Senior management at business software and services group Marlowe (MRL:AIM) must be wondering what they need to do or say to revive the company’s ailing share price.

Despite delivering a 60% increase in first-half revenues and an 80% surge in EBITDA (earnings before interest, tax, depreciation and amortisation) last month, the shares fell nearly 16% to 616p on the day of the results and they are now trading at just 405p.

While growth was impressive, much of it came from acquisitions funded by debt meaning the firm’s gearing is increasing at the same time as interest rates are rising.

As analyst Callum Battersby at investment bank Berenberg points out, thanks to £44 million of bolt-on deals and weaker cash conversion, net debt increased from £109 million in March to £156 million in September.

That represents nearly 40% of the company’s current market value, which means despite the contribution from acquisitions earnings forecasts are being trimmed due to the debt burden and the impact of higher interest rates to come in 2023.

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