Review of the Business
Principal Activity
Selectamark Security Systems plc is a privately owned public limited company. Its principal activity during the year continued to be the development, manufacture and supply of forensic marking and property-identification products, together with the operation of secure online asset-registration platforms. These are delivered principally through the Company's SelectaDNA, BikeRegister, SecureAssetRegister and Selectamark brands, serving law enforcement, public-sector organisations and commercial customers in the UK and internationally.
Strategic Overview
Selectamark is an established provider of forensic marking, property identification and asset-registration solutions, and a trusted partner to law enforcement in the UK and internationally. Its technologies and brands continue to support crime prevention and crime-reduction strategies adopted by police forces, public-sector organisations and commercial customers. The Company's forensic testing is accredited by UKAS to ISO/IEC 17025:2017, and it operates certified management systems under ISO 9001:2015, ISO 14001:2015 and ISO/IEC 27001:2022.
The Company's purpose is to help protect people, property and communities through forensic technologies, trusted brands and secure asset-registration platforms.
Market and Business Model
Selectamark offers a portfolio of overt and covert forensic marking products integrated with secure online registers, enabling effective property identification and crime deterrence. The Company operates a family of complementary brands, comprising SelectaDNA (forensic marking), BikeRegister (the UK's national cycle database), SecureAssetRegister and Selectamark asset labelling, and sells through multiple channels including e-commerce, UK resellers, international distributors and selected white-label partnerships.
The Directors consider the business model to combine three reinforcing characteristics that underpin the quality and resilience of the Company's earnings:
● A differentiated, product-led core. Forensic marking products (DNA kits, forensic sprays and offender-tagging solutions) and security labelling reflect proprietary formulation, in-house manufacturing and pricing discipline rather than reliance on discounting. Their evidential reliability, providing robust and compliant evidence into the Criminal Justice System, further sets them apart.
● Recurring and repeat revenue. Secure online registers (BikeRegister, SecureAssetRegister and the SelectaDNA database) create ongoing engagement and repeat purchasing, while police-force and public-sector programmes generate multi-year, relationship-based demand that is less transactional than one-off hardware sales.
● A capital-light, cash-generative model. The Company converts profit efficiently into cash and operates from an almost debt-free balance sheet, giving it the flexibility to invest in innovation and in the register platforms through the cycle.
Revenue is diversified across UK direct, reseller, e-commerce and international channels, and across forensic marking, cycle security and asset identification. The advantages that protect this model, being registered intellectual property, UKAS-accredited forensic testing and long-standing police relationships, are described under Barriers to Entry. The Directors also actively manage the factors that could constrain it, in particular the concentration of international revenue within a small number of distributor relationships (see Principal Risks and Uncertainties) and the need to sustain investment in the digital register platforms. Management's strategy is directed at broadening the recurring-revenue base and reducing concentration, to strengthen the resilience of the Company's earnings.
Barriers to Entry
...CONTINUED
Review of the Business - continued
Selectamark operates in a tightly regulated forensic environment, and the requirements of UKAS accreditation to ISO/IEC 17025:2017 and of The Forensic Science Regulator Code of Practice (Version 2, dated May 2025) create a material barrier to new entrants. Achieving and maintaining this accreditation and regulatory compliance demands specialist scientific expertise and robust quality systems that are costly and time-consuming to replicate.
In addition, the Company's standing as a trusted partner to UK police forces, built on the evidential reliability of its forensic evidence and on joint crime-reduction programmes, provides a further advantage that is not easily reproduced. The Company's registered intellectual property, proprietary DNA formulations and established brands reinforce these barriers.
Business Environment
The UK operating environment during the year ended 31 October 2025 was characterised by easing but still-restrictive monetary conditions, inflation that remained above target, and rising employment costs that bore directly on small and medium-sized enterprises. The developments most relevant to the Company were as follows.
● Inflation remained above the 2% target and proved sticky. Consumer Price Index inflation rose through the year, plateauing at around 3.8% in mid-2025 before easing to 3.6% by October 2025, above the Bank of England's 2% target throughout the financial year. Persistent services and wage-driven inflation kept input and payroll cost pressure elevated.
● Interest rates eased gradually. The Bank of England reduced Bank Rate in steps from 4.75% at the start of the year to 4.0% by August 2025 (via cuts in February, May and August), improving financing conditions modestly while keeping the cost of capital materially higher than the pre-2022 norm. With minimal borrowings and substantial cash balances, the Company benefited from continued attractive returns on its deposits.
● A significant increase in employment costs from April 2025. The Autumn Budget of 30 October 2024 raised the main rate of employer (secondary Class 1) National Insurance from 13.8% to 15% and cut the secondary threshold from £9,100 to £5,000 with effect from 6 April 2025, alongside a 6.7% increase in the National Living Wage to £12.21 per hour. Although the Employment Allowance rose to £10,500, these measures increased the cost of employment across the economy: for the Company, for its suppliers, and for its public-sector customers, including police forces whose budgets were affected by the same changes.
● A recalibration of public-sector spending, with crime prevention retained as a priority. Following the July 2024 General Election, public-sector budgets were reset, but neighbourhood crime, tool theft, vehicle theft and retail crime remained areas of government and police focus.
● Supportive policy momentum on equipment and tool theft. The Equipment Theft (Prevention) Act 2023 remained in force, and in October 2025 the Government published its response to the call for evidence, confirming intentions to widen scope to larger agricultural and construction machinery and citing forensic marking and record-keeping among expected security measures. This provides a favourable backdrop for the Company's core technologies.
● A competitive labour market in technical and scientific fields, sustaining upward pressure on salaries for the specialist roles on which the Company depends.
● Global trade and supply-chain uncertainty. Renewed international tariff activity and geopolitical tension increased trade uncertainty, although supply chains for the Company's specialist components remained broadly stable.
● Heightened expectations around cybersecurity and data protection, reflecting the Company's operation of secure online registers holding customer and asset data.
Against this backdrop, the Company sustained its margins and strengthened its balance sheet while absorbing higher payroll and investment costs during the year.
Strategic Priorities
...CONTINUED
Review of the Business - continued
Following a strategic review, and in response to the conditions described above, the Company has focused on four priorities:
● Strengthening core UK markets. Enhancing digital capability, deepening engagement with law enforcement and expanding adoption across public-sector and commercial clients.
● Broadening international reach. Extending distribution in priority regions and supporting international distributors through improved partner enablement and technical support, while broadening the distributor base to reduce concentration.
● Investing in product innovation. Continued development of forensic DNA technology, high-security labelling, digital identification tools and next-generation asset registers.
● Developing organisational capability. Strengthening talent, operational systems, compliance frameworks and governance to support sustainable growth.
Business Performance
The Company delivered a resilient top line and a stronger balance sheet in a year of elevated cost inflation. Turnover was marginally lower year on year, the gross margin improved, and both cash and net assets grew. Reported profitability reduced, reflecting a one-off discretionary pension contribution and a deliberate increase in investment in people and capability.
Financial highlights
|
Year ended 31 October
|
2025 £'000
|
2024 £'000
|
|
Turnover
|
4,691
|
4,868
|
|
Gross profit
|
2,785
|
2,810
|
|
Gross margin
|
59.4%
|
57.7%
|
|
Operating profit
|
599
|
1,054
|
|
Profit before taxation
|
631
|
1,093
|
|
Cash at bank
|
3,018
|
2,730
|
|
Net assets
|
3,589
|
3,443
|
Revenue. Turnover of £4,691,291 was approximately 4% lower than the prior year (2024: £4,868,225). UK turnover was broadly stable at £2,102,877 (2024: £2,116,400), supported by sustained demand from police forces, public-sector contracts and corporates, while international turnover eased to £2,588,414 (2024: £2,751,826) on lower distributor volumes.
Margin. Gross profit was held at £2,785,366 (2024: £2,810,067) and the gross margin improved to 59.4% (2024: 57.7%), reflecting pricing discipline and product quality sustained despite significant input and wage-cost inflation.
Profitability. Operating profit was £599,042 (2024: £1,054,280) and profit before taxation £631,333 (2024: £1,093,060). The reduction reflects a one-off discretionary employer pension contribution, together with a deliberate increase in headcount, recruitment and capability investment and continued marketing spend, in a year when the April 2025 employment-cost changes lifted the payroll base. The Directors regard this as investment to support future growth rather than a structural erosion of returns, as underlined by the improved gross margin.
Cash and capital strength. The Company remained cash-generative, with cash at bank rising to £3,017,603 (2024: £2,730,368) and net assets to £3,588,631 (2024: £3,443,335) after funding the discretionary pension contribution, continued investment in intellectual property and a distribution to shareholders, all from internal resources. The Company is almost debt-free, carrying only a long-standing related-party loan, giving it the capacity to invest through the cycle and to pursue selective growth opportunities.
...CONTINUED
Review of the Business - continued
The Company continued to invest in innovation, product testing and certification to maintain its position in forensic marking technologies and digital asset-registration platforms. During the year it also played an active role in national tool-theft prevention initiatives, working closely with UK police forces, trade bodies and retailers to improve the identification and recovery of stolen tools, reinforcing the Company's role as a trusted partner in crime prevention across the trade, construction and utilities sectors.
Non-financial performance. The Company manages performance using non-financial measures alongside its financial results, including customer satisfaction measured through online surveys. The Company's Net Promoter Score (NPS) was 74 (2024: 81), based on an online survey of 1,502 customers during the year, consistent with high customer retention across the register and forensic-product businesses.
Outlook
The Directors expect the structural drivers of demand for forensic marking and asset registration (legislative momentum on equipment and tool theft, sustained police and government focus on acquisitive crime, and growing corporate and public-sector adoption) to support the Company's growth over the medium term. As the current investment in people and capability matures, the Board expects operating margins to recover. Supported by an almost debt-free balance sheet, dependable cash generation and established market positions, the Company is well placed to benefit from these trends, and the Directors are confident in its long-term prospects.
Principal Risks and Uncertainties
The Board has reviewed the principal risks in light of conditions during the year ended 31 October 2025. The previously identified risks remain relevant, with mitigations updated. Two further risks, being Employment Cost and Wage Inflation and Customer and Geographic Concentration, have been added to reflect the current environment and the profile of the Company's revenue.
● Economic and Political Environment. Changes in economic conditions or public-sector funding may affect customer demand. Above-target inflation and the reset of public-sector budgets during the year kept this risk elevated. Mitigation: diversification of revenue, flexible pricing, and ongoing monitoring of policy developments.
● Employment Cost and Wage Inflation. The April 2025 increases in employer National Insurance and the National Living Wage, combined with a competitive market for technical and scientific talent, have raised the cost of employment. This was a primary driver of the increase in administrative expenditure during the year. Mitigation: disciplined workforce planning, productivity and automation initiatives, use of the increased Employment Allowance, and pricing that reflects input-cost movements.
● Customer and Geographic Concentration. A significant proportion of international revenue is generated through a small number of distributor relationships in Europe. A change in those relationships, in local demand, or in trading terms could have a material effect on turnover. Mitigation: the Board monitors customer and geographic concentration as a standing agenda item and is executing a structured diversification programme, broadening the international distributor base and developing additional routes to market in the core European territory, prioritising new geographies, deepening the UK recurring-revenue base, and maintaining close, senior-level relationships with key partners. The Directors are confident of onboarding new international clients operating in complementary industries during the second half of 2026, which is expected to broaden the customer base and further reduce concentration.
● Competitive Landscape. Presence of domestic and international competitors. Mitigation: continued investment in innovation, branding, accreditation and certification.
● Cybersecurity and Data Protection. Evolving cyber threats and stringent regulatory expectations, given the Company's operation of secure online registers. Mitigation: strengthened cyber controls, ISO/IEC 27001:2022-certified information security management, audits, penetration testing and staff training.
...CONTINUED
Review of the Business - continued
● International Expansion. Challenges entering or scaling new markets, compounded by trade and tariff uncertainty. Mitigation: structured distributor selection, market prioritisation and enhanced governance.
● Supply Chain Reliability. Potential disruption to specialist components. Mitigation: multi-supplier sourcing, improved forecasting and robust inventory management.
Section 172(1) Statement
In accordance with Section 172(1) of the Companies Act 2006, the Directors confirm that they have acted in the way they consider, in good faith, would most likely promote the success of the Company for the benefit of its members as a whole.
In doing so, they have had regard to the interests of employees, customers, suppliers, regulators and the wider communities in which the Company operates.
The Board engages regularly with staff and key partners to ensure that stakeholder feedback informs strategic and operational decisions. Environmental, social and governance factors are considered as part of every significant business decision, consistent with the Company's commitment to long-term sustainability, scientific integrity and compliance with forensic-science standards.
The Directors also recognise the importance of the Company's contribution to public safety through partnerships with UK police forces and participation in national crime-reduction programmes. In balancing these factors, the Board seeks to deliver sustainable growth, protect the Company's reputation and uphold high standards of business conduct for the benefit of shareholders and stakeholders alike.
Sustainability and ESG Commitment
Selectamark applies environmental, social and governance principles across its operations to support long-term sustainability and maintain trust with customers, police forces and partners.
Environmentally, the Company maintains ISO 14001:2015 certification and continues to reduce waste, improve energy efficiency and increase renewable-energy use. Packaging improvements and selective carbon-offsetting further reduce environmental impact and support customer sustainability expectations.
Social responsibility is an important part of the Company's work. Selectamark works closely with police forces, insurers and community partners on crime-reduction initiatives, including tool-theft prevention and cycle-crime programmes, helping protect livelihoods and enhance public safety. The Company continues to convene the National Acquisitive Crime Conference and the National Cycle Crime Conference, which remain well attended each year and bring together police forces, industry and community partners; the 2025 events were held in Liverpool. These conferences reflect the Company's role in crime prevention and its ongoing engagement with law enforcement.
Governance is central to how the Company operates: its forensic testing is accredited by UKAS to ISO/IEC 17025:2017, and its laboratory complies with The Forensic Science Regulator Code of Practice (Version 2, dated May 2025), ensuring its forensic evidence is robust and compliant for use in the Criminal Justice System. This evidential reliability is central to the Company's standing as a trusted partner to law enforcement. Its certified information-security management (ISO/IEC 27001:2022) supports the secure operation of the asset-registration platforms, and its ISO 9001:2015 certification underpins the Company's approach to quality, with ESG oversight maintained at Board level.
People and Culture
The Company's success continues to be driven by its skilled and committed workforce. With the labour market remaining competitive, particularly in digital and technical fields, and employment costs rising following the April 2025 changes, the Company has strengthened investment in training, talent development and retention. The Company supports a diverse and inclusive workplace and continues to prioritise employee engagement.
...CONTINUED
Review of the Business - continued
Reflecting its commitment to fair pay and to attracting and retaining talent, in April 2026 the Company took the decision to pay all staff at or above the London Living Wage.
The gender breakdown of the Company's workforce at 31 October 2025 was as follows:
|
Male
|
|
Female
|
|
|
Directors
|
3
|
15%
|
1
|
5%
|
|
Employees in other senior executive positions
|
4
|
20%
|
3
|
15%
|
|
Other employees
|
4
|
20%
|
5
|
25%
|
|
Total employees
|
11
|
55%
|
9
|
45%
|