LONDON (ShareCast) - (Sharecast News) - Marlowe reported a rise in full-year earnings from continuing operations on Thursday, as it prepared for its takeover by Mitie, following a year of major strategic change that included the divestment of its governance, risk and compliance assets and the demerger of its occupational health division.
Revenue from continuing operations for the year ended 31 March rose 4% to £304.5m, with adjusted operating profit up 6% to £20.3m.

Adjusted EBITDA rose 4% to £32.8m, maintaining a margin of 10.8%.

The AIM-traded firm said adjusted basic earnings per share surged 47% to 15.3p, as it swung to a statutory operating profit of £5m, compared with a £3.2m loss the year before, reflecting the completion of restructuring costs.

Marlowe's net cash position at year-end stood at £22.2m, compared to net debt of £176.6m a year earlier, following the £430m sale of its GRC assets in June last year and the settlement of its previous debt facility.

Group statutory profit before tax was £144.9m, largely driven by a £141.4m gain on the divestment.

The company returned £223m to shareholders during the year, including a £150.3m special dividend and £72m in share buybacks by June 2025.

It had planned an additional £15m buyback, but that was shelved following Mitie's recommended offer to acquire the company.

Mitie's offer, announced in June, valued Marlowe at £366m, or 466p per share, representing a 39% premium to Marlowe's three-month average price prior to the announcement.

Including the value of previous distributions, shareholders would have received 831p per share, a 164.5% premium to the company's share price low of 314p in December 2023.

"Marlowe has undergone significant strategic change over the past year, repositioning the group to focus solely on the attractive UK compliance services market," said Lord Ashcroft, interim non-executive chair.

"Following the £430m divestment of certain GRC software and service assets in June 2024 and the demerger of our occupational health division in September, Marlowe now consists entirely of its market-leading testing, inspection and certification (TIC) businesses in fire safety and security, and water and air hygiene.

"The recommended offer for Marlowe by Mitie represents excellent value for Marlowe shareholders and offers the opportunity to participate in further potential value creation through the new Mitie shares to be issued."

Marlowe said trading since the year-end had been broadly in line with expectations, though margin pressure had emerged due to the April increases in National Insurance and minimum wage costs.

The company said it was continuing to pursue bolt-on acquisitions to drive further growth.

At 0918 BST, shares in Marlowe were down 0.17% at 441.25p.

Reporting by Josh White for Sharecast.com.

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