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Better than expected earnings and new broker help to revive Marlowe’s share price
Marlowe (MRL:AIM) 432p
Gain to date: 1.4%
Original entry point: Buy at 426p, 28 June 2018
Shares in fire and water safety expert Marlowe (MRL:AIM) have strengthened in recent weeks for three reasons.
First, the service group appointed investment bank Berenberg as joint corporate broker alongside Cenkos, helping to raise its profile among institutional investors.
Berenberg believes Marlowe’s shares could be worth 620p in the next 12 months based on a discounted cash flow model and expectations that it will keep making acquisitions at decent prices.
Marlowe also pleased the market on 29 April by saying full year adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) will be ahead of market forecasts after enjoying ‘significant growth’ in revenue and profit.
Coinciding with this news was an event for investors to learn more about the business including information on the recently-acquired William Martin operation, which is Marlowe’s first acquisition in the health and safety audit and inspection market.
William Martin is growing faster than the rest of the group, it has a higher proportion of recurring revenues and it generates higher operating margins.
SHARES SAYS: We’re pleased to see our trade on Marlowe is back in positive territory after a weak period for the share price. The investment case remains highly attractive so keep buying.