Marks Electrical Group PLC on Wednesday kept its annual dividend unchanged, although pretax profit fell thanks to non-underlying costs.

The Leicester, England-based electrical products retailer said revenue jumped 17% to £114.3 million for the financial year that ended on March 31, from £97.8 million the previous year. The cost of sales rose 20% to £85.2 million from £71.1 million.

Pretax profit, however, plummeted by 90% to £616,000 from £6.4 million. The pretax profit margin narrowed to 0.5% from 6.6%.

Marks Electrical said this was due to ‘non-underlying costs...as well as the weaker trading profitability’.

Non-underlying costs, Marks explained refers to all one-off costs associated with the implementation of its new enterprise resource planning software system. These totalled £2.7 million, including £2.5 million in consultancy fees.

Administrative expenses jumped 34% to £17.5 million from £13.0 million. Distribution costs surged 53% to £11.1 million from £7.2 million.

Chief Executive Officer Mark Smithson described the year as ‘challenging but rewarding’, since ‘in an environment where consumers remained highly price-conscious, we continued to make good strategic progress across multiple fronts as a business.’

Smithson continued: ‘Our strategy and approach leaves us very well positioned for a market recovery when it occurs...Whilst I continue to be personally frustrated about our margin progression during the year, I remain confident in 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.’

Marks Electrical declared a final dividend of 0.66 pence per share for financial 2024, unchanged from the prior year. This brings the total payout to 0.96p, again unchanged annually.

‘The dividend payout is being maintained year on year, despite the lower profitability, reflecting the group’s strong cash position and confidence in its future outlook,’ the company said.

Looking ahead, CEO Smithson commented: ‘The first three months of [financial 2025] have been encouraging and we have been pleased to see a return to double-digit growth during the period, providing us with a robust platform to continue driving profitable market share gains, and ultimately enabling the group to deliver long-term value creation and become the UK’s leading premium electrical retailer.’

Shares in Marks Electrical edged up 0.7% to 71.00p in London early on Wednesday afternoon.

Copyright 2024 Alliance News Ltd. All Rights Reserved.