Marks Electrical reported lower revenue and earnings for the year to 31 March despite an improved second half performance.

Underlying revenue for its FY26 fell 7.5% year-on-year to £108.4m, while adjusted earnings declined to £2.5m from £4.2m after a challenging first half.

Net cash reduced to £4.4m from £8.8m a year earlier, although the company said it retains a robust balance sheet. Gross margin remained resilient at 24%, supported by established supplier relationships, and diluted adjusted earnings per share fell to 0.67p. The group said no final dividend will be paid as it prioritises restoring profitability.

Operationally, the retailer maintained its market share in major domestic appliances at 2.6%, increased returning customers to 30% and completed the rollout of its Microsoft Dynamics 365 platform to support future efficiency gains.

Post year-end, Marks Electrical also reached a settlement with the Competition and Markets Authority (CMA), relating to its previously disclosed investigation, reducing the financial penalty to £0.7m alongside around £0.6m of consumer redress, which will be treated as an exceptional item.

The company said trading at the start of FY27 is in line with expectations, with stronger demand in May for major domestic appliances and improving consumer electronics sales supported by increased interest in TVs and sound systems.

CEO Mark Smithson said: "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.”

Smithson added: "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.”

The combination of lower revenues and cautious outlook were enough to see shares slide, dropping between 5% and 7% in early trading following the announcement.

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