Anexo Share Discussion Threads

[sharesoc] 08/10/2019 13:14

We have a growth company seminar on the 15th October in Manchester with Anexo lined up to present. This may be of interest to potential investors or current shareholders. More details and registration can be found here:

[sharesoc] 01/10/2019 19:26

We have a growth company seminar on the 15th October in Manchester with Anexo lined up to present. This may be of interest to potential investors or current shareholders. More details and registration can be found here:

[benjyt] 24/9/2019 09:41

Hi. Will there be a video of this available to your members? Thanks.

[sharesoc] 23/9/2019 19:30

We have a growth company seminar on the 15th October in Manchester with Anexo lined up to present. This may be of interest to potential investors or current shareholders. More details and registration can be found here:

[aishah] 12/9/2019 12:27

Credit hire and legal services provider Anexo Group (ANX:AIM) delivered a significant increase in half-year revenues and earnings thanks to an increase in vehicles on hire and an increase in cash collection from its legal team.

Revenues for the six months to end-June rose 55% to £36.7m while cash collection grew by 30% to £36.6m and pre-tax profits grew by 63% to £11m. After a strong performance over the last month, the shares eased back 1.8% to 188p.

Anexo shares rose sharply at the start of August after the firm revealed that full-year pre-tax profits would ‘significantly exceed market expectations’, which stood at £20m at the time. Management now expects profits to hit analysts’ revised estimates of £23m.

As well as growing its revenues and cash collection, Anexo has renegotiated its working capital facilities resulting in a ‘considerable improvement’ in its financing costs and agreed new terms with its vehicle fleet insurers which will bring more cost savings this year and next year.

Anexo provides vehicle hire for not-at-fault drivers who are involved in an accident and who need a replacement car, van or motorcycle. The claimant’s vehicle is taken to an approved repairer and they are supplied with a hire vehicle for the duration of the claim.

The at-fault driver’s insurance company picks up the bill for the repairs and the hire cost of the replacement vehicle, all handled by the legal team at Bond Turner, so the claimant gets an end-to-end service.

The average number of vehicles on hire in the first half was just under 1,500 compared with just over 900 the previous year. Motorcycle hire has been a particularly successful niche, especially with courier firms who have to have a replacement bike the same day if one of their riders is involved in a no-fault accident.

Meanwhile Bond Turner, the legal services division, has out-performed management’s expectations with the new Bolton office breaking even just four months after it opened.

Both the number and the quality of litigators recruited has exceeded expectations, driving cash collection, while a focus on higher-value cases from the existing portfolio is driving profits higher.

Cash collection grew by 30% in the first half and the strong trend carried on into July which looks like it could be a record month. It’s worth noting that experienced litigators tend not to reach capacity in terms of settlement and cash collection for 12 months so there is potential for more good news to come on the legal services front.

sharesmagazine.co.uk

[aishah] 11/9/2019 08:56

@investchampion

Anexo: with a growing number of litigators, revenue for 2020 is forecast to rise 8.7% to £84.9m and pre-tax profit grow a similar amount to £25m, with Eps 18.8p resulting in the multiple falling to 9.8x.

[74tom] 10/9/2019 12:33

Ron I can see I have no hope here, the phrase you are looking for is “revenue is vanity, profit is sanity”. They do generate free cash flow, but it is reinvested back into the company. Do you actually understand how Anexo works? They have a large working capital gap, that is why they need cash, not because they aren’t cash generative! You need to do a lot more research IMO

[aishah] 10/9/2019 11:50

Anexo Group - improving cash collection is looking very encouraging

Anexo Group is a specialist legal services business supporting impecunious customers who have been involved in a non-fault accident. The rating looked attractive at IPO and it hasn't disappointed with the latest interim results poiting to an improvment in cash collection. There could be plenty more to go for as the expanding litigation team encourages the insurers to pay up quicker.

[ronwilkes123] 10/9/2019 11:01

Outflow not losses*

[ronwilkes123] 10/9/2019 10:32

It doesn't generate fcf and that's the issue - est 6 mill outflow in today's figures over the full year.Profits of 23 million but in reality cash losses of 6 million. That's the issue. Profit is vanity cash is sanity. Once it's seen to generate fcf it will retate.

[ronwilkes123] 10/9/2019 10:07

Cash is king and this doesn't generate any

[dan de lion] 10/9/2019 08:35

Those two 10k trades look like a "rollover" to me, did not affect the share price at the time buy price actually went up afterwards.

[74tom] 10/9/2019 08:10

Classic post results drop, caused primarily by 2 x 10k sells just after 8. Let’s see how the rest of the week plays out...

[ronwilkes123] 10/9/2019 07:21

Cash outflow looks like it's going to be higher/flat on last year. So whilst it's generating profits, it's not actually at the min generating free cash. Hence the market being passive here. Fully expect it to come back at bit on the cash flow figure.

[74tom] 10/9/2019 07:04

Fantastic results! There are so many positives, I’ll make a list later but safe to say this is heading for mid cap status if growth maintains its current trajectory. Once they have enough lawyers onboard to collect more fees than they invest in cases, this will become a cash generating machine. This should happen at the end of this year!

[dan de lion] 09/9/2019 13:53

Only 14 million of 110 million shares in free issue, rest held by management and II`s.

[74tom] 06/9/2019 18:23

A good end to the week - I would expect Monday to be more of the same in advance of results - should hit at least £2 at open on Tuesday!

[74tom] 06/9/2019 10:06

It’s just people putting 2 & 2 together ahead of the results, there is a clear valuation gap here both versus peers and the wider market.

[ronwilkes123] 06/9/2019 08:21

Something leaked Tom?

[74tom] 05/9/2019 19:21

Example 1:



Manolete’s current market cap is £177m

Their profit before tax for 2018 was £6.8m

Investment in cases up 72% to GBP18.2m (FY18: GBP10.6m)
-- Case gross cash inflow of GBP8.8m up 48% in FY19 (FY18: GBP5.9m

So a cash outflow of £9.4m on cases. Around the same cash outflow overall as per their cash flow statement.

Manolete’s EPS was reported at 12.7p

So they have a PE of 32 at present.

Example 2:

Keystone Law is another legal listing with a high PE.



They generated cash of £4.6m last year & have a PE of nearly 40...

So a comparable cash generator has a PE of 40 and a comparable non cash generator has a PE of 32. Anexo with its PE of less than 10 seems hugely undervalued vs it’s peers!

[74tom] 05/9/2019 18:49

I wouldn’t call it an issue per say, Burford, Litigation Capital & Manolete all burn cash as it’s the only way to grow the business until you get enough scale.

Not sure if you’ve seen the below quote from April’s investors chronicle?

“Management believes that the fourth quarter of 2019 will mark an “inflection point”. It expects to settle more cases than it takes on and transitioning from “a cash absorber to a cash generator”.



We already know that July was a record month for cash collection, and as they only recognise revenue when cases are settled this must also mean that the P&L is benefitting. Hence the ‘significantly above expectations” comment.

I wouldn’t be surprised if they end up with > £25m PBT this year, and if cash starts to pile up then we’ll reach the £3.45 Arden target sooner rather than later.

[ronwilkes123] 05/9/2019 14:12

Free cash flow is an issue Tom as atmIt doesn't generate any. Though indications it's going to generate fcf shortly would be v positive.

[74tom] 05/9/2019 13:14

Moving up with every buy on low volume...having read the prospectus in more detail last night, it is l quite obvious where this company is going IMO

1. There was a backlog of 18000 cases when they listed
2. This backlog increased by around 2000 cases last year
3. The average revenue per case is around £11k
4. There new Bolton office has allowed them to increase lawyer numbers, resulting in more cases being dealt with.
5. They could feasibly double closed cases this year and still not reduce the backlog
6. 20000 open cases * £11k revenue per case = £220m. Operating profit margin around 30%, so £66m of profit to collect.
7. They will reinvest the resultant cash flow in more lawyers, sales staff & marketing to continue growing the business organically, whilst paying a growing dividend.

It may not play out in such a straightforward manner, but on paper this looks like a cracking investment at present.