Research Update: Lancaster Group Holdings FY2025
Sound basis for continued investment...VCs & PEs look elsewhere.
Key findings: FY2025 group revenue £48.4m (+6.1% YoY) | ICT Reverse +32.4% to £8.9m against a near-flat Mazuma at £39.5m (+1.6%) | online consumer sales +20% to £13.9m, a 35.1% CAGR since 2020, while trade sales held broadly flat at £34.5m (+1.2%) | gross margin eased to 27.5% from 28.2% under aggressive competition for device supply | operating profit down 5.3% to £5.2m at a 10.8% margin as administrative costs rose 10.5% to £8.1m | profit before tax down 4.7% to £5.3m at 10.9%, helped by lower net finance costs of £39k against £57k | Mazuma built inventory from £1.95m to £4.7m, taking group cash to £2.80m from £4.08m after £1.39m of debt repayment and £1.46m of dividends | net assets strengthened to £5.17m at Mazuma and £1.9m at ICT Reverse, up 61% | Full financial analysis available as a downloadable report here.
Ever since unicorns ceased to only be a mythical animal and became the moniker for what was supposed to be a statistical rarity among investors1, financial commentary too often focuses on huge investments and over-valuations from PEs and VCs. Whilst that serves some purpose, incumbent organisations can be overlooked, despite having founders who had early visions and who’ve been plugging away at their mission for years. Lancaster Group Holdings Limited (11190451), previously EcoRenew Holdings, has two such operating companies.
Recap
ICT Reverse Asset Management Limited (04736549) was founded in 2003 by Craig Smith (who made the Power50 List at the forthcoming Mobile Industry Awards2) and offers corporate mobile and device recycling services alongside other office electronic recycling and IT relocation services. Mazuma Mobile Limited (05909550) now also managed by Craig Smith under the Lancaster umbrella was founded in 2006. I might be wrong, but I think this puts Mazuma as one of the first consumer-focused buy-back companies out there. Regardless, their googly eyed robot phone dude has seemingly been around forever. In addition to the core B2B focus, Mazuma offers a business service although I’m unclear on the overlap with ICT.
2017 turned out to be a busy year for Hong Kong based Ecorenew Group, founded by Gary Lau, who acquired both of the above companies and set up a holding structure shortly after. Ecorenew have entities in the U.S., Japan, Dubai, Australia, and the Philippines, as well as an interest in UK-based Mobilise Technology, founded by Hamish White. There was another UK acquisition in 2017 of iMend.com which was then rebranded Mazuma Repair for a while but ceased to trade in 2019. After a bit of restructuring in November 2023, Ecorenew Holdings moved out from under its immediate parent and now sits directly under the Hong Kong holding company. It was subsequently renamed to Lancaster Group Holdings in July 2024.
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The operating company breakdown in full, why ICT Reverse is carrying the group and what a near-flat Mazuma tells us about the consumer buy back model under pricing pressure.
The read on cash and the balance sheet, how management is funding inventory build, debt reduction and dividends at the same time, and what that says about its priorities.
The strategic outlook, where the longer term hedge lies as carriers and manufacturers extend their own secondary market activity, plus the public sector and R&D angles.
Alternatively, this article is available as a downloadable pdf report here.