Corporate News

"Continued focus on investment and sustainable growth across all Group divisions"

Anexo Group plc (AIM: ANX), the specialist integrated credit hire and legal services provider, announces its audited final results for the year ended 31 December 2024 (the 'period' or 'FY2024).

It should be noted that, as previously reported, the results for the year ended 31 December 2023 ('FY2023') include the contribution from the agreement reached with Volkswagen AG ('VW') in relation to the Emissions Claim. The terms of the agreement (as announced on 5 June 2023) are subject to confidentiality restrictions. The agreement resulted in revenues in FY2023 outside the normal course of historic business, which should be taken into account when comparing the results of FY2023 and FY2024. The underlying business on a normalised basis grew in FY2024 compared with FY2023.

To aid comparison of the FY2024 results with FY2023 we have provided a divisional breakdown in trading performance below.   

Financial Highlights

Revenues

• Credit Hire revenues increased by 22.9% to £70.4 million (2023: £57.3 million) reflecting the ongoing diversification of the book
• Legal Services revenues reduced by 16.9% to £71.5 million (2023: £86.0 million), noting the results for FY2023 include the impact of the agreement reached with VW in relation to the Emissions Claim.
• Group revenue reduced by 1.0% to £141.9 million (2023: £143.3 million, which included the impact of the agreement reached with VW in the Emissions Claim).

1. The results for FY2023 include the impact of the agreement reached with VW in the Emissions Claim
2. Note: Certain of the results and balances for FY2023 have been restated, this had the impact of reducing opening reserves by £2.3 million, but had no impact on the Statement of Total Comprehensive Income or Statement of Cash Flows for FY2023. Further details are included in Note 1 below.

Overview and Financial and Operational KPIs

2024 has been a year of targeted investment in a number of strategic areas. This has focused on driving increased performance and shareholder value by continuing the development of Bond Turner's staff and infrastructure across all key divisions, including Housing Disrepair, Large Loss (Injury), class actions (which includes emissions) and credit hire. Whilst credit hire remains the most significant component of the Group, our internal focus has changed slightly to look to drive additional value from the division; firstly, from the generation of additional large loss opportunities, for which there are no significant incremental costs; and secondly, from diversification of the claim portfolio within credit hire.

It should be noted that, as previously reported, the results for 2023 include the contribution from the agreement reached with Volkswagen AG ('VW') in relation to the Emissions Claim. The terms of the agreement (as announced on 5 June 2023), which was subject to confidentiality restrictions, noted that the agreement had resulted in a net positive cash position to Anexo of £7.2 million and revenues in that year being outside the normal course of historic business. The claim should therefore be taken into account when comparing 2023 and 2024. The underlying Legal Services business on a like-for-like basis grew in 2024 compared with 2023. It should also be noted that certain comparative information has been re-stated as a result of the prior year adjustment set out in Note 1 to the financial information.

The Group's success lies in the strength of Bond Turner and is supported by ongoing investment in staff, and diversification of the credit hire book alongside expanding revenues from its two other key divisions, targeting growth but not at the expense of increasing levels of working capital and debt. Cash collections improved throughout the year, deriving from credit hire claims, housing disrepair claims and the serious injury and clinical and professional negligence large loss teams. Overall cash collections increased from £163.5 million in 2023 to £169.7 million in 2024. These figures exclude the contribution from the agreement reached in June 2023 with VW referred to above.

Revenues for Legal Services reduced from £86.0 million in 2023 to £71.5 million in 2024; these figures reflect the fact that 2023 included the impact of the agreement of the Emission Claim in the year. On a like-for-like basis, 2024's revenues were above those reported for 2023. This improvement is even more pleasing as the business continued to face disruption in the courts system post-COVID, with delays and adjournments to court dates and hearings, which have impacted turnover and hence profitability. The delays in the Civil Court system are well publicised and are currently subject to a review by the Justice Committee. The Company is playing an active and collaborative role in that review with a Director having already given evidence before the committee.

Following the agreement with VW, the Group continued its investment in claims against other manufacturers, including Mercedes Benz, Vauxhall, BMW/ Mini, Peugeot/Citroen and Nissan/Renault. During 2024, the Group invested a total of £6.5 million in marketing, staff and other costs (2023: £4.3 million) and at the end of 2024 had secured claims against Mercedes Benz (where court proceedings have been issued) from approximately 12,000 clients, and a further 24,000 claims against other manufacturers. These costs which are included within Administrative Expenses in the Income Statement, contribute significantly to the development and ultimate success of the claims. New claim acquisition and marketing has now ceased. Favourable settlement of these claims would be expected to enhance the Company's revenue, profitability and cashflows although the certainty, quantum and timing of any negotiations or settlement remains uncertain.

Staff numbers within Bond Turner continued to grow, driving improvements in performance and cash collections with an increased focus on both developing our own staff but recruiting where necessary to increase settlement capacity. This growth was particularly notable within the housing disrepair and large injury teams, where staff numbers increased from 69 and 77 respectively at the end of 2023 to 84 and 100 at the end of 2024 (an increase of 21.7% and 29.9% respectively). Staff numbers in the Legal Services division reached a total of 768 at the end of December 2024, a 9.4% rise from 2023.

In addition, the business continues to increase its footprint within the field of professional and clinical negligence and large and catastrophic personal injury case book. A new head of clinical negligence has recently been recruited, and the Group is delighted to have attracted a highly experienced, commercially minded and sought after individual which bodes well for future success. Further recruitment of senior people continues to take place across the large and personal injury departments. The Group is able to draw upon its significant marketing capability and nationwide footprint to generate claims effectively.

Opportunities for new work within the Credit Hire division continued to be buoyant. Management continued the active management of claims and sought to diversify the business, expanding the provision of vehicles on a credit hire basis to taxi drivers who had been involved in non-fault accidents. The Group, with its decades of experience, has given careful and strategic consideration to the diversification of its offering between cars, motorbikes, vans, taxis and bicycles, concentrating on those claims that generate the best value for the Group as a whole, alongside ensuring that the demands and needs of its clients are satisfied. This diversification led to overall vehicle numbers being reduced from 2,409 at the end of 2023 to 1,772 at the end of June 2024 and 1,552 at the end of 2024. This reduction in 2024 is expected to have a positive impact on settlements in 2025 and beyond. The readjustment is intended to position the business well for future opportunities within each sector. The diversification is also expected and indeed has already started to open avenues for high value personal injury work where there is no associated credit hire.

Having diversified the book of business and actively managed claim numbers during the year, the strong start to 2024 in terms of vehicle activity resulted in an increase in revenues in the year, rising from £57.3 million in 2023 to £70.4 million in 2024. The focus for the majority of the year was very much on cash generation and our ability to manage claim volumes underlines the robust health of the core business. A number of factors contributed to the increase in revenue including the diversification of the credit hire book. As for many years, all claims generated are passed for recovery to the experienced legal team at Bond Turner, who have shown their strength in driving case settlements in a period where court delays and adjournment are now the norm; the impact of these external factors has seen little improvement during 2024.

2024 also saw the Group replace, or agree enhancements to, its key funding facilities. In August 2024, the Group agreed a £30.0 million, three year committed, loan facility with Callodine Commercial Finance LLC. The Group has drawn down £20.0 million of this facility, to provide further headroom and to repay the loan provided by Blazehill Capital Limited. This refinancing has significantly reduced the overall cost of capital to the Group, as has an agreement to increase the funding available under the facility provided by Secure Trust Bank PLC. Secure Trust has extended and increased the funding period, the effect of which was to provide an additional £5.0 million of funding for the Group within the £40.0 million facility limit previously agreed. Both facilities are committed through to July 2027.

In October 2024, the Group secured a £16.0 million revolving credit facility from Lloyds Bank PLC, of which £13.5 million has been drawn down to increase headroom and repay the facility formerly provided by HSBC Bank PLC (£10.0 million). This facility is also committed for a three year period with no repayments due until that date.

The Group has a number of opportunities for growth in 2025, not only from the current divisions but from wider opportunities in the legal services sector including the growth of higher value personal injury work and continued diversification of the credit hire book. The Board believes that there are significant opportunities to manage the overall Group to ensure it maximises shareholder value by continuing to seize opportunities for growth as they present themselves without the need for significant increases in debt funding. We have provided certain data and statistics below and on the following pages to give further detail around the trading and operational performance of the Group. The measures presented are those which management believes provide the best reflection of performance.

Commenting on the Final Results, Alan Sellers, Executive Chairman of Anexo Group plc, said: "The Board is very pleased with these results, which demonstrate our continued commitment to sustainable investment across our divisions, enabling appropriate growth while managing our debt levels efficiently.

We are immensely proud to be able to offer social justice and full legal support to our clients and members of the public. 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. The credit hire and housing disrepair teams continue to perform with both strength and a high level of legal expertise, and carry out invaluable work for members of the public in difficult situations, who would  not otherwise have access to justice. 

"The Group has multiple opportunities in its existing business in areas which offer huge potential for growth. Our legal services division is involved in a number of high-profile actions which will heighten its public profile and reputation for expertise, while the credit hire division is benefitting from our recent expansion into the taxi sector. The future for the Group is both exciting and promising."

Notes to Editors:

Anexo is a specialist integrated credit hire and legal services provider. The Group has created a unique business model by combining a direct capture Credit Hire business with a wholly owned Legal Services firm. The integrated business targets the impecunious not at fault motorist, referring to those who do not have the financial means or access to a replacement vehicle.

Through its dedicated Credit Hire sales team and network of 1,100 plus active introducers around the UK, Anexo provides customers with an end-to-end service including the provision of Credit Hire vehicles, assistance with repair and recovery, and claims management services. The Group's Legal Services division, Bond Turner, provides the legal support to maximise the recovery of costs through settlement or court action as well as the processing of any associated personal injury claim.

Bond Turner incorporates a number of other specialist legal divisions. One deals with housing disrepair claims acting for clients living in conditions where there is disrepair, damp and mould, and concentrates mainly on the social housing sector. Another focuses on large loss claims, including professional and clinical negligence and complex medical claims. Bond Turner is also involved in group actions including diesel emissions and is currently pursuing claims against Mercedes and several other major manufacturers.

The Group was admitted to trading on AIM in June 2018 with the ticker ANX. For additional information please visit: www.anexo-group.com