Update on COVID-19

31 March 2020

Marlowe plc

Update on COVID-19

Marlowe plc, the specialist services group focused on developing companies which assure safety and regulatory compliance, provides the following update on its trading and the impact of COVID-19.

Trading in the second half of the year has been strong and we expect to perform in line with expectations for the year to 31 March 2020, despite increasingly challenging conditions in recent weeks. Given the essential nature of our services, we remain confident that our resilient business model positions us more favourably than most sectors of the economy to both operate under the current COVID-19 restrictions and to benefit from a wider recovery in activity once these restrictions are eased.

The health, safety and wellbeing of our employees and our customers are our overriding priorities and we have put in place appropriate safety protocols across the Group. The services that we deliver have been largely designated as critical under current Government guidance, enabling us to play our part in helping to keep our clients - which include healthcare facilities, food production and care homes - compliant with health & safety laws and regulations, and their premises safe and operational, during these unprecedented times.  

Following the enhanced Government and Public Health England guidance issued on 23 March, we have seen some impact where staff are unable to gain access to sites in order to complete work and, whilst we are unable to predict the long-term impact of these measures with any degree of certainty, it is likely that we will see some impact on our operations and performance in the first quarter of our new financial year. However, given the regulatory-driven nature of our business, we expect the majority of any lost revenue in this period to be recovered once normal site access resumes. Parts of our Group, including our employment law, HR compliance, occupational health and certain water hygiene activities, are experiencing an increased demand for services.   

We have a strong balance sheet, with the Group's debt facility comprising a £45m revolving credit facility, and net debt at 30 September 2019 (excluding the effects of the adoption of IFRS 16) was £19.6m. As such, we are confident that we have sufficient funding capacity to manage a wide range of scenarios. To prepare for the possibility that current restrictions remain in effect beyond the immediate term, and to minimise any concomitant impact on our business, we are implementing cost reduction measures across the Group to protect profitability and preserve cash.

Alex Dacre, Chief Executive of Marlowe plc, said:

"We are pleased to report a strong second half to our financial year despite the challenging conditions in the final few weeks. Whilst restrictions related to COVID-19 will have an impact on our ability to complete some of our scheduled work in the short-term, we expect that a large proportion of this revenue will be deferred to later in our new financial year.

"Our outlook beyond COVID-19 is positive, with growing demand for the type of regulated safety and compliance services that our Group delivers. We will provide a further update as and when there is greater clarity on the impact of COVID-19 on our trading environment."

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About Marlowe plc

Marlowe is a UK leader in specialist services which assure safety and regulatory compliance, whilst managing risk for businesses across the country. The company was formed to create sustainable shareholder value through the acquisition and development of businesses that provide regulated inspection, testing and compliance services. It is focused on health & safety, employment law compliance, fire safety, security, water treatment & hygiene, air quality and occupational health services - all of which are vital to the wellbeing of its customers operations and are invariably governed by regulation. Marlowe currently provides services to over 15% of Britain's commercial premises and is increasingly attractive to customers who require a single outsourced, nationwide, provider of a comprehensive range of regulated compliance and safety services. Our customers can be found in most office complexes, high streets & leisure facilities, manufacturing plants and industrial estates, and include SMEs, local authorities, facilities management providers, multi-site NHS trusts and FTSE 100 companies.