Credit hire and legal services specialist Anexo (ANX) floated on Aim in June, and its maiden interim results require some context. In 2017, before planning to go public, management decided to focus on motorcycle claims and settling current claims, instead of pursuing new claims generation. In effect, it wanted to manage its credit hire business for cash. This led to "reduced activity" in the second half of 2017 and the start of 2018, which the company blames for the weaker showing year-on-year. But after deciding to list, and anticipating access to fresh capital, it reversed this strategy.
Half-year numbers illustrate this story. Anexo’s vehicle fleet increased from 1,568 to 2,293, and vehicles on hire grew by 27 per cent to 1,240. But while revenues rose very slightly, pre-tax profits were down considerably. This stemmed not just from listing costs, but the aforementioned shift in focus, as well as a change in the company’s insurance provider. The associated increase in the net insurance cost has also hit gross margins.
Anexo’s IPO funds were intended to drive capacity within its legal services business, to allow credit hire to expand. Accordingly, new cases funded have risen by 12 per cent, and since the period ended the group secured the lease for a new legal office in Bolton.
Broker Arden Partners expects adjusted pre-tax profits of £14.7m and EPS of 11.1p for 2018 (from £13.8m and 10.1p in 2017).
| ANEXO (ANX) | ||||
| ORD PRICE: | 116p | MARKET VALUE: | £128m | |
| TOUCH: | 114-118p | 12-MONTH HIGH: | 116p | LOW: 102p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 13 | |
| NET ASSET VALUE: | 62p | NET CASH: | £6m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017* | 22.9 | 8.50 | 6.4 | nil |
| 2018 | 23.5 | 5.34 | 4.1 | nil |
| % change | +3 | -37 | -36 | - |
| Ex-div: | n/a | |||
| Payment: | n/a | |||
| *Pre-IPO figures. | ||||
