Marlowe Share News (MRL)

(Sharecast News) - Business software and regulatory service provider Marlowe updated the market on its recent trading on Wednesday, reporting "strong" financial progress, in line with expectations.

The AIM-traded firm, which was holding its annual general meeting, said revenue in the four months ended 31 July were 66% higher year-on-year, of which more than 85% were recurring.

It recorded "high single digit" organic revenue growth in the period, which was expected to continue for the rest of the financial year ending 31 March 2023, with "encouraging" new business wins across both the governance, risk and compliance (GRC) and testing, inspection and certification (TIC) divisions.

Marlowe said "limited" cost inflation was being successfully managed via contract pricing, while its acquisition integration programmes remained on track.

The board described a "disciplined execution" of its merger and acquisition pipeline, with nine bolt-on acquisitions completed in the year-to-date for total consideration of £39m.

Software subscriptions now contributed around 25% of group run-rate adjusted EBITDA, with group run-rate revenues and adjusted EBITDA now over £450m and £79m, respectively.

"We remain confident of achieving our run-rate targets of £500m of revenues and £100m of adjusted EBITDA materially ahead of the end of the 2024 financial year, as originally targeted, as we continue to build our positions across the highly attractive and resilient compliance markets that we occupy," the Marlowe board said in its statement.

"The strong and increasing margins in our business, and its low capital intensity, makes our business highly cash generative and we continue to expect to generate at least 90% cash conversion per annum.

"This enables us to fund increasing organic investment in our business, as well as fund further bolt-on acquisitions."

At 1259 BST, shares in Marlowe were up 8.04% at 734.65p.

Reporting by Josh White at Sharecast.com.