90. Marlowe
Providing inspection, testing and compliance services, Marlowe (MRL) is unlikely to win any awards for Aim’s most exciting company. But it is tapping into businesses’ needs to outsource an ever-increasing regulatory burden. Positioning itself as a ‘one-stop shop’, the group covers areas such as health and safety, fire safety, water treatment and air quality. The mission-critical nature of these services enables client ‘stickiness’, with long-term contracted customer relationships providing earnings visibility.
Its primary growth driver is acquisitions, which help to increase productivity and route density. The group has made three purchases since the beginning of 2020, including safety consultancy Eurosafe, for an enterprise value of £2.5m. Once it reaches sufficient scale within a speciality, Marlowe is able to cross-sell services to boost organic revenue growth.
The Covid-19 pandemic is disrupting the group’s ability to complete scheduled work, and it expects a large proportion of sales will be deferred to the next financial year. Recurring revenues derived from non-discretionary services make it a defensive play and an ever-increasing mountain of regulation will underpin long-term demand. Buy. NK