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Expansion underpins growth at Marlowe
23rd Jun 2021 09:13
(Sharecast News) - Safety and regulatory software and services company Marlowe reported a 15% improvement in group revenue in its final results on Wednesday, to £192m.
The AIM-traded firm said current 12-month run rate revenues totalled £280m, with around 83% recurring in nature.
Adjusted EBITDA for the year ended 31 March was ahead 30% year-on-year at £28.7m, with the company's run rate adjusted EBITDA coming in at £44m.
Marlowe said adjusted profit before tax was 31% firmer at £17.1m, while adjusted earnings per share were 6% higher at 25p, despite the dilutive effect of placings during the year.
It recorded "strong" operating cash flow, with net cash generated from operating activities before acquisition and restructuring costs rising to £28.3m, from £11.2m in the prior year, with "significantly improved" underlying cash conversion of 110%, compared to 83% in the 2020 period.
Marlowe also said its margin expanded, with its divisional adjusted EBITDA margin increasing to 16.2% from 13.1% year-on-year.
Its governance, risk and compliance adjusted EBITDA margin increased to 32.7% from 27.2%, and its testing, inspection and certification margin was 12.6%, rising from 11.9%.
The board described the balance sheet as strong as well, with net cash excluding IFRS 16 lease liabilities at year-end standing at £43.3m, swinging from net debt of £32.3m a year earlier.
That followed the firm's recent oversubscribed placing to raise around £100m to fund the group's acquisition-led expansion strategy.
Looking at its medium-term growth strategy, Marlowe said it was targeting run rate revenue of £500m and £100m of run rate adjusted EBITDA, with at least 90% cash conversion by the end of the 2024 financial year.
"We have continued to execute at pace upon the opportunity to build the UK leader in business-critical services and software across the governance, risk and compliance and the testing, inspection and certification markets," said chief executive officer Alex Dacre.
"We have made substantive progress in executing our merger and acquisition strategy, delivered further strong margin expansion and cash generation whilst organically building our base of recurring revenues, which now stand at over 83%.
"The platform acquisition of Ellis Whittam has transformed the scale of our governance, risk and compliance activities, and Elogbooks represents a significant step in the delivery of our digital strategy."
Dacre said that alongside 13 further bolt-ons during the year, and eight post period-end, the firm was continuing to add scale and capabilities in line with its strategy.
"We have made a strong start to the new financial year, with good levels of organic growth, and look forward to delivering further profitable growth.
"This progress underpins our confidence to continue executing our strategy and to achieve our medium-term targets through deepening our market share across our sectors, broadening our activities across the business-critical arena, strengthening our business via operational improvements and delivering on our digital strategy to reach compliance software revenues of around £50m," Alex Dacre added.
At 0851 BST, shares in Marlowe were up 0.53% at 851.5p.
The AIM-traded firm said current 12-month run rate revenues totalled £280m, with around 83% recurring in nature.
Adjusted EBITDA for the year ended 31 March was ahead 30% year-on-year at £28.7m, with the company's run rate adjusted EBITDA coming in at £44m.
Marlowe said adjusted profit before tax was 31% firmer at £17.1m, while adjusted earnings per share were 6% higher at 25p, despite the dilutive effect of placings during the year.
It recorded "strong" operating cash flow, with net cash generated from operating activities before acquisition and restructuring costs rising to £28.3m, from £11.2m in the prior year, with "significantly improved" underlying cash conversion of 110%, compared to 83% in the 2020 period.
Marlowe also said its margin expanded, with its divisional adjusted EBITDA margin increasing to 16.2% from 13.1% year-on-year.
Its governance, risk and compliance adjusted EBITDA margin increased to 32.7% from 27.2%, and its testing, inspection and certification margin was 12.6%, rising from 11.9%.
The board described the balance sheet as strong as well, with net cash excluding IFRS 16 lease liabilities at year-end standing at £43.3m, swinging from net debt of £32.3m a year earlier.
That followed the firm's recent oversubscribed placing to raise around £100m to fund the group's acquisition-led expansion strategy.
Looking at its medium-term growth strategy, Marlowe said it was targeting run rate revenue of £500m and £100m of run rate adjusted EBITDA, with at least 90% cash conversion by the end of the 2024 financial year.
"We have continued to execute at pace upon the opportunity to build the UK leader in business-critical services and software across the governance, risk and compliance and the testing, inspection and certification markets," said chief executive officer Alex Dacre.
"We have made substantive progress in executing our merger and acquisition strategy, delivered further strong margin expansion and cash generation whilst organically building our base of recurring revenues, which now stand at over 83%.
"The platform acquisition of Ellis Whittam has transformed the scale of our governance, risk and compliance activities, and Elogbooks represents a significant step in the delivery of our digital strategy."
Dacre said that alongside 13 further bolt-ons during the year, and eight post period-end, the firm was continuing to add scale and capabilities in line with its strategy.
"We have made a strong start to the new financial year, with good levels of organic growth, and look forward to delivering further profitable growth.
"This progress underpins our confidence to continue executing our strategy and to achieve our medium-term targets through deepening our market share across our sectors, broadening our activities across the business-critical arena, strengthening our business via operational improvements and delivering on our digital strategy to reach compliance software revenues of around £50m," Alex Dacre added.
At 0851 BST, shares in Marlowe were up 0.53% at 851.5p.