Manolete Partners Share Discussion Threads

[maddox] 17/6/2022 10:00

The CVL figures for May have been released - these figures are a leading indicator for cases that will be referred to MANO for litigation financing. This is now the twelfth month in a row showing a growth trend, and is now firmly trending well above pre-pandemic levels:

'In May 2022 there were 1,584 Creditors’ Voluntary Liquidations (CVLs), 70% higher than in May 2021 and 66% higher than May 2019. Numbers for other types of company insolvencies, such as compulsory liquidations, remained lower than before the pandemic, although there were four times as many compulsory liquidations in May 2022 compared to May 2021, and the number of administrations was 95% higher than a year ago.'



So, we're trending at 66% higher than pre-Covid 2019 CVL figs, last month it was 74%, so April might have been a catch-up blip but were seeing consistent 60+% in CVLs. I thus think that, all other things being the same, the market for MANO's services has returned and at a higher level than pre-Covid.

[maddox] 09/6/2022 12:37

Hmmm, neither of those short attacks flagged anything of concern - naked market manipulation IMHO. The LSE and FCA turn a blind eye and let shareholder get clobbered.

[battyliveson] 09/6/2022 12:32

Thank you for the responses, riverman77, Bibbaggy and Maddox.

I have held Mano in the past and valued them on earnings, and fully expect a strong couple of years as the government delayed business collapses with bounce back loans and this is now coming home to roost. I have been caught out in the past when short attacks on Bur/Mano validly questioned the valuation basis.

I may hold on for a bit of a pullback before buying.

Good luck and thanks again.

B

[maddox] 09/6/2022 11:40

Great question Battyliveson,

I presume you're looking for a price valuation. Well the Covid-affected FY22 Results due on the 24 June are going to be under previous expectations - as we know from the recent update. So, the recently revived share price should already be factoring that in - but also looking forward to future prospects for MANO. The backdrop, CVL figures and business disruption indicates that Insolvency Practitioners are going to be very busy.

So, IMHO the expectation is that will generate case enquiries for MANO over pre-Covid levels of c. 50/month. I'll certainly be looking for an update on current case enquiry numbers along with the FY22 Results.

Running a few scenarios indicates a share price range for June 2023 of 436p - 566p dependent upon the speed of recovery and the value the market puts on the earnings.

These scenarios are never 'correct' but the fact that there is a very attractive potential shareholder return, including a margin for error. But as always DYOR.

Regards Maddox

[riverman77] 08/6/2022 10:28

I've given this a bit of thought and think it's fair to value more on an earnings basis rather than the book value of its cases. The real value of the business is in its expertise and relationships - a network of highly specialised insolvency solicitors with close links to the all important insolvency practitioners. There are only a handful of people in the UK qualified to do this work. This cannot be easily replicated and represents huge intangible value (and barriers to entry) that would not be reflected in the simple book value of the assets.

[battyliveson] 08/6/2022 10:16

I find this a hard company to value. I like the sector and it seems well placed. However it is arguable that it should be valued based on the fair value of its investments, like an investment trust rather that a multiple of future profits. Looking at the accounts I believe the cases on the balance sheet are at "fair value", or should I be applying their 3x multiplier? If They are really ramping up their investments due to favourable environment then I can understand a premium to NAV.

I am sure Lord Lee would have done his due diligence, and it is wise to have investments in something counter-cyclical. I would be interested in how other investors here assess value of this company.

Good luck to holders.

B

[bigbaggy] 01/6/2022 12:17

Maddox - Lord Lee (a well respected Financial Times tipster) agrees. See FT article today: "How to engage your grandchildren in investing".

[maddox] 01/6/2022 12:04

MANO shares are showing strong momentum and positive trend that dates back to the 11 April 2022 Trading Update. The CVL stats have been exhibiting a consistent trend above pre-Covid levels that, with a period of delay, generate cases to feed MANO's pipeline of business. However, this now appears to be being reflected in a change of sentiment towards the shares.

The Chart reveals the share price rising against lower volumes traded - which may be indicative that we've cleared the weaker holders and supply is drying-up. I know I'm tempting providence but it'll be interesting to see how resilient this trend is. We're up c.46% (220p - 320p) as I post.

[theborn] 30/5/2022 15:33

Surge in insolvencies

Mano have just posted this on their LinkedIn. I don't think they'd be posting it if they weren't seeing it positively hit their new business, otherwise its misleading:

hxxps://www.newstatesman.com/chart-of-the-day/2022/05/how-uk-company-insolvencies-surged-chart

[sallad3] 26/5/2022 08:46

RMJPB

Interesting find, thank you. Worth reading in entirety.

"Manolete’s ROE has averaged 26%, but is forecast to fall in the coming years"

[rmjpb] 25/5/2022 19:16

Anyone see the article in Moneyweek magazine promoting litigation financing? Can only help with promoting Mano to investors. https://moneyweek.com/investments/stocks-and-shares/share-tips/604842/how-to-invest-in-litigation-finance

[theborn] 19/5/2022 14:39

Agreed - I saw that update too. I'm with you on the long term view.
You have to take a long term view on Mano if only for the spread! You need a 10% rise from buying in just to get your money back on the sell...

[maddox] 19/5/2022 10:21

Well we had an update on 11 April and CEO Steven Cooklin further commented on 26 April RNS:

"I am pleased to report that the cash due to us, from this large investment, was received on schedule, within three weeks of the legal completion of the case. Our net debt position is now down to £6.5 million, and with new case enquiries rebounding sharply upwards following the challenges of Omicron, we look forward to further strong progress."

So, it looks pretty clear to me the CVLs are now coming through as new case enquiries.

I'm sure we'll get an update on the current number of enquiries on the 24 June with the FY 2022 Results. This will allow us to quantify the demand for MANO's services and recovery in trading, factoring-in the time from case receipt to case completion ofc.

As an investor I really appreciate a firm where the revenue drivers are transparent. Mr Market is remarkably myopic and thus this presents the opportunity for the more long-sighted investor.

[theborn] 19/5/2022 09:40

I see this being back >£5 as it was pre-covid fairly soon.
Need an TU from the company confirming your post below and will continue to see buyers attracted.

[maddox] 17/5/2022 10:21

The CVL figures for April have been released - these figures are a leading indicator for cases that will be referred to MANO for litigation financing. This is now the eleventh month in a row showing a growth trend, and is now firmly trending well above pre-pandemic levels:

'In April 2022 there were 1,777 Creditors’ Voluntary Liquidations (CVLs), more than double the number in April 2021 and 74% higher than April 2019. Numbers for other types of company insolvencies, such as compulsory liquidations, remained lower than before the pandemic, although there were three times as many compulsory liquidations in April 2022 compared to April 2021, and the number of administrations was 51% higher than a year ago.'



So, we're trending at 74% higher than pre-Covid 2019 CVL figs, last month it was 62%, so we may be seeing an acceleration in CVLs.

Whilst there was a Covid related delay in cases being referred to MANO they have clearly been expecting a growth in referrals and been gearing up capacity.

[theborn] 05/5/2022 09:05

hxxps://www.propertyweek.com/news/worrying-outlook-as-insolvencies-rise-27-on-last-quarter/5120244.article

100% agree. Above out today. Only going one way...

[bigbaggy] 04/5/2022 12:11

Looks like this is steadily heading to over £3. With all the tailwinds now in its favour this company is getting interesting. It dominates the UK insolvency litigation space and that sector should be buoyant for the next several years imho.

[sallad3] 28/4/2022 17:27

Don't get too excited. Only one part was sold to Mano and as often happens the press don't get their facts right.

The details are all on page 9 of the 19 April 2022 Progress Report filed at Companies House.

The structure of the sliding scale of Mano deals is given in all details and does make interesting reading. NB legal fees come out first and ahead of any split and are not subject to independent assessment by the Court as would/could happen if the claims had not been sold to Mano.

[maddox] 28/4/2022 13:45

Great find RMJPB - nice case. There are a load of charlatans in the IFA Defined Benefit Transfer Sector - so it could be quite a rich seam of business.

[rmjpb] 28/4/2022 09:09

In this article Mano are pursuing a claim for circa £2m. With the case coming from the FCA, and with DB pension transfers in the spotlight, it may mean more quality work.http://citywire.com/new-model-adviser/news/collapsed-ifa-directors-pursued-for-2m-as-fscs-payout-nears-33m/a2385515

[brummy_git] 26/4/2022 09:37

More encouraging progress being made at Manolete.

All today's news here.

www.linkedin.com/posts/paul-hill-a5994116_mano-activity-6924606171639128064-q9S3?utm_source=linkedin_share&utm_medium=member_desktop_web