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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Manolete Partners Plc | LSE:MANO | London | Ordinary Share | GB00BYWQCY12 | ORD 0.4P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 140.00 | 135.00 | 145.00 | 140.00 | 140.00 | 140.00 | 17,935 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Legal Services | 20.75M | -3.12M | -0.0714 | -19.61 | 61.27M |
From May 2019 to May 2024
TIDMMANO
RNS Number : 8998K
Manolete Partners PLC
19 December 2018
19 December 2018
MANOLETE PARTNERS PLC
("Manolete" or the "Company")
Unaudited half-year results for the six months ended 30 September 2018
Maiden results in line with expectations
Manolete (AIM:MANO), a leading UK insolvency litigation financing company, today announces its unaudited results for the six months ended 30 September 2018.
Financial highlights:
-- Investment in cases up 75% to GBP13.9m (30 September 2017: GBP8.0m) -- Revenue up 31% to GBP6.5m (H1 FY18: GBP4.9m) -- Gross profit up 44% to GBP4.4m (H1 FY18: GBP3.1m) -- EBIT up 52% to GBP3.3m (H1 FY18: GBP2.1m) -- Profit after tax up 57% to GBP2.5m (H1 FY18: GBP1.6m) -- Proforma earnings per share(1) up 56% to 5.6 pence (H1 FY18: 3.6 pence)
Operational highlights:
-- Investment into 31 new cases during H1 FY19 (H1 FY18: 21)
-- Ongoing delivery of realised returns: 12 case realisations in the period, generating gross proceeds of GBP5.5m
-- Average money multiple of 3.6 times for cases completed in H1 FY19 -- Average case duration across the full portfolio of 173 completed cases is 11 months
-- 65% increase in live cases: 76 in process as at 30 September 2018 (46 as at 30 September 2017)
-- Roll-out of regional network with in-house lawyers recruited in: North West, South West and Southern regions of the UK
-- Exclusive 3-year sponsorship agreement signed this week with the ICAEW's Restructuring and Insolvency Community
-- Successful IPO on London Stock Exchange's AIM market raising net proceeds of GBP14.7m
-- Significantly increased capital capability and financial covenant - extension of revolving credit facility with HSBC from GBP10m to GBP20m at a maximum rate of LIBOR plus 2.75% plus GBP14.7m net IPO proceeds
Steven Cooklin, Chief Executive Officer, commented:
"We are delighted to announce our first set of interim results as a public company, following our AIM flotation earlier this month. This strong set of results is the latest milestone in our track record of delivering profitable growth, underpinned by our core ability to source and price complex legal risk. We achieved impressive double-digit growth in revenue and EBIT during the period, delivering continued outstanding investment returns yielding an average money multiple of 3.6x on completed cases.
"We look forward to working with many more insolvency practitioners and their lawyers, as we deploy the proceeds of the IPO, as well as the enhanced debt facility with HSBC, to accelerate our growth plans through financing more and larger insolvency cases, and to delivering stand-out returns for insolvency creditors and shareholders alike."
For further information please contact:
Manolete Partners
Steven Cooklin (Chief Executive Officer) via Instinctif Partners Peel Hunt (NOMAD and Sole Broker) +44 (0)20 7418 8900
Guy Wiehahn
Adrian Haxby
Rishi Shah
Instinctif Partners +44 (0)20 7457 2020
Giles Stewart
Rachel Cashmore
Lewis Hill
1 On a proforma basis: calculated on the basis of the shares in issue after completion of the IPO
CHIEF EXECUTIVE OFFICER'S STATEMENT
Introduction
I am pleased to present our unaudited interim statements for the first half year to 30 September 2018. This is our maiden set of financial results following our IPO and admission to AIM on 14 December 2018.
Manolete is one of the leading players in the high growth insolvency litigation finance market, a market buoyed by favourable policy tailwinds. As these interim results clearly demonstrate, we performed strongly in the period, delivering outstanding returns and maintaining the pace of our investments into new cases that meet our stringent selection criteria. I am particularly pleased that we delivered on our profitability targets against the backdrop of our IPO preparations.
Performance
In the first half, revenues increased 31% to GBP6.5m (H1 FY18: GBP4.9m), reflecting higher investment into new cases and the benefits of short duration case returns. Operating profit, adjusted for GBP21k of non-recurring IPO costs, increased 53% to GBP3.3m (H1 FY18: GBP2.1m), with margin improving from 43% to 50% reflecting the operating leverage built into our business model. Our business is profitable and we recorded pre-tax profits of GBP3.0m, compared to GBP1.9m in the comparable half year, an increase of 57%. Our pre-tax profit margin improved from 39% to 47%.
Investments
Two key factors set us apart in the litigation finance market: first, our ability to deliver rapid case realisation times and secondly, our long track record of successfully completed cases. In the first half, we completed ten cases and made significant additional recoveries on two cases that had been completed in the previous year, resulting in gross settlement proceeds of GBP5.5m (H1 FY18: GBP4.7m) with gross profit on realisations of GBP2.0m (H1 FY18: GBP1.6m). The average money multiple on these 10 cases was 3.6x. Money multiple is defined as the Company's gain on a case, plus the amount recovered in respect of its legal costs and initial payment to the Insolvent Estate, divided by the amount of those legal costs and the initial payment to the Insolvent Estate.
The fair value of our in-process case investments as at 30 September 2018 increased 75% to GBP13.9m (30 September 2017: GBP8.0m), reflecting in the main, the continued attractive case investment opportunities provided by our longstanding network of Insolvency Practitioners. We invested GBP1.6m in legal costs on live cases in the first half, compared to GBP0.8m in the first half of the previous year.
We continue to seek to have a balanced case portfolio by both size and type of case. In recent periods we have looked to move up the value chain and accept a larger proportion of higher return, higher value case investments. This strategy is underscored by the strength of our case track record and facilitated by our enhanced capital position following the proceeds raised on float together with the extension of our facility with HSBC.
Strategy/Team
Our strategy is to increase the number and average size of our new case investments. We believe this will be achieved by building on, as well as expanding, the wide network of established Insolvency Practitioner and Insolvency Lawyer contacts throughout the UK.
With one eye on the opportunities provided by our position in the litigation finance market we began the process of significantly strengthening our team. In the first half, we added a new in-house solicitor expert in insolvency cases to help us review and process inbound opportunities, with a further one due to join in January 2019. Our regional expansion plans continue to progress well, following the successful appointment in May 2018 of an in-house solicitor at Associate Director level covering the North West region. A further in-house lawyer for the South West region started with the Company this month and another is contracted to commence coverage of the Southern Region at the end of January 2019.
We believe that an increased regional presence will strengthen our relationships with Insolvency Practitioners and legal firms, which will lead to an increased volume of enquiries. We are currently recruiting to extend our regional network and we believe that this in turn will lead to an increased market share.
Further underpinning our expansion strategy, this week we signed an exclusive three-year sponsorship contract, as the sole litigation funder sponsor for the Institute of Chartered Accountants in England and Wales (Restructuring and Insolvency Community). This provides the company with an excellent and exclusive sponsorship platform, over a long-term basis, with the largest single regulator of Insolvency Practitioners in the UK.
Board of Directors
We have made four new Board appointments, three of which occurred post the 30 September 2018 period end. Three independent Non-Executive Directors took up their appointments upon listing: Peter Bertram, our Chairman brings a wealth of Board experience from serving on several publicly listed companies for over twenty years; Dr Stephen Baister was Chief Bankruptcy Registrar from 2004 to 2017 and offers an expert understanding and appreciation of Insolvency Law; Lee Manning was a licensed insolvency practitioner with Deloitte LLP from 2004 to 2018 and brings an expert degree of proficiency in the insolvency sector. We believe that these combined appointments will add significant value to our business capability. At the Executive level, Patrick Lineen joined as CFO and helped guide us through the recent IPO process.
Dividend
The current intention of the Board is to adopt a progressive dividend policy. The Company intends to pay a final dividend only for the full year ending 31 March 2019 based on a payout ratio of 20 per cent. of profit after tax which will be used as the reference point for the progressive dividend policy (after adjusting for the undeclared interim dividend in the year). Going forward, the interim dividend is intended to be equal to approximately one third of the total dividend of the Company's prior financial year. Dividends will take into account the progressive nature of the dividend policy, distributable reserves and other applicable law and the trading performance of the business.
Outlook
Given the strength of our position in the specialist insolvency litigation market, our firmly established network of Insolvency Practitioners and our proven track record of delivering outstanding returns, we look forward to the second half and beyond with confidence and enthusiasm.
I would like to express my gratitude to my colleagues and business partners for all their hard work and support they have given to the Company.
Steven Cooklin
Chief Executive Officer
18 December 2018
CHIEF FINANCIAL OFFICER'S REVIEW
I am pleased to give my review of the Company's unaudited results for the first half year to 30 September 2018, which show strong growth compared to the first half of the previous year.
Revenue
The Company's revenue is split between realised and unrealised revenue, as follows:
Hot Features
Premium
H1 FY19 H1 FY18
GBP000s GBP000s
Realised revenue 4,262 3,647
Unrealised gains on investments in cases 2,236 1,300
-------- --------
Total 6,498 4,947
-------- --------
Realised revenue grew 17% year-on-year to GBP4.3m. We have seen a good level of realisations, with 10 cases closing in the first half, together with additional recoveries of GBP0.8m on two cases that were legally completed in the previous year. At the time of the completion of these two cases, there was a significant degree of uncertainty on the level of additional recovery and as a result we did not recognise this additional revenue in the previous financial year.
Unrealised gains on investments grew by 72% to GBP2.2m, compared to the first half of FY 2018. This reflects both the development of existing case investments and the increase in new case investments in the period. Total investment increased 75% to GBP13.9m in the first half and there was a 65% increase in live cases at period end: as at 30 September 2017, there were 46 live cases in progress, whilst at 30 September 2018, 76 live cases were in process, five of which were completed in October 2018.
The mix of revenue has stayed broadly unchanged, with the majority being realised revenue. Realised revenue was 66% of total revenue, compared to 74% in the first half of FY 2018. The weighting towards realised revenue reflects our strategy of securing early settlements on many of our cases. It should be noted that predicting when cases will reach a successful conclusion is very difficult and accordingly the blend between realised and unrealised gains will change from year to year.
When a case is fully completed, revenue is then recognised as realised and previously unrealised gains on that case are reversed.
Cost of sales
Cost of sales comprises legal costs on realised cases, the initial payments made to Insolvent Estates on our case investments (both purchased and funded) and payments to Insolvent Estates on successful realisations of purchased cases.
Gross profit
Gross profit grew 44% to GBP4.4m (H1 FY18: GBP3.1m). Gross profit margin increased to 68% (H1 FY18: 62%). The growth in gross profit reflects the movement towards larger cases, in both realised and unrealised gains.
We analyse gross profit into the separate categories of funded and purchased cases. Our strategic preference is to purchase cases rather than to fund them. Generally, our Insolvency Practitioner clients, where possible, prefer the Company to purchase cases because this gives them and the Insolvent Estate fuller protection from any potential adverse costs. It also provides the Company with full operational control of the case through the litigation process. The first half gross profit analysis was skewed against this trend, principally due to the impact of three large funded cases, one of which was realised and the other two were unrealised.
H1 FY19 % H1 FY18 %
GBP000s GBP000s
Gross profit on funded cases 1,972 44 363 12
Gross profit on purchased cases 2,477 56 2,722 88
-------- --------
Total 4,449 100 3,085 100
-------- --------
Administrative expenses
Administrative expenses increased 24% to GBP1.2m in the first half (H1 FY18: GBP1.0m). Staff costs are the principal driver of the increase in administrative expenses, with the overall increase driven by higher staff numbers.
Statutory operating profit before non-recurring items (Earnings Before Interest and Tax)
Operating profit before non-recurring items grew by 53% to GBP3.3m in the first half (H1 FY18: GBP2.1m) with margin improving to 50% from 43%.
The Company incurred preliminary costs of GBP0.02m in connection with our Initial Public Offering on AIM, where trading began on 14 December 2018 and these have been shown as non-recurring items.
Finance costs
Gross debt increased from GBP2.3m as at 30 September 2017 to GBP5.0m as at 30 September 2018, reflecting increased new case investment. A loan of GBP2.3m was repaid on 31 January 2018 with borrowings from the new HSBC facility. The GBP5.0m HSBC debt is shown net of capitalised set-up costs of GBP0.6m. Finance costs increased at a much slower pace, by 11% from GBP0.2m to GBP0.22m. This reflects the significantly lower costs of debt achieved via the agreement of the HSBC facility in January 2018 with a margin of 1.75%-2.75%, compared to the interest rate of 11% on the loans that were outstanding as at 30 September 2017 which have since been repaid.
Profit after tax
Profit after tax has increased by 57% from GBP1.6m to GBP2.5m. The post-tax margin has increased from 32% to 38%.
Investment in cases
The company was managing 76 live case investments as at 30 September 2018, compared to 46 live cases as at 30 September 2017. The split between Purchased and Funded cases at these dates is as follows:
As at 30 September 2018 As at 30 September 2017
Funded 17 22% 21 46%
Purchased 59 78% 25 54%
--------- ---------
Total 76 100% 46 100%
--------- ---------
The total investment in cases amounted to GBP13.9m at 30 September 2018, representing an increase of 75% from the value as at 30 September 2017 of GBP8.0m. Investment in cases is shown at valuation, including costs incurred. Live cases are shown at fair value, based on the Company's estimate of the likely future realised gross profit. Any material valuations (greater than GBP0.1m per individual case) are corroborated with the external lawyers working on the case who provide updated legal opinions at the year-end and the half year-end. The Company does not capitalise any of its internal costs, these are fully expensed to the Statement of Comprehensive Income as incurred. The average case value as at 30 September 2018 was GBP0.18m, compared to GBP0.17m as at 30 September 2017. The median case value as at 30 September 2018 remained broadly flat at GBP0.06m.
Trade receivables and cash conversion
Trade and other receivables have increased by 27% from GBP2.4m to GBP3.0m, broadly in line with the increase in revenues.
Many of the realisations achieved are paid by the debtor promptly, especially where the debtor is a large company, an insurance company or a wealthy individual. In some cases, the debtor is dependent on selling assets to realise cash to pay the Court award or settlement and hence cash realisation can, in these instances, be delayed for some months. Where appropriate, the Company will secure its position by obtaining charging orders over the relevant assets. In smaller cases, the Company sometimes accepts payments on an instalment arrangement. Based on realised revenue and receivables as at 30 September 2018, the Company is converting debtors into cash in 169 days, compared to 175 days for the first half of the previous year.
Borrowings and loans
The Company has been financed in the past by debt, equity and retained profits. Debt was principally provided by Moulton Goodies Ltd, its largest shareholder. In January 2018, the Company signed a GBP10m Revolving Credit Facility ("RCF") with HSBC and repaid the Moulton Goodies Ltd debt in full at that time. As previously noted, gross debt increased between 30 September 2017 and 30 September 2018 from GBP2.25m to GBP5m to finance the growth in investment in cases.
Post balance sheet subsequent events
On 14 December 2018, the Company completed an Initial Public Offering and its shares were issued on the Alternative Investment Market. This raised approximately GBP14.7m (after expenses) to enable the Company to pursue its growth strategy. Simultaneously, the RCF was increased to GBP20m. The balance on the RCF will be paid down shortly using the IPO proceeds but the RCF provides the Company with financial flexibility as it fulfils its growth strategy.
Patrick Lineen
Chief Financial Officer
18 December 2018
Manolete Partners Plc
Unaudited Statement of Comprehensive Income for the 6 months ended 30 September 2018
6 months 6 months Year ended
ended 30 ended 30 31 March
September September 2018
2018 2017 Audited
Note Unaudited Unaudited
GBP GBP GBP
Revenue 3 6,498,090 4,947,038 10,630,264
Cost of sales (2,048,599) (1,861,343) (3,839,282)
------------ ------------ ------------
Gross profit 4,449,491 3,085,695 6,790,982
Administrative expenses 4 (1,177,836) (951,010) (2,719,769)
Operating profit before non-recurring item 3,271,655 2,134,685 4,071,213
Non-recurring item - IPO costs 5 (20,527) - -
Operating profit after non-recurring item 3,251,128 2,134,685 4,071,213
Finance income 6 384 148 1,515
Finance charges 7 (219,172) (197,926) (379,542)
Profit before tax 3,032,340 1,936,907 3,693,186
Taxation (573,843) (371,024) (432,392)
Profit and total comprehensive income for the period attributable to the equity
owners of
the company 2,458,497 1,565,883 3,260,794
============ ============ ============
Proforma earnings per share 10 5.6p 3.6p 7.5p
Proforma fully diluted earnings per share 10 5.6p
3.6p 7.4p
The results reflected above relate to continuing activities.
Manolete Partners Plc
Unaudited Statement of financial position as at 30 September 2018
Note 6 months ended Year ended
6 months ended 30 September 2018 30 September 2017 31 March 2018
Company Number: 07660874 Unaudited Unaudited Audited
GBP GBP GBP
Assets
Current assets
Investments 8 13,928,068 7,959,554 10,554,544
Trade and other receivables 3,007,200 2,376,371 2,973,274
Cash and cash equivalents 994,341 539,108 5,934,418
----------------------------------- ------------------- ---------------
Total current assets 17,929,609 10,875,033 19,462,236
----------------------------------- ------------------- ---------------
Total assets 17,929,609 10,875,033 19,462,236
=================================== =================== ===============
Equity and liabilities
Equity
Share capital 99,600 98,300 99,600
Share premium 1,015,000 1,015,000 1,015,000
Retained earnings 9,100,325 4,946,917 6,641,828
----------------------------------- ------------------- ---------------
Total equity attributable to the
equity owners of the company 10,214,925 6,060,217 7,756,428
----------------------------------- ------------------- ---------------
Non-current liabilities
Borrowings and loans 4,425,555 2,250,000 8,870,588
Total non-current liabilities 4,425,555 2,250,000 8,870,588
----------------------------------- ------------------- ---------------
Current liabilities
Trade and other payables 3,289,129 2,439,816 2,830,220
Deferred tax liability 0 125,000 5,000
----------------------------------- ------------------- ---------------
Total current liabilities 3,289,129 2,564,816 2,835,220
----------------------------------- ------------------- ---------------
Total liabilities 7,714,684 4,814,816 11,705,808
----------------------------------- ------------------- ---------------
Total equity and liabilities 17,929,609 10,875,033 19,462,236
=================================== =================== ===============
The interim statements were approved by the Board of Directors and authorised for issue on
18 December 2018.
Manolete Partners Plc
Unaudited Statement of changes in equity as at 30 September 2018
Attributable to the equity owners of the company
Share Capital Share Premium Retained Earnings Total Equity
GBP GBP GBP GBP
As at 1 April 2017 (audited) 98,300 1,015,000 3,381,034 4,494,334
Profit and total comprehensive income for the
period - - 1,565,883 1,565,883
As at 30 September 2017 (unaudited) 98,300 1,015,000 4,946,917 6,060,217
=============================================== ============== ================ ================== =============
As at 1 October 2017 (unaudited) 98,300 1,015,000 4,946,917 6,060,217
----------------------------------------------- -------------- ---------------- ------------------ -------------
Comprehensive Income
Profit and total comprehensive income for the
period - - 1,694,911 1,694,911
Transactions with owners
Issue of ordinary shares 1,300 - - 1,300
As at 31 March 2018 (audited) 99,600 1,015,000 6,641,828 7,756,428
----------------------------------------------- -------------- ---------------- ------------------ -------------
As at 1 April 2018 (audited) 99,600 1,015,000 6,641,828 7,756,428
----------------------------------------------- -------------- ---------------- ------------------ -------------
Comprehensive Income
----------------------------------------------- -------------- ---------------- ------------------ -------------
Profit and total comprehensive income for the
period - - 2,458,497 2,458,497
----------------------------------------------- -------------- ---------------- ------------------ -------------
As at 30 September 2018 (unaudited) 99,600 1,015,000 9,100,325 10,214,925
----------------------------------------------- -------------- ---------------- ------------------ -------------
Manolete Partners Plc
Unaudited Cash Flow Statement for the 6 months to 30 September 2018
6 months 6 months Year Ended
ended 30 ended 30 31 Mar
Sept 2018 Sept 2017 2018
Unaudited Unaudited Audited
GBP GBP GBP
Cash flows from operating activities
Profit before tax 3,032,340 1,936,907 3,693,186
Adjustments for non-cash/non-operating
items:
Fair value movements (2,236,500) (1,300,010) (3,905,000)
Legal costs and IP payments on realised
cases 485,746 799,696 1,374,967
Finance income (384) (148) (1,515)
Finance expense 219,172 197,926 379,542
Interest paid - - 437,387
1,500,374 1,634,371 1,978,567
Changes in working capital:
(Increase) in trade and other receivables (33,926) (793,363) (1,390,266)
(Decrease)/increase in trade and other
payables (119,934) (406,342) 163,262
Cash flow generated from/(used in)
operations 1,346,514 434,666 751,563
------------ ------------ ------------
Taxation received - 221,405 225,586
Net cash generated from/(used in) operating
activities 1,346,514 656,071 977,149
Cash flows from investing activities
Investment in cases (1,622,770) (754,274) (1,319,544)
Interest received 384 148 1,515
------------ ------------ ------------
Net cash (used)/generated from investing
activities (1,622,386) (754,126) (1,318,029)
------------ ------------ ------------
Cash flows from financing activities
Issue of ordinary share capital - - 1,300
Interest paid (219,172) (63,176) (816,929)
Loans repaid (4,445,033) (800,000) (3,050,000)
Loans received - - 8,870,588
Repayment of directors' loans - - (230,000)
Net cash (used)/generated from financing
activities (4,664,205) (863,176) 4,774,959
------------ ------------ ------------
Net (decrease)/increase in cash and
cash equivalents (4,940,077) (961,231) 4,434,079
Cash and cash equivalents at the beginning
of the period 5,934,418 1,500,339 1,500,339
Cash and cash equivalents at the end
of the period 994,341 539,108 5,934,418
============ ============ ============
MANOLETE PARTNERS PLC
Unaudited notes to the financial statements for the six months ended 30 September 2018
1 Company information
Manolete Partners PLC (the "Company") is a public company incorporated in England and Wales. The Company is domiciled in England and its registered office is 2-4 Packhorse Road, Gerrards Cross, Buckinghamshire, SL9 7QE.
The principal activity of the Company is that of acquiring and funding insolvency litigation.
2 Accounting policies (a) Basis of preparation
The consolidated half-yearly financial statements, do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2018 have been filed with the Registrar of Companies at Companies House. The auditor's report on the statutory accounts for the year ended 31 March 2018 was unqualified and did not contain any statements under Section 498 (2) or (3) of the Companies Act 2006.
The published financial statements for the year ended 31 March 2018 were prepared in accordance with International Financial Reporting Standards as adapted for use in the EU ("IFRS")
(b) Going concern
The financial statements relating to the Company have been prepared on the going concern basis.
After making appropriate enquiries, the Directors of the Company have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and for at least one year from the date of the signed financial statements. For these reasons, they continue to adopt the going concern basis in preparing the Company's financial statements.
(c) Revenue recognition
Revenue comprises of fair value of investments and realised consideration. Realised consideration occurs when a case is settled or a Court judgement received. Provisions are made where potential difficulties are envisaged on the enforcement of Court judgements. Unrealised gains are recognised as cases appreciate in value and settlements draws near.
As revenue relates entirely to financing arrangements, revenue is recognised under the classification and measurement provisions of IFRS 9.
(d) Financial assets
Investments
Investments in cases are categorised at fair value through profit or loss. Fair values are determined on the specifics of each investment and will typically change upon an investment progressing through a key stage in the litigation or arbitration process in a manner that, in the Directors' opinion, would result in a third party being prepared to pay an amount different to the original sum invested for the company's rights in connection with the investment. Positive material progression of an investment will give rise to an increase in fair value and an adverse progression a decrease. The valuation of all investments over GBP100,000 each is confirmed by an external legal opinion, which supports the Directors' valuation.
Valuation of investments
Determining the value of purchased and funded litigation requires an estimation of the value of such assets upon acquisition and at the balance sheet date. The future income generation of such litigation is estimated from known information and the opinion of external senior specialist counsel. Valuations of each case, at the balance sheet date, are therefore arrived at by the Directors, considering counsel's assessment of the chances of a successful outcome, the state of progress of the matter through the legal system and the Directors' assessment of all other risks specific to the case.
3 Segmental reporting
During the six months ended 30 September 2018, the revenue was derived from cases funded on behalf of the insolvent estate and cases purchased from the insolvent estate. Where cases are funded, upon conclusion, the Company has the right to its share of revenue whereas for purchased cases, it has the right to receive all revenue from which a payment to the insolvent estate is made. Revenues arising from funded cases and purchased cases are considered one business segment and are considered to be the one principal activity of the Company. All revenues are from continuing operations and are not seasonal in nature.
6 months ended 6 months ended Year
30 Sept 2018 30 Sept 2017 Ended
Unaudited Unaudited 31 March
2018
Audited
GBP GBP GBP
Net realised gains on investments in cases 4,261,590 3,647,028 6,725,264
Fair value movements (net of transfers to realisations) 2,236,500 1,300,010 3,905,000
--------------- --------------- -----------
Revenue 6,498,090 4,947,038 10,630,264
=============== =============== ===========
6 months ended 6 months ended Year
30 Sept 2018 30 Sept 2017 Ended
Unaudited Unaudited 31 March
2018
Audited
GBP GBP GBP
Arising from
Funded Cases 1,982,105 1,128,743 2,744,403
Purchased Cases 4,515,985 3,818,295 7,885,861
--------------- --------------- -----------
6,498,090 4,947,038 10,630,264
=============== =============== ===========
4 Analysis of expenses by nature
The breakdown by nature of administrative expenses is as follows:
6 months ended 6 months ended Year
30 Sept 2018 30 Sept 2017 Ended
Unaudited Unaudited 31 March
2018
Audited
GBP GBP GBP
Staff Costs 710,014 423,268 1,175,239
Office costs 113,312 71,227 184,532
Other costs, inc. marketing costs and doubtful debt charges 354,510 456,515 1,359,798
--------------- --------------- -----------
Total administrative expenses 1,177,836 951,010 2,719,569
=============== =============== ===========
5 Non-recurring item-IPO costs
6 months ended 6 months ended Year
30 Sept 2018 30 Sept 2017 Ended
Unaudited Unaudited 31 March
2018
Audited
GBP GBP GBP
IPO costs 20,527 - -
=============== =============== ==========
The Company's shares were admitted to trading on the Alternative Investment Market (AIM) on 14 December 2018 in an Initial Public Offering (see note 9). The Company incurred some preliminary costs in the first half of the financial year on this IPO.
6 Finance income
6 months ended 6 months ended Year
30 Sept 2018 30 Sept 2017 Ended
Unaudited Unaudited 31 March
2018
Audited
GBP GBP GBP
Bank interest 384 148 554
Other loan interest - - 961
Total finance income 384 148 1,515
=============== =============== ===================
7 Finance costs
6 months ended 6 months ended Year
30 Sept 2018 30 Sept 2017 Ended
Unaudited Unaudited 31 March
2018
Audited
GBP GBP GBP
Other loan interest - 197,926 288,596
Bank loan interest 133,005 - 14,724
Amortisation of HSBC facility set-up costs 86,167 - 28,722
Bank loan charges - - 47,500
219,172 197,926 379,542
=============== =============== ==========
8 Investments
Current asset investments comprise the costs incurred in bringing funded and purchased cases to the position that they have reached at the balance sheet date. In addition, where an event has occurred that causes the Directors to revalue the amount invested, a fair value adjustment is made by the Directors based on Counsel's and the Directors' opinion, which can either be positive or negative.
Any change in value is taken to other reserves as an unrealised gain or loss.
6 months ended 6 months ended Year
30 Sept 2018 30 Sept 2017 Ended
Unaudited Unaudited 31 March
2018
Audited
GBP GBP GBP
As at 1 April 2018 10,554,544 6,704,967 6,704,967
Additions 1,622,770 754,274 1,336,628
Realisations (485,746) (799,697) (1,392,051)
Fair value movement (net of transfers to realisations) 2,236,500 1,300,010 3,905,000
As at 30 Sept 2018 13,928,068 7,959,554 10,554,544
=============== =============== ============
9 Post balance sheet subsequent events
On 14 December 2018, the Company completed an Initial Public Offering and its shares were listed on the Alternative Investment Market. The Company's shares in issue were sub-divided and consolidated from 99,600 shares of GBP1 each to 34,285,711 shares of GBP0.004 each and the Company issued 9,285,714 new shares of GBP0.004 each. This amounts to 43,571,425 shares in total. The new shares were issued at GBP1.75 per share to investors, which raised c, GBP14.7m after expenses.
At the same date, the Company's bankers, HSBC, increased the Revolving Credit Facility, signed on 29 January 2018, from GBP10m to GBP20m for a new four-year term on broadly the same terms as the original facility.
10 Proforma earnings per share
6 months ended 6 months ended 12 months
30 Sept 2018 30 Sept 2017 Ended
Unaudited Unaudited 31 March
2018
Audited
GBP GBP GBP
Profit and total comprehensive income for the period attributable to
the equity owners of
the company 2,458,497 1,565,883 3,260,794
Shares in issue post-IPO (see note 9) 43,571,425 43,571,425 43,571,425
Proforma earnings per share 5.6p 3.6p 7.5p
=============== =============== ============
Fully diluted shares in issue
post-IPO 44,272,558 44,272,558 44,272,558
----------- ----------- -----------
Proforma fully diluted earnings
per share 5.6p 3.6p 7.4p
=========== =========== ===========
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR FKFDDFBDDOBD
(END) Dow Jones Newswires
December 19, 2018 02:00 ET (07:00 GMT)
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