Corporate News

“Continued focus on investment, sustainable growth and provision of high-quality legal services”

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 2024 (‘H1 2024’ or the ‘period’).

Download To view a full version of the results in  PDF format  click here

 

It should be noted that, as previously reported, the results for H1 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) are subject to confidentiality restrictions. The agreement resulted in revenues in H1 2023 outside the normal course of historic business, which should be taken into account when comparing H1 2023 and H1 2024.

To aid comparison of these H1 2024 results with H1 2023 we have provided a divisional breakdown in trading performance below.

 

Divisional Financial Highlights

Revenues

• Credit Hire revenues increased by 21.8% to £35.2 million (H1 2023: £28.9 million) reflecting higher vehicle activity in the period.
• Legal Services revenues reduced by 31.5% to £33.5 million (H1 2023: £48.9 million), noting the results for H1 2023 include the impact of the agreement reached with VW. The underlying business on a normalised basis grew in H1 2024 compared with H1 2023.

Profit Before Taxation

• Credit Hire reported a strong improvement in profit before tax, reaching £4.1 million (H1 2023: £2.2 million) an increase of 86.4%, reflecting both increased vehicle activity in the period and continued cost control.
• Legal Services profit before tax was £3.3 million (H1 2023: £14.2 million) as the investment in staffing continued (a 10.3% increase in headcount was reported in H1 2024), whilst H1 2023 included the impact of the agreement reached with VW.
  

Group Financial Highlights
	H1 2024	H1 2023	Movement
Revenues 1	£68.7 million	£77.8 million	-11.7%
Profit before taxation 1	£5.9 million	£15.2 million	-61.2%
Cash collections	£83.7 million	£77.4 million	+8.1%
Net debt	£67.9 million	£61.2 million	+10.9%
Basic EPS 1	3.7 pence	8.6 pence	-57.0%

 

1. The results for H1 2023 include the impact of the agreement of the VW Emissions Case.

• Cash collections from settled cases increased 8.1% to £83.7 million (H1 2023: £77.4 million). This excludes the legal fees associated with the VW Emissions Claim and reflects also the continued investment in staff and infrastructure across the Group.
• The Group generated £4.7 million in Net Cash from Operating Activities (H1 2023: £15.7 million (including the impact of VW); and H2 2023: £1.6 million), an increase of £3.1 million compared with H2 2023.
• A reduction in net debt (including lease liabilities) was reported in 2023 (£5.2 million – including the impact of VW) following the agreement of the VW Emissions Case. Net debt as at 30 June 2024 stood at £67.9 million, unchanged from 31 December 2023 (£67.9 million).
• Revenue from Credit Hire and Housing Disrepair increased by 21.8% and 15.3% respectively in H1 2024. Group revenue was £68.7 million in H1 2024 (H1 2023: £77.8 million (including the impact of VW; and H2 2023: £71.6 million), reflecting growth across our core business activities, noting Group performance was supported in H1 2023 by the impact of the agreement with VW.
• Profit before tax remains in line with management expectations at £5.9 million in H1 2024 in what is traditionally our quieter half (H1 2023: £15.2 million (including the impact of VW); and H2 2023: £7.8 million). The results for H1 2024 reflect an increased level of investment in new vehicle claims (13.2%) and staff within legal services (10.3%) which will drive growth in future cash collections and performance.

Operational Highlights

		H1 2024		H1 2023		% movement
Credit Hire
Revenues (£’000s)		35,205		28,856		+22.0%
Vehicles on hire at the period end (no)		1,772		1,961		-9.6%
Average vehicles on hire for the period (no)		2,028		1,634		+24.1%
Number of hire cases settled		4,394		4,369		+0.6%
New cases funded (no)		5,770		4,920		+13.2%
Legal Services
Revenues (£’000s) 1		33,529		48,916		-31.5%
Housing disrepair claims ongoing (no)		3,880		3,291		+17.9%
Housing disrepair claims settled (no)		1,127		884		+27.5%
Legal staff at the period end (no)		761		690		+10.3%
Average number of legal staff (no)		739		693		+6.6%
Total senior fee earners at period end (no)		287		243		+18.1%
Average senior fee earners (no)		283		250		+13.2%

1. The results for H1 2023 include the impact of the agreement of the VW Emissions Case.

• Vehicle numbers continued to be managed against forecast activity levels to maximise efficient use of working capital, supporting the stabilisation of net debt in the period. This prudent management nevertheless allowed the Group to increase the average number of vehicles on the road (+24.1%), new claims funded (+13.2%) and  revenues from Credit Hire (+22.0%). This process has continued into H2 2024, noting the second half has traditionally been positively impacted by seasonality and an increase in activity levels.
• The average number of Group vehicles on the road in H1 2024 reached 2,028, some 24.1% above that seen in H1 2023 (1,634). As at 30 June 2024, vehicle numbers stood at 1,772.
• The Group has reported a robust performance within legal services, driving the increase in cash collections. Staff numbers have risen to 761 as at 30 June 2024. As previously reported, Housing Disrepair continues to be an ever-increasing contributor to the division, with revenues increasing by 14% in the period. The HDR division settled 1,127 claims in H1 2024 (H1 2023: 884) and now has a portfolio of 3,880 claims (H1 2023: 3,291). The costs of acquisition are written off as incurred, supporting future claim settlements and revenues.
• The Group has continued its investment in diesel emissions claims in H1 2024, resulting in active claims against manufacturers including Mercedes Benz, Vauxhall, BMW/Mini, Peugeot/Citroen and Renault/Nissan. By the end of June 2024, the Group had secured claims against Mercedes Benz (where court proceedings have been issued) from approximately 12,000 clients, and a further 25,000 claims against other manufacturers. The potential settlement of these claims is expected to significantly enhance profitability and cashflows, while importantly reducing net debt, although the timing of any negotiations remains uncertain.

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

“The Group has demonstrated an improvement in performance in the core business, excluding the impact of VW from H1 2023. This is particularly pleasing with a reported 13% increase in new vehicle claims funded and 10% increase in legal staff, the associated costs being expensed as incurred. The results presented here are testament to the quality and expertise of our people, the diversity of the Group’s activities and our commitment to investment into future growth and opportunities for the business.”

“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 with 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.” 

“This is an exciting time for the Group, with continued growth in our core business and huge opportunities in class actions and other litigation. As reported today, the Group has secured a meaningful increase in headroom across all our principal funding facilities, allowing the Board to react to opportunities to drive additional shareholder returns. The Board looks to the second half of 2024 and beyond with optimism.”

 

Results Conference Call

Alan Sellers, Executive Chairman, and Mark Bringloe, Chief Financial Officer, will provide a live presentation via Investor Meet Company on 20 Aug 2024 at 09:00 BST.

The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 19 Aug 2024, 09:00 BST, or at any time during the live presentation.

Investors can sign up to Investor Meet Company for free and add to meet Anexo Group plc via:

https://www.investormeetcompany.com/anexo-group-plc/register-investor

Investors who already follow Anexo Group plc on the Investor Meet Company platform will automatically be invited. An audio webcast of the conference call with analysts will be available after 12:00 BST today on the Company’s website: www.anexo-group.com

For further enquiries:

Anexo Group plc	+44 (0) 151 227 3008 www.anexo-group.com
Alan Sellers, Executive Chairman Mark Bringloe, Chief Financial Officer Nick Dashwood Brown, Head of Investor Relations
Zeus Capital Limited (Nominated Adviser & Broker)	+44 (0) 20 3829 5000
Hugh Morgan/ David Foreman / Darshan Patel (Investment Banking) Fraser Marshall / Simon Johnson (Corporate Broking)

 

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