Sellers: Growth reflects diversity of activities
The law firm owned by listed company Anexo Group continues to grow rapidly as it expands its housing disrepair and group litigation practices in particular, new figures have shown.
Bond Turner had 761 staff as at 30 June 2024, a 10% increase on a year earlier, with the number of senior fee-earners up 18% to 287, its 2024 half-year results revealed last week.
Legal services revenue actually fell sharply, by 32% to £34m, when compared with the same period in 2023, which Anexo said was due to the costs paid by Volkswagen as part of the confidential settlement of the diesel emissions group claim.
The underlying business otherwise grew in the period but it did not say by how much except in relation to housing disrepair, for which revenue was up by 14%.
The number of housing disrepair claims on the books has risen 18% in a year to 3,880, while 1,127 were settled in the first six months of 2024, compared to 884 in the first half of 2023.
Profit before tax from legal services collapsed even more dramatically, from £14m to £3.3m, due to both the settlement but the increase in headcount.
The other part of the Anexo business is credit hire and revenues from this increased by 22% to £35m, with profits up 86% to £4.1m.
Put together, this meant a 12% drop in group revenue to £69m and 61% slump in profit to £5.9m, the latter figure being “in line with management expectations”. The announcement said the second half of the year was always stronger for Anexo.
Anexo said it has continued its investment in diesel emissions claims and by 30 June had 12,000 clients for the Mercedes Benz case, where court proceedings have been issued, plus 25,000 more against Vauxhall, BMW/Mini, Peugeot/Citroen and Renault/Nissan.
“The potential settlement of these claims is expected to significantly enhance profitability and cashflows, while importantly reducing net debt, although the timing of any negotiations remains uncertain.”
Group net debt rose 11% in the year to 30 June to £68m.
Earlier this month, the announcement revealed, the group agreed a £30m loan facility with Callodine Commercial Finance. It has drawn down £20m of this “to provide further headroom and to repay the loan provided by Blazehill Capital Limited, the refinancing significantly reducing the overall cost of capital to the group”.
It has also agreed an increase in the funding available under the facility provided by Secure Trust Bank PLC. “Secure Trust have extended the funding period within the £40m facility limit previously agreed.”
Barrister Alan Sellers, Anexo’s executive chairman, said: “The group has demonstrated an improvement in performance in the core business, excluding the impact of VW from H1 2023.
“This is particularly pleasing with a reported 13% increase in new vehicle claims funded and 10% increase in legal staff, the associated costs being expensed as incurred.
“The results are testament to the quality and expertise of our people, the diversity of the group’s activities and our commitment to investment into future growth and opportunities for the business.”
He added that the “meaningful increase in headroom across all our principal funding facilities” would allow the board “to react to opportunities to drive additional shareholder returns”.
The board will not pay a half-year dividend, given the continuing investment in the business, and will look at this issue again when preparing the full-year results.
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