Marks Electrical Grp - HY26 Interim Results

Marks Electrical

13/11/2025 07:00

RNS Number : 3264H

Marks Electrical Group plc

13 November 2025

 

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

markselectrical@dgagroup.com                                                                                                                                                                                                 

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.

Six months ended
30 September
2025
£000
Six months ended
30 September
2024
£000
Year ended
31 March
2025
£000
Revenue
53,017
58,844
117,181
Cost of Sales
(40,147)
(44,346)
(88,565)
Gross product profit
12,870
14,498
28,616
Gross product profit margin
24.3%
24.6%
24.4%

 

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.

Six months ended
30 September
2025
£000
Six months ended
30 September
2024
£000
Year ended
31 March
2025
£000
Revenue
53,017
58,844
117,181
Distribution & installation costs
(5,933)
(5,825)
(11,490)
Distribution & installation costs as % of revenue
11.2%
9.9%
9.8%

 

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.

Six months ended
30 September
2025
£000
Six months ended
30 September
2024
£000
Year ended
31 March
2025
£000
Revenue
53,017
58,844
117,181
Advertising and marketing costs
(2,666)
(3,097)
(5,801)
Advertising and marketing as % of revenue
5.0%
5.3%
5.0%

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.

 

Six months ended
30 September
2025
£000
Six months ended
30 September
2024
£000
Year ended
31 March
2025
£000
Revenue
53,017
58,844
117,181
Other operating expenses
(3,805)
(3,553)
(7,349)
Other operating expenses as % of revenue
7.2%
6.0%
6.3%

 

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.

Six months ended
30 September
2025
£000
Six months ended
30 September
2024
£000
Statutory loss after tax
(464)
(827)
Addback:
Exceptional items net of tax
-
1,411
Underlying (loss)/profit after tax
(464)
584
Addback:
Underlying tax (credit)/charge
(110)
236
Underlying profit before tax
(574)
820
Addback:
Net finance (income)/costs
31
(122)
Share based payment costs
136
233
Adjusted EBIT
(407)
931
Depreciation and amortisation
895
1,090
(Profit)/Loss on disposal of fixed assets
(21)
1
Adjusted EBITDA
467
2,022
Adjusted EBITDA margin
0.9%
3.4%

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.

Six months ended
30 September
2025
£000
Six months ended
30 September
2024
£000
Statutory profit after tax
(464)
(827)
Addback:
Exceptional items
-
1,881
Tax effect of exceptional items
-
(470)
Underlying profit for the period
(464)
584
Charges relating to share-based payments net of tax
136
175
Buying group rebates
-
Adjusted profit for earnings per share
(328)
759
Fully diluted number of ordinary shares
104,949,050
104,949,050
Adjusted earnings per share
(0.31)p
0.72p

 

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.

Six months ended
30 September
2025
£000
Six months ended
30 September
2024
£000
Underlying (loss)/profit before tax
(574)
820
Addback:
Finance (income)/costs
31
(122)
(Profit)/Loss on disposal of fixed assets
(21)
1
Depreciation and amortisation
895
1,091
Share based payment cost
136
233
(Increase)/decrease in inventories
940
(7,151)
(Increase)/decrease in receivables
(624)
860
Increase/(decrease) in payables
(6,604)
6,870
Underlying cash (outflow)/flow from operating activities
(5,821)
2,602
Less:
Outflows for lease payments
(473)
(612)
Underlying operating cash (outflow)/flow for conversion
(6,294)
1,990
Operating cash conversion
(1,348)%
98%
Investing activities
(190)
(508)
Tax received/(paid)
0
76
Interest received/(paid)
(34)
120
Underlying free cash (outflow)/flow
(6,518)
1,678

 

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

 

Notes
Six months ended
30 September
2025
Statutory
£000
Six months ended
30 September
2024
Statutory
£000
Year ended
31 March
2025
Statutory
£000
Revenue
53,017
58,844
117,181
Cost of Sales
(40,147)
(44,346)
(88,565)
Gross profit
12,870
14,498
28,616
Distribution costs
(5,933)
(5,825)
(11,490)
Administrative expenses
(7,480)
(9,856)
(18,867)
Operating loss
(543)
(1,183)
(1,741)
Finance income
56
168
217
Finance expenses
(87)
(46)
(186)
Loss before income tax
(574)
(1,061)
(1,710)
Tax on loss
4
110
234
266
Loss for the financial period
(464)
(827)
(1,444)
Total comprehensive expense for the period
(464)
(827)
(1,444)
Earnings per share
Statutory basic and diluted earnings per share
(0.44)p
(0.79)p
(1.38)p

 

Consolidated Balance sheet

At 30 September 2025

 

Notes
At
30 September
2025
£000
At
31 March
2025
£000
Non-current assets
Property, plant and equipment
1,797
2,010
Right-of-use asset
2,032
2,416
Trade and other receivables
240
204
4,069
4,630
Current assets
Inventories
15,979
16,918
Trade and other receivables
8,092
7,521
Current tax assets
-
-
Cash and cash equivalents
1,535
8,807
25,606
33,246
Total assets
29,675
37,876
Current liabilities
Trade and other payables
(16,761)
(23,407)
Lease liabilities
(988)
(993)
Current tax liability
(227)
(336)
(17,976)
(24,736)
Non-current liabilities
Lease liabilities
(1,099)
(1,457)
Deferred tax liabilities
4
(423)
(423)
Total liabilities
(19,498)
(26,616)
Net assets
10,177
11,260
Shareholders' equity
Called up share capital
1,049
1,049
Share premium
4,818
4,818
Treasury shares
(346)
(296)
Merger reserve
(100,000)
(100,000)
Retained earnings
104,656
105,689
Total shareholders' equity
10,177
11,260

 

The interim financial statements of Marks Electrical Group plc were approved by the Board on 12 November 2025 and signed on its behalf by:

 

 

Mark Smithson

Chief Executive Officer

Marks Electrical Group plc

Consolidated Statement of changes in equity

Six months ended 30 September 2025

 

Notes
Called up share capital
£000
Share premium
£000
Treasury shares
£000
Merger reserve
£000
Retained earnings
£000
Total shareholders' equity
£000
At 31 March 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
-
-
-
-
(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 period
(464)
(464)
Contributions by and distributions to owners:
-Dividends paid
-
-
-
-
(689)
(689)
-Share based payment charge
-
-
-
-
120
120
-Purchase of treasury shares
-
-
(50)
-
-
(50)
At 30 September 2025
1,049
4,818
(346)
(100,000)
104,656
10,177

 

All the results arise from continuing operations.

Consolidated Cash flow

Six months ended 30 September 2025

 

Six months ended
30 September
2025
£000
Six months ended
30 September
2024
£000
Year ended
31 March
2025
£000
Cash flows from operating activities
(Loss)/profit for the period
(464)
(827)
(1,444)
Adjustments for non-cash items:
Depreciation of property, plant and equipment
402
464
921
Depreciation of right-of-use assets
493
627
1,158
(Profit)/loss on disposal of property, plant and equipment
(21)
1
21
Share based payment expense
120
233
328
Interest income
(168)
(217)
Interest expense
32
46
186
Taxation credited
(110)
(234)
(266)
Movements in working capital:
(Increase)/decrease in inventories
940
(7,151)
(3,903)
Decrease/(increase) in receivables
(624)
860
1,518
(Decreased)/increase in payables
(6,604)
6,870
5,047
Cash flow generated from operations
(5,836)
721
3,349
Corporation tax received/(paid)
-
76
495
Net cash flow generated from operations
(5,836)
797
3,844
Cash flows from investing activities
Purchase of property, plant and equipment
(190)
(355)
(437)
Deposits on right-of-use assets
(22)
(154)
(154)
Proceeds from sale of property, plant and equipment
1
-
135
Proceeds from sale of right-of-use assets
21
-
21
Interest received
56
168
212
Net cash used by investing activities
(134)
(341)
(223)
Cash flows from financing activities
Interest paid on loan
(21)
-
(61)
Sale of shares
-
-
3
Purchase of shares
(50)
(244)
(335)
Repayment of borrowings
(3,300)
-
(10,500)
Drawdown of borrowings
3,300
-
10,500
Interest paid on lease liabilities
(69)
(48)
(130)
Principal repayment of lease liabilities
(473)
(612)
(1,104)
Equity dividends paid
(689)
(690)
(1,004)
Net cash used by financing activities
(1,302)
(1,594)
(2,631)
Net increase/(decrease) in cash and cash equivalents
(7,272)
(1,138)
990
Cash and cash equivalents at the beginning of the period
8,807
7,817
7,817
Cash and cash equivalents at end of the period
1,535
6,679
8,807


 

Notes to the unaudited financial statements

Six months ended 30 September 2025

 

1       General Information 

Marks Electrical Group plc (the "Company") is a public limited company 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. 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 (the "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

This consolidated financial information has been prepared in accordance with UK adopted international accounting standards. There are no new standards, interpretations and amendments which are not yet effective in these financial statements, expected to have a material effect on the Group's future financial statements.

The financial information has been prepared on a going concern basis under the historical cost convention unless otherwise specified within these accounting policies. 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 figures for the period to 30 September 2025 and the comparative period to 30 September 2024 have not been audited or reviewed. The figures for 31 March 2025 have been extracted from the financial statements for the year to 31 March 2025, which have been delivered to the Registrar of Companies. The interim financial statements do not constitute statutory accounts within the meaning of the Companies Act 2006.

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

2.2       Going concern

Despite challenging economic conditions, the Group has traded positively during the period, delivering gross profit margin of 24.3%.

Management have prepared detailed financial projections for the period to 30 November 2026. These projections are based on the Group'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 Group 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 30 November 2026. 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.

 

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 2025. Subsidiaries are entities 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 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. 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       Operating exceptional charges

The Group presents exceptional items on the face of the statement of comprehensive income these are material items of income and expense which the Directors consider, because of their size or nature and expected non-recurrence, merit separate presentation to facilitate financial comparison with prior periods and to assess trends in financial performance. Exceptional items are included in Administration expenses in the consolidated statement of comprehensive income but not considered to be part of the underlying trading performance of the business.

2.5       Significant accounting estimates and judgements

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

2.6       Long term equity incentive plans

Employees and directors receive remuneration from the Company in the form of share-based payment transactions, whereby they meet performance criteria required by the Company and in consideration receive equity instruments. The cost of the equity settled transactions is measured by a reference to the fair value at the date of grant and is recognised as an expense in the statement of comprehensive income over the vesting period of the schemes.

Market Value Options and Free Shares (issued on IPO)

A Black-Scholes pricing model is used to measure the fair value of the employee share options using six variables, the volatility, type of option, share price on issue, time, strike price and the risk-free rate. Other conditions which are required to be met in order for an employee to become fully entitled are taken into consideration, such as employee attrition rates.

2022, 2023 and 2024 Long-Term Incentive Plan ("LTIP")

The 2022, 2023 and 2024 LTIP is split into three tranches, earnings per share ("EPS"), cash flow and total shareholder return ("TSR"). In estimating the EPS and cash flow, management have considered the likelihood of conditions being met based on current forecasts and performance. This has been applied to the share price at the valuation date after stripping out expected future dividends. For the TSR metric, a Monte Carlo simulation model has been used for the valuation, the model is appropriate given the share-based payments are subject to market conditions.

At each statement of financial position date before the vesting date, the cumulative expense is calculated, representing the expired vesting period and the best estimate of the number of equity instruments that will ultimately vest. The movement in the cumulative balance is recognised in the statement of comprehensive income.

3.      Earnings per share

 

(a)   Earnings

 

Six months ended
30 September
2025
£000
Six months ended
30 September
2024
£000
Year ended
31 March
2025
£000
Statutory earnings
(464)
(827)
(1,444)

 

(b)   Number of shares

 

Six months ended
30 September
2025
Six months ended
30 September
2024
Year ended
31 March
2025
Basic weighted average number of shares
104,949,050
104,949,050
104,949,050
Dilutive effect of share options and awards
-
-
-
Diluted weighted average number of shares
104,949,050
104,949,050
104,949,050

 

 

(c)   Earnings per share

 

Six months ended
30 September
2025
Six months ended
30 September
2024
Year ended
31 March
2025
Statutory earnings
Basic statutory earnings per share
(0.44)p
(0.79)p
(1.38)p
Diluted statutory earnings per share
(0.44)p
(0.79)p
(1.38)p

 

3.1    Non-Statutory earning per share

 

(a)   Earnings

 

Six months ended
30 September
2025
£000
Six months ended
30 September
2024
£000
Year ended
31 March
2025
£000
Statutory earnings
(464)
(827)
(1,444)
Add:
Non underlying costs net of tax
-
1,411
2,179
Share-based payments net of tax
136
175
631
Less:
Buying group rebate
-
-
249
Adjusted earnings
(328)
759
1,615

 

(b)   Number of shares

 

Six months ended
30 September
2025
Six months ended
30 September
2024
Year ended
31 March
2025
Basic weighted average number of shares
104,949,050
104,949,050
104,949,050
Dilutive effect of share options and awards
-
-
-
Diluted weighted average number of shares
104,949,050
104,949,050
104,949,050

 

(c)   Earnings per share

 

Six months ended
30 September
2025
Six months ended
30 September
2024
Year ended
31 March
2025
Adjusted earnings
Basic adjusted earnings per share
(0.31)p
0.72p
1.54p
Diluted adjusted earnings per share
(0.31)p
0.72p
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 exceptional costs as disclosed above.

The number of ordinary shares as at 31 March 2025 through to 30 September 2025 has been used as the basis for the current and prior periods adjusted earnings per share calculation.

4.      Taxation

 

Income tax credit/(expense) is recognised based on management's best estimate of the average annual income tax rate expected for the full financial year applied to the pre-tax income of the interim period. The income tax credit for the six months ended 30 September 2025 is £110,000 (H1-25: £234,000). The Group's adjusted consolidated effective tax rate for the six months ended 30 September 2025 is 25.0% (H1-25: 25.0%).

5.      Dividends paid

 

Six months ended
30 September
2025
£000
Year ended
31 March
2025
£000
Dividends paid during the period:
Final dividend for 2025: 0.66p (2024: 0.66p)
689
693
Interim dividend for 2026: Nil (2025:0.30p)
-
311
Dividends paid
689
1,004

 

Dividends paid and issued during the period totalled £688,849 (2025: £690,060).

 

No interim dividend has been proposed to be paid in relation to FY26 (HY-25: 0.30p).

 

6.      Operating exceptional charges

 

During FY25, the Group incurred exceptional one-off expenditure in administrative expenses in relation to the implementation of a new ERP system. The ERP implementation was completed in September 2024 with all the costs expensed through the statement of comprehensive income and in order to aid comparability, it has been disclosed separately as a non-underlying items. During H1-26 £nil (H1-25: £1,881,000) was incurred as an expense with an associated tax credit of £nil (H1-25: £470,000). No further costs are expected to be incurred in relation to the implementation of ERP system.

 

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