Anexo Group – the AIM-listed business that combines credit hire and legal services – saw revenue and profit increase sharply last year, driven by major growth in its legal division.
The company said it was benefiting from other law firms in the personal injury market going into run-off due to the whiplash reforms that came into force nearly two years ago.
Its law firm, Bond Turner, saw turnover rise 36% to £64m in 2022, while the credit hire division’s income grew by only 5% to £75m.
The group turnover of £138m was a 17% increase overall, with profit before tax up slightly to £24m. But its profit margin shrank by 1.6 percentage points to 21.9%.
Bond Turner’s focus was on “cash collections and corresponding investment in staff to drive increased case settlements”, chairman Alan Sellers, a barrister by training, told investors. “This strategy has had a significant positive impact on financial performance.”
The impact of the pandemic and whiplash reforms on other personal injury firms “has resulted in staff numbers rising at all levels, with the ability to retrain solicitors in the fields of credit hire and housing disrepair for suitable placement within Bond Turner”.
At the end of last year, staff numbers within Bond Turner stood at 678, a 7% increase on a year earlier. Of these, 253 were “senior fee-earners”.
Mr Sellers said Anexo invested £3m in marketing its housing disrepair team last year; it settled around 2,000 claims and had more than 3,000 ongoing by year-end, doubling its case load during 2022.
“With further investment planned into 2023, the housing disrepair team has proven its potential to be a significant contributor to group earnings,” he said. This was particularly as claims in this field have a “shorter life cycle” than personal injury matters.
Anexo also invested £4m – in staffing and claims lead generation fees – in its work on Mercedes Benz emissions cases. Lead solicitors Leigh Day and Pogust Goodhead obtained a group litigation order in March. Bond Turner has 12,000 claimants and a place on the claimant solicitors’ steering committee.
“The board remains confident that these cases have the potential to be of significant value to both the claimants and the group,” Mr Sellers said. The firm is also acting for clients suing Volkswagen over emissions.
A strategic review conducted this year concluded that Anexo should continue to concentrate on cash generation. This was likely to constrain profit growth in the current financial year “but there will be an increased return on capital employed”.
As in 2021, Anexo is paying a final 1.5p dividend for 2022, having dropped the interim dividend to invest instead in emissions cases.
Anexo’s shares have been on a slow downward trajectory over the past 18 months, going from 134p at the start of 2022 to 91p yesterday.
Mr Sellers and his wife, Samantha Bond, who heads Bond Turner, have suffered a personal blow through the recent administration of fellow listed firm the Ince Group, in which they last year became the largest shareholder.