Investing.com - Financial Markets Worldwide

Shares of U.K.’s Marlowe rise on upbeat profit forecast

AuthorMaria Ponnezhath
Published 28/04/2025, 10:48
© Reuters.
WM
3.65%
MRLM
0.23%

Investing.com -- Shares of Marlowe PLC (LON:MRLM) climbed 1.6% on Monday following the company’s trading update, which revealed an adjusted profit before tax (PBT) surpassing market expectations.

The company expects to report an adjusted PBT of £18.5m, which is significantly higher than the consensus estimate of £16m. This news comes amidst a broader market characterized by volatility, signaling robust performance by Marlowe.

Marlowe’s group revenue is projected to hit £305m, nearly matching the consensus prediction of £306m and aligning with RBC’s estimate of £305.5m.

Adjusted EBITDA is also set to meet the guidance provided in February 2025, as well as consensus estimates, at £32.5m. Moreover, Marlowe has maintained a solid financial position, with net cash excluding leases at £22m and an undrawn debt facility, after returning approximately £66m to shareholders through a share buyback program during the fiscal year.

Further bolstering investor confidence, Marlowe announced the acquisition of SludgeTek, a specialist service provider for the Waste Management (NYSE:WM) and Manufacturing sectors.

The acquisition, valued at an enterprise value (EV) of £6.2m, or roughly 3.6x adjusted EBITDA, is expected to enhance Marlowe’s wastewater solutions within the Testing, Inspection, and Certification (TIC) sector. 

According to RBC analysts, the in-line trading update is seen as positive news for Marlowe, highlighting the resilience of the underlying business during a period of significant market volatility.

"This follows a very busy ~18 months for the company, after successfully completing the divestment of its software assets and Occupational Health division, leaving it with leading positions in Water & Air Hygiene, and Fire Safety & Security, within Testing, Inspection and Certification (TIC). It is also positive to see progress on a more controlled M&A strategy with the first bolt-on acquisition announced since these divestments at a sensible multiple," RBC said in a note. 

 

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