“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’).
|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%|
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|| |
|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/.
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
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.
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).
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.
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.
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.
20 September 2022
|Cost of sales||(16,253)||(10,668)||(26,756)|
|Depreciation & profit / loss on disposal||(5,561)||(3,809)||(8,504)|
|Operating profit before share based payments||15,963||10,603||27,728|
|Share based payment charges||175||(236)||(378)|
|Non-recurring administrative expenses||-||-||-|
|Net financing expense||(2,500)||(1,456)||(3,604)|
|Profit before tax||13,638||8,911||23,746|
|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.
|Property, plant and equipment||3||2,323||2,217||2,071|
|Deferred tax assets||112||112||112|
|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|
|Equity and liabilities|
|Share based payment reserve||-||1,935||2,077|
|Equity attributable to the owners of the Group||137,774||117,775||128,224|
|Other interest-bearing loans and borrowings||5||20,710||3,029||13,814|
|Deferred tax liabilities||-||32||32|
|Other interest-bearing loans and borrowings||5||37,235||28,781||38,499|
|Trade and other payables||9,966||9,108||12,635|
|Corporation tax liability||7,262||5,520||4,496|
|Total equity and liabilities||230,427||178,246||214,963|
|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||-|
|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|
|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|
|At 31 December 2021||58||16,161||2,077||109,928||128,224|
|Cash flows from operating activities|
|Profit for the year||10,904||7,101||19,148|
|Depreciation and profit / loss on disposal||5,561||3,809||8,504|
|Share based payment charge||(175)||-||378|
|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)|
|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|
|Repayment of borrowings||(4,753)||(4,171)||(7,951)|
|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