Manolete Partners (MANO ) has described the six months to 30 September 2021 as a period of resiliency with case completions in line with expectations and 23% higher than in 1H21.
The insolvency litigation financing company saw revenues rise by 15% to £10.2m from 2H21 (£8.9m) and fall 46% below 1H21 (£19m), a period that had benefited from an exceptionally large single case settlement of £9.3m and that was impacted less from the pandemic.
It said results reflect its operations during a time when the UK insolvency market was artificially suppressed by the UK Government action initiated in June 2020. The Board has proposed an interim dividend of 0.39p per share (1H21: 1.17p), payable on 6 January 2022.
“Despite the effect of the Government actions the business has continued to perform strongly, particularly in terms of case completions which were 23% higher than the comparable period last year and in line with management expectations,” said Chief Executive, Steven Cooklin.
Profit rose by 38% to £5.4m from 2H21 (£3.9m) and was 43% below 1H21 (£9.5m), with the decline largely due to reduced unrealised profits reflecting the decline in the number of new case investments which was suppressed due to the Covid-19 related temporary measures.
In 1H22, 76% of revenues were from realised completed cases (1H21: 71%) while cash generated from completed cases increased 3% to £4.3m compared to £4.2m in 1H21.
64 case realisations occured in 1H22 representing a 23% rise from the 52 case realisations in 1H21), generating gross proceeds of £7.9m, over an average duration of 11.5 months.
Manolete said new case investments declined by 39% to 78 (1H21: 110) as a result of unprecedented Government support to the economy during the Covid-19 pandemic.
Despite the temporarily challenging environment, cash generated from previously completed cases exceeded the cash costs of operating the business, before investment in new cases. Since 30 September 2021, Manolete’s investment in cases has grown by 5% to £41.4m.
With the temporary government measures having ended last month, the market is beginning to recover to pre-pandemic levels with “a sharp increase in both case enquiries and signed cases,” said Cooklin, who added that he expects strong growth momentum to return.
Manolete said its KPIs for September and October 2021 show strong signs of recovery with the number of new case enquiries at 50 and 55 for those two months, respectively, compared to a low of 31 for the month of March 2021 while the Temporary Measures were in force.
The number of new signed cases for September and October were 15 and 18, respectively, compared to 10 in August 2021. The Company added that cartel cases remain ongoing and that it expects there to be considerable progress within the next six to twelve months.
In the expectation of sustained higher operational activity, Manolete is increasing the number of new in-house lawyers, which it said is a key factor in increasing its business capacity.
“These are resilient results, produced against a back-drop of an extraordinary market, and they demonstrate the strength of the Manolete business,” added Cooklin of the results.
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