Management attributed the earnings decline to lower sales volumes and narrower profit margins during the period.
Marks Electrical concluded a Competition and Markets Authority investigation and agreed to pay a £0.7 million penalty plus £0.6 million in consumer redress payments.
As part of its strategic shift, the retailer scaled back low-margin marketplace activity to concentrate on sales through its own website and telesales operations. The company also reduced distribution headcount and cut advertising spend while pursuing a programme of operational improvements, particularly in the second half of the fiscal year, management said.
Sales performance varied across product categories. Consumer Electronics saw a sharp drop in both sales and margins, which the company linked to inventory reduction efforts. By contrast, Major Domestic Appliances delivered relatively more stable sales during the period.
Marks Electrical said current trading is in line with management expectations. The company noted that activity in Major Domestic Appliances during May ran ahead of the comparable period last year.
Looking ahead to fiscal year 2027, the retailer warned it expects headwinds for both sales growth and gross margin as a result of difficult conditions in the UK economy. The company said that the operational improvements implemented and ongoing cost management measures are expected to support adjusted EBITDA in the coming year.
Key points
- Revenue declined 8% in FY26 after Marks Electrical scaled back low-margin marketplace operations and prioritized direct website and telesales channels.
- Adjusted EPS fell to 0.67 pence from 1.54 pence, reflecting both lower sales and reduced margins.
- The company settled a CMA investigation with a £0.7 million penalty and £0.6 million in consumer redress.
Risks and uncertainties
- Challenging UK economic conditions that the company expects to weigh on sales growth and gross margin in FY27 - this affects retail and consumer discretionary sectors.
- Regulatory and compliance costs stemming from the CMA settlement, which directly impact the company’s near-term cash outflows and consumer-facing operations.
- Reduced marketplace activity and lower advertising spend may limit revenue upside while the company rebalances toward direct sales channels, affecting e-commerce and distribution sectors.