When not-at-fault motorists are involved in an accident, Anexo’s (ANX) credit-hire business provides a replacement vehicle. Its litigators then recoup the hire costs, repair expenses and any injury claims from the at-fault driver’s insurance company. In effect, the legal services division is the real cash generator, acting like a debt collector for the credit hire business.
While last year saw a build-up of the hire fleet to around 1,500 vehicles, this held steady in the six months to 30 June as the group turned its attention to settling more cases and unlocking cash from its case backlog. Cash collection – the money received from a case settlement – rose by 30 per cent to £36.6m in the first half of 2019, with intake post-period in July hitting a monthly record. This pushed legal services revenue up by over a quarter to £13.5m.
Investment in the new Bolton office and recruitment costs dampened the segment’s pre-tax profit. But, bearing in mind that cases can take months to resolve, the benefit of increasing the number of senior fee earners from 89 at the year-end to 109 should come through in the full-year numbers.
House broker Arden forecasts adjusted pre-tax profit of £23m and EPS of 17.2p for the full year, rising to £25m and 18.7p in 2020.
| ANEXO (ANX) | ||||
| ORD PRICE: | 188p | MARKET VALUE: | £207m | |
| TOUCH: | 184-192p | 12-MONTH HIGH: | 196p | LOW: 115p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 14 | |
| NET ASSET VALUE: | 75p | NET DEBT: | 28%** | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018* | 23.6 | 5.34 | 4.1 | nil |
| 2019 | 36.7 | 10.4 | 7.6 | 1.0 |
| % change | +56 | +95 | +85 | - |
| Ex-div: | 19 Sep | |||
| Payment: | 23 Oct | |||
| *Pre-IPO **Excludes lease liabilities of £10m | ||||
