Results for the six months ended 30 September 2025

Marks Electrical Group plc ("Marks Electrical" or "the Group"), an online electrical retailer, today announces its unaudited results for the six months ended 30 September 2025 ("the Period" or "H1-26" or "first half").

Financial highlights

·      The Group reports revenue of £53.0m, down 9.9% YoY against a challenging, declining market being down 2.0% in H1-26.

·      Gross margin has remained stable at 24.3% (H1-25: 24.6%).

·      Adjusted EBITDA(1) of £0.5m (H1-25: £2.0m).

·      Adjusted weighted average EPS was (0.31p) (H1-25:0.72p)(2), statutory weighted average EPS was (0.45p) (H1-25: (0.79p)).

·      Debt-free balance sheet with closing net cash of £1.5m(3) (H1-25: £6.7m). The reduction in cash primarily relates to working capital outflows to build the correct inventory mix for peak trading.

Operational highlights

·      The Group has completed its first full year of trading using the new ERP system, Microsoft Dynamics 365 ("D365").  The transition required training and adaptation across the business, resulting in additional short-term costs. The project is now progressing into the phase where increased efficiencies, enhanced automation and improved insight will be achieved. While these benefits may take time to fully materialise, they are anticipated to deliver tangible value in the near to medium term and to underpin the Group's future growth.

·      Maintained our Trustpilot score of 4.8, reaching over 90,000 reviews with 93% of those reviews being 4 and 5 star, demonstrating the enduring strengths of our best-in-class customer proposition.

Outlook

·      The Group has returned to revenue and profitability growth in October, and management remains confident in the revised FY26 market expectations.

·      Management remains focused on achieving sustainable, profitable growth as the business aims to unlock efficiencies and automation from D365, while maintaining disciplined cost management to ensure overheads remain appropriately aligned to current and future trading.

·      Despite challenging conditions, Marks Electrical continues to deliver best-in-class customer experiences and has achieved its highest rate of returning customers since the IPO. The Group operates in a £7 billion market, presenting substantial growth potential, with a strong platform and proven model, the Group is well positioned to capture market share and improve profitability as market conditions recover.

·      Tom Pallatt has joined the Company as Interim Chief Financial Officer, a non-Board position. Tom was at Ibstock Brick for 17 years where he held senior finance roles, including serving as Group Financial Controller of Ibstock PLC. Dipesh Mistry will now move to a process and controls role within the Company.

·      Alyson Fadil has informed the Board of her intention to step down from the board of Marks Electrical PLC at the end of November 2025.  The duties of RemCo Chair will pass to Warren Middleton as the other Independent Non Executive Director on the Board and the current Chair of the Audit and Risk committee. Mark would like to thank Alyson for her valuable contribution over the last 4 years.

Mark Smithson Chief Executive Officer, commented:

"The first half of FY26 has been challenging for the business, reflecting a highly competitive market environment combined with continued cost pressures. During the period, the Group has focused on repositioning its inventory holdings, as we announced on 25 September 2025, which has temporarily impacted top- and bottom-line performance.

With inventory now realigned, the Group has returned to revenue growth and improved profitability in October, in line with revised forecasts. Cost headwinds have arisen from increases in the National Minimum Wage ("NMW") and National Insurance Contributions ("NIC"), alongside higher operating costs linked to the implementation of D365. Management has taken proactive measures to mitigate the impact of these increases, and the benefits of these actions are beginning to materialise.

The operational impact of implementing D365 was initially underestimated. While the new system carries ongoing running costs, the first year of operation caused significant distraction for all users in the business and has also generated additional resource costs due to the learning curve and adaptation required across the business. As teams have become more proficient with the system, we have already seen a marked improvement in efficiency and task completion times. Importantly, unlike the legacy platform, D365 provides compatibility with a wide range of third-party applications and AI-enabled tools, allowing the business to integrate future technologies and enhance automation capabilities that were previously constrained. With the platform now stable and performing reliably, we are beginning to introduce automation to drive cost savings and operational efficiencies. Although the benefits have taken longer to realise than initially anticipated, we are now progressing down the improvement curve towards enhanced productivity.

With revenue and profitability improving in October, we remain confident in our full-year outlook and long-term strategy. I am extremely proud of the dedication and commitment shown by our colleagues over the past year. Despite softer financial results, significant progress has been made behind the scenes to strengthen our foundations. We are building a business for the future, and our focus on delivering best-in-class customer service continues to underpin that ambition."

^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, ERP replacement project, share-based payment charges and revaluation of investments, over the total diluted ordinary number of shares in issue.}

^{(3)   Net cash/(debt) represents cash and cash equivalents less financial liabilities (excluding lease liabilities)}

Enquiries:

Marks Electrical Group plc                                                    Via DGA Group:

Mark Smithson (CEO)                                                                           Tel: +44 (0)20 7664 5095 

DGA Group (Financial PR)

Jonathon Brill / James Styles                                                                Tel: +44 (0)20 7664 5095

[email protected]                                                                                                                                                                                                 

Canaccord Genuity (NOMAD and Broker)

Max Hartley / George Grainger                                                             Tel: +44 (0)20 7523 8000                                                    

About Marks Electrical

Marks Electrical is a highly scalable, technology driven e-commerce electrical 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 £7 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/.

Financial review

The Group has had a challenging start to FY26, driven by a contracting market and a strategic refocus. Revenue was £53.0m, down 9.9% YoY and profitability was impacted by cost headwinds.

As a result, profitability has been softer in H1-26 than we originally forecast. However, the Group has had a strong October and remains confident in the revised full year expectations.

Revenue and gross product profit

In H1-26, the combined MDA and CE markets contracted by 2.0%, and the Group made strategic shifts in its inventory base, which resulted in a revenue decline of 9.9% YoY to £53.0m. Gross product margin was broadly flat YoY at 24.3%, down 30bps from H1-25. We expect gross margin to improve marginally in H2-26.

Distribution and installation costs

Distribution and installation costs increased by 130bps YoY to 11.2% of revenue. This is a reflection of higher employee costs driven by increases in the National Minimum Wage ("NMW") and National Insurance Contributions ("NIC"), as well as reduced delivery density following lower order volumes. The overall rise has had a notable impact on unit economics and overall profitability. Towards the end of H1-26, a series of initiatives were implemented to enhance transport efficiency and offset the impact of increased labour costs, and the benefits of these actions are now beginning to be reflected in the results.

We expect distribution and installation costs to come down as a percentage of sales during H2-26, as we see the leverage on higher revenue levels.

Advertising and marketing costs

Advertising and marketing costs were tightly controlled at 5.0% of revenue, versus 5.3% in the prior year. The Group has continued to invest in brand awareness across various channels, including digital marketing, social, radio and out-of-home campaigns.

Full year marketing costs are expected to be 5.0% of revenue, reflecting lower spend in H2-26.

Other operating expenses (excluding depreciation)

Other operating expenses are 7.2% of revenue, versus 6.0% in the prior year. This is primarily driven by reduced operating leverage following lower revenue levels and increased costs associated with operating Dynamics 365 in year one. We expect to gain leverage in H2-26 as we start to see operating efficiencies through D365.

Adjusted earnings before Interest, Tax, Depreciation and Amortisation ("EBITDA")

The Group achieved Adjusted EBITDA for the period of £0.5m representing a margin of 0.9%, down 250bps against H1-25. This decrease in margin year on year is primarily driven by lower revenue and increased distribution and overhead costs in the period.

Earnings per share

Basic earnings per share ("EPS"), which is calculated for both the current and comparative period based upon the weighted average number of shares in the year, was a loss of (0.44)p per share (H1-25: (0.79)p).

Adjusted EPS was a loss of (0.31)p per share (H1-25: earnings 0.72p per share), the table below shows the reconciliation between statutory and adjusted earnings. See Note 3 to the financial statements for further details.

Cashflow and statement of financial position

During H1-26, the Group recorded an underlying cash outflow from operations of £6.3m and free cash outflow of £6.5m. This operational cashflow generation is primarily due to working capital outflows.

During H1-25, the Group invested in Consumer Electronics ahead of peak trading, which did not perform as expected during H2-25. As a result, the Group took actions during H1-26 to rebalance its inventory mix, leading to temporary working capital outflows as part of this process. With inventory levels now optimised, and the business well positioned for peak trading, a cash recovery is anticipated in H2-26.

The Group closed the period in a net cash position of £1.5m versus £6.7m at H1-25 and £8.8m at FY25.

RCF

The Group retains access to a Revolving Credit Facility of £4.0m and a £1.0m overdraft facility. The purpose of the facility is to provide flexibility for working capital during peak trading periods. While we intend on strategically maintaining a net cash position, this facility will provide the Group with additional comfort during periods of inventory build. At the period end the facility was undrawn.

Events after the reporting period

There have been no material events to report after the end of the reporting period.

Consolidated Statement of comprehensive income

Six months ended 30 September 2025