Anexo Group plc – the listed business which combines legal services with credit hire – saw turnover increase 39% in 2019 to £79m after spending the year focused on building up its law firm.
Anexo owns Bond Turner, which is headquartered in Liverpool and also has an office in Bolton – with another in Leeds on the cards – and had a turnover of £31m, up £8m on the previous year.
With “significant investment made during 2019 in staff, property and IT infrastructure”, the law firm’s profit before tax increased slightly to £5.9m.
Staff numbers at Bond Turner increased from 267 to 442 during the year, with 127 senior fee-earners, up from 89. Anexo has previously said it is looking at potential law firm and credit hire acquisitions.
Anexo’s annual results showed that group operating profit jumped 60% to £25m, with investment in legal staff starting “to bear fruit”: case settlements rose from 2,066 in in the first half of 2019 to 2,872 in the second.
“The group anticipates further growth in 2020 as the case portfolio of the new recruits matures.”
The number of claims instigated increased from 3,392 in the first half to 3,567 in the second.
Anexo said the investment in legal services, whilst “restraining” growth within the credit hire division, was aimed at driving increased cash generation.
“The group has reached the landmark inflexion point from cash absorption to cash generation within our core business, an achievement of which the board is very proud.”
Earlier this month, Anexo raised £7.5m from a share placement – which saw two of its lawyer directors make £3.2m by selling small parts of their stakes – and said it also has headroom within its funding facilities, which include a revolving credit facility of £8m with HSBC and an invoice discounting facility of £19m with Secure Trust Bank plc.
It has also secured a £2.1m lending facility from a litigation funder to support the proposed investment in the VW emissions case as well as a term loan from Secure Trust Bank of £5m under the government backed coronavirus business interruption loan scheme “to further enhance headroom”.
The announcement said: “With the lockdown being gradually relaxed, vehicles on the road rising and efficiencies improving as the legal teams become more accustomed to home working practices, the board remains confident that the Group is in a strong financial position and is well placed to weather the current worldwide uncertainty and to take advantage of further opportunities in a more stable future environment.”
Alan Sellers, the barrister who is Anexo’s executive chairman, said: “Our core business continues to be focused on the ever-increasing opportunities identified in the UK credit hire market, but the board is also optimistic about the future outcome of our specialist advocacy team’s work on behalf of claimants in the VW emissions case…
“We started the year well with high levels of cash collection continuing, and the board is pleased to confirm that in the first four months of the year our credit hire operation was net cash positive. This is a key milestone for the group…
“The board remains confident of the group’s capacity for organic growth and, given the resilience of our business and our strong financial position, believes Anexo is well positioned to weather the current storm and deliver near-term profitable growth to our shareholders.”
Anexo proposed a dividend of 0.5p to add to the 1p interim dividend announced last year.