Corporate News

Placing and proposed Admission to trading on AIM

18 June 2018


This announcement is an advertisement and not an admission document or a prospectus and does not constitute or form part of any offer to sell or issue or any solicitation of any offer to subscribe for or purchase any securities in any jurisdiction nor should it (or any part of it), or the fact of its distribution, form the basis of, or be relied upon in connection with, or act as any inducement to enter into, any contract or commitment whatsoever relating to any securities. Prospective investors should not purchase or subscribe for any securities referred to in this announcement except in compliance with applicable securities laws and regulation and on the basis of the information in the final admission document (the "Admission Document") published by Anexo Group plc (the "Company") in connection with the proposed admission of its ordinary shares to trading on AIM, a market operated by London Stock Exchange plc ("Admission"). Copies of the Admission Document will, following Admission, be available to view on the Company's website and at the registered office of the Company, subject to applicable securities laws or regulations.

Anexo Group plc ('Anexo', the 'Company' or the 'Group'), the specialist integrated credit hire (EDGE) and legal services (Bond Turner) provider, is pleased to announce that it has today published its Admission Document following the successful pricing of its £25 million fundraising and applied for admission of its issued and to be issued ordinary shares of 0.05p each in the capital of the Company ('Ordinary Shares') to trading on AIM, a market operated by London Stock Exchange plc ('Admission'). Admission is expected to occur and dealings in the Ordinary Shares to commence at 8.00am on 20 June 2018, under the ticker ANX and with ISIN GB00BF2G3L29.

  • The Placing Price of 100 pence per Placing Share. Based on the Placing Price, the market capitalisation of Anexo at Admission will be £110.0 million.
  • The Placing will raise gross proceeds of £10.0 million for the Company and £15.0 million for the Selling Shareholders, of which not less than £5.0 million is to be repaid to the Company.
  • On Admission, the Company will have 110,000,000 Ordinary Shares in issue.
  • Arden Partners plc is acting as Nominated Adviser and Broker to the Company.

Key Highlights

  • Differentiated direct capture of credit hire customers sourcing customers directly from garages rather than from insurers / brokers and integrated claims management within a wholly owned legal services firm.
  • Significant addressable market focused on the impecunious, not at fault, motorist entitled to claim credit hire cost with Anexo supporting the individual at no upfront cost.
  • Business model underpinned by UK case law that has affirmed the impecunious claimants' legal right to recover credit hire costs.
  • Organic growth since 2015 of approximately 10% despite capital constraints and strong financial performance; calendar 2017 revenue of £44.8 million and £14.6 million Profit Before Tax.
  • Executive Chairman Alan Sellers has founded this niche business, which has been built over 20 years supported by a highly experienced senior management team.
  • Anexo intends to adopt a progressive dividend policy post Admission.

Reasons for Admission

  • To pursue its growth strategy including:
    • grow market share in a consolidating market;
    • increase the number of solicitors and legal assistants and set up a new regional office;
    • increase vehicles available for hire and employ additional sales representatives to increase lead generation;
    • bring more barristers in house to reduce externally instructed barristers; and,
    • regional expansion with considerable potential to expand coverage and increase business from across a greater proportion of England and Wales.

Alan Sellers, Executive Chairman of Anexo Group plc, said:

"I am delighted to announce that Anexo will be joining the AIM market. Over the last 20 years our highly specialist team has worked hard to build Anexo into an integrated credit hire and litigation focused group. Joining the London Stock Exchange and raising £15 million for the Company will remove the constraints to enable expansion of our proven model and deliver significant organic growth in the future.

"There is an ever-increasing UK credit hire and legal claims market opportunity and our focus on impecunious claimants has allowed us to create a business that we believe will scale quickly and generate near-term returns for our new shareholders."


For further information:

Anexo Group plc
Alan Sellers, Executive Chairman Tel: +44 (0) 151 227 3008
Mark Bringloe, Chief Financial Officer
Arden Partners plc
(Nominated Adviser and Broker)
Chris Hardie / John Llewellyn-Lloyd / Benjamin Cryer / Alex Penney Tel: +44 (0) 20 7614 5900
Media enquiries:
Henry Harrison-Topham / Steph Watson / Gemma Mostyn-Owen Tel: +44 (0) 20 7466 5000
[email protected]



Anexo is a specialist integrated credit hire and legal services group focused on providing replacement vehicles and associated legal services to impecunious customers who have been involved in a non-fault accident. These individuals typically do not have the financial means or access to a replacement vehicle which allows the Group to charge credit hire rates recovering these charges from the at-fault insurer at no upfront cost to the individual.

The Group has developed an integrated business model with a dedicated field sales team generating almost all of the Group's Road Traffic Accident ('RTA') customers from a network of approximately 1,000 active referrers including body shops, vehicle workshops and recovery agents. Anexo provides an integrated end to end service to the customer including the provision of a credit hire vehicle, upfront settlement of repair and recovery charges through to the management and recovery of costs and the processing of any associated personal injury claim.

The legal services division of Anexo emerged in 2006 following the incorporation of Armstrongs Solicitors Limited, since renamed Bond Turner, enabling the provision of a complete litigated claims process, principally to support the recovery of credit hire costs and repair disbursements. The Group currently comprises four business units under the two main reporting divisions - Credit Hire (EDGE) and Legal Services (Bond Turner).

Credit Hire division

EDGE, the credit hire business, was founded in 1996 and trades through two main brands - DAMS, which provides car and van hire, and McAMS, which offers motorcycle hire. The business operates from four regional depots that give nationwide coverage for the provision of hire vehicles across England and Wales. In addition, the Group trades as CAMS in respect of its bicycle hire operations.

Legal Services division

Bond Turner is the Liverpool-based legal practice, integrated within the Group, specialising in road traffic accident claims that involve an element of credit hire. The business has grown to approximately 200 employees as at 30 April 2018, 127 of which are fee earners. Bond Turner manages the complete claim cycle with a team of lawyers and barristers (both in-house and externally retained) to take a case from initial processing through to a litigated court process.

Bond Turner operates within three key areas; firstly, the recovery of credit hire debts owed to EDGE from individuals who have been provided a vehicle. Secondly, the processing of Personal Injury ('PI') claims, as RTA cases referred by EDGE often include an element of PI, albeit this work is generated a bi-product of the credit hire provision rather than the focus of the business. Finally, Bond Turner operates a division focused on a range of other professional litigation disciplines including professional/clinical negligence (branded as Been Let Down) and commercial litigation.

Other services

In addition, the Group operates Professional and Legal Services Limited ('PALS'), specialising in arranging independent experts to support claims. PALS also arranges for expert witnesses, interpreters, photographic reports and consultants where necessary. IGCA 2013 Limited ('IGCA'), which administers after-the-event ('ATE') insurance policies for independent third party insurers which has been obtained by customers of EDGE such that if a client loses their case, the insurer pays the associated third party legal costs and disbursements.


The RTA and Credit Hire Market trends

The RTA market covers the full provision of credit and legal services to non-fault motorists and includes the management of a claim to assist with the repair of a vehicle, provision of a replacement vehicle during the repair or replacement process and any associated legal claim. This is typically provided by a Claims Management Company ('CMC') either within or outside of the insurance supply chain.

The UK has an accident claim market worth almost £4 billion. This includes both consumer personal injury claims resulting from RTAs and medical negligence claims. Traditionally this model was split between claims gatherers/processers and law firms (litigated claims). The model has evolved and today legal services businesses typically operate one, or a combination, of two business generation models; being direct capture model whereby the legal business sources clients itself, or third-party capture in conjunction with a regulated CMC or from the insurer. By virtue of its sales representatives, Anexo operates a direct capture model and does not rely on a third party to generate claims.

Market trends

The total UK Credit Hire market was estimated to comprise 301,000 cases annually (CMA: 2014), although submissions to the CMA suggested a higher total market size of 374,000. At the end of 2017, Department for Transport records show that there were 37.7 million licensed vehicles on the road representing an annual increase of 1.3%. There are varying estimates on the total number of RTAs that occur each year in the UK with an estimated 700,000 claims recorded in 2017.

Over the past five years the market has undergone a period of consolidation driven in part by changing regulation and a ban on referral fees. The total number of authorised CMCs focused on RTA and associated personal injury has fallen by 68% from over 2,500 in 2012following the ban on referral fees came into force in April 2013. This has restricted the ability of CMCs to seek personal injury cases and selectively pass leads on to panel law firms. This has impacted CMCs, credit hire and consumer law firms with each experiencing consolidation.

In addition to consolidation amongst CMCs, RTA law firms have come under pressure from a changing regulatory environment and increasing prevalence of corporate business models with greater scale resulting in a trend of decreasing recoverable rates.

Key strengths of Anexo

The Directors believe that Anexo's core strengths lie in the following areas:

Differentiated model from wider RTA credit hire and claims services
Anexo is an integrated specialist in litigated claims, combining direct capture of customers via its credit hire business and claims management, within a wholly owned legal services firm. This enables the Group to generate and screen high quality, profitable cases and to process them to their conclusion. Anexo's integrated service helps the Group to maintain quality at each stage and effectively manage the process with a legal division motivated to recover the credit hire charges for the benefit of the wider Group.

Significant addressable market targeting the 'impecunious' customer
Anexo is focused on the impecunious customer, typically individuals who do not have the financial means or access to a replacement vehicle, which allows the Group to recover credit hire rates which are significantly higher than upfront spot hire rates. Costs of hire, repairs and recovery are recovered from the at-fault insurer at no upfront cost to the individual.

Business model underpinned by legal precedent

The fundamental basis for an impecunious claimant's right to a credit hire vehicle was established by a House of Lords ruling (Clark v Ardington (2003)) that non-fault accident victims deemed impecunious have the right to recover credit hire rates from third party insurers. As a House of Lords ruling it cannot easily be challenged by any higher court. This ruling fundamentally underpins the Group's business model and its ability to reclaim credit hire rates from at-fault insurers.

The private motor insurance industry has also been the subject of a review by the CMA concluding in 2014, which
encompassed the credit hire supply chain. It concluded that it would not be appropriate to cap credit hire rates or otherwise intervene in the market.

Business model extremely attractive to customers and referrers
The integrated model enables the management of cases without the need for customers to contact and manage separate advisers or have their case farmed out to a panel firm following initial contact. This business model also benefits the referrers as they are able to maintain their own customer relationship and undertake repairs on the vehicles at commercial rates and payment terms.

Highly scalable, profitable model with market leading margins
Anexo has delivered organic growth of approximately 10% since 2015, despite capital constraints and demonstrated strong financial performance with calendar 2017 revenues reported at £44.8 million and £14.6 million Profit Before Tax achieved.

Experienced management team
Anexo has been built over 20 years, with founder Alan Sellers pioneering the development of the niche Group with the support from a highly experienced team specialising in impecunious claims.

Growth Strategy

The Directors believe that there are a number of opportunities to grow the business. At present, the vast majority of claims are settled by negotiation, partly driven by the Group's need to preserve working capital. This has historically restricted recovery rates to approximately 50% to 60% of the gross hire claim. The funds raised on Admission will provide an opportunity to increase these recovery rates with greater funding reducing the need to accelerate settlement by accepting a lower offer. The individual does not suffer loss in these negotiated settlements as the injury claim is settled in full.

Growing the number of solicitors and legal assistants to process the Group's cases and enable Anexo to take on more cases. Currently, the legal services business is based in Liverpool with around 170 employees with further expansion constrained by availability of high quality recruits. Opening new regional offices for Bond Turner would help to attract new legal staff and a first new office is likely to be in Manchester. Additional funds raised will also allow the Group to bring more barristers in house so that work does not need to be given to other chambers. These additional barristers would be paid a basic salary and receive a share of fees which will retain more profit in-house.

Admission will also allow Anexo to increase the number of vehicles available for hire and employ additional sales representatives. In the recent past the number of cars and sales representatives supporting EDGE has been reduced in order to conserve financial resources. This has now been reversed and the growth record of this business is expected to be resumed. Sales representatives are typically most effective closer to home with an increase in the number of representatives expecting to generate increased claims from a wider geographic area.

Furthermore, Anexo intends to grow market share in a consolidating market and take advantage of opportunities that may arise following the anticipated introduction of the Civil Liability Bill in April 2019. The Directors believe that changes to regulation will present an opportunity as law firms change strategy and exit the market.

Board of Directors

Alan Sellers - Executive Chairman, aged 58
Alan Sellers was called to the Bar in 1991 at the Gray's Inn Bar and is currently practising from the Liverpool Civil Law Chambers. Alan is an expert in civil litigation, personal injury and credit hire claims and clinical and professional negligence, and he is recognised as a leading figure in these fields. Mr Sellers was one of the founders of the business and has been instrumental in forming Anexo Group plc as it operates today. On admission, Mr Sellers will continue to practise as one of Anexo's in house team of barristers.

Mark Bringloe - Chief Financial Officer, aged 45
Mark Bringloe is a Chartered Accountant having previously worked at Ernst & Young, Robson Rhodes and BDO. Mark was Director in BDO's Corporate Finance team prior to working as a consultant. Mark started working for Anexo in 2009 before joining the Board in 2009 as Chief Operating Officer.

Samantha Moss - Bond Turner Managing Director, aged 37
Samantha Moss graduated from the University of Manchester with a degree in law and accountancy in 2003 and she was subsequently admitted as a solicitor in 2008. Samantha has worked at Bond Turner since 2004 and is currently Managing Director. Samantha is a specialist in clinical and professional negligence and civil litigation, including personal injury and credit hire claims. Samantha also maintains managerial responsibility for Bond Turner and overseas regulatory compliance, client care, complex claim, staff supervision, account and complaints handling. Samantha is married to Alan Sellers.

Chris Houghton - Senior Independent Non-Executive Director, aged 59
Chris Houghton is a fellow of the Chartered Institute of Management Accountants. He joined Park Group plc in 1986 in a finance role rising to Finance Director in 2001. After taking on operational responsibilities he became Chief Executive in 2012 retiring from the group in 2018.

Richard Pratt - Independent Non-Executive Director, aged 61
Richard Pratt was called to the Bar in 1980 and has practised in Liverpool, specialising in criminal law. He was appointed a QC in 2006 and has been the head of his chambers since 2012 and leader of the Northern Circuit between 2011 and 2013. Richard is also a recorder of the Crown Court.

Roger Barlow - Independent Non-Executive Director, aged 64
Roger Barlow is a Chartered Accountant and was a partner with KPMG until 2000. Since then he has held a number of directorships and is currently Chairman of Marsden Building Society and Senior Independent Non-Executive Director and Chair of Audit at a challenger bank, Bank & Clients plc. He is the independent member of the Audit Committee at the Information Commissioner's Office and was recently Chair of Audit at a NHS Foundation Trust Hospital. He has also been CFO and Chairman of two AIM listed companies.

Elizabeth Sands - Independent Non-Executive Director, aged 46

Elizabeth Sands is currently Chairman of Great Bowery, a New York based fashion agency back by Private Equity. She has also provided independent advice to a number of both private and public companies including a FTSE100 utilities company and an international investment bank. She was previously Head of Organisation and Transformation UK at AT Kearney following which she was Vice Chair of the Finance and Investment, and Workforce committees at the Devon Partnership NHS Trust.


Important Notices

The contents of this announcement, which has been prepared by and is the sole responsibility of the Company, have been approved by Arden Partners plc ("Arden Partners" (registered address: 5 George Road, Edgbaston, Birmingham, England, B15 1NP)) solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

Neither this announcement nor any copy of it may be taken or transmitted, published or distributed, directly or indirectly, in whole or in part, in, into or from the United States of America (including its territories and possessions, any state of the United States and the District of Columbia (the "United States" or the "US")), Canada, Australia, the Republic of South Africa or Japan or transmitted, distributed to, or sent by, any national or resident or citizen of any such countries or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction (each a "Restricted Jurisdiction"). Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese or South African securities laws.

This announcement does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or other securities in any Restricted Jurisdiction. The placing of Ordinary Shares ("Placing") and the distribution of this announcement and other information in connection with the Placing and Admission in certain jurisdictions may be restricted by law and persons into whose possession this announcement, any document or other information referred to herein comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Neither this announcement nor any part of it nor the fact of its distribution shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

This announcement is directed only at persons whose ordinary activities involve them in acquiring, holding, managing and disposing of investments (as principal or agent) for the purposes of their business and who have professional experience in matters relating to investments and are: (i) if in a member state of the European Economic Area, qualified investors within the meaning of article 2(1)(e) of the Prospectus Directive ("Qualified Investors"); or (ii) if in the United Kingdom, Qualified Investors and fall within: (a) article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); or (b) article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the Order (all such persons together being referred to as "Relevant Persons"). The term "Prospectus Directive" means Directive 2003/71/EC as amended and includes any relevant implementing measures in each member state of the European Economic Area.

This announcement must not be acted on or relied on by persons who are not Relevant Persons. Persons distributing this announcement must satisfy themselves that it is lawful to do so. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. This announcement does not itself constitute an offer for sale or subscription of any securities in the Company.

The Ordinary Shares referred to in this Announcement have not been, and will not be, registered under the United States Securities Act of 1933 (the "US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. The Ordinary Shares have not been and will not be approved or disapproved by the US Securities and Exchange Commission or any state securities commission, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

Any subscription for or purchase of Ordinary Shares in the proposed Placing should be made solely on the basis of the information contained in the final Admission Document to be published by the Company in connection with the Placing and Admission. The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may or should be placed for any purposes whatsoever on the information contained in this announcement or its accuracy, completeness or fairness. The information in this announcement is subject to change. However, the Company does not undertake to provide the recipient of this announcement with any additional information, or to update this announcement or to correct any inaccuracies, and the distribution of this announcement shall not be deemed to be any form of commitment on the part of the Company to proceed with the Placing or any transaction or arrangement referred to in this announcement. This announcement has not been approved by any competent regulatory authority.

In connection with the Placing, Arden Partners and/or any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase Ordinary Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Ordinary Shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references in the Admission Document, once published, to the Ordinary Shares being offered, subscribed, acquired, placed or otherwise dealt in should be read as including any offer to, or subscription, acquisition, placing or dealing by Arden Partners and/or any of their respective affiliates acting as investors for their own accounts. In addition, Arden Partners and/or their respective affiliates may enter into financing arrangements and swaps in connection with which Arden Partners and/or their respective affiliates may from time to time acquire, hold or dispose of Ordinary Shares. Arden Partners does not have any intention to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Arden Partners which is authorised and regulated by the Financial Conduct Authority in the United Kingdom is acting exclusively for the Company and no one else in connection with the Placing and Admission and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing and Admission or any other matters referred to in this announcement.

Neither Arden Partners nor any of its subsidiary undertakings, affiliates or any of its partners, directors, officers, employees, advisers, agents or any other person accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy, completeness or fairness of the information or opinions in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

The anticipated timetable for Admission, including the publication of the Admission Document and/or the date of Admission, may be influenced by a range of circumstances, including market conditions. There is no guarantee that the Admission Document will be published or that Admission will occur and investors should not base their financial decisions on the Company's intentions in relation to the Placing and Admission at this stage.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

Certain figures in this announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this announcement may not conform exactly with the total figure given.


This announcement contains certain statements that are, or may be, forward looking statements. These include, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations or statements relating to expectations in relation to shareholder returns, dividends or any statements preceded by, followed by or that include the words "targets", "estimates", "envisages", "believes", "expects", "aims", "intends", "plans", "will", "may", "anticipates", "would", "could" or similar expressions or the negative thereof.

Such forward looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results and performance to be materially different from future results and performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. Accordingly, prospective investors should not rely on these forward looking statements.

These forward looking statements speak only as of the date of this Announcement. Each of the Company and Arden Partners expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein to reflect any change in the Company's expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by law or any appropriate regulatory authority.