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Listed law firm owner sees shares reach all-time high

Stock exchange: Trading updates

Shares in Anexo Group, the AIM-listed business that owns Liverpool law firm Bond Turner, reached a new high yesterday after announcing that it expected profits to exceed market expectations.

Anexo is an integrated credit hire and legal services provider and in a trading update yesterday said that it expected its 2019 profits to “significantly exceed current market expectations of £20m”.

The share price was up 10% to 193.5p, having listed in June 2018 at 100p and previously jumped in April at the announcement of its 2018 results [1].

Last year group revenues rose by nearly 25% to £57m in 2018 – the legal services division recording a 10% rise in revenues to £23m – with adjusted profit before taxation up 10% to £16m.

Anexo raised £25m when it listed and a “significant portion” of this was targeted at increasing capacity within Bond Turner.

The update said the growth of Bond Turner’s office in Bolton – which opened last December – “continues to result in increased levels of case settlements, cash collection and overall legal fee income” – last month saw a record level of cash collection.

Further, the group has “recently successfully renegotiated its working capital facilities and has secured considerable improvement in its financing arrangements from both new and existing providers”.

Anexo has also agreed new terms with its existing fleet insurance provider, while targeting “specific claims types from the impecunious market place has allowed the group to deploy capital into the most valuable claims, enhancing its average claim statistics and underlying profitability”.

Meanwhile, Gordon Dadds Group PLC is set to change its name to ‘The Ince Group PLC’, subject to approval at the company’s annual general meeting.

In a statement to investors, it said: “The board believes that this name will better reflect the main trading name of the group’s commercial and disputes practice in London together with the seven international offices where the group operates around the world.

“The other well-regarded historic name within the group, Gordon Dadds, will continue to be used for the private client and family practice in Mayfair, London.”

The Gordon Dadds share price has fluctuated sharply in recent months. Having climbed to a high of 189p in January, an unexpected share placing raised £11.5m [2] but sent the share price crashing, hitting a low of 120p at the end of March. It then recovered to 160p in May but fell again, and closed yesterday at 144.5p.

A trading update from another of the listed law firms, Rosenblatt, said last week that it was “performing well and delivering year-on-year growth at high net margins”, and expected to report full-year results in line with market expectations.

The firm has a contentious bias and it said the number of litigation cases was growing, especially those undertaken on a contingent basis.

The corporate division, however, “remains impacted by the cautious business environment in part caused by Brexit uncertainty”.

The update said: “When this uncertainty clears, the indications are that there will be an increase in the volume of transactions, which have been delayed, including M&A from which the group will benefit.”

Rosenblatt put some of the money it raised from listing towards establishing a litigation funding arm. It currently has four cases under consideration for funding and seven in progress, and is also developing a secondary market for its investments.

“The group has started to successfully realise revenues from the sale of partial participation rights in its litigation assets to third parties as part of the board’s policy of generating returns from these assets while limiting its risk exposure to individual cases.”

Rosenblatt’s shares have been relatively volatile as well since listing at 95p in May 2018. They reached an all-time high of 135p soon after, before falling to 70p at the start of this year. But having shot up to 123.5p in June, they closed yesterday at 89p.

Finally, a half-year report from Countrywide – the listed property group that owns Countrywide Property Lawyers – said its pipeline of live cases has grown 18% compared to the end of June 2018, following heavy investment “to grow capacity in order to capitalise on an enhanced focus on complementary income from the branch network”.

The company completed 13,247 conveyances in the six months, 16% higher than the same period last year, with income from conveyancing up 27% year on year. It trumpeted its customer engagement, citing a high net promoter score of over 60 and current Feefo rating of 4.3.

“Full roll-out of our customer portal has delivered operational benefits and an enhanced, more secure, customer journey,” it said.

Countrywide is the UK’s largest estate agency business, operating under dozens of brands, including the likes of Bairstow Eves and Hamptons International.

The group, which is listed on the main market, has had a difficult two years, with profit warnings and a major cash call last year on the back of a sluggish property market, and its share price has collapsed from 270p three years ago to 5p yesterday.