- Bumper return of capital
- Shares climb 7% on news
- Trading ‘in line’ this year
It has been something of a wild ride for investors in fire safety specialist Marlowe (MRL:AIM) over the past six months or so, but today they can celebrate after the firm announced it would return a significant part of the proceeds from the sale of some of its software and service assets.
The shares, which collapsed more than 30% last December from 500p to 310p, have gradually clawed their way back to the 500p level, boosted by the news in February that chief executive Alex Dacre was stepping down, and today added just under 7% to 570p taking their gains year-to-date to 33%.
BUMPER PAYOUT
Having sold some of its governance, risk and compliance and services assets for an enterprise value (including debt) of £430 million, as announced in February, today the FTSE 250 firm revealed it would return £225 million to shareholders in the form of a special dividend and a buyback.
The special dividend of 155p per share amounts to £150 million, while the buyback – which will be launched on payment of the special dividend – is worth up to £75 million.
Alongside the announcement, Marlowe said it had made ‘good financial and strategic progress’ in the financial year to March and trading had been in line with expectations.
Revenue from continuing operations is expected to be just over £400 million, with testing, inspection and certification seen reporting £292 million of turnover and occupational health accounting for £111 million.
Net debt is seen lower than forecast at £177 million, ‘reflecting strong cash generation and working capital improvements in the second half’.
Executive chairman Kevin Quinn commented: ‘The recently-announced divestment clarifies the group's forward strategy in the highly-attractive and regulated compliance service markets and our focus on consistent organic growth, margin enhancement and the disciplined allocation of capital.’
