FY26 Financial Results

Marks Electrical Group plc

19 June 2026

 

Marks Electrical Group plc

Annual financial results for the year ended 31 March 2026

A strong end to the year after a challenging start, well positioned for the year ahead

Marks Electrical Group plc ("Marks Electrical" or "the Group"), the online electrical retailer, today announces its full year audited results for the 12 months ended 31 March 2026 ("the year" or "FY26").

Financial highlights

·      Full-year underlying revenue of £108.4m (FY25: £117.2m), a 7.5% reduction year-on-year as we strategically reduced our marketplace presence, placing elevated focus on organic routes to market via the Group's main website and internal telesales.

·      Resilient underlying gross margin of 24.0% (FY25: 24.4%), leveraging our mature brand relationships.

·      Adjusted EBITDA⁽¹⁾ of £2.5m (FY25: £4.2m) as previously guided. A much improved performance in the second half of the year with a good "peak" period outturn and decisive actions taken, delivering improved operational efficiencies and fixed costs savings.

·      Diluted adjusted EPS of 0.67p⁽²⁾ (FY25: 1.54p), statutory loss per share of 0.40p (FY25 loss per share: 1.38p).

·      No final dividend is proposed as we prioritise delivering trading profit recovery in the year ahead.

·      Robust balance sheet, with Group net cash of £4.4m (2025: £8.8m).

Operational highlights

·      Our dedicated teams remained resilient and maintained an outstanding Trustpilot rating of 4.8, based on over 110,000 reviews, demonstrating the enduring strengths of our differentiated and popular customer proposition.

·      Brand loyalty remains as strong as ever, our returning customers metric improved to 30% (FY25: 28%)

·      Maintained our Major Domestic Appliances ("MDA") market share position in FY26 of 2.6% (FY25: 2.6%)⁽⁴⁾.

·      Reevaluated our relationship with Euronics as our combined values & strategic ambition have realigned, entering the year ahead with a bespoke membership.

·      New enterprise resource planning ("ERP") system Microsoft Dynamics 365 ("D365") now fully operational across the business, supporting the technological advancement in moving to a cloud-based platform. This will enable the business to continue to drive operational efficiencies.

·      Post period-end, resolution reached with the Competition and Markets Authority (CMA) in relation to previously disclosed investigation with financial penalty of £1.2m reduced to £0.7m and consumer redress of c£0.6m all to be met from existing cash resources and will be treated as an exceptional item for accounting purposes.

Current trading and outlook

Current trading is in line with market expectations. MDA activity in May is tracking ahead year-on-year and we are seeing Consumer Electronics activity pick up, with the FIFA World Cup providing a lift and there has been a notable pick up in demand for TV and sound systems. We are well positioned heading into FY27 with positive trading momentum and a positive cash position. That said, overall consumer confidence remains weak with the level of UK inflation, interest rates and unemployment all impacting net disposable income along with concerns around the impact from the ongoing conflict in the Middle East on the cost of living.

Whilst we continue to target profitable growth, with the benefits of our rigorous focus in FY26 on efficiencies and operational cost controls expected to benefit the Group's FY27 adjusted EBITDA performance, we are taking a more cautious outlook for the year ahead on sales growth and gross margin.

Mark Smithson, Chief Executive Officer, commented:

"With the strong business that we have, with growing brand recognition, nationwide distribution and installation capability, I am pleased that after a challenging first half, we were able to deliver an improved second half performance thanks to our disciplined focus on margin and operational cost management.

We are well positioned heading into FY27 with positive trading momentum and a strengthened cash position. We are targeting sustainable growth in both revenue and profitability in FY27 as our focus on margin and operational efficiency yields positive results. We do however remain mindful of the well-documented macro-economic factors within the UK around inflation, interest rates and current unemployment levels, all of which create trading headwinds that we have to navigate to the best of our ability.

I have personally led the business for nearly 40 years now and so this is nothing new for me and we have successfully navigated several economic cycles. With the current experienced leadership team that we have in place in the business and on the Board, I am confident that we will continue to drive the business forward, delivering long-term growth and value creation.

I am extremely proud of the dedication and commitment shown by our colleagues over the past year. 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.

I am pleased to welcome Darren, Chris & Helen to the Board, who will all individually and collectively provide great support and experience as we work to continually deliver on our strategic ambition in the short term."

^Notes

^{(1)   Adjusted EBITDA is a non-statutory measure defined as earnings before interest, tax, depreciation, and amortisation and adjusted for non-underlying items, share-based payment charges and buying group rebates receivable.}

^{(2)   Adjusted EPS is a non-statutory measure of profit after tax, adjusted for non-underlying items (ERP implementation costs), share-based payment charges and buying group rebates receivable, over the total diluted ordinary number of shares in issue.}

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

^{(4)    Based on the Group's analysis of GfK Market Intelligence sales tracking GB data, Major Domestic Appliances and Consumer Electronics.}

Enquiries:

Marks Electrical Group plc                                                                                              Via DGA Group:

Mark Smithson (CEO)                                                                                                           Tel: [phone]

Tom Pallatt (CFO)                                                                                                                

DGA Group (Financial PR)

Jonathon Brill / James Styles                                                                                                Tel: [phone]

[e-mail]                                                                                                                                                                                                        

Canaccord Genuity (NOMAD and Broker)

Max Hartley / George Grainger                                                                                            Tel: [phone]                                                                                     

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/.

Group Chief Executive Officer's review

A resilient performance under challenging conditions

Our strategy for growth

Our strategic approach is very clear - we put the customer at the heart of everything we do and have four key elements to our strategy for growth:

1. Customer proposition

Our operating model continues to be unique across the MDA sector in that we consistently offer next day delivery throughout our wide range of products, to over 90% of the UK population. In addition, our installation service offering provides customers with the ability to add integrated, gas, electric and television installation services to their order, which can be carried out within a rapid time frame. This proposition centres around the vertical integration of our delivery model, with our own fleet, employed drivers and installers, in-house training academy, and our centralised single site distribution centre, maximising efficiency and service quality. During the period, we made further advancements in developing our customer proposition, including:

• Further training in our ME Academy, our leading in-house product- installation facility for driver, installer and customer service training; and

• Further developing our website to continually improve the customer journey

2. Brand awareness

A key to our success is to optimise our brand awareness. In FY26 we continued to dedicate significant time to further developing our relationships with our brand partners' marketing teams, in order to offer them innovative opportunities to advertise with us going forward as well as continuing to invest in external specialist marketing support as we target increased organic website traffic and checkout conversion rate. We recognise that there is significant opportunity for further brand awareness growth, as more people across the UK come into contact with our brand for the first time. Investment in brand awareness moving into FY27 remains firmly in focus as we seek to optimise the investment we make in this key area.

3. Operational capacity

We have invested heavily in this area over the last few years, covering our warehouse capability and fleet size as well as making a significant investment in technology and the replacement of our entire legacy ERP system in FY25. Optimising the returns on these investments remains the focus as we seek to become more efficient in everything that we do.

The implementation of D365 represents a significant strategic investment in the future capability of the business. As with any major systems transformation, the first year required teams across the organisation to adapt to new ways of working, and we are pleased with how quickly users have built proficiency. That significant investment is already delivering returns: we have seen a marked improvement in efficiency and task completion times as teams have become more confident with the system.

Critically, D365 positions the business for the future in a way the legacy platform it replaced could not. It offers compatibility with a wide range of third-party applications and AI-enabled tools, opening the door to integrate emerging technologies and expands our automation capabilities. With the platform now stable and performing reliably, we have begun introducing automation to drive cost savings and operational efficiencies. While the full benefits are being realised over a longer horizon than first anticipated, we are now firmly on the improvement curve and well positioned to capitalise on the platform's potential in the periods ahead.

We continue to see significant scope for further technology enhancements, enabling us to improve our level of automation and sophistication, both improving the customer journey and operational leverage. We continue to believe that investing across our business in people, processes and equipment will ensure that we retain talent and provide them with the best tools to provide customers with a market-leading experience.

4. Financial performance

Resilience

The first half of FY26 was challenging for the business, reflecting a highly competitive market environment combined with continued cost pressures. Cost headwinds arose from increases in the National Minimum Wage and National Insurance Contributions, alongside higher operating costs linked to the implementation of D365. We took proactive, decisive and effective steps to mitigate the impact of these increases, rightsizing our fixed cost base. Furthermore, after our peak trading period in FY25, we strategically began repositioning our inventory holdings towards MDA, destocking in CE at lower margin levels which did temporarily impact our top- and bottom-line performance.

Positioned to take advantage

The strength of our performance in the second half of last year, recovering from a challenging H1, provides us with great momentum and positivity going into the new financial year. Across all areas we achieved a marked improvement against H1 with sales +4.6% and EBITDA of £2.0m, well ahead of the £0.5m in the first half and at the same level that we achieved in H2 FY25. The elevated focus on distribution and efficiencies came through strongly, as we achieved 9.6% distribution cost to sales, a 20bps improvement on FY25 and a 160bps improvement on H1 FY26.

We continue to focus on margin and firmly believe that as the economic environment and market backdrop improve, our vertically integrated business model and commitment to delivering an exceptional service for our customers will enable us to leverage higher average order values and drive improved margins.

Finally, I wanted to share where we are as a business in relation to the on-going CMA investigation.

Following constructive engagement with the CMA, the Group has agreed to resolve the matter by way of settlement. In connection with this, the CMA has issued a Final Infringement Notice imposing a financial penalty of £1,200,000, which is reduced to £720,000 following the application of the maximum available settlement discount.

The penalty is payable within six months of the date of the Final Infringement Notice with the ability to apply to the CMA for a revised payment schedule within 14 days of the notice. The Group has also agreed to provide consumer redress of approximately £0.6 million to affected customers in accordance with directions issued by the CMA.

The Group has already ceased the relevant conduct and implemented changes to its checkout processes and will undertake further compliance measures in accordance with the CMA's directions to ensure full compliance with current consumer protection requirements under the DMCC Act. The financial penalty will be met from existing cash resources and will be treated as an exceptional item for accounting purposes.

Marks Electrical takes its obligations under consumer and competition law seriously and remains committed to maintaining high standards of transparency and compliance for the benefit of its customers.

Outlook - focused on delivering profitable market share growth

We operate in a very competitive industry that continues to deal with sustained macro-economic headwinds which currently outweigh the strong fundamentals that have always underpinned the market in which we operate.

As momentum continues to develop and our brand awareness increases, our focus on operational excellence supported by technology and cash flow generation provides us with a robust platform to sustainably grow the business and become the UK's leading premium electrical retailer.

Mark Smithson

Chief Executive Officer

Financial review

The Group's statutory revenue for the year was £107.9m, down by 8% from £117.2m in 2025. Gross profit for the year was £25.5m, down 11% from £28.6m in 2025, with a gross margin of 23.6%, down 80 bps from 2025.

Statutory operating loss was £0.3m up from a statutory loss of £1.7m in 2025.

Statutory loss before tax was £0.4m.

Statutory measures		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000	Change %/bps
Revenue		107,933	117,181	(7.9)%
Gross profit		25,497	28,616	(10.8)%
Gross profit margin		23.6%	24.4%	(80)bps
Operating loss		(282)	(1,741)	83.8%
Operating loss margin		(0.3)%	(1.5)%	120bps
Loss before tax		(366)	(1,710)	78.6%
Loss before tax margin		(0.3)%	(1.5)%	120bps
Loss after tax		(421)	(1,444)	70.8%
Loss after tax margin		(0.4)%	(1.2)%	80bps

Revenue and gross product margin

The Company delivered revenue of £107.9m, a reduction of 8% driven by the decision during the year to discontinue the low margin, often loss making, marketplace activity placing elevated focus on organic routes to market via the main website and internal telesales. This decision impacted our CE sales order volumes and delivered revenue predominantly which ended c43% down YoY. The core MDA category performed well overall, which is pleasing, with sales orders only c2.9% down YoY, 1.7% of which was driven by reduced average order value, as our customer base continue to be price sensitive

Gross product margin at 23.6% was stable was we moved through the year, only marginally down versus the prior year. It proved difficult to move margin forward meaningfully with our key brand partners during the year, with pressure on average order values across all categories and wider cost inflation dynamics in play throughout.

At a category level, our CE category product margin came under pressure in the year as we sold out of an unfavourable inventory holding position that we came into the year with. That aside, our core MDA margin was resilient, and we were able to improve our Small Domestic Appliance (SDA) category margin by 270bps.

		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000	Change %*/BPS
Revenue		107,933	117,181	(7.9)%
Cost of Sales		(82,436)	(88,565)	(6.9)%
Gross product profit		25,497	28,616	(10.8)%
Gross product margin		23.6%	24.4%	(80)bps

Distribution costs

Revenue performance in H1 drove efforts to improve operational efficiencies. Distribution headcount reduced by 13% across transport & installation over the course of the year, mainly in the second half, giving us a cost run-rate boost into FY27. The cost benefit of this was negated in part by Government driven wage & national insurance increases as well as operational inefficiencies that existed in H1. External courier costs were managed closely. We also gained on fleet insurance costs in the year as negotiations on premiums went well, supported by our solid track record in this respect as well as operating on a reduced fleet.

		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000	Change %*/BPS
Revenue		107,933	117,181	(7.9)%
Distribution costs		(11,214)	(11,490)	(2.4)%
Distribution costs as % of revenue		10.4%	9.8%	60bps

Advertising and marketing costs

Total advertising costs for the year were £5.0m (2025: £5.8m) and advertising as a percentage of revenue was controlled at 4.7% (2025: 5.0%), with a planned reduction in the final quarter of the year only.

The Group focusses on both online marketing and offline brand building activities, both with equal importance, to drive brand awareness and ultimately lead to conversion.

Online marketing spend is dedicated to search engine optimisation, pay-per-click activities, affiliate programmes and marketplace listing fees.

		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000	Change %*/BPS
Revenue		107,933	117,181	(7.9)%
Advertising costs		(5,021)	(5,801)	(13.4)%
Advertising costs as % of revenue		4.7%	5.0%	(30)bps

Other operating expenses

For the full year, overall other operating costs remained flat at £7.3m.

Within fixed employment costs, as headcount was reduced by c15% over the course of the year, this translated into a 5% cost saving in the year. At the same time, our PLC cost base was reduced by £0.1m as we reduced the level of dependence on external consultants that had accumulated post IPO. IT investment increased as expected, following the implementation of Microsoft Dynamics 365, licence, support and security costs associated with moving ahead of last year.

		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000	Change %*/BPS
Revenue		107,933	117,181	(7.9)%
Other operating expenses (excluding depreciation)		(7,319)	(7,349)	0.0%
Other operating expenses as % of revenue		6.8%	6.3%	50bps

Adjusted EBITDA

The Group achieved adjusted EBITDA in the year of £2.5m (2025: £4.2m), on the back of a much stronger second half performance in which we delivered £2.0m adjusted EBITDA, after a challenging H1. Product margins were consistent throughout the year and improving on these proved difficult. Versus H1, we were able to increase sales in H2 by 5%, improve our distribution efficiencies by 160bps, create greater value within our advertising spend, saving 80bps, and reduce our fixed cost base by c8%. The advertising spend saving was largely a function of timing. We expect to increase our level of advertising spend back to 5%-6% of revenue in FY27 to ensure that brand awareness moves forward in line with the Group's strategy.

		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000	Change %*/BPS
Statutory loss after tax		(421)	(1,444)	70.8%
Add back:
ERP costs net of tax		-	2,179	(100.0)%
CMA costs net of tax		1,097	-	100.0%
Underlying profit after tax		676	735	(8.0)%
Add back:
Underlying tax charge		180	460	(60.9)%
Underlying profit before tax		856	1,195	(28.4)%
Add back:
Finance costs		181	186	(2.7)%
Finance income		(97)	(217)	(55.3)%
Share based payment		-	713	(100.0)%
Buying group rebates		-	249	(100.0)%
Adjusted EBIT		940	2,126	(55.8)%
Depreciation*		1,530	2,100	(27.1)%
Adjusted EBITDA		2,470	4,226	(41.6)%
Adjusted EBITDA margin		2.3%	3.6%	(130)bps

*In FY25 the loss on disposal was added back to Adjusted EBITDA

Statutory loss after tax

During the year statutory loss after tax was £0.4m (2025: loss £1.4m).

The improvement year on year is due to the impact of the cost incurred in the prior year to replace our legacy enterprise resourcing planning system with D365 offset in part by the CMA cost accrued in FY26.

Share-based payments

The 2022 LTIP vested during the year, with only the operational cash element measure being achieved, the cost of this was fully accrued in prior years and so there was no direct cost impact of this aside the national insurance at the time of exercises being made.

Based on the very latest information we have and taking a realistic view on short term trading versus the metrics set to trigger a pay-out across EPS, TSR and Cash flow, we do not anticipate to be in the position of having to settle either the 2023 LTIP or the 2024 LTIP in 2026 and 2027 respectively.

No awards were made during the year.

Depreciation and amortisation

Depreciation and amortisation decreased by £0.5m to £1.5m during the year (2025: £2.0m), as we only made selective capital investments in the year and also as we continue to maintain our asset base to a high level, we are seeing that the useful lives of the assets across the business naturally extending.

Taxation

The underlying tax charge for 2026 is £0.1m with an effective underlying tax rate of 15.0%. The gap of 10.0% between the effective tax rate and the 25% rate of corporation tax is coming from an over-accrued tax position in previous periods.

Earnings per share

Basic statutory earnings per share ("EPS"), which is calculated for both the current and comparative year based upon the weighted average number of shares in the year, is a loss of 0.40p (2025: (1.38p)).

Diluted adjusted EPS is 0.67p per share (2025: 1.54p per share), the reduction year on year being driven by a combination of lower gross product margin, operational efficiencies and impacted fixed cost absorption both impacted by lower sales in the year. The table below shows the reconciliation between statutory and adjusted earnings per share. See Note 3 to the financial statements for further details.

		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000	Change %*/BPS
Loss for financial year		(421)	(1,444)	70.8%
Statutory EPS		(0.40)p	(1.38)p	70.8%
Add back:
ERP costs net of tax		-	2,179	(100.0)%
CMA costs net of tax		1,097	-	100.0%
Underlying profit for the year		676	735	(8.0)%
Charges relating to share-based payments net of tax		16	631	(97.5)%
Buying group rebate net of tax		-	249	(100.0)%
Adjusted profit for earnings per share		692	1,615	(57.2)%
Fully diluted number of ordinary shares		104,030	104,949	(0.8)%
Adjusted EPS		0.67p	1.54p	(56.5)%

Cash flow and statement of financial position

During the year the Group reported an adjusted cash flow from operating activities of (£0.8)m (2025: £6.7m) with an adjusted operating cash flow for conversion of (£1.7)m (2025: £5.6m) at (69%) (2025: 133%). Underlying free cash flow of (£2.3)m (2025: £5.7m), resulting in a closing net cash position of £4.4m (2025: £8.8m).

Prior to FY26, we consistently applied a policy of delaying supplier payments at September and March to support half year and full year cash reporting, the benefit in FY25 of doing this being £6.2m. During the course of FY26, it was decided to commercially move away from this approach and pay suppliers on time each month, contributing to an in year total cash outflow of £9.9m across total payables.

We placed elevated focus on cash management in the second half of the year, within inventory and receivables in particular, as well as maintaining our capital allocation discipline.

In the lead up to a solid peak trading performance, as is normal, inventory levels were invested in across all categories. As we then moved into the final quarter of the year, we took the opportunity to align stock intake dynamically.

Within receivables, we were able to optimise our debtor position with Domestic & General, improving the underlying process at the same time, as well as ensuring that our cash supplier rebates were agreed and settled pre year end, a huge effort made leading to a more positive closing cash position.

The Group finished the year in a net cash position of £4.4m (2025: £8.8m) and we retain access to a committed revolving credit facility and overdraft with Lloyds Banking Group of £5.0m, which were undrawn at the period end. Moving forward, as we trade profitably and generate cash, the intention is to invest this into the right inventory at the right time to fuel the growth ambition that we have.

		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000	Change %*/BPS
Underlying profit before tax		856	1,195	(28.4)%
Add back:
Finance costs		181	186	(2.7)%
Finance income		(97)	(217)	(55.3)%
(Profit)/loss on disposal of fixed assets		(81)	21	(485.7)%
Depreciation and amortisation		1,530	2,079	(26.4)%
LTIP costs		-	713	(100.0)%
Buying group rebates		-	249	(100.0)%
Decrease/(increase) in inventories		3,888	(3,903)	199.6%
Decrease in receivables		2,866	1,518	88.8%
(Decrease)/increase in payables		(9,911)	5,047	(296.4)%
Exceptional WC adjustments		-	(178)	100.0%
Adjusted cash (outflow)/inflow from operating activities		(768)	6,710	(111.4)%
Less:
Outflows for lease payments		(936)	(1,104)	(15.2)%
Operating cash flow for conversion		(1,704)	5,606	(130.4)%
Operating cash conversion		(69)%	133%	(20,200)bps
Investing activities		(68)	(223)	(69.5)%
Tax (paid)/received		(347)	495	(170.1)%
Interest paid		(181)	(191)	(5.2)%
Underlying free cash flow		(2,300)	5,687	(140.4)%

Events after the reporting period

Following constructive engagement with the CMA, the Group has agreed to resolve the matter by way of settlement. In connection with this, the CMA has issued a Final Infringement Notice imposing a financial penalty of £1,200,000, which is reduced to £720,000 following the application of the maximum available settlement discount.

The penalty is payable within six months of the date of the Final Infringement Notice with the ability to apply to the CMA for a revised payment schedule within 14 days of the notice. The Group has also agreed to provide consumer redress of approximately £0.6 million to affected customers in accordance with directions issued by the CMA.

The Group has already ceased the relevant conduct and implemented changes to its checkout processes and will undertake further compliance measures in accordance with the CMA's directions to ensure full compliance with current consumer protection requirements under the DMCC Act. The financial penalty will be met from existing cash resources and will be treated as an exceptional item for accounting purposes. Marks Electrical takes its obligations under consumer and competition law seriously and remains committed to maintaining high standards of transparency and compliance for the benefit of its customers.

Current trading and outlook

Our focus is on sustainable growth with key brands across all product categories, margin expansion, optimising operational efficiencies, maintained focus on the fixed cost base, inventory investment and cash management. The Group is mindful of the macro-economic conditions within the UK, in particular around inflation, interest rates and unemployment and so whilst we continue to target growth we expect this to be challenging over the next 12 months.

Dividend Declaration

We delivered an adjusted EPS of 0.67p, a much improved position from our (0.31)p adjusted EPS at the time of our interim results announcement reflecting a stronger underlying performance in the second half of the year. Despite this improvement, and on the back of not declaring an interim dividend earlier in the year, we are not recommending a final dividend. For further information on dividends, see Note 12 to the financial statements.

Mark Smithson

Chief Executive Officer

Consolidated Statement of comprehensive income

Year ended 31 March 2026

	Notes	Year ended 31 March 2026 Underlying                             £000	Year ended 31 March 2026 Non-underlying £000	Year ended 31 March 2026 Statutory £000	Year ended 31 March 2025 Statutory £000
Revenue		108,435	(502)	107,933	117,181
Cost of Sales		(82,436)	_	(82,436)	(88,565)
Gross profit		25,999	(502)	25,497	28,616
Distribution costs		(11,214)	_	(11,214)	(11,490)
Administrative expenses		(13,845)	(720)	(14,565)	(18,867)
Operating profit/(loss)		940	(1,222)	(282)	(1,741)
Finance income		97	_	97	217
Finance expenses		(181)	_	(181)	(186)
Profit/(loss) before income tax		856	(1,222)	(366)	(1,710)
Tax on profit/(loss)		(180)	125	(55)	266
Profit/(loss) for the financial year		676	(1,097)	(421)	(1,444)
Total comprehensive income/(expense) for the period		676	(1,097)	(421)	(1,444)
Earnings per share	3
Statutory basic and diluted earnings per share				(0.40)p	(1.38)p

All the results arise from continuing operations.

Consolidated Statement of financial position

At 31 March 2026

	Notes	Year ended 31 March 2026 £000	Year ended 31 March 2025 £000	Year ended 31 March 2024 £000
Assets
Non-current assets
Property, plant and equipment		1,545	2,010	2,671
Right-of-use assets		1,963	2,416	1,152
Trade and other receivables		261	204	71
		3,769	4,630	3,894
Current assets
Inventories		13,030	16,918	13,015
Trade and other receivables		4,598	7,521	9,172
Current tax assets		_	_	461
Cash and cash equivalents		4,434	8,807	7,817
		22,062	33,246	30,465
Total assets		25,831	37,876	34,359
Liabilities
Current liabilities
Trade and other payables		(13,496)	(23,407)	(18,501)
Lease liabilities		(1,096)	(993)	(621)
Current tax liabilities		(179)	(336)	_
		(14,771)	(24,736)	(19,122)
Non-current liabilities
Lease liabilities		(788)	(1,457)	(534)
Deferred tax liabilities		(288)	(423)	(991)
Total liabilities		(15,847)	(26,616)	(20,647)
Net assets		9,984	11,260	13,712
Shareholders' equity
Called up share capital	7	1,049	1,049	1,049
Share premium	7	4,818	4,818	4,815
Treasury shares	7	(399)	(296)	(3)
Merger reserve	7	(100,000)	(100,000)	(100,000)
Retained earnings	7	104,516	105,689	107,851
Total equity shareholders' funds		9,984	11,260	13,712

The financial statements of Marks Electrical Group plc were approved by the Board on 18 June 2026 and signed on its behalf by:

Mark Smithson

Chief Executive Officer

Consolidated Statement of changes in equity

Year ended 31 March 2026

	Notes	Called up share capital £000	Share premium £000	Treasury shares £000	Merger reserve £000	Retained earnings £000	Total shareholders' equity £000
At 01 April 2024		1,049	4,815	(3)	(100,000)	107,851	13,712
Total comprehensive expense for the year		-	-	-	-	(1,444)	(1,444)
Contributions by and distributions to owners:
-Dividends paid	6	-	-	-	-	(1,004)	(1,004)
-Share options and LTIP charge		-	-	-	-	328	328
-Issue of shares to employees		-	-	42	-	(42)	-
-Purchase of treasury shares		-	-	(335)	-	-	(335)
-Sale of treasury shares		-	3	-	-	-	3
At 31 March 2025		1,049	4,818	(296)	(100,000)	105,689	11,260
Total comprehensive expense for the year		-	-	-	-	(421)	(421)
Contributions by and distributions to owners:
-Dividends paid	6	-	-	-	-	(689)	(689)
-Share options and LTIP charge		-	-	-	-	(4)	(4)
-Issue of shares to employees		-	-	56	-	(59)	(3)
-Purchase of treasury shares		-	-	(159)	-	-	(159)
-Sale of treasury shares		-	-	-	-	-	-
At 31 March 2026		1,049	4,818	(399)	(100,000)	104,516	9,984

All the results arise from continuing operations.

Consolidated Cash flow

Year ended 31 March 2026

	Notes	Year ended 31 March 2026 £000	Year ended 31 March 2025 £000
Cash flows from operating activities
Loss for the year		(421)	(1,444)
Adjustments for non-cash items:
Depreciation of property, plant and equipment		644	921
Depreciation of right-of-use assets		886	1,158
(Profit)/loss on disposal of property, plant and equipment		(81)	21
Share-based payment (credit)/expense		(4)	328
Interest income		(97)	(217)
Interest expense		181	186
Taxation charged/(credited)		55	(266)
Movements in working capital:
Decrease/(increase) in inventories		3,888	(3,903)
Decrease in receivables		2,866	1,518
(Decrease)/increase in payables		(9,911)	5,047
Cash flow (used in)/generated from operations		(1,994)	3,349
Corporation tax (paid)/received		(347)	495
Net cash flow (used in)/generated from operations		(2,341)	3,844
Cash flows from investing activities
Purchase of property, plant and equipment		(243)	(437)
Deposits on right-of-use assets		(65)	(154)
Proceeds from sale of property, plant and equipment		114	135
Proceeds from sale of right-of-assets		30	21
Interest received		97	212
Net cash used by investing activities		(67)	(223)
Cash flows from financing activities
Interest paid on loan		(39)	(61)
Sale of shares	6	-	3
Purchase of shares		(159)	(335)
Repayment of borrowings		(9,000)	(10,500)
Drawdown of borrowings		9,000	10,500
Interest paid on lease liabilities		(142)	(130)
Principal repayment of lease liabilities		(936)	(1,104)
Equity dividends paid	5	(689)	(1,004)
Net cash used by financing activities		(1,965)	(2,631)
Net increase/(decrease) in cash and cash equivalents		(4,373)	990
Cash and cash equivalents at the beginning of the year		8,807	7,817
Cash and cash equivalents at the end of the year		4,434	8,807

.

Notes to the financial statements

Year ended 31 March 2026

1        General Information

The financial statements of Marks Electrical Group plc ("Company") for the year ended 31 March 2026 ("FY26") were authorised for issue by the Board of Directors on 18 June 2026 and signed on its behalf by Mark Smithson.

The Company is a public limited company, limited by shares, incorporated in the United Kingdom under the Companies Act 2006 (registration number 13509635). The Company is domiciled in the United Kingdom and its registered address is 4 Boston Road, Leicester, LE4 1AU, England. The Company's ordinary shares are listed on the AIM market, of the London Stock Exchange.

The principal activity of the Company and its subsidiaries ("Group") throughout the period is the supply of domestic electrical appliances and consumer electronics in the United Kingdom.

2        Accounting policies

2.1        Basis of preparation

The annual financial information presented in this preliminary announcement does not constitute the Company's statutory accounts for the years ended 31 March 2026 or 2025 but is based on, and consistent with, that in the audited financial statements for the year ended 31 March 2026, and those financial statements will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The financial statements are those that the auditors reported on; their report was unmodified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006.

Statutory financial statements for the year ended 31 March 2025 have been delivered to the Registrar of Companies, the auditors reported on those financial statements; their report was unmodified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006.

The preliminary financial report for the year ended 31 March 2026 follows the same accounting policies as the 2025 Annual Report. This preliminary financial report does not include all of the notes of the type normally included in an annual financial report and should therefore be read in conjunction with the Marks Electrical Group plc 2025 Annual Report.

This consolidated financial information has been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.

The financial information has been prepared on a historical cost basis except for the following:

·      Trade and other receivables (excluding prepayments) - measured at amortised cost

·      Inventories - measured at lower of cost and net realisable value

·      Cash and cash equivalents - measured at amortised cost

·      Trade and other payables - measured at amortised cost

·      Lease liability - measured at amortised cost

·      Equity-settled long-term incentive plan - measured at fair value

 The financial information and the notes to the financial information are presented in thousands ('£'000') except where otherwise indicated. The functional and presentation currency of the Group is pound sterling.

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the periods presented, unless otherwise stated.

2.2        Going concern

Management have prepared detailed financial projections for the period to 31 July 2027. These projections are based on the Company's detailed annual business plan. Sensitivity analysis has been performed to model the impact of more adverse trends compared to those included in the financial projections in order to estimate the impact of severe but plausible downside risks.

The key sensitivity assumptions applied include:

·      a material slow-down in e-commerce sales; and

·      a substantial decline in gross margin.

Mitigating actions available to the Company were applied and the Board challenged the assumptions used.

The Board of Directors has completed a rigorous going concern assessment and taken the following actions to test or enhance the robustness of the Company's liquidity levels for the period to 31 July 2027. As part of its assessment, the Board has considered:

·      The cash flow forecasts and the revenue projections for the Company;

·      Reasonably possible changes in trading performance, including a severe yet plausible downside scenario;

·      The Company's robust policy towards liquidity and cash flow management;

·      The Company's ability to successfully manage the principal risks outlined in this report;

·      The current cost of living crisis; and

·      Inflation pressures facing the Company and its employees.

Under the severe yet plausible scenario the Company remains with the limits of its revolving credit facility, with no mitigating actions required. The company remains compliant with the agreed revolving credit facilities covenants in both the base and the severe but plausible cases.

After reviewing the forecasts and risk assessments and making other enquiries, the Board has formed the judgement at the time of approving the financial statements that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements.

2.3        Consolidation

The Group financial statements include those of the parent Company and its subsidiaries, drawn up to 31 March 2026.

Subsidiaries is an entity over which the Company obtains and exercises control through voting rights. Income, expenditure, unrealised gains and intra-Group balances arising from transactions within the Group are eliminated.

At the time of the Company's admission to trading on the AIM market of the London Stock Exchange ("IPO"), the acquisition of the trading subsidiaries was achieved by way of share for share exchange and the difference between the par value of the shares issued and the fair value of the cost of investment was recorded as an addition to the merger reserve. Following impairment, the parent Company statement of financial position shows a merger reserve of £nil and an investment of £43,237,000.

On a Group basis, an accounting policy was adopted based on the predecessor method as this is not a business combination but rather a group re-organisation and thus falls outside the scope of IFRS 3. IFRS does not specifically state how group re-organisations are accounted for. Therefore, in accordance with IAS 8, the Directors have considered the accounting for group re-organisations using merger accounting principles, as set out in FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland. Under this method, the financial statements of the parties to the combination are aggregated and presented as though the combining entities had always been part of the same group. The investment by Marks Electrical Group plc in Marks Electrical Limited was eliminated and the difference between the fair value and nominal value of the shares was adjusted through the merger reserve in the Group statement of financial position.

2.4        Revenue recognition

Product and services revenue

Revenue from contracts with customers is recognised when or as the Group satisfies a performance obligation by transferring a promised good or service to a customer. A good or service is transferred when the customer obtains control of that good or service.

The transfer of electrical appliances and consumer electronics sold by the Group coincides with the delivery of the item to the customer and the customer taking physical possession. The Group principally satisfies its performance obligations at a point in time and recognises revenue on delivery to the customer. This policy therefore applies to all products delivered to customers as well as services provided upon the day of delivery such as delivery fees, waste removal and installation of products.

Revenue is measured at the fair value of the consideration received, excluding sales taxes or duty. Revenue includes a provision for anticipated returns, which is based upon historical returns performance, the provision is held within trade and other receivables.

Amounts received in advance for electrical appliances sales are recorded as contract liabilities within trade and other payables (net customer advances) and revenue is recognised as the performance obligations are met.

Commission revenue

Commission revenue is revenue the Group has achieved through acting as an agent for a third party. The Group currently acts as an agent selling product protection plans for Domestic and General ("D&G").

The Group introduces the customer to D&G for the product protection plan, at which point the Group has met its performance obligation. The product protection plans are rolling agreements whereby the end customer pays a monthly fee for the plan. The Group receives commission for these plans annually in advance.

Revenue from commissions on product protection plans is accounted for based on the fair value of anticipated future commissions receivable throughout the estimated duration of the plan, plus the initial commission received. Recognition of revenue occurs upon the Group fulfilling its responsibilities to the customer at the time of sale. These recognised amounts are determined by factors such as the plan's duration, historical customer attrition rates as provided by D&G and are held as a contract asset on the balance sheet within trade and other receivables and discounted accordingly.

3.      Earnings per share

3.1     Statutory earnings per share

(a)   Earnings

		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000
Statutory earnings/(loss)		(421)	(1,444)

(b)   Number of shares

		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000
Basic weighted average number of shares		104,029,570	104,949,050
Dilutive effect of share options and awards		-	-
Diluted weighted average number of shares		104,029,570	104,949,050

(c)    Earnings per share

		Year ended 31 March 2026	Year ended 31 March 2025
Statutory earnings
Basic statutory earnings per share		(0.40)p	(1.38)p
Diluted statutory earnings per share		(0.40)p	(1.38)p

3.2     Non-Statutory earnings per share

(a)   Earnings

		Year ended 31 March 2026 £000	Year ended 31 March 2025 £000
Statutory earnings/(loss)		(421)	(1,444)
Add:
Non underlying net of tax		1,097	2,179
Share based payments net of tax		16	631
Less:
Buying group rebate		-	249
Adjusted earnings		692	1,615

(b)   Number of shares

		Year ended 31 March 2026	Year ended 31 March 2025
Basic weighted average number of shares		104,029,570	104,949,050
Dilutive effect of share options and awards		-	-
Diluted weighted average number of shares		104,029,570	104,949,050

(c)    Earnings per share

		Year ended 31 March 2026	Year ended 31 March 2025
Adjusted earnings
Basic adjusted earnings per share		0.67p	1.54p
Diluted adjusted earnings per share		0.67p	1.54p

Adjusted earnings per share is a non-statutory measure the Group is using to provide comparability and ease of understanding to the users of the financial statements. This includes adjustments to the earnings and the number of shares.

Adjusted earnings exclude all non-underlying items, expenses relating to share-based payments, plus the add back of the CMA investigation cost and costs related to the implementation of the new Enterprise Resource Planning system.

The number of ordinary shares during the year ended 31 March 2026 remained constant. At the year-end, 919,480 treasury shares were held, having a dilutive effect on the Group's shares.

4.      Operating segments

IFRS 8 'Operating Segments' requires the Group to determine its operating segments based on information which is provided internally. Based on the internal reporting information and management structures within the Group, it has been determined that there is only one operating segment, being the Group, as the information reported includes operating results at a consolidated Company level only. There is also considered to be only one reporting segment, which is the Company, the results of which are shown in the statement of comprehensive income.

Management has determined that there is one operating and reporting segment based on the reports reviewed by senior management which is the chief operating decision-maker. Senior management is made up of Executive Directors and heads of departments. Senior management is responsible for the strategic decision-making of the Group.

5.      Non-underlying costs

CMA investigation

Following constructive engagement with the CMA, the Group has agreed to resolve the matter by way of settlement. In connection with this, the CMA has issued a Final Infringement Notice imposing a financial penalty of £1,200,000, which

is reduced to £720,000 following the application of the maximum available settlement discount.

The penalty is payable within six months of the date of the Final Infringement Notice with the ability to apply to the CMA

for a revised payment schedule within 14 days of the notice. The Group has also agreed to provide consumer redress of

approximately £0.6 million to affected customers in accordance with directions issued by the CMA.

The Group has already ceased the relevant conduct and implemented changes to its checkout processes and will

undertake further compliance measures in accordance with the CMA's directions to ensure full compliance with current

consumer protection requirements under the DMCC Act.

The financial penalty will be met from existing cash resources and will be treated as an exceptional item for accounting

purposes.

Marks Electrical takes its obligations under consumer and competition law seriously and remains committed

to maintaining high standards of transparency and compliance for the benefit of its customers.

ERP system implementation costs

During the prior year, the Company completed the implementation of a new ERP system. The non-underlying costs in relation to the new ERP system in the prior year totalled £2,905,000 being made up of £2,503,000 implementation consultancy fees, £139,000 in wages and salaries, £248,000 in technology costs and £15,000 in other legal and professional fees. No further expenditure was incurred in the current year in relation to the ERP system.

Exceptional emoluments

During the prior year, the Company also incurred exceptional emoluments of £279,000, in relation to one-off awards payable to employees that participated in the market value option at the time of listing. No such emoluments occurred in the current year.

6.      Dividends

	Year ended 31 March 2026 £000	Year ended 31 March 2025 £000
Dividends paid during the year:
Final dividend for 2025: 0.66p (2024: 0.66p)	689	693
Interim dividend for 2026: 0.00p (2025: 0.30p)	-	311
Dividends paid  (1)	689	1,004
Final dividend for 2026 : 0.00p (2025: 0.66p)	-	689

(1)       Dividends paid and issued during the period totalled £688,849 (2025: £1,003,761)

7.      Share capital and reserves

Authorised, allotted, called up and fully paid	At 31 March 2026 £	At 31 March 2026 Number	At 31 March 2025 £	At 31 March 2025 Number
Ordinary shares of £0.01 each	104,949,050	1,049,491	104,949,050	1,049,491
	104,949,050	1,049,491	104,949,050	1,049,491

Share Capital

Share capital comprises the nominal value of the Company's shares of £0.01 each.

Share premium

The share premium reserve is the premium paid on the Company's £0.01 ordinary shares. During the year ended 31 March 2022, 4,545,454 shares were issued for £1.10 each, resulting in a net premium of £4,694,000 consisting of £4,954,000 premium paid less £260,000 placing costs. During the prior year, the Company sold treasury shares at a premium to the purchase price leading to a £3,000 increase in share premium.

Merger reserve

The merger reserve relates to the merger relief under section 612 of the Company's Act, on the acquisition of Marks Electrical Limited, a 100% owned subsidiary of the Group.

On 8 October 2021, Marks Electrical Group plc acquired the 100 ordinary shares (100% of the share capital) in Marks Electrical Limited, in return for the issue of 99,999,999 ordinary shares with a nominal value of £1.00 each, at a price of £1.60 each, bringing the total consideration to £160,000,000. This transaction falls under section 612 of the Companies Act and merger relief was applied. On consolidation under the predecessor method a merger reserve of £100,000,000 was recognised.

Treasury shares

Treasury reserve relates to shares acquired by the Group's employee benefit trust. At the year end the Group held 919,480 (2025: 681,266) treasury shares.

Retained Earnings

Retained earnings are the accumulated profits and losses of the Group net of dividends and other adjustments.

 

END