Earnz has reached an important milestone. For the first time, the group reported positive adjusted EBITDA for a full year, which is a fancy way of saying the core trading business has finally moved into the black before interest, tax, depreciation, amortisation and one-off items.
That matters because buy-and-build stories on AIM can look exciting on paper but chew through cash for years. In FY2025, EARNZ showed that its first wave of acquisitions is at least capable of covering head office costs. That is the good news. The less comfortable bit is that cash still went out of the door and debt went up.
EARNZ FY2025 results show first positive adjusted EBITDA as revenue jumps to £11.8 million
The headline numbers were much stronger year on year, helped by the full-year contribution from Cosgrove & Drew and South West Heating Services, plus six months from A&D Carbon Solutions.
| Key FY2025 numbers | FY2025 | FY2024 |
|---|---|---|
| Revenue | £11.8 million | £2.6 million |
| Gross profit | £3.1 million | £0.3 million |
| Gross margin | 25.9% | 13.1% |
| Adjusted EBITDA | £94,000 | (£996,000) |
| Loss before tax | £1.7 million | £3.6 million |
| Cash balance | £1.1 million | £2.0 million |
| Net debt | £1.2 million | Net cash of £0.3 million |
Revenue rising from £2.6 million to £11.8 million looks spectacular, but investors should be honest about what is driving it. This was mainly acquisition-led growth rather than purely organic growth. That is not a criticism – it is the strategy – but it does mean integration and discipline are everything.
The better quality signal is adjusted EBITDA of £94,000, which the company also rounds to £0.1 million in its highlights. For a group that only really started trading in this form in August 2024, that is a meaningful step forward.
Gross margin improvement at Cosgrove & Drew is the standout feature in the EARNZ results
If you want to know what really improved here, look at gross profit and margin. Gross profit rose to £3.1 million and gross margin almost doubled to 25.9% from 13.1%.
The main driver was Cosgrove & Drew, which delivered £2.8 million of margin at 29.3%, versus £214,000 at 9% in 2024. Management says that came from tighter cost control, better forecasting and more financial rigour. In plain English, they are pricing and managing jobs better. That is exactly what you want to see in an engineering and maintenance business.
Not every part of the group was as pretty. South West Heating Services posted a lower margin of 27% against 33% in 2024, although the company says that was expected because the prior year only included the stronger winter trading months. A&D also diluted the overall margin in its first six months inside the group.
So my read is this: one core business is firing nicely, one looks more normalised, and one newer acquisition still needs work. That is fairly standard for a consolidator, but it also means investors should avoid assuming every acquired pound of revenue will be equally profitable.
Cash burn, rising net debt and dilution are the parts of the EARNZ FY2025 story to watch closely
Here is the bit that stops this becoming an easy slam-dunk set of results. Despite positive adjusted EBITDA, net cash used in operating activities was £2.3 million. Cash fell to £1.1 million from £2.0 million.
Management points out that operating cash flow included £642,000 of exceptional start-up costs for Warm Low Living and National Retrofit Solutions, plus £304,000 of transaction costs for the A&D acquisition. That explanation is reasonable, but the cash still left the business. Investors in small caps learn quickly that profit adjustments do not pay suppliers.
- Net debt moved to £1.2 million from net cash of £0.3 million.
- Excluding IFRS 16 lease liabilities, net debt was £0.7 million.
- The group also had £1.1 million of contingent consideration outstanding at year end.
- Invoice factoring liabilities were £0.6 million.
Another reality check is dilution. EARNZ raised £1.9 million net from new shares during FY2025, and then raised a further £3.5 million through a placing post year end, alongside a £0.3 million retail offer, to help fund the Zero Carbon Group acquisition and working capital.
That is not unusual for an acquisitive AIM company, but it does mean future returns need to grow faster than the share count. Otherwise shareholders end up funding growth without seeing much benefit per share.
EARNZ buy-and-build strategy expands with A&D Carbon Solutions and Zero Carbon Group
Strategically, EARNZ is moving fast. It bought A&D Carbon Solutions in July 2025, then used that platform to launch Warm Low Living and National Retrofit Solutions. Post year end, it added Zero Carbon Group for a maximum consideration of £9.5 million.
That is a chunky deal relative to the current size of the group, so it could be transformative if executed well. It also increases the stakes. Bigger acquisitions can accelerate growth, but they can also magnify integration mistakes and funding pressure.
There are encouraging signs on the commercial side. The group highlighted multi-year contract wins with Equans in FY2025 and then further wins in 2026 via Equans and Fortem, including work for Sanctuary Housing in Stoke-on-Trent and Chester. Management says the order book is strong.
The sector backdrop is supportive too. The CEO pointed to the Government’s Warmer Homes Plan, with £15 billion of funding over five years, including £5 billion for those on low incomes. If even a modest slice of that flows through to EARNZ, there is a decent runway.
One yellow flag worth noting: prior-year figures were restated after omitted overhead costs were found in the South West Heating Services acquisition model. That led to changes in goodwill, intangibles and contingent consideration. It does not derail the growth story, but it is a reminder that roll-up strategies need very sharp financial controls.
What EARNZ shareholders should watch in FY2026 after these final results
The board says momentum has continued into Q1 2026 and remains confident on the FY2026 outlook. I can see why. The platform is bigger, the geographic reach is wider, contract wins are coming through and adjusted EBITDA has crossed into positive territory.
For me, the investment case now shifts from promise to proof. EARNZ needs to show that positive adjusted EBITDA can turn into sustained cash generation, not just a one-year milestone surrounded by start-up and deal costs. If it can do that, the shares may start to look more interesting. If not, investors could face more debt, more placings and more waiting.
So the verdict is broadly positive, with a sensible dose of caution. The trading platform looks more real than it did a year ago. Now management has to prove it can turn this growing collection of businesses into a properly cash-generative group.
EARNZ AGM details for shareholders
The AGM will be held at 10.30am on 23 June 2026 at Blackwell House, Guildhall Yard, London EC2V 5AE. No dividend has been recommended.
