REG - Marlowe PLC - FY25 Trading Update

MarloweAnnouncement

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RNS Number : 2977G  Marlowe PLC  28 April 2025

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as amended by regulation 11 of the Market Abuse (Amendment)
(EU Exit) Regulations 2019/310. Upon the publication of this announcement via
Regulatory Information Service, this inside information is now considered to
be in the public domain.

 

28 April 2025

 

Marlowe plc

("Marlowe" or the "Group")

 

FY25 Trading Update

 

Marlowe plc, the leader in business-critical services, provides a trading
update ahead of publication of the Group's full year results for the year
ended 31 March 2025 ("FY25").

 

The Group also announces the bolt-on acquisition of Sludge Tek Holdings
Limited and one of its trading subsidiaries, Sludge Tek Limited (together
"SludgeTek"), a leading specialist in wastewater services.

 

FY25 Trading Update

 

Marlowe has delivered strong financial and strategic progress in FY25. During
the period, the Group successfully completed the divestment of selected
Governance, Risk and Compliance ("GRC") software and service assets for an
enterprise value of £430 million, and following this transaction, returned
£150 million to Group shareholders by way of a special dividend paid on 5
July 2024. In addition, the Group launched a £75 million share buyback
programme on 22 May 2024, which is now nearing completion.

 

In September 2024, the Group completed the demerger of its Occupational Health
division, resulting in the formation of Optima Health plc, a separately listed
entity. Following this transaction, Marlowe's continuing operations are now
focused exclusively on the attractive Testing, Inspection and Certification
("TIC") markets, comprising market-leading businesses in both Water & Air
Hygiene and Fire Safety & Security.

 

The Group's continuing operations are expected to deliver FY25 revenue of
approximately £305.0 million and adjusted EBITDA(1) of approximately £32.5
million (after £4.2 million of head office costs), both in line with market
expectations(2). Adjusted profit before tax(1) is expected to be ahead of
market expectations(2) at approximately £18.5 million.

 

At 31 March 2025, Marlowe had a net cash position (excluding IFRS lease
liabilities) of approximately £22 million, reflecting strong cash generation
ahead of market expectations in the period and progress made on the share
buyback programme which returned an aggregate of £66 million to Marlowe
shareholders over the course of FY25. As at 31 March 2025, the Group's £50m
debt facility remained undrawn.

 

As previously announced, the Group has made strong progress with its
integration programme, with all restructuring activity and associated costs
related to continuing operations concluded by 30 September 2024, in line with
previous guidance. As part of the finalisation of this process, the Group
undertook a detailed review of certain balance sheet items within the Water
& Air Hygiene segment, which is expected to result in a revision of
approximately £3.1 million in non-cash adjusting items at 31 March 2025. The
revision primarily relates to the reassessment of the recoverability of
certain aged balances, and while this will result in a one-off FY25 impact,
there is no impact upon the ongoing trading performance or future cash
generation of the business.

 

Acquisition of SludgeTek

As previously announced, the TIC service markets remain highly fragmented and
notwithstanding the Group's primary focus in the near term remaining on
driving margin enhancement and organic growth, bolt-on acquisitions continue
to present an attractive route for the Group to deliver additional shareholder
value.

The Company is therefore also pleased to announce the acquisition of SludgeTek
for an expected enterprise value of £6.2 million (the "Acquisition").
Headquartered in Andover and established in 2001, SludgeTek provides
specialist services to the Waste Management and Manufacturing sectors.

In the year ended 30 September 2024, SludgeTek generated revenue and adjusted
EBITDA(1) of £5.3 million and £1.7 million respectively and the
consideration for the acquisition consists of an initial payment of £5.7
million, and deferred consideration of an estimated £0.5 million based on the
completion of certain post-acquisition performance targets objectives.

The Acquisition further strengthens Marlowe's position as a leading provider
of wastewater rental solutions and is highly complementary to the Group's
existing capabilities. The business is expected to be easily integrated into
the Group's operations, and Marlowe does not anticipate any associated
restructuring costs to be reported in connection with the transaction.

The Group continues to actively assess further bolt-on acquisition
opportunities across both Water & Air Hygiene and Fire Safety &
Security, consistent with its strategy to build scale and consolidate market
leadership in these attractive and resilient sectors.

(1)Adjusted measures are presented before acquisition and disposal costs,
restructuring costs, amortisation of acquired intangibles, share-based
payments and legacy long-term incentives, as well as fair value losses in
contingent consideration and the one-off revision to balance sheet items noted
above.

(2)Analyst consensus prior to this announcement is for FY25 revenue of £306
million, adjusted EBITDA of £33 million and adjusted profit before tax of
£16 million.

 For further information:

 Marlowe plc
 Lord Ashcroft, Interim Non-Executive Chair  www.marloweplc.com

 Adam Councell, Chief Financial Officer      Tel: +44 (0)20 3813 8498

 Benjamin Tucker, Head of Group Reporting    IR@marloweplc.com (mailto:IR@marloweplc.com)

 Cavendish Capital Markets Limited (Nominated Adviser & Broker)
 Ben Jeynes                                  Tel: +44 (0)20 7220 0500

 George Lawson

 FTI Consulting
 Nick Hasell                                 Tel: +44 (0)20 3727 1340

 Alex Le May

 

About Marlowe plc

Marlowe is a leader in business-critical services which ensures compliance
with strict regulations and insurance requirements across Fire Safety &
Security and Water & Air Hygiene. The Group has a national footprint and
serves approximately 27,000 customers across office complexes, high streets
& leisure facilities, manufacturing plants and industrial estates, and
include thousands of SMEs, local authorities, facilities management providers,
multi-site NHS trusts and FTSE 100 companies.

 

 

 

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