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 2021, a period during which the Group has shown a robust recovery from the restrictions imposed by the COVID pandemic. The increase in
traffic levels following the easing of lockdown has led to record numbers of vehicles on the road, while increased case settlements within the legal services division have ensured a significant rise in cash collections.
The continuing demand for vehicles and the ongoing growth in staff levels within legal services combine to provide excellent opportunities for significant growth. The Board has considerable confidence in the prospects for H2 2021 and beyond.
H1 2021 Group Performance
Anexo has delivered a strong performance across all key Group financial metrics and KPIs over the first six months of the year, following a resilient performance during the COVID-19 related lockdowns. Group revenues in H1 2021 increased by 31.9 per cent
to £48.3 million (H1 2020: £36.3 million) and profit before tax rose by 40.5 per cent to £8.9 million (H1 2020: £6.3 million).
Credit Hire Division
Demand for vehicles remained strong throughout the lockdown period and continued to increase steadily throughout the various stages of lockdown easing which began on 8 March 2021. The average number of vehicles on the road during H1 2021 reached 1,461
(H1 202: 1,286), a 13.6 per cent increase on the prior year. The rising rate of the recovery in demand is illustrated by the number of vehicles on hire at the period end, which stood at 1,740 as at 30 June 2021, a rise of 26.1 per cent on the same
date last year.
This increase led to growth in Credit Hire revenue of 27.1 per cent, rising from £20.7 million in H1 2020 to £26.3 million in H1 2021. Profit before tax in the Credit Hire division rose by 17.0 per cent to £7.97 million in H1 2021 (H1
2020: £6.81 million). Completed vehicle hires rose by 38.2 per cent to 4,081 in H1 2021 (H1 2020: 2,953). This increase has been supported by a number of new protocols with insurance companies and by ongoing investment in technology and staff
within the Group’s legal subsidiary, Bond Turner. Consequently, the average hire period in H1 2021 fell by 15.9 per cent to 69 days (H1 2020: 82 days).
The Group’s active hire fleet currently divides into roughly one third cars and commercial vehicles and two thirds motorcycles. Further strategic investment in the fleet is likely to maintain this ratio. We seek to target the most valuable claims
for the Group, which has the effect of improving individual claim performance and driving growth in revenues and profitability over and above the number of vehicles on the road.
Legal Services Division
The Group’s longstanding policy is to grow its claim settlement capacity and consequently recruitment has continued throughout the lockdown period, including the opening of the Leeds office in Q1 2021. The number of senior fee earners employed at
the end of H1 2021 rose by 27.8 per cent to 175 (H1 2020: 137) and the overall number of legal staff rose from 450 in H1 2020 to 578 in H1 2021, an increase of 28.4 per cent.
This investment has underpinned continued growth in cash collections, which rose 18.1% in H1 2021 to a total of £56.67 million (H1 2020: £47.96 million). Revenues from the Legal Services division, which strongly converts to cash, increased
by 38.2 per cent to £22.01 million in H1 2021 (H1 2020: £15.92 million). Profit before taxation rose from £0.84 million in H1 2020 to £2.59 million in H1 2021, an increase of 209 per cent. The Group expects this revenue trend
to continue as more of our staff reach maturity from a cash collection and settlement position.
The advocacy team continues to act on behalf of a number of individuals in the pursuit of a claim against Volkswagen AG (“VW”) and its subsidiaries (the “VW Emissions case”). Following a marketing campaign in FY 2020 conducted
mainly via social media, the Group announced on 27 April 2021 that it was engaged in approximately 14,356 cases. Given the strong recovery in credit hire demand as the lifting of lockdown accelerated, the Board took the decision to concentrate its
working capital on maximising fleet utilisation and corresponding capacity within the Legal Services division. Consequently there has been no marketing spend on the VW Emissions case in H1 2021 and the number of cases remains broadly unchanged. The
Group anticipates further developments in the case during H2 2021.
The Board is pleased to propose an interim dividend of 0.5p per share which will paid on 22 October 2021 to those shareholders on the register at the close of business on 24 September 2021. The shares will become ex-dividend on 23 September 2021. The
Board intends to maintain its stated dividend policy.
Current activity levels indicate a strong second half performance for the Credit Hire division. The number of vehicles on the road is consistently reaching record levels and, as of 7 September 2021, stands at 2,023. The outlook for the Legal Services
division is also strongly positive, with case settlements and consequent cash collections set to increase as the courts re-open fully and the backlog of cases diminishes.
The Group’s finance providers have proposed increases in our debt facilities and the Board anticipates that agreements will be concluded shortly. Current market conditions offer significant opportunities and the Board believes that reaffirming its
growth strategy will benefit both the Credit Hire and Legal Services divisions and contribute to the creation of value for all our shareholders. The Board looks to the second half of 2021 and beyond with renewed optimism.
13 September 2021