Q2 Trading Update

Marks Electrical Group plc ("Marks Electrical" or "the Group"), the online electrical retailer, today announces a Q2 trading update in respect of the full year to 31 March 2026 ("the year" or "FY26").

At the Full Year Results in June 2025, as part of the Group's pivot back to the premium segment of the market, we noted that we had experienced lower revenue during Q1-FY26. Disappointingly, this trend has continued into Q2-FY26 with both Major Domestic Appliances ("MDA") and Consumer Electronics ("CE") markets down year on year. We have also continued to see consumers remaining highly price conscious and scaling back on discretionary spending. This has impacted our average order values and in turn has resulted in higher relative delivery costs.

Compounding the challenging market backdrop, we continue to face cost headwinds with increased technology and ongoing costs of our new ERP system along with higher employee related costs, impacting our distribution costs and overheads. We remain happy with the performance of the new ERP and the efficiencies it will drive as we return to growth.

Management remains focussed on delivering profitable market share growth and maintaining a disciplined approach to capital allocation. During H1-FY26 we have taken several measures to control our distribution costs and overheads but remain committed to maintaining our outstanding customer service levels and delivering our next day delivery and installation service to customers. We are also taking a number of steps to optimise business performance in our transport operations and allocation of marketing spend in order to best manage short-term market challenges.

As we look ahead to H2-FY26 and our peak trading period, we have made a strategic decision to invest into stock and expect revenue in the second half to exceed that in H2-FY25. Whilst we expect to see a return to revenue growth in H2-FY26, the weaker trading in H1-FY26, coupled with the reduced operating leverage, is expected to have a material impact on our full year profit guidance and we now expect adjusted EBITDA for FY26 to be approximately £1.7 million. In light of this performance, the Board has decided to delay any decision on the interim dividend at the time of the Interim Results and will re-consider this and the quantum of any final dividend at the time of the Group's Full Year Results.

The Group expects to release its Interim Results for the six-month period ending 30 September on 13 November 2025.

Mark Smithson, Chief Executive Officer, commented:

"Clearly, I am very disappointed that sales in Q2-FY26 continued the trend we noted in our FY-25 preliminary announcement. That said, we have built a strong business over the last few years, with growing brand recognition, nationwide distribution and installation capability. We continue to focus on margin but with increasing employee costs and increased technology cost for our new ERP system, we have not yet been able to exploit the operating leverage effectively. With a more balanced product mix as we enter the peak period of our trading, we remain confident in a stronger H2 performance.

Long term, 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."