In its 1H21 results, Manolete Partners (AIM:MANO) highlighted that it has made “strong progress” during the period with its revenue skyrocketing by 153%. As a result, the group’s Board has proposed an interim dividend of 1.17p per share, 134% higher than 0.5p in 1H20.
The insolvency litigation financing specialist has reported revenue growth of 153% to £19m (1H20: £7.5m), driven by an increase in realised income due to the completion of 52 cases in the period, including a significant case generating realised revenue alone of £9.3 million.
Unrealised revenue remained ‘broadly unchanged’ at £5.4m in 1H21, compared to £5.6m in 1H20 which the company said reflects the development of existing case investments, the realisation of completed cases as well as the increase in new case investments in the period.
The number of case realisations was up by 189% - with 52 cases completed - in 1H21 with generated realised revenues from these totalling £13.5m (1H20: £1.9m). Manolete said this reflects the higher rate of case completions which was signalled in earlier financial reports.
The group completed ‘a significant case’ within the six-month period alongside HMRC as the main creditor on a commercial settlement of £15.0m, generating a Manolete profit of £4.4m.
“We completed 52 cases in the six-month period - that means we were completing on average two insolvency claims every single week of the six-month reporting period,” said Chief Executive, Steven Cooklin who said the results evidence “strong progress” made.
He said the rate of execution is almost three-times as many cases completed than in 1H20 last year and close to the 54 cases completed for the whole of the previous full financial year.
Shares in Manolete Partners have traded within a range of 262.5p and 280p in the past two weeks to open 8.04% higher this morning at 302.5p following the announcement.
Profit after tax has increased by 49% to £5.2m (1H20: £3.5m) while cash generated from completed cases up 45% to £4.2m (1H20: £2.9m). As at 30 September 2020, Manolete Partners was managing 237 live case investments, a 63% increase from 131 in 2019.
“The pipeline of new cases also continues to grow at a strong rate in the first six months. We made 110 new case investments that meet our stringent selection criteria in the first half of this financial year, 69% more than the same period last year,” added Cooklin.
Outlook
Cooklin said “strong momentum” has continued into 2H21 with total case completions already up to 62 as at 31 October 2020 and with another 40 live cases scheduled for ‘Alternative Dispute Resolution’ or currently on subject of serious settlement offer negotiations.
Alongside favourable macroeconomic trends, the company said this granular data underpins its excitement at the prospects for the second half of the year and beyond.
"This performance reflects Manolete's core strengths: market-leading position; operating in a specialist sector where Manolete can buy almost all cases ; significant first-mover advantage and deeply embedded relationships with all key stakeholders in the Turnaround, Restructuring and Insolvency community, nurtured over our 11-year operating history,” added Cooklin.
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