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MRL Marlowe Plc

-10.00 (-1.72%)
24 May 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Marlowe Plc LSE:MRL London Ordinary Share GB00BD8SLV43 ORD 50P
  Price Change % Change Share Price Shares Traded Last Trade
  -10.00 -1.72% 570.00 369,459 16:35:07
Bid Price Offer Price High Price Low Price Open Price
566.00 576.00 578.00 565.00 575.00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Investors, Nec 465.7M -3.8M -0.0393 -145.29 552.58M
Last Trade Time Trade Type Trade Size Trade Price Currency
16:43:32 O 25,000 570.00 GBX

Marlowe (MRL) Latest News (2)

Marlowe (MRL) Discussions and Chat

Marlowe Forums and Chat

Date Time Title Posts
22/5/202415:41Marlowe, a leading specialist compliance services group181
04/10/202010:20everyone MUST READ!106
10/9/200810:13Medoro with Charts & News33
20/7/200715:58 Medoro Resources > recovery thread1,945
18/4/200708:19are the shares ever going to go fucking up225

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Marlowe (MRL) Most Recent Trades

Trade Time Trade Price Trade Size Trade Value Trade Type
2024-05-24 15:43:37569.0040,000227,600.00O
2024-05-24 15:43:33569.0044,231251,674.39O
2024-05-24 15:42:08568.0064,363365,581.84O
2024-05-24 15:40:53569.0040,000227,600.00O
2024-05-24 15:36:28571.2632,857187,699.18O

Marlowe (MRL) Top Chat Posts

Top Posts
Posted at 25/5/2024 09:20 by Marlowe Daily Update
Marlowe Plc is listed in the Investors, Nec sector of the London Stock Exchange with ticker MRL. The last closing price for Marlowe was 580p.
Marlowe currently has 96,774,854 shares in issue. The market capitalisation of Marlowe is £552,584,416.
Marlowe has a price to earnings ratio (PE ratio) of -145.29.
This morning MRL shares opened at 575p
Posted at 22/5/2024 15:41 by dr biotech
This has been quiet for ages. A steady business that will be cash rich. Some cash strapped will probably attempt an all share offer at some point. Compliance doesn't really get my blood flowing.
Posted at 02/4/2024 08:58 by dr biotech
Had a positive research note from Cavendish this morning with a 775p 12month price target. Reckons once the deal completes the debt questions will be over and it should lead to a rerating.
Posted at 29/2/2024 06:46 by mirabeau
Inflexion Deal Gives Marlowe Scope For A Big Rerating

By Mark Watson-Mitchell

28 February 2024

In February 2021, Marlowe (LON:MARL), the safety and regulatory compliance services group, set out a new three-year strategy to achieve an aim of doubling group revenues to around £500m, while almost tripling group adjusted EBITDA to some £100m, with a 20% adjusted EBITDA margin and delivering over 90% cash conversion.

It also targeted a software ARR of at least 10% of overall group revenues.

The basis of delivering that new strategy was its ‘Deepen, Broaden, Strengthen and Digitalise’ plan.

At the time of announcing that new plan its shares were trading at around 680p, they peaked at 1,020p in December 2021, a year later they were down to 405p – typically showing the vagaries of the marketplace.
Market Whispers

In early July last year, I noted to Master Investor subscribers that recent market whispers had suggested that the group was contemplating the sell-off of its testing, inspection and certification division, with £650m possibly being the currently negotiated disposal value.

At that time, when its shares were 576p, I opined that if the market rumours prove to be well-founded then such a TIC side disposal would clear the group’s £160m net debt position and leave it very well funded for future impactive acquisitions.
However – Think Again

Instead of selling off TIC, the group has agreed to sell certain of its Governance, Risk & Compliance software and services assets to Inflexion Private Equity for an enterprise value of £430m on a debt-free, cash-free basis.

That side generates some 40% of the group’s total EBITDA.

Marlowe said that the divestment, which accounts for around 20% of its revenue, contributed £85.8m in revenue and £31.4m in earnings before interest, tax, depreciation and amortisation in the year ended March 31.

Upon completion of the deal the group intends to fully retire its debt facility, and then return around £150m of cash to its shareholders.
What Is Left?

The divestment does not include Marlowe’s Compliance Services businesses in OH and TIC, which represented approximately 80% of Group revenues in FY23.

The remaining business, which would be left with a net cash position of about £60m at year end, would be split into two main divisions – TIC and OH.
Testing, Inspection And Certification

The TIC side services largely revolve around keeping its customers business premises safe and compliant with relevant regulation and legislation, addressing compliance requirements across fire safety & security, and water & air hygiene.

This division is focussed on ensuring the safety and compliance of customers’ business premises in accordance with relevant regulation and legislation.

With a focus on fire safety & security and water & air hygiene, its comprehensive services cater to some 27,000 customers.

This extensive support is delivered by around 1,900 specialists who consistently achieve best-in-class compliance rates, reinforcing the division’s market-leading position.

Operating on largely multiyear contracts, its offerings are underpinned by regulations making them mandatory, which results in a high degree of recurring revenues.
Occupational Health

Marlowe’s Occupational Health division is the UK leader in the occupational health and wellbeing sector.

The backdrop for the UK workforce is one that is getting older and progressively less healthy with an estimated £90bn+ lost through absence and presenteeism in the UK.

In addition, the compliance burden for employers is significantly increasing.

Its comprehensive OH services improve the health & wellbeing of its customers’ employees, minimising workplace risk and maximising corporate productivity.

The services are delivered, often through multi-year contracts, by some 900 occupational health clinicians to over 3,000 customers.

Like the TIC division, it ensures compliance with regulations, such as HSE, COSHH, Noise at Work Regulations and the Working Time Directive, which provides a high degree of recurring revenues.
Knowledgeable Share Trading Perhaps

A week ago, the group’s shares, just two days ahead of the deal announcement, were trading at only 360p – the next day they responded to some possibly knowledgeable buying, closing at 425p.

On Thursday 22nd February, upon the announcement they hit 600p with some 6.57m shares changing hands that day, before closing at 502p.
Too Low A Valuation

Last Friday saw another 2.13m shares traded, closing at 530p, valuing the whole group at just £509m.

That is far too low a valuation, assuming the deal completes.

This Inflexion transaction leaves the group’s investors with 60% of the generating businesses and clears all debt, while putting £60m of cash into the bank, as well as £150m cash being given back to shareholders (just how that is going to be done is yet to be announced – hopefully a cash payment as opposed to a ‘buyback’).

This disposal simplifies the group’s focus and strategy upon its core compliance services businesses and is sure to be a major ‘swivel-point’ for the group.
Management Comment

Chairman Kevin Quinn stated that:

“This divestment represents an excellent outcome for Marlowe and its shareholders and underscores the significant value that has been created through the delivery of our growth strategy.

The valuation achieved demonstrates the substantial potential within our business and will reset our capital structure, giving Marlowe strategic agility whilst delivering meaningful returns to our shareholders.”
The Equity

There are some 96.8m shares in issue.

Largest shareholder, Michael Ashcroft, with 12.27% of the equity must be pleased to witness the Inflexion deal.

Other large holders include Capital Research & Management (7.14%), Slater Investments (5.543%), Abrdn Investment Management (4.97%), Threadneedle Asset Management (3.81%), Aegon Asset Management (2.96%), Canaccord Genuity Wealth (2.69%), Danske Bank (1.17%) and Sp-Fund Management (1.03%).

Current but soon departing CEO Alex Dacre, who will transfer with the Divestment, holds 4.84% of the Marlowe equity.

Where To Now

The divestment will allow the group to capitalise on the inherently attractive end markets of TIC and OH, to strengthen its balance sheet while also providing an opportunity for a more optimised approach to capital allocation.

In due course it may well invest in carefully selected bolt-on acquisition opportunities across the remaining Occupational Health and TIC assets once restructuring investments in respect of historically completed acquisitions have reduced.

It may be too soon yet to predict the levels to where its shares are headed, but they continue to have strong appeal.

Analyst Calum Battersby at Berenberg retained his ‘buy’ recommendation and target price of 720p on the stock, anticipating a rerating on the company’s de-risked balance sheet and cleaner future equity story for the remaining business.

There are 5 analysts that follow the company, the consensus average Price Objective is 748p, with the highest price sought is 1,000p, while the lowest is just 453p.

The shares closed last night at just 512.50p, valuing the whole group at just £496m, which makes them look like an extremely attractive proposition.

(Profile 30.01.20 @ 468p set a Target Price of 550p*)
Posted at 23/2/2024 13:52 by dr biotech
Bit from Berenberg

Overall, said Berenberg, the announcements are ‘undoubtedly positive for shareholders following a turbulent period for the company’s share price’.

The broker, which has a ‘buy’ rating and 720p price target for Marlowe, sees a strong argument for a higher valuation ‘given that the group’s balance sheet has been de-risked, capital can now be reinvested in growth, and the group’s future equity story is significantly cleaner than it has been of late. This is our view, although we expect this may take time to pan out, as the company’s future strategy is made clear.’
Posted at 22/2/2024 18:40 by elsa7878
June 2023 they thought the TIC business could be worth £600m. Since they clearly did not get it does not mean its a pup, just worth less. As i see it when the t/o has been done they will have £200m net cash or 200p a share and the TIC business (and Health business?) making £50m plus in Ebitda. Clearly need to account for tax and central costs and tax on a shareholder dividend if thats there chosen route for shareholder distribution. Should do a tender or buyback.
On that basis it still looks good value.
Posted at 22/2/2024 07:48 by dr biotech
Yep. Leaves us with the TIC and about £200m. Presumably they couldn't get the price they wanted for the TIC - rumoured last year to be asking for £600m. If it can be valued at £400m that will give us a substantial rise today.
Posted at 15/6/2023 20:34 by dunns_river_falls
Interesting given the mcap of MRL is £570m
Posted at 23/2/2023 16:53 by dr biotech
Well you can always use your retrospective broker to sell at higher price as you did above.
Posted at 30/12/2022 09:10 by masurenguy
The word on the street about Marlowe’s gyrating share price

Almost exactly a year ago the shares hit £10, valuing the group at £1 billion..........By the time of its half-year results last month, the stock had fallen by 30% to 700p......By the middle of this month Marlowe had lost a further 45% prompting comment that with the shares at 400p, that may restrict its ability to raise money on the stock market......then the shares went pop, putting on 25% in a week to go back above 500p. Yesterday they lost 31p, falling 6.1%, to 473p. Word is that the volatility is being caused by marginal buying and selling by retail punters.

Complete article::
Posted at 06/12/2022 08:10 by masurenguy
Some interesting points about the recent interims and the subsequent negative market reaction from Insider Ideas have brought Marlowe back onto my radar screen following some substantial share sales by Dacre and Skinner @690p in March last year. I subsequently sold out at just over 800p some 15 months ago. The current price of circa 475p is back to the fund raising levels of 475p in July 2018 and 478p in June 2020 and is also 13% below the last fund raising @547p in October 2020. At this level it is looking like an interesting proposition once again and therefore it's now back onto my watchlist. The main negative issues are debt and cashflow, which need to be addressed in this inflationary climate.

* Market cap £480m@ 490p, net debt @ Sep 22 £155m, EV £635m.

* Marlowe’s compliance service related revenue streams seem to be highly predictable and should remain secure throughout the economic cycle. Revenues are enjoying high single digit organic growth rates thanks to volume growth, pricing power, and cross-selling efforts between its various offerings.

* The management and BoD are heavily invested in the equity and seem to be of high quality/integrity.

* On 23 November 2022 the company reported interim results and the stock traded down heavily in the subsequent trading days. Broker reactions to results are mostly positive although some brokers have downgraded forecasts slightly to reflect rising cost of floating debt outstanding, and/or commented on the need for cash conversion to pick up in H2.

* The stock now sits on a current run rate multiple of 7.7x EV/adj EBITDA using Marlowe’s adjustments, or 6.4x using Marlowe’s £100m fwd adj EBITDA number that it said on 23 November will be reached “materially ahead of the original end of FY '24 goal”. Given the stability and economic robustness of the growing revenue streams, this valuation seems worthy of consideration.

* Management have just bought shares following the recent price drop. The management and board have a strong vested interest in the company’s equity, which aligns their incentives with the rest of the shareholders. Even after much dilution through share issuance for acquisitions, Alex Dacre still owns c5% of Marlowe today. Lord Ashcroft retains a 12.4% holding and seems to have sold little or no shares since Marlowe’s founding.

* Management also have quite a significant performance incentive scheme, the 2021 Executive Incentive Programme (EIP), which will pay out to certain directors 10% of the total shareholder return above a 10% hurdle rate over a five year period from Mar 2021, using the March 2021 placing price as reference. Alex Dacre has a 56.5% share of the incentive pool, the new CFO Adam Councell has a 18% share, and ‘other directors’ have 25.5%. This implies that Alex Dacre must get the share price above £11 (almost double current price) before he or fellow directors start receiving any value from the EIP. Furthermore, in order to agree the EIP with the board, Alex Dacre and other participating directors had to commit to below-market salaries and forfeit annual bonuses for the 5 year period. The management were willing to sacrifice annual security and short term gains in exchange for greater leverage to long term upside, in a manner that makes them more aligned with other shareholders.

* Cash flow and cash conversion was a disappointment in the H1 results. There is now significant pressure on H2 results to show an improvement in cash flow conversion of profits.

* The company is split into two main divisions - Governance Risk & Compliance (GRC) and Testing, Inspection and Certification (TIC). The company’s early years were mostly focused on growing scale within TIC, which is composed of fire safety and water & air safety compliance services. In more recent years the balance of growth has shifted towards GRC, which is composed of health/safety, employment law/HR compliance, occupational health, and compliance software.

* The nature of these businesses should mean that revenues are able to grow organically even through a recession, as customers need to continue paying for compliance services if they want to be open for business at all - the vast majority of Marlowe’s services are not a discretionary spend for its customers that can be turned down when business is weak.
Marlowe share price data is direct from the London Stock Exchange

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