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Ok great - thanks. Helpful that you have attenuated my numbers, for sure. Yes I would agree re headcount. Interesting on the strategy here as HoT must have been agreed Feb / March with a view that this would be completed in the new financial year. They are certainly pushing on with the acquisitions.
Shorts clearly see downside but Octopus topping up. A lot to reconcile!
I don’t think your figures are quite right. The dividends are in the final notes of the accounts and reserves are on the balance sheet
I think profit last year (Apr-22) was poor about £150k but £800k or so the year before
Maybe the business had a bad 12 months but you’d think with that many staff Marlowe can cut 30-40%?
Good spot, thanks for mentioning. Yes - looks sizeable. They have trade debtors of £2m so on a 60 days debt turn would be £12m ish revenues, £2.5m ebitda and £17m EV. Based on this and the PCS acquisition, looks like they are funding TIC bolt ons via cash (so net debt now c£190m ish). So assume that GRC deals further down track will be via a placing at some point
Clymac - fire safety business with 133 staff! So hopefully there are some big synergies with this one via route density
More cash out of the door though!
Makes you wonder what they are seeing here? Is it that they expect SME’s to get hammered and therefore Marlowe have a dip in profits and some bad debts?
I don’t see what the broad issue is here? Inflation today will mean rates go up again but this can be afforded especially if Marlowe can pass through some more price rises which for their services they likely can
Don’t worry Dartron, I know you see this as a long term play that will come good. As the mother of 2 young rascals, I am always reminding myself of this type of sentiment!
GLG joining the party? Overall short at 2.5% Wowzers! Hope I can get mine back under £5, that would be over a10% gain.
Well this is going from bad to worse!
Perhaps they took advantage of the short. As I wrote in my post, perhaps the short then backed off. Which would explain the strong price / liquidity. My guess is that they wont want any more, and maybe the short(s) will start up now. I think Blackrock need it to drop to about £4.60 (24th March). Sorry to be bearish, but id like it to drop as I sold mine and need them back. ;)
A good sign. Their average is a lot higher than the current price so I did wonder why they hadn’t averaged down given they built their previous hold with such conviction
A positive sign. But I still want a PE bid here
Interesting to see Octopus have acquire a further 1m shares / 1% - that would explain the significant liquidity I was offered.
I guess the question is are they going to continue buying? To get to this point, they triggered 3% on 20.09.22 and then on 4 occasions up to 2nd Nov 22, increased by an additional 1% up to 7% in total. This is early in the tax year for a VCT to be buying (usually they buy in the second half).
Any thoughts?
Ah ok, thanks. In May 21, valuations were pretty much as high as they have been in a good while, so Marlowe EV currently trading on 7x Mar 24 ebitda, feels like a steal. As you say, toggling between the two at, say, 12x has to be on someone’s radar right now. THG and the other PE deals announced today just highlight this fact, for sure, don’t they. Will wait and see….
That bid to take private was Macquarie. WP then acquired their stake 2 or 3 years later but at an even higher premium
Yes, the PTSG bid was pretty much a 100% premium to the price it was trading at the week before the offer. At the moment, a c.£1bn deal for Marlowe is fairly low probability given the markets but later in the year, with an improving macro, probably becomes more possible. On the flip side, the improving macro should raise the share price to a level where they will potentially raise equity for software deals, therefore we are in a win win position. However, I wouldn’t be surprised if the markets will move lower before we are in that position. Either way, price wise, there is more upside than downside!
That’s amazing. Well let’s hope there’s a PE bid soon
As well as what I said about Citation I heard from good authority from an IB friend that the Warburg Pincus deal for PTSG was at 17x EBITDA. I can accept valuations have come off but even if you apply 12x (which is arguably cheap when you see that PTSG has no software) then we clear £10 a share
Yes, built up mostly in 2016. Apologies, I don’t have an LSE premium account to be able to direct message you.
Are you serious? Wow!
Mind me asking your background?
I hold 0.21% of the equity. Looks like a bull flag has formed nicely and a golden cross should play out next week so I see this pushing up to the £6+ area shortly.
Wow you’ve a fair few share here!
Currently able to sell c.30,000 shares at £5.52 - this level of liquidity has broadly been the case all week; which makes me think the institutions continue to want to buy….
The 0.1% increase is equivalent to 100,000 shares but the volume each day this week (in a rising market) has been 800,000. Does that not mean that longs are in control / the proportion of shorts is not enough to be a worry?
JP Morgan are up again! They seem to really have conviction here
Are they driving the volume? I’m not sure how shorting would do that?
Coincidently they were increasing their short on Network International and that received a PE bid this afternoon
Yes, the volume has been high the last 2 days. Doesn’t look like much of it is isa transfers either!
After all that, someone is buying today...
Thanks for the short analysis. I don’t see Ashcroft’s vehicle buying. The only time he has bought was as a subscription to support a placing in Sept 16, when the business was starting to acquire. Like you say, I see this as a 3-4x return once markets recover and given mgt share options mature at £11.50+ in 2026. A 12x PE or 8x Ebitda has to be cyclically low, so just sit and wait I would say….