Marlowe (MRL) H2 2024 earnings summary

Executive summary

• Completed divestment of select GRC software and service assets for £430m, refocusing on Testing, Inspection & Certification (TIC) and Occupational Health (OH) businesses.

• Returned £150m via special dividend and initiated up to £75m share buyback; all debt repaid post-divestment.

• FY24 marked by significant restructuring, integration, and operational progress, especially in consolidating OH under Optima Health.

Financial highlights

• FY24 revenue from continuing operations rose 5% year-over-year to £403m; organic growth was 1%.

• Adjusted EBITDA fell 4% to £49m, with margin down 120bps to 12.2% due to OH contract losses and one-off TIC adjustments.

• Adjusted basic EPS declined to 36.4p from 45.3p, mainly due to higher interest costs.

• Net debt (excluding leases) increased to £177m prior to divestment completion.

• Operating cash flow conversion was strong at 96% of adjusted EBITDA.

Outlook and guidance

• FY25 restructuring costs expected at £5m, all in H1; no exceptional costs anticipated for FY26 barring new M&A.

• Net finance costs to reduce materially in FY25 as debt facilities are now undrawn.

• Capex guidance for FY25 is c.£6m; working capital outflow of £2–4m expected.

• Focus on driving organic growth, margin expansion, and cash generation; targeting group margins of 15%.