Credit hire and legal services group reports record annual results
Anexo Group, the Liverpool-based specialist integrated credit hire and legal services provider, reported record results today.
Total revenues in the year to December 31, 2019, jumped by 38.9% to £78.51m, while pre-tax profits of £22.4m represented a 57% improvement.
The group announced a proposed final dividend of 0.5p per share, giving a total dividend for the year of 1.5p per share, the same as last year.
Last monthe the group raised £7.5m through a share placing to expand the business, including recruitment of new staff and increased marketing in a legal case involving car maker Volkswagen.
A specialist team within Anexo’s Bolton-based legal services division, Bond Turner, is acting on behalf of around 8,000 individuals who have registered their intention to pursue a claim against VW.
They claim the car maker subverted key air pollution tests by using special software to reduce emissions of nitrous oxides under test conditions.
In the event of a settlement being reached, Bond Turner would be entitled to claim a percentage of any damages awarded to each of its clients, as well as legal costs.
The Anexo board has said this would have a significant positive impact on the group’s expectations for profits and cash flow for the relevant accounting period.
During 2019 the group saw significant improvements in a number of key performance measures that have resulted in a significant reduction in the level of cash absorbed by the group in the second half versus the first half of the year.
Despite this reduction in cash consumption, the number of claims instigated during the period increased from 3,392 in the first half of 2019 to 3,567 in the second half.
The group’s investment in the number of senior fee earners also increased, rising from 89 at the end of 2018 to 109 at the end of the first half of 2019 and reaching 127 at the end of 2019.
Most notably the number of cases settled increased during 2019 as the group’s investment in legal staff started to bear fruit.
Cases settled rose from 2,066 in the first half of 2019 to 2,872 in the second half – an increase of 39%. The group anticipates further growth in 2020 as the case portfolio of the new recruits matures.
Alan Sellers, executive chairman, said: “I am pleased to report another year of financial and operational progress across Anexo as our focus on driving cash generation yields positive results.
“In 2019 we successfully grew our high quality legal team, allowing us to increase the number of cases settled and improve the working capital position of the group.
“Our core business continues to be focused on the ever-increasing opportunities identified in the UK credit hire market, but the board is also optimistic about the future outcome of our specialist advocacy team’s work on behalf of claimants in the VW emissions case, particularly with the support of the additional funding provided by the group’s placing in May 2020.
“We started the year well with high levels of cash collection continuing, and the board is pleased to confirm that in the first four months of the year our credit hire operation was net cash positive.
“This is a key milestone for the group.”
He added: “Looking forward, we are also conscious of the future uncertainty shaped by the current COVID-19 pandemic.
“Both our business divisions have remained fully operational throughout the past few months and the group has demonstrated considerable resilience. Nevertheless, we continue to believe it is too early to provide forward looking financial guidance at this time.
“The board remains confident of the group’s capacity for organic growth and, given the resilience of our business and our strong financial position, believes Anexo is well positioned to weather the current storm and deliver near-term profitable growth to our shareholders.”