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I don’t literally mean two years. More a turn of phrase but my point was we did the Unilever point a while back
I’m just pointing out how new investors are seeing things also
I wonder if Aegon want out above a certain price and therefore we come up now before they try and clear some more
I think Marlowe do update quite well and have done a tonne of CME days. Just atm no one seems to care
You look at that Finnish business? Thanks
I’m in the later. Got caught catching the downs after results
But to your point yesterday (which you correctly called) we now know the sell off was Aegon and not fears over anything nasty as as major shareholders they would have inside info
Interesting look at Caverion in Finland which is being acquired. A c.12x multiple only 65% recurring revenue and EBITDA margins of <5%!
Aegon look as though they want out
Now under 3% so we might not see any more RNS from their selling
Shame as their holding was just below 5% at one point
It is quite funny how the conversations and ideas that went around 2 years ago are now coming back around again
Well Marlowes margins have been improving and a point for me in the last update was the strong organic growth, particularly in fire and the TICC division when you think most growth would be from the sexy SAAS side
Looking at shareholders all have held for very low values except Octopus who built up to £8ish. Most investors will have put in at £10 to buy Optima
If there was a bid at £10 I think shareholders would accept. Especially if it was all cash. I even think £9
A 12x EBITDA multiple gets you to those figures which feels cheap when you consider
- Citation was acquired for 17x by KKR
- Ideagen was acquired for 33x by HG (HG still hold a stake in Citation I should add)
- Fire safety businesses in the PE space are 10x or above but are much smaller scale
So I think time has come for Marlowe to look for new owners. Also I think it’s an easy P2P given the founding shareholder (Lord something) will likely want to cash out and holds a chunk you can then roll management (8% or so of shares)
I think this is mainly related to the high debt and rising interest costs impacting cash conversion
I also think the pricing of a recession is impacting ie how many small businesses will be forced into closure and therefore impact Marlowe
So until we get an update to see 1) how resilient the customer base is and 2) how debt is being paid down then I think we will drift
On the upside if the customer base is strong (which I think overall it will be) then into FY25 cash flow should be clear of exceptionals and deferred consideration and cashflow will be very strong. There’s still FY24 of neutral cashflow
On another thought Marlowe should be looking for a private equity takeover. A PE firm could acquire Marlowe clear the debt and take to a tax haven. That instantly puts £30m to the positive in terms of FCF
How do you see it?
Please can someone share (I assume it’s rubbish but would still like to see it)
Thanks
Good to see as it's cash in the door but isn't the whole point of ingenuity that we go D2C? We are just paying away margin here
I like this for convenience items but I don't like for clear whey where I want as much of that profit as possible and ability to upsell
Here’s some of what I mean
“ For example, a 200g bag of full roast coffee granules has dropped to £2.25 from £3.99, little gem lettuce has been cut to 85p from 99p, and a four-pack of toilet tissue costs now £1.99 from £2.55.”
Coffee for example exploded in price (I drink a lot) but look now a huge cut in price. That for me shows the hike wasn’t really inflation but a chance to rebase the price and see what consumers would take
I caveat and understand coffee is a commodity but that drop of £1.75 is huge and should fall through nicely for inflation
Agree. Last few weeks there have been huge cuts from Morrisons and Sainsbury’s etc
What was really interesting in a Morrisons article was by how much stuff had been cut. I think a lot of price hikes were not inflation but a chance to rebase and also get a head of any scary inflation. Now that’s not the reality, input costs are falling and volumes prices are heading back
agree
it also answers some of their problems re public sector strikes as takes away some of the reason that those workers need a payrise ie rising energy costs
Tories were the same through covid. Always slow or too late to make the move that was needed and would have garnered support for them
I can’t see why Jeremy Hunt doesn’t roll the price cap over for three more months at £2,500
That take a huge (already priced in) jump in energy inflation away. It looks great in the polls and it also means input costs lower which in turn allows further falls in pricing
It’s a move he needs to make
@ryan Asos and boohoo do have automation in their warehouses! Asos was probably 3-5 years a head of THG on that front
The difference is Asos uses a shuttle system
Boohoo has only just automated but again gone for a shuttle system
Autostore does have flaws that’s why it’s not used in every case of automation
and another Heinz site!
https://www.linkedin.com/posts/nik-gupta_new-hot-sauce-ed-sheeran-is-launching-activity-7033792231039754240-AGEJ?utm_source=share&utm_medium=member_desktop
This adds to ketchup one I shared at Christmas
Good momentum here with Heinz
Canary they haven’t “picked” THG for this as Autostore say the deal for the pick offering isn’t exclusive. It just done with THG first but will be available to all partners, who in turn all have a WMS
The MFC is an Autostore design as one of the main draw backs from investors to Autostore was the rise of Uber east, gorilla and gett etc. ie saying does fast but out of city large fulfilment become obsolete when the above businesses can deliver from stores or empty units in under and hour
So to combats this Autostore designed MFCs
It’s significant as it shows how many people here haven’t got a scooby
Would be buying through the market
Can’t do a placing as we’d go mad. Private, why there is liquidity to buy more shares in the market
Rumour - Kelso will be buying more stock in next few weeks