Latest Results

Interim Results

“Significant revenue and profit growth with unchanged outlook for the year”

Anexo Group plc (AIM: ANX), the specialist integrated credit hire and legal services provider, is pleased to report its Interim Results for the six months ended 30 June 2022 (‘H1 2022’ or the ‘period’).

 

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Financial Highlights

  H1 2022 H1 2021 Movement
 
Revenue £68.6 million £48.3 million +42.0%
Operating profit £16.1 million £10.4 million +54.8%
Profit before tax £13.6 million £8.9 million +52.8%
Net assets £137.8 million £117.8 million +17.0%
Cash collection £67.9 million £56.7 million +19.8%
Basic EPS 9.3 pence 6.1 pence +52.5%
  • Revenue increased 42% to £68.6 million (H1 2021: £48.3 million) from increased vehicles on hire and growth in legal fee earners
  • Operating profit increased 55% per cent to £16.1 million (H1 2021: £10.4 million) from improved cash collections, leverage of overhead, maximising opportunities within credit hire and an improved vehicle mix
  • Cash collections from settled cases increased 20% to £67.9 million (H1 2021: £56.7 million) with strong sales growth driving an increase in Trade Receivables to £209.8 million (30 June 2021: £160.5 million, 31 December 2021: £188.1 million)

 Operational Highlights

  • The Group has shown robust growth across both its divisions with strong growth in Group vehicle numbers and high-quality senior fee earner recruitment in the legal division
  • Vehicle numbers which grew rapidly in the first half of the year are now being carefully managed to maximise efficient use of working capital
  • The number of Group vehicles on the road on 31st August 2022 was 1,828
  • The proportion of the vehicle fleet composed of motorcycles continues to increase following the agreement with MCE Insurance in the fourth quarter of 2021
  • Good progress is being made with the Volkswagen AG (“VW”) emissions case ahead of the scheduled court date in early 2023. The Group has committed the £2 million of funding raised at the end of 2021 towards the acquisition of Mercedes emissions cases. Total cumulative investment in both VW and Mercedes cases is £5.8 million, all of which has been expensed including £1.3 million in the first half of 2022 (H1 2021: £0.5 million)
  • The Group’s burgeoning Housing Disrepair (“HDR”) business has gained significant traction in the first half, with approximately 2,300 cases overall, of which almost 600 settled in the first half of the year. HDR revenue more than doubled in the first half to £4.7 million (2021: £2.2 million), with profit of £2.4 million (2021 H1: £1.1 million).

Outlook
 
The Group has shown robust growth during the period and plans to optimise cash generation in the second half year. The Board has confidence in meeting market expectations for the year with a focus on improving the vehicle mix, building on the strong progress in Housing Disrepair and maximising the emissions opportunities.  

 

KPIs
  		H1 2022 H1 2021 Movement
Number of vehicles on hire at the period end 1,947 1,740 +11.9%
Average number of vehicles on hire for the period  
2,043 		 
1,461 		+39.8%
Completed vehicle hires 5,501 4,081 +34.8%
Number of hire cases settled 3,563 2,924 +21.9%
Number of new cases funded 5,082 4,208 +20.8%
Cash collections from settled cases (£’000s) 67,931 56,665 +19.9%
Legal staff employed at period end 633 578 +9.5%

 

Commenting on the Interim Results, Alan Sellers, Executive Chairman of Anexo Group plc, said:

 “I am delighted to report that the Group has continued its strong performance during the first half of the year. Business activity in both our credit hire and legal services divisions has grown strongly.

“We are proud of the social value of the services we offer. Anexo provides assistance to people who find themselves in an invidious position through no fault of their own, whether through being deprived of an essential vehicle or through living in substandard housing conditions, along with the other problems which may be exacerbated by such situations. We remain committed to providing help to those who might otherwise be unable to obtain redress.

“We continue to manage our vehicle fleet carefully and to maximise cash collections by identifying appropriate hire opportunities, particularly within the motorcycle sector; this allows for more efficient use of working capital whilst also increasing the overall number of case settlements.

“The strong progress being made in housing disrepair and emissions will underpin the continued growth in the core business, and the Board remains confident in meeting market expectations for the year.”

Results Conference Call

An analyst conference call will be held at 09:30 BST today, 20 September 2022. Retail investors will also be able to listen to the call but will not be eligible to ask questions. A copy of the Interim Results presentation is available at the Group's website: https://www.anexo-group.com/. Please contact Nick Dashwood Brown, Head of Investor Relations, at [email protected] if you would like to join the call.

An audio webcast of the conference call with analysts will be available after 12:00 BST today on the Company’s website: https://www.anexo-group.com/. 

 

Executive Chairman’s Statement

On behalf of the Board, I am pleased to introduce Anexo’s results for the six-month period ended 30 June 2022. The Group has continued to demonstrate the effectiveness of its business model. Vehicle numbers within the credit hire division have grown, while increased case settlements within the legal services division have ensured a good rise in cash collections.

Demand for hire vehicles shows no signs of abating. We continue to recruit staff in targeted areas within the legal services division, while case settlements and cash collections continue to grow. This points to plenty of opportunities for the Group, albeit at lower levels of growth to ensure that cash generation can be further improved.

H1 2022 Group Performance

Anexo has delivered a strong performance across all key Group financial metrics and KPIs over the first six months of the year. Group revenues in H1 2022 increased by 42% to £68.6 million (H1 2021: £48.3 million) and profit before tax rose by 52% to £13.5 million (H1 2020: £8.9 million).

Credit Hire Division

Demand for vehicles has remained strong throughout the period following the decisive return of traffic levels to pre-pandemic levels. The average number of vehicles on the road during H1 2022 reached 2,043 (H1 2021: 1,461), a 40% increase on the prior year. The Group is committed to careful management of vehicle numbers to maximise efficient use of working capital; as a consequence, the overall number of vehicles on the road has been declining toward the end of the first half of the year and at the period end the number stood at 1,947. This still represents an 11.9% increase on the H1 2021 number but shows a reduction of 17.7% on the 2,366 vehicles on the road at the end of FY 2021.

This performance led to growth in Credit Hire revenue of 62%, up from £26.3 million in H1 2021 to £42.5 million in H1 2022. Profit before tax in the Credit Hire division rose by 36% to £10.9 million in H1 2022 (H1 2021: £8.0 million). Completed vehicle hires rose by 35% to 5,501 in H1 2022 (H1 2021: 4,081). This increase has been supported by the agreement with MCE Insurance announced on 25 November 2021 as well as by a number of protocols with insurance counterparties.

Legal Services Division

Credit Hire

The Group remains committed to its strategy of increasing its claim settlement capacity, thereby maximising cash collections. The number of senior fee earners employed at the end of H1 2022 rose by 41% to 247 (H1 2021: 175) and the overall number of legal staff rose from 578 in H1 2021 to 633 in H1 2022, an increase of 10%.

This investment has underpinned continued growth in cash collections, which rose 20% in H1 2021 to a total of £67.9 million (H1 2021: £56.7 million). Revenues from the Legal Services division, which strongly converts to cash, increased by 8.1% to £21.4 million in H1 2022 (H1 2021: £19.8 million). Profit before taxation rose from £1.5 million in H1 2021 to £2.5 million in H1 2022, an increase of 67%. The Group expects this revenue trend to continue as more of our staff reach maturity from a cash collection and settlement position.

Housing Disrepair

The Group’s Housing Disrepair (“HDR”) division continues to show significant growth. The number of ongoing claims currently stands at approximately 2,300 cases. HDR continues to require additional cash funding; this amounted to £0.3 million in the first half year, with profit of £2.4 million (2021 H1: £1.1 million).

Emissions Litigation

The advocacy team continues to act on behalf of a number of individuals in the pursuit of a claim against VW and its subsidiaries (the “VW Emissions case”). The Group announced on 26 May 2022 that it is engaged in approximately 13,000 cases. The Group remains in discussions with VW and its representatives around a possible settlement of these claims.

The Group continues to pursue other emissions cases, particularly in relation to Mercedes Benz. Total expenditure that has been expensed in the H1 2022 is £1.3 million (H1 2021: £0.5 million). The Group currently has approximately 4,000 Mercedes cases.

The Board believes there is a significant short-term opportunity to accelerate growth in emissions claims against specific vehicle manufacturers, as well as HDR claims. Accordingly, the Group has negotiated an increase in its loan agreement with Blazehill Capital, first announced on 11 May 2022, from £7.5 million to £15 million. The funds will be drawn down immediately to take advantage of this opportunity. The costs in targeting further emissions claims will be expensed in the normal way and the Group will update the market with details of emissions expenditure on a regular basis.

Dividend

The Board believes that the emissions opportunity warrants significantly increased investment over the next few months and has therefore resolved that the interests of the Group and its shareholders would be best served by paying an annual dividend following the announcement of the Group’s full year results.

Outlook

The Group has shown robust growth in the first half and plans to optimise cash generation in the second half year with a focus on improving the vehicle mix. The Board has confidence in meeting market expectations for the year with a focus on continuing the strong progress in Housing Disrepair and maximising the emissions opportunities. 

 

 

Alan Sellers
Executive Chairman
20 September 2022

 

 

Consolidated Statement of Comprehensive Income
For the unaudited period ended 30 June 2022

  Unaudited Unaudited Audited
  Half year
ended		Half year
ended
Year ended
  30-Jun-22 30-Jun-21 31-Dec-21
 Note £’000s £’000s £’000s
     
Revenue 2 68,610 48,316 118,237
Cost of sales  (16,253) (10,668) (26,756)
Gross profit  52,357 37,648 91,481
     
Depreciation & profit / loss on disposal  (5,561) (3,809) (8,504)
Amortisation  (74) (65) (137)
Administrative expenses  (30,759) (23,171) (55,112)
Operating profit before share based payments  15,963 10,603 27,728
     
Share based payment charges  175 (236) (378)
Non-recurring administrative expenses  - - -
Operating profit  16,138 10,367 27,350
     
Net financing expense  (2,500) (1,456) (3,604)
     
Profit before tax  13,638 8,911 23,746
Taxation  (2,734) (1,810) (4,598)
Profit and total comprehensive income for the year attributable to the owners of the company  10,904 7,101 19,148
     
Earnings per share     
Basic earnings per share (pence) 9.3 6.1 16.5
    
Diluted earnings per share (pence) 9.3 6.0 16.2

 

The above results were derived from continuing operations.

 

 

Consolidated Statement of Financial Position
Unaudited at 30 June 2022

  Unaudited Unaudited Audited
  30-Jun-22 30-Jun-21 31-Dec-21
Assets Note £’000s £’000s £’000s
Non-current assets     
Property, plant and equipment 3 2,323 2,217 2,071
Right-of-use assets  16,816 13,337 16,896
Intangible assets  112 238 188
Deferred tax assets  112 112 112
  19,363 15,904 19,267
Current assets     
Trade and other receivables 4 209,817 160,485 188,134
Corporation tax receivable  - 439 -
Cash and cash equivalents  1,247 1,418 7,562
  211,176 162,342 195,696
     
Total assets  230,427 178,246 214,963
     
Equity and liabilities     
Equity     
Share capital  59 58 58
Share premium  16,161 16,161 16,161
Share based payment reserve  - 1,935 2,077
Retained earnings  121,554 99,621 109,928
Equity attributable to the owners of the Group 137,774 117,775 128,224
     
Non-current liabilities     
Other interest-bearing loans and borrowings 5 20,710 3,029 13,814
Lease liabilities  8,462 7,382 8,430
Deferred tax liabilities  - 32 32
  29,172 10,443 22,276
     
Current liabilities     
Other interest-bearing loans and borrowings 5 37,235 28,781 38,499
Lease liabilities  9,018 6,619 8,833
Trade and other payables  9,966 9,108 12,635
Corporation tax liability  7,262 5,520 4,496
  63,481 50,028 64,463
     
Total liabilities  92,653 60,471 86,739
     
Total equity and liabilities  230,427 178,246 214,963
     

 

 

Consolidated Statement of Changes in Equity
For the unaudited period ended 30 June 2022

  Share capital Share
premium 		Share based
payment
reserve 		Retained
earnings 		Total
  £’000s £’000s £’000s £’000s £’000s
       
At 1 January 2022  58 16,161 2,077 109,928 128,224
Profit for the period and total comprehensive income - - - 10,904 10,904
Issue of share capital  1 - - - 1
Share based payment charge  - - (175) - (175)
Transfer of share based payment reserve  - - (1,902) 1,902 -
Dividends  - - - (1,180) (1,180)
       
At 30 June 2022  59 16,161 - 121,554 137,774
       
At 1 January 2021  58 16,161 1,699 92,520 110,438
Profit for the period and total comprehensive income - - - 7,101 7,101
Issue of share capital  - - - - -
Share based payment charge  - - 236 - 236
Dividends  - - - - -
       
At 30 June 2021  58 16,161 1,935 99,621 117,775
Profit for the period and total comprehensive income - - - 12,047 12,047
Share based payments charge  - - 142 - 142
Adjustment - - - - -
Dividends - - - (1,740) (1,740)
       
At 31 December 2021  58 16,161 2,077 109,928 128,224

 

 

Anexo Group Plc
Consolidated Statement of Cash Flows
For the unaudited period ended 30 June 2022

  Unaudited Unaudited  
  Half year
ended 		Half year
ended 		Audited
Year ended
  30-Jun-22 30-Jun-21 31-Dec-21
  £’000s £’000s £’000s
Cash flows from operating activities     
Profit for the year  10,904 7,101 19,148
Adjustments for:     
Depreciation and profit / loss on disposal  5,561 3,809 8,504
Amortisation  74 65 137
Financial expense  2,500 1,456 3,604
Share based payment charge  (175) - 378
Taxation  2,734 1,810 4,598
  21,598 14,241 36,369
Working capital adjustments     
Increase in trade and other receivables  (21,682) (12,577) (40,224)
Increase in trade and other payables  (2,667) (160) 3,131
Cash generated from operations  (2,751) 1,504 (724)
     
Interest paid  (2,380) (1,335) (3,364)
Tax repaid  - 154 (3,219)
Net cash from operating activities  (5,131) 323 (7,307)
     
Cash flows from investing activities     
Proceeds from sale of property, plant and equipment  722 448 941
Acquisition of property, plant and equipment (1,285) (497) (1,439)
Investment in intangible fixed assets - (70) (91)
Net cash from investing activities  (563) (119) (589)
     
Cash flows from financing activities     
Proceeds from new loans  10,265 908 25,039
Dividends paid  (1,180) - (1,740)
Repayment of borrowings  (4,753) (4,171) (7,951)
Lease payments  (4,953) (3,743) (8,110)
Net cash from financing activities  (621) (7,006) 7,238
     
Net decrease in cash and cash equivalents (6,315) (6,802) (658)
Cash and cash equivalents at 1 January  7,562 8,220 8,220
Cash and cash equivalents at period end  1,247 1,418 7,562

 

 

Notes to the Interim Statements
For the unaudited period ended 30 June 2022

The notes are available in the printable pdf of the results. To download it, please click here

 

Page last updated: 20 September 2022