Dialight: Half-year Financial Report

Performance highlights

Commenting on these results, Steve Blair, Group Chief Executive Officer, said:

“The Group continues to realise the financial benefits of all five pillars of the Transformation Plan, which have underpinned the significant improvement in performance over the past three years. We are continuing to deliver profitable sales growth and strong cash generation, and reaching a positive net cash position is an important milestone for the Group. I would like to thank all stakeholders, but especially our employees, for their belief, commitment and hard work in improving the Group’s performance in the past three years.

“We enter the second half of the year with a strong outlook and are targeting continued sales growth and gross margins meeting our upgraded guidance. The Board therefore believes the Group has the potential to significantly exceed current market expectations5 for net income for the full financial year. Subject to wider macroeconomic conditions, we are optimistic also on our medium-term potential.”

Interim results presentation

The interim results presentation can be found at: https://www.dialight.com/ir/reports-news/

Contacts

Dialight plc

Tel: +44 (0)203 058 3525

Neil Johnson, Group Chair

Steve Blair, Group Chief Executive Officer

Mark Fryer, Group Chief Financial Officer

Legal Entity Identifier: 2138001AD31KKD29Z495

About Dialight

Dialight (LSE: DIA.L) is a global leader in sustainable LED lighting for industrial applications and OE components. Dialight’s LED products are providing the next generation of lighting solutions that deliver reduced energy consumption and create a safer working environment. Our products are specifically designed to provide superior operational performance, reliability and durability, reducing energy consumption and ongoing maintenance, and achieving a rapid return on investment for our customers.

The Group has operations in the US, the UK, Mexico, Malaysia, Singapore, Australia and Dubai. To find out more about Dialight, visit www.dialight.com.

Notes

Cautionary statement regarding forward-looking statements

This announcement contains certain statements, statistics and projections that are or may be forward-looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the future financial position, strategy, projected costs, plans and objectives for the management of future operations of Dialight plc and its subsidiaries is not warranted or guaranteed. These statements typically contain words such as “intends”, “expects”, “anticipated”, “estimates” and other similar words. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Although Dialight plc believes that the expectations will prove to be correct, there are a number of factors, many of which are beyond the control of Dialight plc, which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. This announcement contains inside information on Dialight plc.

CHIEF EXECUTIVE OFFICER’S REVIEW

The Group has had an excellent first half of the financial year with operating profit of $14.9m well ahead of the underlying $10.3m for the last full financial year. This performance has been achieved by returning Group revenue to growth while the impact of the Transformation Plan initiatives has pushed gross margins to a record level of 48.7%, with good control of overheads. Group revenue for the six months ended 30 September 2026 was $94.4m, up 9.3% from the prior period. An increase in revenue of 14.4% was reported in the Lighting segment with the benefit of pricing discipline and increased and improved sales resources. Components (excluding Traffic and Rail of $7.6m from the prior period comparative) increased revenue by 37.5%.

All of the Group’s products manufactured in Mexico are currently tariff-free under the United States-Mexico-Canada Agreement (“USMCA”) free trade agreement. This situation is kept under review and is closely monitored. Some of the Group’s components are imported from outside the US and Mexico and have been subject to tariffs. The overall impact of this has been negligible.

The Group’s Mexican operations are currently operating at less than half theoretical capacity so can easily meet the growing demand for the Group’s Lighting products. We are investing in people, processes, facilities and capital equipment in the Group’s Malaysian facility to keep pace with the doubling in order intake that we have achieved in our OE product line in the first half of the year. We expect growth to continue strongly in the second half, provided that data centre investment continues to increase globally.

COMPONENTS

The Group has a transformed outlook for Components. Last year we conducted a thorough strategic review of our OE product line. This had, for a long time, been the “junior” product line that had been flat to marginally declining over the last decade. The OE product line generates good gross margins and we therefore decided to reinvigorate and to invest in it. This has included investing in new product development and stock keeping unit (“SKU”) reductions and will be supplemented with additional sales and business development resources. We have also adopted a more aggressive sales outlook, have seen increased sales win rates and partnered more closely with Asian contract equipment manufacturers. This has stimulated a 37.5% growth of this product line which has a direct correlation to the growth in data centres where our OE products are used extensively on their servers and equipment.

LIGHTING SALES/SALES TRANSFORMATION

The implementation of the Transformation Plan has accelerated in the last year where we have introduced tollgate approval processes to control pricing and margin, we have increased pricing, we have terminated the employment of certain poor-performing salespeople, we have recruited good replacements and we have also re-created a global Engineering, Procurement and Contracting (“EPC”) team. We have introduced a new sales commission scheme targeted on sales growth and margin and have therefore seen a good improvement in pricing discipline and an increased focus on selling the higher margin products from a limited number of SKUs. The impact of all these initiatives is that Lighting revenue has increased by 14.4% in the first half and gross margin has increased from 36.9% to 48.3%.

OPERATIONAL TRANSFORMATION

Our Operations function has delivered on several projects in the period. Sub-assembly SKU numbers have been further reduced over the past six months; finished goods SKUs have also been further reduced and cost reductions and purchase price variances have not only offset tariff pressure but increased gross margin as the right-sizing of the manufacturing operations in Mexico now fully delivers the required gross margins. Several new products have also been introduced into the production process.

The Group’s Traffic business, disposed of in 2024 but for which the Group had an assembly commitment through to the end of October 2025, had no sales in the first half of the 2027 financial year. Sales for the six months ended 30 September 2025 were $7.6m (including Rail). The Group’s Traffic business had historically been loss making so being without this has contributed to the increased gross margin and operating profit. All inventory related to this business has been sold.

During the first half of the year, the Group’s three key new initiatives have progressed. These are intended to focus on consolidation and optimisation of our own manufacturing footprints to increase profit, capacity and flexibility.

In order of importance, the three initiatives as noted above are:

These projects have made good progress in the first half of the year and the savings are still expected to be worth approximately $4m, which should accrue from the second half of next year.

PROFIT PERFORMANCE

Operating profit before interest and tax has increased by over 150% to $14.9m compared to the $5.9m in the prior period. The primary factors for the increased underlying operating profit are increased sales, gross margin percentage increases and further control of non-revenue generating overheads. The increase in overheads has come from increased sales headcount, increased sales commission on higher sales and non-repeat of foreign exchange gains of $0.6m in the prior year and a foreign exchange loss of $0.7m in the current period.

Gross margin overall has increased to 48.7% from 35.3% in the comparable period. This increase has added almost $13m to operating profit. The increase has been driven by price increases, selling a better mix of the more profitable products, cost reduction, right-sizing direct labour and the impact of fewer SKUs.

WINNING HEARTS AND MINDS

We have a clear and coherent strategy. Our employees are deeply invested in the Transformation Plan to improve Dialight and make it a better place to work and drive a better future. Through the first half, we have had around a dozen cross-functional teams with representation from every department looking to simplify and improve our business. It is testament to our staff and these teams that the positive progress reported here has occurred. The result of this work is reflected in the increased profit and cash generation. From this, and for the second time, in July 2026 we paid a small bonus to all eligible employees not already participating in a bonus or commission scheme as a statement of gratitude and thanks. The management bonus also paid out.

CASH FROM OPERATIONS

Overall cash generated by operations was $16.3m in the first half of the year (six months to 30 September 2025: $16.3m). This has been achieved through EBITDA for the six months of $19.0m offset by a $3.1m increase in working capital. The Group paid $0.1m of non-underlying cash costs in the six months ended 30 September 2026.

We have good control of our capital expenditure, with capitalised development costs of $0.8m (six months ended 30 September 2025: $1.6m) with an associated amortisation charge of $0.8m (six months ended 30 September 2025: $0.9m) and capital projects (mainly replacement) of $1.7m (six months ended 30 September 2025: $0.9m).

OUTLOOK

We enter the second half of the year with a strong outlook and are targeting continued sales growth and gross margins meeting our upgraded guidance. The Board therefore believes the Group has the potential to significantly exceed current market expectations for net income for the full financial year. Subject to wider macroeconomic conditions, we are optimistic also on our medium-term potential.

Steve Blair

Group Chief Executive Officer

9 November 2026

CHIEF FINANCIAL OFFICER’S REVIEW

The Group’s first half results are strong across all of our key financial metrics which are set out in the table below:

FINANCIAL REVIEW

Group revenue of $94.4m for the six months ended 30 September 2026 (six months ended 30 September 2025: $86.4m) generated a gross profit of $46.0m (six months ended 30 September 2025: $30.5m), giving a gross margin of 48.7% (six months ended 30 September 2025: 35.3%). This increase of 1,340 basis points has been driven by increased prices, selling more profitable products and the continuation of driving better financial discipline on pricing and costs.

In the first half, there were no non-underlying costs. In the prior period, the Group received Employment Retention Credits (“ERCs”) of $2.9m which was recognised as other operating income, but which was treated as non-underlying. There were also costs of the impending wind up of the Group’s bought-in defined benefit pension schemes ($1.1m) and the costs of the Transformation Plan ($1.3m).

Distribution costs of $14.4m (six months ended 30 September 2025: $13.3m) and administrative expenses of $16.7m (six months ended 30 September 2025: $14.2m) resulted in a statutory operating profit of $14.9m (six months ended 30 September 2025: $5.9m).

Share-based payment charges in the first half year were $0.5m (six months ended 30 September 2025: $0.3m). These costs have been charged in arriving at the operating profit, EBITDA and return on sales percentages above.

Total Company-only costs for the first half were $5.8m (six months ended 30 September 2025: $4.0m) due to an accrued management bonus charge of $2.3m and an accrued National Insurance cost associated with the Group’s long-term share incentive schemes of $1.9m.

Underlying performance

The Group’s gross profit for the first half was $46.0m (six months ended 30 September 2025: $30.5m) and, excluding net non-underlying items (for the prior period only), total underlying overheads in the six months ended 30 September 2026 were $31.1m (six months ended 30 September 2025: $25.0m). This resulted in an underlying operating profit of $14.9m (six months ended 30 September 2025: $5.5m).

Lighting before central costs

The Lighting segment represents approximately 70% of the Group’s revenue and consists of two revenue streams: large capital expenditure projects and ongoing maintenance, repair and operations (“MRO”) spend.

In the six months ended 30 September 2026, Lighting revenue is up by $8.7m to $69.1m due to price increases, better pricing discipline and an expanded and improved salesforce. Gross margins are 1,140 basis points up in the first half against the comparative period with underlying overheads higher by $1.8m, mainly due to increased sales commission.

Components before central costs

Components is a high-volume business operating within highly competitive markets. There are two elements: OE components, which is by far the larger element, and vehicle lights.

Overall, Components revenue decreased from $26.0m in the six months ended 30 September 2025 to $25.3m in the first half of this year. Gross margins have increased significantly in the period to 49.8%, driven by the Group’s renewed focus on and investment in OE products. Traffic light contract manufacturing to Leotek made a profit of $0.4m (on revenue of $7.6m including Rail) in the first half of the prior period with this activity ceasing in October 2025. Excluding Traffic, revenue is up 37.5% in the six months ended 30 September 2026.

Central costs

Central overheads comprise costs not directly attributable to a segment and primarily relate to head office costs and professional fees. Total underlying unallocated costs increased from $4.7m to $7.9m in the six months ended 30 September 2026 due to accrued National Insurance charges on the Group’s long-term share incentive schemes (as set out above) and the adverse impact of foreign exchange revaluations.

NON-UNDERLYING COSTS

There were no non-underlying costs in the six months ended 30 September 2026, although the Group has paid $0.1m in the period to settle prior year liabilities. As explained above, in the six months ended 30 September 2025, the Group received ERCs which were one-off in nature and will not recur. During the six months ended 30 September 2025, costs of $1.3m were incurred relating to the Transformation Plan, $1.1m relating to the wind-up of two closed bought-in defined benefit pension schemes and $0.1m on the final costs associated with the Sanmina litigation.

INVENTORY

Inventory of $36.1m has increased by $6.1m from $30.0m at 31 March 2026. This increase has primarily been in fast-moving, highly-profitable Lighting inventory and additional safety stock to support the reduction in lead times for Components. The Group is expecting a further small increase in inventory in the second half of the year to support sales growth.

Capitalised overheads included within inventory at 30 September 2026 were $9.5m (31 March 2026: $5.9m) which has resulted in a $3.6m benefit to operating profit in the first half.

The aged inventory provision has increased to $2.6m at 30 September 2026 compared with $2.3m at 31 March 2026.

CASH AND BORROWINGS

At 30 September 2026, the Group had net cash of $4.5m, a movement of $6.4m from the 31 March 2026 net bank debt balance of $1.9m. Net cash excludes IFRS 16 lease liabilities of $6.9m which are excluded for covenant testing purposes. The roll forward of net cash/(bank debt) was as follows:

Cash on hand of $8.5m was offset by gross bank debt of $4.0m. Refer to Note 11 of the condensed consolidated interim financial statements for further details of bank borrowings. The Group’s finance expense of $0.7m is analysed in Note 4 and is represented by $0.3m of interest on borrowings, together with IFRS 16 lease interest costs and fees associated with the new bank facility.

BANKING AND COVENANTS

On 22 April 2026, the Group entered into a new £15.0m (equivalent to approximately $20.0m) multi-currency RCF with an uncommitted accordion of £10.0m (equivalent to approximately $13.5m) with an initial maturity date of 22 April 2029 with two one-year extension options exercised at the lender’s discretion. This is subject to quarterly covenants encompassing maximum leverage of 2.5 times and minimum interest cover of 4.0 times. The Group complied with covenants at all times during the first half with significant headroom. See Note 11 to the condensed consolidated interim financial statements for further details.

GOING CONCERN

The Directors consider it remains appropriate to continue to adopt the going concern basis in the preparation of these condensed consolidated interim financial statements. Furthermore, the Group has assessed whether any material uncertainties exist and has concluded that there are none. Further details are provided in Note 1b of the condensed consolidated interim financial statements on pages 21 to 22.

TAX

The tax charge of $4.1m for the six months ended 30 September 2026 (six months ended 30 September 2025: $1.8m) reflects the best estimate of the weighted average effective income tax rate expected for the full financial year. The effective tax rate for the current period is 28.9% compared with 40.0% in the prior period.

CAPITAL MANAGEMENT AND DIVIDEND

At the time of the presentation of the 2026 Preliminary Results, the Directors consulted with shareholders on their preferences for future capital allocation. The feedback, almost unanimously, was that the Board should re-invest first in the Group to achieve 25% to 50% target return on net assets. Thereafter, capital should be deployed to buy shares in the market to ensure no future dilution from Director and employee equity option arrangements. After that capital should be used to buy back shares, and finally to consider a dividend. This is now the Board’s capital allocation plan. The Board’s policy is to have a strong capital base to maintain customer, investor, and creditor confidence and to sustain future development of the business. The Board considers consolidated total equity as capital, which at 30 September 2026 equated to $55.0m (30 September 2025: $49.4m). The Board is not declaring an interim dividend payment for the six months ended 30 September 2026 (30 September 2025: $nil).

SHAREHOLDER ENGAGEMENT AND CONSULTATION

The Directors have engaged and consulted with shareholders following the Annual General Meeting (“AGM”) held on 1 September 2026. The Board values the views of all shareholders and remains committed to maintaining an open and constructive dialogue with investors. A further update on shareholder engagement and the actions taken in response to the voting outcomes of the AGM will be provided in the Company’s 2027 Annual Report. The Board thanks shareholders for their continued support and constructive feedback.

EBT

The increase in the Group’s market capitalisation combined with shareholder guidance to buy shares in the market - so as to ensure no future dilution from Director and employee equity option arrangements - has resulted in the Company buying additional shares for the EBT. At the beginning of the year, the EBT held 413,706 shares. During the first half of the year, 265,003 shares were allotted, and a further 425,000 shares were purchased at a total cost of $3.2m. At 30 September 2026, the EBT held 573,703 shares.

Mark Fryer

Group Chief Financial Officer

9 November 2026

PRINCIPAL AND EMERGING RISKS AND UNCERTAINTIES

The principal risks and uncertainties affecting the business activities of the Group for the six months ended 30 September 2026 remain substantially unchanged from those disclosed in the 2026 Annual Report and Accounts.

DIRECTORS’ RESPONSIBILITY STATEMENT

We confirm that to the best of our knowledge:

The full list of current Directors can be found on the Company’s website at www.dialight.com.

On behalf of the Board,

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS

for the six months ended 30 September 2026

All results arise from continuing operations. The accompanying Notes form an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the six months ended 30 September 2026

The accompanying Notes form an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at 30 September 2026

The accompanying Notes form an integral part of these condensed consolidated interim financial statements.

Registered number: 02486024

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2026

The accompanying Notes form an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 30 September 2025

The accompanying Notes form an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2026

The accompanying Notes form an integral part of these condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

for the six months ended 30 September 2026

The accompanying Notes form an integral part of these condensed consolidated interim financial statements.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

for the six months ended 30 September 2026 (unaudited)

1. Basis of preparation and principal accounting policies

Dialight plc (the “Company”) and its subsidiaries (together referred to as the “Group”) provides sustainable, energy efficient and intelligent LED lighting technologies, helping our customers drive towards a net zero economy. Its primary market is North America, with smaller operations in Europe, the Middle East and Africa (“EMEA”), Australia and the rest of the world. The Company is listed on the London Stock Exchange and is incorporated in the United Kingdom, registered and domiciled in England and Wales under registration number 02486024. Its registered office is at 60 Petty France, London, SW1H 9EU, England.

These condensed consolidated interim financial statements were approved by the Board of Directors for issue on 9 November 2026 and have not been audited nor reviewed.

(a) Statement of compliance

These condensed consolidated interim financial statements for the six months ended 30 September 2026 have been prepared in accordance with the DTR of the Financial Conduct Authority and with UK-adopted IAS 34. These condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements for the year ended 31 March 2026, which have been prepared in accordance with UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006.

These condensed consolidated interim financial statements do not comprise statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2026 were approved by the Board of Directors on 22 June 2026 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified and did not contain a statement under Section 498 of the Companies Act 2006.

(b) Basis of preparation

Going concern

As set out in Note 11, on 22 April 2026, the Group entered into a new £15.0m (equivalent to approximately $20.0m) RCF agreement with HSBC with an initial maturity date of 22 April 2029. The new agreement with HSBC also includes an uncommitted accordion of £10.0m (equivalent to approximately $13.5m). The decrease in the size of the Group’s committed bank facility aligns with the Group’s liquidity needs and has no adverse impact on the Group’s viability.

Net cash has increased to $4.5m at 30 September 2026 (30 September 2025: net bank debt of $10.2m; 31 March 2026: net bank debt of $1.9m) comprising cash and cash equivalents of $8.5m (30 September 2025: $10.4m; 31 March 2026: $7.1m) offset by borrowings of $4.0m (30 September 2025: $20.6m; 31 March 2026: $9.0m). Further details of borrowings are included in Note 11 to the condensed consolidated interim financial statements.

The new RCF facilities are subject to quarterly financial covenants encompassing maximum leverage and minimum interest cover as set out below:

The covenants under the new facility were met for both quarters of the six months ended 30 September 2026. See Note 11 to the condensed consolidated interim financial statements for further details on the Group’s banking covenants. The going concern assessment as described below has been carried out based on the new facility.

The condensed consolidated interim financial statements for the six months ended 30 September 2026 have been prepared on a going concern basis. The Group has carried out a thorough assessment of its projected trading of at least 12 months from the date of authorisation of these condensed consolidated interim financial statements to 31 December 2027 (based on the Group’s covenant reporting timetable). This assessment incorporated a severe but plausible downside scenario which demonstrates that the Group has sufficient liquidity, resources and covenant headroom to continue in operation for the foreseeable future. The assessment also included a reverse stress test (break-even assessment), which indicated that a 36.0% decline in revenue in the second half of the year ending 31 March 2027, with no controllable mitigating actions taken other than the removal of a bonus provision, would result in a breach of the leverage covenant in the fourth quarter of the year to 31 March 2027.

As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully. The Directors confirm there are no material uncertainties which may cast significant doubt on the Group’s ability to continue as a going concern. Therefore, the Directors consider it remains appropriate to continue to adopt the going concern basis in the preparation of these condensed consolidated interim financial statements. The financial statements do not include all of the information required for full annual consolidated financial statements and should be read in conjunction with the March 2026 Annual Report and Accounts.

Taxation

The tax charge reflects the best estimate of the weighted average effective income tax rate expected for the full financial year.

Uncertain tax positions

The Group operates in certain jurisdictions that are unstable or have changing political conditions, giving rise to occasional uncertainty over the tax treatment of items of income and expense. In addition, from time to time certain tax positions taken by the Group are challenged by the relevant tax authorities, which carry a financial risk as to the final outcome. The Directors have considered the potential impact arising from these uncertainties and risks on the Group’s tax assets and liabilities, both recognised and unrecognised, and believe that they are not material to these condensed consolidated interim financial statements.

(c) Use of judgements, estimates and assumptions

The preparation of these condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. These judgements, estimates and assumptions are based on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The areas which require the most use of management judgement and estimation are set out below.

Significant judgements

Development and patent costs

The Group capitalises development costs and patent costs provided they meet all the recognition criteria as set out in IAS 38 Intangible Assets. Costs are only capitalised when management applies judgement that is satisfied as to the ultimate commercial viability of the projects based on a review of the relevant business case. The capitalised costs are amortised over the expected useful economic life, which is determined based on the reasonable commercial prospects of the product and a comparison to similar products being sold by the Group.

The Group has $7.6m (30 September 2025: $9.3m; 31 March 2026: $7.5m) of development and patent costs that relate to the current product portfolio and new products expected to launch over the next one to two years.

All of the Group’s development projects are within the Lighting cash-generating unit (“CGU”) and are tested for impairment at the CGU level. However, management also performs a review of each individual project to see if there are any indications of specific impairment.

The Directors have considered the reversal of impairments recognised in prior periods and determined that there were no material indicators to support a reversal of prior impairments.

Deferred tax assets

The Group must determine the extent to which deferred tax assets can be recognised. This determination is based on an assessment of the probability that future taxable income will be available, against which the deductible temporary differences and tax loss carry-forwards can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions. At 30 September 2026, the Group has recognised a net deferred tax asset of $4.4m (30 September 2025: $7.8m; 31 March 2026: $7.7m).

The Group considers it highly probable that sufficient future taxable profits will arise in the US based on both the earning history and the future forecasted profits. In addition, the Group is satisfied that the losses will unwind in the same period as the forecasted taxable profits.

Estimates

Inventory provision

The total value of the inventory provision for all categories of inventory over which judgement has been exercised was $2.6m (30 September 2025: $5.3m; 31 March 2026: $2.3m;) which represents 6.7% (30 September 2025: 12.9%; 31 March 2026: 7.1%) of the gross inventory value. Details of the inventory provision are set out in Note 9 to the condensed consolidated interim financial statements.

Inventory provision: raw materials and sub-assemblies

The Group’s policy is that all raw material and sub-assembly inventory that is over two years old at the balance sheet date is provided for in full. This basis for estimate reduces estimation subjectivity, while allowing for the adverse impact from component shortages that have led to high inventory levels and some components being held for longer than expected. Two years has been assessed to be appropriate as the components have a long shelf life, continue to be used in production and reflects the product demand mix between project and MRO.

The value of the inventory provision for raw materials and sub-assemblies at 30 September 2026 was $0.4m (30 September 2025: $3.3m; 31 March 2026: $0.4m).

If all raw material and sub-assembly inventory over 18 months old at the balance sheet date was to be provided for, the inventory provision for these categories would be $1.0m (an increase of $0.6m). Alternatively, if all raw material and sub-assembly inventory over three years old at the balance sheet date was only to be provided for, the inventory provision for these categories would be $0.2m (a decrease of $0.2m).

Inventory provision: finished goods

The review of finished goods inventory was based on all finished goods over one year old. Inventory on hand was compared to historical sales data, current sales orders (also referred to as backlog), sales order pipeline and whether the product had been recently launched. Management judgement was then applied to determine whether there was a reasonable probability that the inventory would be sold, with a provision being required for any inventory that failed this assessment.

Management believes that any reasonably possible change in the assumption would not cause any significant change in the provision estimate for finished goods. The value of the inventory provision for finished goods at 30 September 2026 was $2.2m (30 September 2025: $2.0m; 31 March 2026: $1.9m).

2. Operating segments

The Group has two reportable operating segments.

These segments have been identified based on the internal information that is supplied regularly to the Group’s chief operating decision maker for the purposes of assessing performance and allocating resources. The chief operating decision maker is considered to be the Group Chief Executive Officer.

The two reportable operating segments are:

There is no inter-segment revenue and there are no individual customers that represent more than 10% of revenue. All revenue relates to the sale of goods. Segment gross profit is revenue less the costs of materials, labour, production and freight that are directly attributable to a segment. Central & Unallocated overheads comprise operations management plus corporate costs, which include share-based payments.

Segmental assets and liabilities are not reported internally and are, therefore, not presented below.

Other segmental data

Geographical segments

Revenue by geographical market

Lighting and Components segments are managed on a worldwide basis but operate in three principal geographic areas: North America, EMEA and the rest of the world. The following table provides an analysis of the Group’s revenue by geographical market, irrespective of the origin of the goods. All revenue relates to the sale of goods.

Non-current assets1 by geography

3. Non-underlying items

During the six months ended 30 September 2025 and the year ended 31 March 2026, the Group incurred costs and earned income that was non-recurring in nature or that, in the Directors’ judgement, needed to be separately disclosed by virtue of its size and incidence in order for users of the condensed consolidated interim financial statements to assess the underlying performance of the Group. There were no non-underlying items recognised during the six months ended 30 September 2026.

The table below presents the components of non-underlying items recognised in the condensed consolidated statement of profit or loss in prior periods. All costs were recognised within administrative expenses unless otherwise stated.

4. Net finance expense

5. Taxation

The taxation charge of $4.1m for the six months ended 30 September 2026 (six months ended 30 September 2025: $1.8m; year ended 31 March 2026: $3.3m) reflects the best estimate of the weighted average annual income tax rate expected for the full financial year. Non-underlying items in prior periods were taxed using the relevant tax rates where deductions were available.

6. Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit or loss for the period attributable to equity owners by the weighted average number of ordinary shares in issue during the period. The calculation of the weighted average number of ordinary shares excludes the shares held by the EBT which are treated as cancelled. There have been no transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of authorisation of these condensed consolidated interim financial statements.

Diluted earnings per share

Diluted earnings per share is calculated after adjusting the weighted average number of ordinary shares in issue during the period to assume conversion of all potentially dilutive shares. The calculation of the weighted average number of ordinary shares excludes the shares held by the EBT.

7. Dividends

There were no dividends declared or paid in the six months ended 30 September 2026 (six months ended 30 September 2025: $nil; year ended 31 March 2026: $nil).

8. Intangible assets

9. Inventories

In the six months ended 30 September 2026, inventories to the value of $26.6m (six months ended 30 September 2025: $30.7m; year ended 31 March 2026: $54.2m) were recognised as an expense. The inventory provision at 30 September 2026 was $2.6m (30 September 2025: $5.3m; 31 March 2026: $2.3m), which represents 6.7% of gross inventory (30 September 2025: 12.9%; 31 March 2026: 7.1%). The provision increased from 31 March 2026 by $0.3m due to additions of $1.2m being offset by the utilisation of the provision of $0.9m. See Note 11 for details of fixed and floating charges which includes the value of inventory in material Group companies.

10. Provisions

The warranty provision relates to sales made over the past nine years. The warranty provision has been estimated based on historical warranty data with similar products. The Group expects to settle the majority of the liability over the next two to three years.

The lease dilapidations provision represents the Group’s estimated liability to restore various leased properties to their original condition upon lease expiry, as mandated by the respective lease contracts. The expected outflow is expected to occur over the next two to five years.

11. Borrowings

Bank facility at 30 September 2026

On 22 April 2026, the Group entered into a new RCF agreement with HSBC with the following key features:

As noted above, the new RCF is subject to quarterly covenants encompassing maximum leverage and minimum interest cover. In the six months ended 30 September 2026, the covenants have been complied with and the outstanding borrowings of $4.0m have been classified as a non-current liability at 30 September 2026 in line with the facility expiring in April 2029. The banking covenants are as follows:

Bank facility at 30 September 2025 and 31 March 2026

At 30 September 2025 and 31 March 2026, the Group’s bank facility with HSBC comprised a multi-currency RCF of $28.8m. At 30 September 2025, $20.6m was drawn (31 March 2026: $9.0m). The facility was extended on 5 June 2025 to 21 July 2027 on the same terms as the original agreement. Interest was based on the SONIA rate or the SOFR, depending on the tranche of debt. The Group’s previous bank facility included security for HSBC by way of fixed and floating charges over all the material companies in the Group. This was registered at Companies House on 21 July 2022. The previous RCF was subject to quarterly covenants encompassing maximum leverage of 3.0 times and minimum interest cover of 4.0 times. In the six months ended 30 September 2025 and in the year ended 31 March 2026, the covenants were complied with. The outstanding borrowings at 30 September 2025 of $20.6m and at 31 March 2026 of $9.0m were classified as a non-current liability at 30 September 2025 and 31 March 2026, respectively, in line with the facility expiring in July 2027 (as at the reporting dates). As set out above, the Group entered into a new RCF agreement with HSBC during the current period.

12. Related party transactions

The ultimate parent company of the Group is Dialight plc. Transactions between the Company and its subsidiaries have been eliminated on consolidation. There have been no other changes in the nature of related party transactions from those described in the March 2026 Annual Report and Accounts that could have a material effect on the financial position or performance of the Group in the six months ended 30 September 2026.

13. APMs

The Group uses APMs which are not defined or specified under IFRS and may not be comparable with similarly titled measures used by other companies. These APMs represent additional measures in assessing performance and for reporting both internally and to shareholders and other external users. The Group believes that the presentation of these APMs provides useful supplemental information which, when viewed in conjunction with IFRS financial information, provides readers with a more meaningful understanding of the underlying financial and operating performance of the Group. None of these APMs should be considered as an alternative to financial measures drawn up in accordance with IFRS.

As explained in Note 3, the Group has previously incurred costs and earned income that was not considered to be reflective of the underlying performance of the business. In the assessment of performance of the business units of the Group, management examines underlying performance, which removed the impact of non-underlying costs and income in the comparative periods.

Net cash/(bank debt)

Net cash/(bank debt) is defined as cash and cash equivalents less total Group borrowings (excluding lease liabilities recognised under IFRS 16). At 30 September 2026, the Group’s net cash of $4.5m (30 September 2025: net bank debt of $10.2m; 31 March 2026: net bank debt $1.9m) consisted of cash and cash equivalents of $8.5m (30 September 2025: $10.4m; 31 March 2026: $7.1m) less borrowings of $4.0m (30 September 2025: $20.6m; 31 March 2026: $9.0m).

Including lease liabilities recognised under IFRS 16 of $6.9m (30 September 2025: $8.9m; 31 March 2026: $8.3m), net debt at 30 September 2026 is $2.4m (30 September 2025: $19.1m; 31 March 2026: $10.2m).

Dialight Results for six months ended 30 September 2026

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