Latest Results

Interim Results


Increased cash collections lead to milestone of net cash generation


Anexo Group plc (AIM: ANX), the specialist integrated credit hire and legal services provider, is pleased to report Interim Results for the six months ended 30 June 2020 (‘H1 2020’ or the ‘period’).  The Board is pleased to report that the Group has attained its target of net cash generation throughout the period. This milestone has been achieved against the backdrop of the COVID-19 pandemic which, despite the Group’s two core divisions remaining fully operational throughout, has inevitably affected performance in the latter part of H1 2020. In particular, the number of vehicles on the road fell sharply as the UK went into lockdown, but has since recovered to exceed recent peaks. Anexo has continued to invest in its business and the Board is confident in the outcome for FY 2020.


Financial Highlights

 H1 2020 H1 2019 Movement 
Revenue £36.6 million £36.7 million -0.3%
Adjusted operating profit1 £7.8 million £11.8 million -33.9%
Adjusted profit before tax1,2 £6.7 million £10.8 million -38.0%
Net assets £103.9 million £82.9 million +25.4%
Cash collection £48.0 million £36.6 million +30.9%
Basic EPS 4.5 pence 7.6 pence -40.7%


  • Net cash inflow from operating activities of £6.2 million (H1 2019: net cash inflow £2.5 million)
  • Overall net cash inflow (excluding the recent fundraise) of £2.4 million (H1 2019: net cash outflow £7.0 million)
  • Significant reduction in cash absorbed into working capital reducing from £13.0 million in H1 2019 to £4.5 million in H1 2020, supporting the cash generative nature of the Group during the period
  • Overall reduction of £4.0 million in adjusted operating profit, largely as a result of investment in staff to drive settlements and cash receipts in FY 2021 (£2.6 million), investment in the VW case acquisition (£0.7 million) and office and IT costs associated with the headcount increase (£0.5 million)
  • Proposed interim dividend of 0.5p per share (H1 2019: 1 penny per share)
  • Net debt balance at 30 June 2020 stood at £19.6 million (30 June 2019: net debt of £23.4 million)
  • The Board expects H2 2020 underlying profit before tax (before investment in VW emissions case acquisition) to recover strongly

1 Adjusted results exclude share based payments.
2 After expenditure of £4.0m on staff expansion, VW case acquisition and associated costs.


Operational Highlights

  • Anexo has attained its target of net cash generation throughout the period in line with the strategy set out at IPO
  • Successful Placing in May 2020 to raise £7.0 million to expand the advocacy and specialist litigation team with specific emphasis on funding the acquisition and processing of VW emissions cases and support opening of new office in Leeds in FY 2020
  • The Group raised an additional £2.1 million from a litigation funder to allow capital to continue to be deployed into client acquisition in relation to the VW emissions case without detracting from our core business. The Group has further increased its capital base with £5.0 million drawn from the Governments CBILS scheme in July 2020
  • The COVID 19 impact on activity levels in the Credit Hire division was particularly evident in H1 2020 and affected revenue generation, but the number of the Group’s vehicles on the road as we enter the second half of the year is ahead of our own internal targets and currently stands at 1,575 vehicles as at 12 August 2020
  • As anticipated, as a result of the COVID 19 pandemic there was a reduction in settlement efficiency for the Legal Services division as staff were transitioned to working from home. This, combined with the costs associated with opening the second floor within the Bolton office and associated staff investment and recruitment, have led to both a reduction in cash receipts and fee income and an increased cost base
  • As high-quality new lawyers reach case maturity and staff return to the office Anexo expects a return to previous efficiencies and increases in settlements and cash collections in H2 2020
H1 2020 H1 2019 Movement
Number of vehicles on hire at the period end 1,380 1,571 -12.2%
Average number of vehicles on hire for the period 1,286 1,496 -14.0%
Completed vehicle hires 2,953 3,363 -12.2%
Number of hire cases settled 2,622 2,066 +26.9%
Cash collections from settled cases (£’000s) 47,961 36,628 +30.9%
Number of new cases funded 3,025 3,392 -10.8%
Legal staff employed at period end 450 344 +30.8%
Number of senior fee earners at period end 137 109 +25.7%
Average number of senior fee earners 134 98 +36.7%

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

“I am pleased to report that Anexo has hit its target of becoming cash generative in the period. As we set out at IPO in 2018, our strategy was to invest and expand the Group’s Legal Services division in order to increase the number of cases settled and therefore boost cash collections and maximise the value from the extensive back log of cases in our portfolio. Our ability to deliver on the strategy sends a clear message about Anexo’s ability to deliver results to our shareholders, and will give confidence in the Group as we look to expand our unique business model and make the most of the significant market opportunity.

“The COVID 19 pandemic has undoubtedly impacted the Group in the first six months of the year, but as we see activity levels for our Credit Hire division returning to normal, and the case portfolio of our expanded Legal Services division matures and case settlement efficiency improves, we are confident that both revenue generation and earnings growth should return in the second half.


“As we continue to offer dividends to our shareholders and reinstate market guidance, we look forward to the future with confidence.”

Analyst meeting

A conference call for analysts only will be held at 09.30am today, 13 August 2020. A copy of the Interim Results presentation is available at the Group's website: Please contact Buchanan if you would like to join the call.

An audio webcast of the conference call with analysts will be available after 12pm today:


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 2020, a period during in which the Group has achieved its target of becoming net cash generative.

As in 2019, and notwithstanding the issues associated with the COVID-19 pandemic, the Group has continued to focus on the legal services business, with efforts and investment driving settlement capacity and cash collections from the recruitment of a significant number of senior litigators across both the Liverpool and Bolton offices.

This investment has driven value from within our extensive case portfolio, and as a result the Group has reported an overall net cash inflow (excluding proceeds from the recent placing) of £2.4 million. This is a milestone for the Group and represents a significant improvement over the position in H1 2019 where £7.0 million of cash was absorbed, and that of H2 2019, where a further £1.5 million of cash was absorbed.

The most significant contributory factor to this trend remains cash collections from settled cases. Driven by the continued investment in legal staff, these reached £48.0 million in H1 2020, an increase of 30.9% on H1 2019 (£36.6 million) and a slight increase over that seen in H2 2019, which totalled £47.5 million. The cash collections figure should be viewed in the light of the impact of the COVID-19 pandemic. As previously announced, our Legal Services division has remained operational throughout the lockdown period. Many of our staff have transitioned to working from home and the court system has remained open for hearings via video conference or telephone. Notwithstanding the ability of the division to adapt, there were significant logistical challenges for our litigators, as there were for the insurers, the defence law firms and the courts, as they all battled to work through the widespread disruption of normal working practices. This inevitably had an effect on the ability of our staff to agree settlements with their counterparty representatives and to expedite the consequent collection of cash. We are encouraged by the speed with which our staff have returned to normal working practices following the end of formal lockdown.

The credit hire business has also been affected by the effects of the pandemic. The number of vehicles on the road fell sharply at the end of March 2020 as the UK went into lockdown. At the lowest point during this period our weekly levels of new business fell to around 25% of our normal expected volumes.

It has been pleasing, therefore, to see activity levels recovering quickly. This has been particularly helped by the large element of our business focussed upon the courier market, which predominantly concentrates on smaller motorcycles of 125cc and below. As a consequence, the number of vehicles on the road as we enter the second half of the year is ahead of our own post-pandemic internal targets. The initial drop-off has inevitably impacted H1 2020, with the average number of vehicles on the road falling 14% to 1,286 (H1 2019: 1,496). The number of vehicles on the road drives revenues and performance in the Credit Hire division, as do cash collections for the Legal Services division. Both of these were affected by the pandemic and further details of this impact are given below.

H1 2020 Group performance

Anexo delivered a strong performance across all key financial metrics and KPIs in 2019 and that trend broadly continued into H1 2020. Nevertheless, the reported results for the full six months have been impacted at both a profit and cash perspective by the COVID-19 pandemic. Whilst revenues at a Group level were in line with those reported in H1 2019, reaching £36.6 million, they were 12.3% below H2 2019 (£41.8 million) as both the number of cases funded reduced and the investment in legal staff continued. The unavoidable reduction in settlement efficiency as staff were transitioned to working from home inevitably meant that the division, despite its increased staffing levels, did not enjoy a corresponding increase in cash receipts and fee income in the short term. Overall wages and salary costs within the Legal Services division, which are expensed as incurred, increased from £6.0 million in H1 2019 to £8.0 million in H2 2019 to £8.8 million in H1 2020. As a result of this and combined with £0.4 million of VW marketing costs, which have also been expensed as incurred, alongside an increased investment in office and IT costs (£0.5 million), adjusted operating profit reduced in H1 2020 to £7.8 million from £11.8 million in H1 2019 (H2 2019: £13.4 million). This illustrates the impact which the COVID-19 pandemic has had on the Group trading performance but equally shows the division’s success in attracting high-quality staff and the commensurate prospects for increased cash collections as settlement efficiencies return and the new recruits reach case maturity.

Credit Hire division

As previously reported in 2019, Anexo has continued to carefully manage growth in the Credit Hire division so as to focus investment on increasing settlement capacity within the Legal Services division. This strategy, alongside the impact of the COVID-19 pandemic, has resulted in a decline in activity levels between H1 2019 and H1 2020. The number of completed vehicle hires reduced from 3,363 to 2,953 respectively during this period and the impact of the COVID-19 pandemic is particularly apparent between H2 2019 (completed hires: 3,819) and H1 2020 where activity fell by 23.0%.

Whilst the average number of vehicles on the road declined by 14.0% period to period to 1,286 in H1 2020 (H1 2019: 1,496), it reached 1,380 at the end of H1 2020, reflecting the sharp recovery in activity levels. The number of vehicles on the road now exceeds the Group’s own post COVID-19 expectations, reflecting our strong offering to the market and increased market share due to a number of our competitors reducing or ceasing activity in the sector.

This decline in activity impacted the trading performance of the division with revenues declining by 10.7% to £20.7 million in H1 2020 (H1 2019: £23.2 million), and profit before tax declining from £8.3 million in H1 2019 to £6.8 million in H1 2020. However, we have continued to see improvements in the value of each claim taken on as our sales team remains focused on generating the best possible opportunities for us to deploy working capital. We expect this policy and trend to continue as competition reduces. 

Legal Services division

As noted above, effort remains focused on growing the claim settlement capacity of the Group and recruitment has continued throughout H1 2020 with the number of senior fee earners rising from 106 at the end of H1 2019 to 127 at the end of FY 2019 to 137 at the end of H1 2020. We have continued to recruit staff during this period and the fact that many of our peers have been making redundancies has provided opportunities for the Group to add to its pool of specialist litigators. It is also worth noting that the Group did not furlough any staff during the period.

This investment continues to drive growth in cash collections, despite the impact on growth levels caused by transitioning our staff to work from home and the impact of the COVID-19 pandemic on the insurers, their legal representatives and the courts. Cash collections increased by £11.3 million or 30.9% between H1 2019 and H1 2020, rising to £48.0 million from £36.6 million. The figure for H1 2020 was slightly above that seen in H2 2019 (£47.5 million) and, while positive in itself, this demonstrates the impact of the COVID-19 pandemic on our ability to settle cases and generate cash for the Group.

With our offices remaining open throughout the period, a large proportion of our staff have now returned to their office locations. We have introduced a fully flexible 24-hour working day alongside measures to ensure our staff are operating in as safe an office environment as they can. These measures are expected to result in a return to previous efficiencies and increases in settlements and cash collections into H2 2020. 

Revenues for the Legal Services division, which strongly converts to cash, showed an increase of 17.8%, reaching £15.9 million in H1 2020 (H1 2019: £13.5 million).  Profit before taxation declined to £0.6 million (H1 2019: £2.3 million), reflecting the significant investment in the new Bolton office and associated staff recruitment costs.  As noted above, staffing costs within the Legal Services division increased from £6.0 million in H1 2019 to £8.8 million in H1 2020. As a result of the slowdown caused by the COVID-19 pandemic, the full effect of this investment has yet to be seen. Nevertheless, the number and quality of the senior staff we now have as well as our existing backlog of quality cases, puts the Group in a strong position to benefit as we return to more normal times. Noting the working capital cycle of a typical case and the timeline for settlement inherent in the court process, an experienced litigator will not reach capacity from a settlement and cash collection position for at least nine to twelve months, a period which has been extended in some cases due to COVID-19. Consequently, the considerable benefits to cash collections from the Group’s investment in FY2019, initially expected in early FY2020, are expected to be seen later in the cycle.

With Bolton out-performing management’s expectations, property negotiations continue to ensure the Leeds office is open and operational in FY 2020.  

As previously outlined, Bond Turner also operates an in-house advocacy and specialist litigation team which handles complex professional and clinical negligence claims. Many of these constitute high value and high profile cases, some of which have been ongoing for many years; one example is the class action concerning historic abuse at Aston Hall psychiatric hospital. The case was settled for the clients in 2019 and negotiations regarding our associated legal fees continue.

More recently the advocacy team commenced action on behalf of a number of individuals who have registered their intention to pursue a claim against Volkswagen AG (“VW”) and its subsidiaries (the “VW Emissions case”). The Group is currently actively engaged on approximately 10,700 cases following a limited marketing campaign in late 2019 and mid 2020 which was predominantly conducted through social media channels, the costs of which have been expensed as incurred. Approximately £935,000 was invested and expensed in H2 2019 in marketing, IT and staffing costs, with an additional £689,000 being invested in H1 2020 to drive additional claimants to the Group.

The Board notes the decision by the Court of Appeal, announced on 7 August 2020, to refuse Volkswagen permission to appeal against the High Court judgement of 6 April 2020. This decision reinforces the Board’s belief that a settlement is both desirable and necessary. In the event of any settlement, the percentage of potential damages and associated costs accruing to the Group would have a significant positive impact on the Group's expectations for profits and cash flow for the relevant accounting period. Any revenue from a settlement would be unlikely to accrue until FY 2021 at the earliest. There is no certainty that a settlement in favour of the Group's clients will be reached, nor is there any guarantee that such a settlement would include financial compensation.

However, the current state of the proposed litigation process has led the Group to raise £2.1 million from a litigation funder to provide capital for further client acquisition without detracting from our core business. As explained in note 2 to the accounts, we have expanded our segmental reporting disclosures to provide transparency into the underlying level of performance of the core business and areas of investment.


The Board is pleased to propose an interim dividend of 0.5p per share which will be paid on 23 September 2020 to those shareholders on the register at the close of business on 28 August 2020. The shares will become ex-dividend on 27 August 2020. The Board intends to maintain its progressive dividend policy over the full year but with a greater weighting towards the second half.

Trading Outlook

Having seen a decline in activity levels and cash collections in H1 2020 as a result of the global pandemic, recent activity levels indicate a strong second half performance for the Credit Hire division. The outlook for the Legal Services division is also positive with recruitment continuing as the market remains challenging for many competing legal businesses. Recovery to the levels originally envisaged in cash collections is expected to be somewhat slower to recover than credit hire activity; however, the return of our staff to the office and recent trends indicate positive momentum in what is traditionally a slower period during the summer months.

The recent fundraise, generating £7.0 million of funds after expenses, alongside the £2.1 million secured to support the investment in VW and £5.0 million drawn from Secure Trust Bank Plc in July 2020, under the Government backed CBILS scheme, has resulted in a significant improvement in cash headroom for the Group. This will allow us to continue to take advantage of growth opportunities in the market whilst pursuing our core strategy of increasing cash generation from the Group’s significant case portfolio.

Anexo has weathered the unprecedented storm of the COVID-19 pandemic extremely well and the Board is very proud of the fact that both its core divisions remained operational throughout.  The Board is confident of the Group’s ability to continue on its growth trajectory and, mindful of the significant possible opportunities which may arise from the current disruption, looks to the future with considerable optimism.

While uncertainty remains on the future economic impacts of the COVID-19 pandemic, with seven months of trading completed the Board is pleased to provide the following guidance to the market.

  • Despite a challenging H1 2020, the Board notes the rebound in vehicle numbers within the Credit Hire division and is confident that H2 2020 should recover strongly.
  • The Group is anticipating significantly increased planned investment in staff and marketing in relation to the VW emissions case of circa £4.0 million for H2 2020. The Group takes the prudent accounting approach of expensing all these costs in full at the time of spend.
  • This investment, which will be separately disclosed by the Group going forward, will be funded through both a portion of the funds raised in May 2020 and the newly agreed facility of £2.1 million from a litigation funder.
  • While this investment will impact overall cash flow, the Board expects the core credit hire and legal services business to continue to be cash generative in H2 2020.


Alan Sellers
Executive Chairman

13 August 2020

Consolidated Statement of Comprehensive Income
For the unaudited period ended 30 June 2020

Half year
Half year

Year ended
 Note £’000s £’000s £’000s
Revenue  36,625 36,717 78,510
Cost of sales  (7,560) (7,225) (15,703)
Gross profit  29,065 29,492 62,807
Depreciation & gain on sale of fixed assets  (1,122) (1,192) (2,327)
Depreciation on right of use assets  (2,041) (2,849) (4,220)
Amortisation  (44) - (35)
Administrative expenses  (18,044) (13,638) (30,975)
Operating profit before exceptional items  7,814 11,813 25,250
Share based payment charges  (329) (329) (657)
Non-recurring administrative expenses  - - -
Operating profit  7,485 11,484 24,593
Finance costs  (965) (762) (1,801)
Lease finance costs  (176) (292) (401)
Total finance costs  (1,141) (1,054) (2,202)
Profit before tax  6,344 10,430 22,391
Taxation  (1,374) (2,045) (4,403)
Profit and total comprehensive income for the year attributable to the owners of the company  4,970 8,385 17,988
Earnings per share     
Basic earnings per share (pence) 4.5 7.6 16.4
Diluted earnings per share (pence) 4.4 7.4 16.0

The above results were derived from continuing operations.

Consolidated Statement of Financial Position
Unaudited at 30 June 2020


Assets Note £’000s £’000s £’000s
Non-current assets     
Property, plant and equipment  4,056 3,233 3,673
Right-of-use assets  7,129 9,815 7,821
Intangible assets  191 - 175
  11,376 13,048 11,669
Current assets     
Trade and other receivables  132,379 116,841 127,768
Cash and cash equivalents  11,211 491 2,270
  143,590 117,332 130,038
Total assets  154,966 130,380 141,707
Equity and liabilities     
Share capital  58 55 55
Share premium  16,180 9,235 9,235
Share based payment reserve  1,370 713 1,041
Retained earnings  86,334 72,862 81,365
Equity attributable to the owners of the Group 103,942 82,865 91,696
Non-current liabilities     
Other interest-bearing loans and borrowings  2,712 - 393
Lease liabilities  4,885 5,150 5,029
Deferred tax liabilities  - 20 32
  7,597 5,170 5,454
Current liabilities     
Bank overdraft  17,320 14,532 17,784
Other interest-bearing loans and borrowings  10,813 9,382 12,144
Lease liabilities  2,599 4,927 3,124
Trade and other payables  7,726 9,118 7,915
Corporation tax liability  4,969 4,386 3,590
  43,427 42,345 44,557
Total liabilities  51,024 47,515 50,011
Total equity and liabilities  154,966 130,380 141,707


Consolidated Statement of Changes in Equity
For the unaudited period ended 30 June 2020


Share based


  £’000s £’000s £’000s £’000s £’000s
At 1 January 2020  55 9,235 1,041 81,365 91,696
Profit for the year and total comprehensive income - - - 4,970 4,970
Issue of share capital  3 6,944 - - 6,947
Share based payments  - - 329 - 329
Dividends  - - - - -
At 30 June 2020  58 16,179 1,370 86,335 103,942
At 1 January 2019  55 9,235 384 66,127 75,801
Profit for the year and total comprehensive income - -  
8,385 8,385
Share based payments  - - 329 - 329
Dividends  - - - (1,650) (1,650)
At 30 June 2019  55 9,235 713 72,862 82,865
Profit for the year and total comprehensive income - -  
9,603 9,603
Creation of share based payments reserve  - -  328 - 328
Dividends - - - (1,100) (1,100)
At 31 December 2019  55 9,235 1,041 81,365 91,696

Consolidated Statement of Cash Flows
For the unaudited period ended 30 June 2020


Half year
Half year

Year ended
  £’000s £’000s £’000s
Cash flows from operating activities     
Profit for the year  4,970 8,385 17,988
Adjustments for:     
Depreciation and amortisation  3,163 4,041 6,574
Amortisation  44 - 35
Financial expense  1,141 1,054 2,202
Taxation  1,374 2,045 4,403
  10,692 15,525 31,175
Working capital adjustments     
Increase in trade and other receivables  (4,611) (15,211) (26,294)
Increase in trade and other payables  137 2,225 1,351
Cash generated from operations  6,218 2,539 6,232
Interest paid  (965) (762) (1,797)
Tax paid  (27) (2,240) (5,230)
Net cash from operating activities  5,226 (463) (795)
Cash flows from investing activities     
Proceeds from sale of property, plant and equipment  476 195 374
Acquisition of property, plant and equipment (1,981) (1,349) (3,104)
Investment in intangible fixed assets (59) - (210)
Net cash from investing activities  (1,564) (1,154) (2,940)
Cash flows from financing activities     
Net proceeds from the issue of
share capital
 6,947 - -
Proceeds from new loan  3,324 - 13,107
Dividends  - (1,650) (2,750)
Repayment of borrowings  (2,706) (210) (10,920)
Lease payments  (2,193) (2,879) (4,289)
Payment of finance lease liabilities  (1,098) (681) (2,225)
New finance lease arrangements  1,469 - 2,302
Net cash from financing activities  5,743 (5,420) (4,775)
Net increase / (decrease) in cash and cash equivalents 9,405 (7,037) (8,510)
Cash and cash equivalents at 1 January  (15,514) (7,004) (7,004)
Cash and cash equivalents at period end  (6,109) (14,041) (15,514)



Notes to the Interim Statements
For the unaudited period ended 30 June 2020


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


Page last updated: 13 August 2020