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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% | 145.00 | 140.00 | 150.00 | 147.50 | 142.50 | 147.50 | 19,010 | 16:26:29 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Legal Services | 20.75M | -3.12M | -0.0714 | -20.31 | 63.45M |
From Apr 2019 to Apr 2024
TIDMMANO
RNS Number : 1352U
Manolete Partners PLC
21 November 2019
21 November 2019
MANOLETE PARTNERS PLC
("Manolete" or the "Company")
Unaudited half-year results for the six months ended 30 September 2019
Manolete (AIM:MANO), the leading UK-listed insolvency litigation financing company, today announces its unaudited results for the six months ended 30 September 2019.
Steven Cooklin, Chief Executive Officer, commented:
"These are a strong set of interim results which showcase the excellent progress of the business since the IPO in December 2018. We continue to deliver stand-out returns for insolvency creditors and shareholders alike. We made 65 new case investments in the first six months of this financial year, benefitting from the availability of increased cash resources from the IPO and the establishment of our nationwide in-house legal team.
That total of 65 new case investments represents a 110% increase over the comparable six-month period last year and even exceeds the total 61 new cases signed over the full 12 months of the previous accounting year. We have achieved impressive double-digit growth in revenue, gross profit and EBIT during the period, delivering continued outstanding investment returns yielding an average money multiple of 2.9 times on 18 completed cases.
At the period end, there were 32 live cases already scheduled for either Alternative Dispute Resolution, trial or currently the subject of serious settlement offer negotiations. Indeed, six of these have already completed in October and November 2019 generating further gross proceeds of GBP762k, and we are excited by the case completion prospects for the second half of the year and beyond. With average completed case durations remaining constant at 11 months, we expect the record number of new case investments to translate into higher levels of realised profits and significant new cash generation over the next six to twelve months."
Financial highlights:
-- Investment in cases up 83% to GBP25.4m (H1 FY19: GBP13.9m, FY19 GBP18.2m) -- Revenue up 15% to GBP7.5m (H1 FY19: GBP6.5m) -- Gross profit up 50% to GBP6.6m (H1 FY19: GBP4.4m) -- EBIT up 37% to GBP4.5m (H1 FY19: GBP3.3m) -- Profit before tax up 42% to GBP4.3m (H1 FY19: GBP3.0m) -- Profit after tax up 41% to GBP3.5m (H1 FY19: GBP2.5m) -- Earnings per share up 41% to 7.9 pence (H1 FY19: 5.6 pence) -- Interim dividend proposed of 0.5p per share
-- Net Assets of GBP30.9m (GBP28.0m as at 31 March 2019) and cash balances of GBP3.1m as at 30 September 2019 (GBP9.7m as at 31 March 2019)
-- Fully unutilised GBP20m HSBC Revolving Credit Facility available
Operational highlights:
-- During H1 FY20, investment into new cases rose by 110% to 65 (H1 FY19: 31). This exceeds the total number of 61 new cases signed for the entire 12 months of FY19
-- Ongoing delivery of realised returns: 18 case realisations in the period (12 case realisations in H1 FY19, gross proceeds GBP5.5m), generating gross proceeds of GBP2.4m, over an average case duration of 11 months
-- Average money multiple of 2.9 times for cases completed in H1 FY20 (3.6 times H1 FY19)
-- High level of forthcoming potential case completions, with 32 live cases scheduled over the coming months for either Alternative Dispute Resolution (mediations and formal without prejudice settlement meetings), trial or currently the subject of settlement offers and negotiations. Six of these have been completed since the period end generating gross proceeds of GBP762k
-- Average case duration across the full portfolio of 215 completed cases remains constant at 11 months (11 months H1 FY19)
-- 72% increase in live cases: 131 in process as at 30 September 2019 (76 as at 30 September 2018). Live cases total currently 144 (as at 7 November 2019)
-- 90% of live cases have been signed in the last 18 months. Only two cases remain ongoing from the FY17 vintage. 100% of earlier case vintages have been completed
-- Roll-out of regional network of in-house lawyers completed. Manolete now has a proprietary network of highly experienced in-house insolvency solicitors based in: North West England, South West England & Wales, London, Eastern England, North East England, Midlands, Southern England and Scotland
-- Recruitment of a new CFO in October 2019
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
Rishi Shah
Instinctif Partners +44 (0)20 7457 2020
Tim Linacre
Lewis Hill
Katie Bairsto
CHIEF EXECUTIVE OFFICER'S STATEMENT
Introduction
I am pleased to present our unaudited interim statements for the first half year to 30 September 2019.
Manolete is the leading UK-listed company 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 first six-month period of FY20: 18 case completions was 50% higher than the comparative period last year and 65 new investments, that meet our stringent selection criteria, exceeded the 61 new case investments for the entire 12 months of FY19.
As promised at the time of the IPO, in December 2018, we have now completed the development of our regional network and have dedicated in-house lawyers situated in every major region of the UK.
Performance
In the first half, gross profits increased 50% to GBP6.6m (H1 FY19: GBP4.4m), reflecting the record number of new cases and the benefits of short duration case returns. Operating profit increased 37% to GBP4.5m (H1 FY19: GBP3.3m), with margin improving from 50% to 60% reflecting the operating leverage built into our business model. Our business is profitable, and we recorded pre-tax profits of GBP4.3m, compared to GBP3.0m in the comparable half year, an increase of 42%. Our pre-tax profit margin improved from 47% to 57%.
Investments
Two key factors set us apart in the litigation finance market: first, our ability to deliver rapid case realisation times and second, the volume of realised, successful completed cases. In the first half, we completed 18 cases, resulting in gross settlement proceeds of GBP2.4m (H1 FY19: GBP5.5m) with gross profit on realisations of GBP0.9m (H1 FY19: GBP2.0m). The average money multiple on these 18 cases was 2.9x. 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 2019 increased 82% to GBP25.4m (30 September 2018: GBP13.9m; 31 March 2019: GBP18.2m), reflecting in the main, the continued attractive case investment opportunities provided by our long-established network of Insolvency Practitioners and insolvency lawyers who refer cases into us. We invested GBP2.1m in legal and investment costs on live cases in the first half, compared to GBP1.6m in the first half of the previous year.
A leading indicator of future profitability is the number of new cases that we have signed up. Over the first six months of FY 20 we have invested in 65 new cases (H1 FY19 31 new cases), which is more than the total number of 61 cases we signed in the entire 12 months of FY19. With the strong capital position following the IPO and the extension of our facility with HSBC we have moved up the value chain in a measured manner, and accept a larger proportion of higher return, higher value case investments. This strategy is well supported by our stringent case selection criteria, our historic case track record and diversified portfolio (both by size and case type).
Vintages Table
This table highlights some of the key features of Manolete's model:
1. The relatively short durations of our cases (average 11 months): it is the short durations and the repeat case types (all our cases are UK insolvency and insolvency-related claims) that make the case outcomes capable of accurate estimation. Allied to the fact that Manolete owns outright the large majority of its cases (rather than acting as a mere funder of third-party claims), this drives conversion of unrealised profits into realised profits in a consistently short timeframe.
2. High ROI and MoM (average 159% and 2.6x, respectively): these levels have been delivered on a consistent basis for each of the last 8.5 years and across a large and diverse number of cases.
3. Only two cases remain open from the FY17 vintage. All earlier cases are fully completed. In contrast to our listed peer group, the age of Manolete's unrealised case portfolio is short, with 90% of cases commencing in the last 18 months.
Hot Features
Premium
IP
Financial # Number % Number Open Cases Closed Case Total Total Total Share Manolete Duration ROI MoM IRR
completed
Year Investments Completed Completion Outstanding Investments Investments Invested Recovered Gain Gain cases
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s (months)
2010 3 3 100% - - 52 52 28 (24) - (24) 7 -46% 0.5 0%
2011 - - 100% - - - - - - - - - 0% 0.0 0%
2012 8 8 100% - - 763 763 2,524 1,761 580 1,181 18 155% 2.5 236%
2013 10 10 100% - - 174 174 780 606 316 290 7 167% 2.7 281%
2014 42 42 100% - - 594 594 3,884 3,290 2,427 863 10 145% 2.5 424%
2015 39 39 100% - - 1,476 1,476 7,029 5,553 3,290 2,263 13 153% 2.5 526%
2016 36 36 100% - - 1,895 1,895 9,019 7,124 4,129 2,995 15 158% 2.6 176%
2017 31 29 94% 2 266 992 1,258 4,355 3,363 1,951 1,412 11 142% 2.4 609%
2018 29 19 66% 10 1,299 347 1,646 3,225 2,878 1,989 889 9 256% 3.6 1413%
2019 59 27 46% 32 723 487 1,210 2,018 1,531 743 788 7 162% 2.6 168%
2020 YTD 80 2 3% 78 1,373 55 1,428 480 425 - 218 3 396% 5.0 177%
337 215 64% 122 3,661 6,835 10,496 33,343 26,508 15,632 10,876 11 159% 2.6 132%
------------ ---------- ----------- ------------ ------------ ------------ --------- ---------- -------- -------- --------- ---------- ----- ---- ------
Note: The Vintages table excludes Cartel Cases and is net of deductions for bad debt provisions.
It is stated as at 7th November 2019.
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 long-established Insolvency Practitioner and Insolvency Lawyer contacts throughout the UK.
At IPO, we promised to build out the then nascent regional network of our in-house lawyers nationwide. This has now been completed. The increased regional presence is strengthening our relationships with Insolvency Practitioners and legal firms, which has led to a record volume of new case enquiries and signed cases.
Dividend
An interim dividend is proposed equal to a third of the previous financial year's dividend, consistent with our Admission document. The Board has announced an interim dividend of 0.5p per ordinary share. The interim dividend will be paid on 31 December 2019 to those shareholders on the register at the close of business on 13 December 2019. The shares will go ex-dividend on 12 December 2019.
Outlook
We are well positioned to grow our business profitably given our dominant position in the specialist insolvency litigation market, our growing network of insolvency practitioners and the strong funding position of the Group.
We have invested in an exciting portfolio of cases and as at 30 September 2019 we had 32 live cases scheduled for either alternative dispute resolution, trial or currently the subject of serious settlement negotiations. Indeed, six of these have already been completed since the end of the interim period, generating gross proceeds of GBP762k. Therefore, we anticipate that we will receive meaningful increases in realisations in the second half of the year and beyond, evidencing the attractiveness of our current case portfolio which now comprises 144 ongoing live cases (as at 7 November).
Given the strength of our position in the specialist insolvency litigation market, our firmly established and growing 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
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 2019, which show strong growth compared to the first half of the previous year.
Revenue
Revenue in H1 FY20 has increased by 15% to GBP7.5m in comparison to H1 FY19 (GBP6.5m). This growth in revenue has been driven by an increase in unrealised income due to the significant investment in new cases (65 new cases in H1 FY20 in comparison to 31 in H1 FY19) and growth in the fair value of existing live cases.
The Company's revenue is split between realised and unrealised revenue. When a case is fully completed, revenue is then recognised as realised and previously unrealised gains on that case are reversed.
Unrealised revenue grew by 149% to GBP5.6m, compared to the first half of FY19 of GBP2.2m. This reflects both the development of existing case investments and the increase in new case investments in the period.
As previously discussed, with a significantly growing portfolio we would expect unrealised revenue will exceed realised revenue during this growth phase. However, given the c.11 month average case duration this can fluctuate over a short time period.
At 18 case completions, the numbers of case realisations were up 50% in H1 FY20. These generated realised revenues of GBP1.9m (GBP4.3m H1 FY19). Although we have always guarded against predicting exact timings for any litigation matter, there are a significant number of large cases that are nearing settlement opportunities. Hence, we are anticipating an increased level of realisations in the second half of the year and the next six month period beyond that.
Accounting standards require a value judgment to be made on cases in respect of their unrealised revenue. All cases greater than GBP100k are independently reviewed. Our proven extensive track record of rapidly converting unrealised into realised gains speaks to the robustness and accuracy of this important process.
H1 FY20 Realisations
There were 18 cases settled in H1 FY20 with case settlement values of between GBP0.7m at the largest to GBP10,000 and an average settlement value of GBP135,556. The money multiple has averaged 2.9x with a return on capital employed of 193% on average and an average case duration of 11 months.
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 (the Insolvent Estate's share of the realisation) of purchased cases.
Gross profit
Gross profit grew 50% to GBP6.6m (H1 FY19: GBP4.4m). Gross profit margin increased to 89% (H1 FY19: 68%). The growth in gross profit margin reflects the growth in unrealised revenue in the period.
We analyse gross profit into the separate categories of funded and purchased cases. Our strategic preference is to purchase cases rather than fund them. Generally, our Insolvency Practitioner clients, where possible, prefer the Company to purchase cases as this gives them and the Insolvent Estate complete protection from any potential adverse costs. It also provides the Company with full operational control of the case through the litigation process.
H1 FY20 % H1 FY19 %
GBP000s GBP000s
Gross profit on funded
cases 2,179 33 1,972 44
Gross profit on purchased
cases 4,453 67 2,477 56
-------- --------
Total 6,632 100 4,449 100
-------- --------
Administrative expenses
Administrative expenses increased 83% to GBP2.2m in the first half (H1 FY19: GBP1.2m). Staff costs are the principal driver of the increase in administrative expenses, with the overall increase driven by higher staff numbers, as we have recruited in-house lawyers regionally across the UK, as we promised at the IPO.
Statutory operating profit before non-recurring items (Earnings Before Interest and Tax)
Operating profit before non-recurring items grew by 38% to GBP4.5m in the first half (H1 FY19: GBP3.3m) with the operating profit margin improving to 60% from 50%. This reflects the good operational gearing in the business: overheads have increased by 83% but this has been surpassed by business revenue gains.
Finance costs
These costs comprise: the amortisation charge of the costs of setting up the GBP20m HSBC borrowing facility of GBP0.1m, which are being amortised over the four year life of the facility; commitment fees of GBP0.1m on this unutilised, standby facility, levied at the rate of 0.7% on the GBP20m amount of the facility.
Profit after tax
Profit after tax has increased by 41% from GBP2.5m to GBP3.5m. The post-tax margin has increased from 38% to 46%.
Investment in cases
The company was managing 131 live case investments as at 30 September 2019, compared to 84 live cases as at 31 March 2019, a 56% increase. The split between Purchased and Funded cases at these dates is as follows:
As at 30 September As at 31 March 2019
2019
Funded 29 22% 13 15%
Purchased 102 78% 71 85%
--------- --------
Total 131 100% 84 100%
--------- --------
The total investment in cases amounted to GBP25.4m at 30 September 2019, growth of 40% from the value as at 31 March 2019 of GBP18.2m (30 September 2019 value of GBP13.9m). Investment in cases is shown at costs incurred plus valuation. 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 as 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 value per case as at 30 September 2019 was GBP0.19m, compared to GBP0.21m as at 31 March 2019 (GBP0.18m as at 30 September 2018). The median case value as at 30 September 2019 remained broadly flat at GBP0.05m (GBP0.04m as at 31 March 2019).
In September 2019, our solicitors (Collyer Bristow) delivered their Phase 2 Report on the Cartel Cases. Progress is in line with previous expectations and the value of the claims was increased by GBP1.2m to GBP6.3m. As previously highlighted, the significant claims here relate to Comet and City Link, where Manolete enjoys a 90% ownership position on the claims. City Link is currently being restored to the Companies Register. Once complete, the next stage of work will commence. The Cartel Cases will be much longer duration cases compared to our core insolvency claim portfolio.
As previously introduced in our Annual Report for 2019, we successfully funded a Trustee in Bankruptcy on a Transaction at Undervalue claim which resulted in the bankrupt estate recovering a valuable London property. So that the Trustee could distribute cash to creditors, Manolete had the property professionally valued and then purchased the property for GBP446k (including Stamp Duty). Over the last few months a further GBP50k of refurbishment expenditure has been incurred. We have recently exchanged contracts for sale at GBP512.5k and we expect to complete this transaction on 22 November 2019. This property is currently shown on the balance sheet as stock.
Cash utilisation
Cash balances have decreased from GBP9.7m as at 31 March 2019 to GBP3.1m as at 30 September 2019. The Company also has the benefit of the fully unutilised GBP20m HSBC Revolving Credit Facility (4-year facility).
This cash outflow of GBP6.6m over the 6 month period has been utilised by the Company as follows: Investment in new cases of GBP2.1m; Corporation tax paid of GBP2.5m (including GBP1.2m relating to a one-off catch-up payment in respect of corporation tax on all unrealised gains up to 31 March 2018 following advice from our tax advisors); Dividends paid of GBP0.6m and cash outflow from operations (including increased working capital) of GBP1.2m. The balance of GBP0.2m consists of investment in a residential property, associated refurbishment costs and finance interest costs.
FH Gilman Loan
In June 2019, the Company provided a short term secured loan of GBP500k to FH Gilman & Co. This short-term investment opportunity was considered an effective use of our strong balance sheet which has the added benefit of providing finance to assist the administrator on this case. An arrangement fee of GBP12,500 was received in June and an interest rate of 10% applies in Year 1, increasing to 12% in Year 2. The loan is secured by a senior charge on land outside Stamford, South Lincolnshire which has been independently valued at GBP2.4m.
Mark Tavener
Chief Financial Officer
Manolete Partners Plc
Unaudited Statement of Comprehensive Income for the 6 months ending 30 September 2019
Year
6 months 6 months ended
ended 30 ended 30 31
September September March
2019 2018 2019
Note Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Revenue 3 7,480 6,498 13,772
Cost of sales (848) (2,049) (3,686)
---------- ---------- --------
Gross profit 6,632 4,449 10,086
Administrative expenses 4 (2,159) (1,178) (2,874)
Operating profit before exceptional costs 4,473 3,271 7,212
Exceptional costs - IPO costs 5 - (21) (882)
Operating profit after non-recurring item 4,473 3,250 6,330
Finance income 6 33 - 1
Finance charges 7 (215) (219) (393)
Profit before tax 4,291 3,031 5,938
Taxation (837) (574) (1,274)
Profit and total comprehensive income for the period attributable to the equity
owners of
the company 3,454 2,457 4,664
========== ========== ========
Earnings per share 12 7.9p 5.6p 31.9p
Fully diluted earnings per share 12 7.8p 5.6p 31.5p
The results reflected above relate to continuing activities.
Manolete Partners Plc
Unaudited Statement of financial position as at 30 September 2019
Note 6 months as at 30 September 6 months as at Year as at
2019 30 September 2018 31 March 2019
Company Number: 07660874 Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Non-current assets
Intangible assets 63 - 6
Deferred tax asset 111 - 46
--------------------------------- ------------------- ---------------
174 - 52
Current assets
Investments 8 25,403 13,928 18,197
Stock 497 - 447
Trade and other receivables 10 4,096 3,007 3,777
Cash and cash equivalents 3,120 994 9,692
--------------------------------- ------------------- ---------------
Total current assets 33,116 17,929 32,113
--------------------------------- ------------------- ---------------
Total assets 33,290 17,929 32,165
================================= =================== ===============
Equity and liabilities
Equity
Share capital 174 100 174
Share premium 4 1,015 4
Share based payments reserve 160 - 67
Special reserve 905 - 3,157
Retained earnings 29,670 9,100 24,613
--------------------------------- ------------------- ---------------
Total equity attributable to the
equity owners of the company 30,913 10,215 28,015
--------------------------------- ------------------- ---------------
Non-current liabilities
Borrowings and loans - 4,425 -
Total non-current liabilities - 4,425 -
--------------------------------- ------------------- ---------------
Current liabilities
Trade and other payables 11 2,377 3,289 4,150
Deferred tax liability - - -
--------------------------------- ------------------- ---------------
Total current liabilities 2,377 3,289 4,150
--------------------------------- ------------------- ---------------
Total liabilities 2,377 7,714 4,150
--------------------------------- ------------------- ---------------
Total equity and liabilities 33,290 17,929 32,165
================================= =================== ===============
The interim statements were approved by the Board of Directors and authorised for issue on 20 November 2019.
Manolete Partners Plc
Unaudited Statement of changes in equity as at 30 September 2019
Attributable to the equity owners of the company
Share based Special
payment Non-distributable
reserve reserve Retained
Share Capital Share Premium Earnings Total Equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
As at 1 April
2018 (audited) 100 1,015 - - 6,642 7,757
Profit and
total
comprehensive
income for the
period - - 2,458 2,458
As at 30
September 2018
(unaudited) 100 1,015 - - 9,100 10,215
================ ============== =============== =============== ================== =============== =============
As at 1 October
2018
(unaudited) 100 1,015 - - 9,100 10,215
---------------- -------------- --------------- --------------- ------------------ --------------- -------------
Comprehensive
Income
Profit and
total
comprehensive
income for the
period - - 2,206 2,206
Transactions
with owners
Issue of
ordinary
shares 74 16,213 (37) 16,250
Transaction
costs of share
issue (723) (723)
Reduction of
share premium
account (16,501) 3,157 13,344 -
Share based
payment
expense 21 21
Deferred tax on
share-based
payments 46 46
As at 31 March
2019 (audited) 174 4 67 3,157 24,613 28,015
---------------- -------------- --------------- --------------- ------------------ --------------- -------------
As at 1 April
2019
(audited) 174 4 67 3,157 24,613 28,015
---------------- -------------- --------------- --------------- ------------------ --------------- -------------
Comprehensive
Income
---------------- -------------- --------------- --------------- ------------------ --------------- -------------
Profit and
total
comprehensive
income for the
period - - 3,454 3,454
---------------- -------------- --------------- --------------- ------------------ --------------- -------------
Share based
payment
expense 28 28
---------------- -------------- --------------- --------------- ------------------ --------------- -------------
Deferred tax on
share-based
payments 65 65
---------------- -------------- --------------- --------------- ------------------ --------------- -------------
Dividend (649) (649)
---------------- -------------- --------------- --------------- ------------------ --------------- -------------
Release of
Special
Reserve (2,252) 2,252 -
---------------- -------------- --------------- --------------- ------------------ --------------- -------------
As at 30
September 2019
(unaudited) 174 4 160 905 29,670 30,913
---------------- -------------- --------------- --------------- ------------------ --------------- -------------
Manolete Partners Plc
Unaudited Cash Flow Statement for the 6 months to 30 September 2019
6 months 6 months Year Ended
ended 30 ended 30 31 Mar
Sept 2019 Sept 2018 2019
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Cash flows from operating activities
Profit before tax 4,291 3,031 5,938
Adjustments for non-cash/non-operating
items:
Fair value movements (5,576) (2,237) (6,624)
Legal costs and IP payments on realised
cases 494 487 1,387
Finance income (33) - (1)
Finance expense 215 219 393
Deferred tax movement (65) - -
Share option reserve (93) - (21)
(767) 1,500 1,072
Changes in working capital:
(Increase) in trade and other receivables (319) (34) (157)
(Decrease)/increase in trade and other
payables (94) (119) 40
Cash flow generated from/(used in)
operations (1,180) 1,347 955
----------- ------------ --------------
Taxation paid (2,504) - -
----------- ------------ --------------
Net cash generated from/(used in) operating
activities (3,684) 1,347 955
Cash flows from investing activities
Investment in cases (2,124) (1,623) (2,405)
Purchase and refurbishment of property (50) - (447)
Purchase of intangible assets (57) - (6)
Interest received 33 - 1
----------- ------------ --------------
Net cash (used)/generated from investing
activities (2,198) (1,623) (2,857)
----------- ------------ --------------
Cash flows from financing activities
Proceeds from issue of ordinary shares - - 15,569
Repayment of borrowings - (4,445) (9,500)
Interest paid (41) (219) (220)
Dividend paid (649) - -
Payment of borrowing facility set up
costs - - (189)
Net cash (used)/generated from financing
activities (690) (4,664) 5,660
----------- ------------ --------------
Net (decrease)/increase in cash and
cash equivalents (6,572) (4,940) 3,758
Cash and cash equivalents at the beginning
of the period 9,692 5,934 5,934
Cash and cash equivalents at the end
of the period 3,120 994 9,692
=========== ============ ==============
Manolete Partners Plc
Unaudited notes to the financial statements for the six months ended 30 September 2019.
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-year 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 2019 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 2019 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 2019 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 has been prepared on the going concern basis.
After making appropriate enquires, 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. On recognition of realised revenue, any unrealised revenue relating to that case converts into realised. Provisions are made where potential difficulties are envisaged on enforcement of Court judgements. Unrealised gains are recognised as cases that appreciate in value and settlement 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 2019, 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 2019 30 Sept 2018 Ended
Unaudited Unaudited 31 March
2019
Audited
GBP000s GBP000s GBP000s
Net realised gains on investments in cases 1,904 4,262 7,148
Fair value movements (net of transfers to realisations) 5,576 2,236 6,624
--------------- --------------- ----------
Revenue 7,480 6,498 13,772
=============== =============== ==========
6 months ended 6 months ended Year
30 Sept 2019 30 Sept 2018 Ended
Unaudited Unaudited 31 March
2019
Audited
GBP000s GBP000s GBP000s
Arising from:
Funded Cases 2,421 1,982 4,612
Purchased Cases 5,059 4,516 9,160
--------------- --------------- ----------
7,480 6,498 13,772
=============== =============== ==========
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 2019 30 Sept 2018 Ended
Unaudited Unaudited 31 March
2019
Audited
GBP000s GBP000s GBP000s
Staff Costs 1,135 710 1,756
Office costs 142 113 243
Other costs, inc. marketing costs and doubtful debt charges 882 355 875
--------------- --------------- ----------
Total administrative expenses 2,159 1,178 2,874
=============== =============== ==========
5 Non-recurring item-IPO costs
6 months ended 6 months ended Year
30 Sept 2019 30 Sept 2018 Ended
Unaudited Unaudited 31 March
2019
Audited
GBP000s GBP000s GBP000s
IPO costs - 21 882
================= =============== ==========
The Company's shares were admitted to trading on the Alternative Investment Market (AIM) on 14 December 2018 in an Initial Public Offering.
6 Finance income
6 months ended 6 months ended Year
30 Sept 2019 30 Sept 2018 Ended
Unaudited Unaudited 31 March
2019
Audited
GBP000s GBP000s GBP000s
Bank interest 33 - 1
Other loan interest - - -
Total finance income 33 - 1
=============== =============== ====================
7 Finance costs
6 months ended 6 months ended Year
30 Sept 2019 30 Sept 2018 Ended
Unaudited Unaudited 31 March
2019
Audited
GBP000s GBP000s GBP000s
Other loan interest 50 - -
Bank loan interest - 133 179
Amortisation of HSBC facility set-up costs 86 86 172
Bank loan charges 79 - 42
215 219 393
=============== =============== ===========
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 2019 30 Sept 2018 Ended
Unaudited Unaudited 31 March
2019
Audited
GBP000s GBP000s GBP000s
As at 1 April 2019 18,197 10,555 10,555
Additions 2,124 1,623 2,405
Realisations (494) (487) (1,387)
Fair value movement (net of transfers to realisations) 5,576 2,237 6,624
As at 30 Sept 2019 25,403 13,928 18,197
--------------- --------------- ----------
9 Analysis of fair value movements
6 months 6 months Year
ended ended Ended
30 Sept 30 Sept 31 March
2019 2018 2019
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
New cases signed in the period 3,540 1,160 3,231
Increase in valuation of existing
cases 2,770 2,978 4,882
Fair value movement of Cartel cases 1,171 (25) 1,284
Decrease in valuation of existing
cases (796) (55) (133)
Reversal of valuation on realised
cases (1,109) (1,821) (2,640)
--------------- ---------------- ---------------
Total fair value movements 5,576 2,237 6,624
--------------- ---------------- ---------------
10 Trade and other receivables
6 months 6 months Year
ended ended Ended
30 Sept 30 Sept 31 March
2019 Unaudited 2018 Unaudited 2019 Audited
GBP000s GBP000s GBP000s
Trade receivables 2,857 2,968 2,978
Other receivables 1,239 39 799
---------------- ---------------- --------------
Trade and other receivables 4,096 3,007 3,777
---------------- ---------------- --------------
Note: Other receivables as at 30 September 2019 includes a secured loan of GBP500k, with a maturity date of 30 June 2021.
11 Trade and other payables
6 months 6 months Year
ended ended Ended
30 Sept 30 Sept 31 March
2019 Unaudited 2018 Unaudited 2019 Audited
GBP000s GBP000s GBP000s
Other taxation and social security 154 201 66
Corporation tax payable 878 1,857 2,557
Accruals and other payables 1,345 1,231 1,527
------------------ ---------------- --------------
Trade and other payables 2,377 3,289 4,150
------------------ ---------------- --------------
12 Earnings per share
6 months ended 6 months ended 12 months
30 Sept 2019 30 Sept 2018 Ended
Unaudited Unaudited 31 March
2019
Audited
GBP000s GBP000s GBP000s
Profit and total comprehensive income for the period attributable to
the equity owners of
the company 3,454 2,457 4,664
Share in issue 43,571,425 43,571,425 14,585,475
Earnings per share 7.9p 5.6p 31.9p
=============== =============== =============
Fully diluted shares in issue post-IPO 44,272,558 44,272,558 14,819,186
=============== =============== =============
Fully diluted earnings per share 7.8p 5.6p 31.5p
=============== =============== =============
The EPS for the 12 months to 31 March 2019 is as per stated in the statutory accounts, with the number of shares being a weighted average pre and post IPO. The number of shares included in the EPS calculation for the 6 months to 30 September 2018 has been restated using the post IPO number of shares for comparison to the 6 months to 30 September 2019.
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 LBLLLKFFXFBV
(END) Dow Jones Newswires
November 21, 2019 02:01 ET (07:01 GMT)
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