Marks Electrical tumbles after profit warning

Online electricals retailer Marks Electrical tumbled on Wednesday after a profit warning.

The company said that in a "challenging" trading environment, with consumers still "highly price-conscious", its gross product margin did not increase to the levels it had expected. Despite proactive action on other controllable costs, this affected the peak trading period and had a material impact on full-year profit guidance.

As a result, Marks now expects full-year revenue of around £115m to £118m and earnings before interest, tax, depreciation and amortisation of £5m to £6m.

"Going forward, we expect to see continued revenue growth in-line with our expectations, but remain cautious on the speed of recovery in consumer buying patterns, which we expect to temporarily impact the recovery of our gross product margin," it said.

In an update for the nine months to the end of December, Marks said year-to-date revenue grew 22% to £88.9m, and it increased its market share in the major domestic appliances and consumer electronics markets.

Chief executive Mark Smithson said: "Whilst I am personally frustrated about our expected margin progression in the second half, I remain confident about our long-term growth prospects and continue to be impressed by our ability to deliver market share gains profitably, against a fiercely competitive backdrop, whilst maintaining the highest levels of customer service standards in the industry."

At 0855 GMT, the shares were down 25.5% at 68.20p.