Trading at two home electrical specialists has risen beyond forecast.
Marks Electrical grew its revenues for the 12 months to 31 March ’23 by 21.5 per cent, reaching £97.8 million with its fourth quarter performing particularly strongly. The company said that demand for A-rated energy efficient washing machines and tumble driers had been particularly strong, driven no doubt by greater consumer awareness of the energy costs associated with running their older, less efficient models. CEO Mark Smithson said: “This further demonstrates the strength of our business model and the attractiveness and advantage of our market-leading customer offering, as more people continue to discover our brand up and down the country.”
Meanwhile, the considerably larger AO has raised its guidance. With its estimated annual revenues to 31st March 2023 expected to be in the region of £1.13bn with profits of between £37.5m-£40m, founder & CEO John Roberts commented: “We are encouraged by the work undertaken to pivot the business during the financial year 2023. AO enters the new financial year with net funds on the balance sheet, a robust trajectory, and full confidence in our ability to deliver on our medium-term profit guidance of % per cent adjusted EBITDA”.(AO will release its FY results in July).
Elsewhere, consumers who had curbed virtually all non-essential spending in order to buffer their household finances against the rising cost of living are beginning to show signs of returning confidence. Although many are prioritising holidays rather than buying fashion and homewares, the imminent bank holidays are expected to result in an uptick in spending on clothing for the Spring/Summer and on gardening-related products.
Commenting on AO World’s trading update, Julie Palmer, partner at Begbies Traynor, said: “The economy may be flat-lining but AO World appears to be escaping the current gloom, upgrading its profit forecast for the third time this year, with founder John Roberts saying the tough conditions the company initially expected had failed to materialise.
“Whether this is a case of AO World under-promising and then over-delivering, last year’s cost cuts paying off, or consumers shrugging off concerns about a potential recession – and maybe even a combination of all three – is unclear. However, other retailers battling the tough environment will be looking on jealously at AO World’s confidence.”
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