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29 June 2020

Anexo Group – FY Results

Share Price 140p

Mkt Cap £163m

Conflict Disclosure: No Holding

  • Results These are December results. Revenue up 39% to £78.5m. Adjusted operating profit up 47% to £25.2m. EPS 17p. Total dividend flat at 1.5p. Net assets £91.7m, net debt £27.7m and net cash outflows were £0.8m. During COVID the company has been cash generative but declines to provide guidance.
  • Estimates Revenue was in line with forecasts but EBITDA lower. Modest PBT growth of 2.5% was expected prior to guidance being withdrawn.
  • Valuation The NAV is tangible NAV of £91m, of which £127m is receivables. PE historic 8.2X.
  • Conclusion The crucial difference of having a law firm to collect the debtors marks this company out from previous credit hire disasters, but the model remains highly capital intensive. With an ROE of 20% and a modest valuation the company is cheap and should provide good returns, though it is hard to argue for a high rating.

29 May 2020

Anexo Group – Placing

Share Price 137p

Mkt Cap £151m

Conflict disclosure: No Holding


  • Placing The company is raising £7.5m of new money and the Chairman and director selling £3.5m shares at 125p. The new money is to expand the litigation team and invest in the VW class action, to expand the legal team and the fleet while enabling the company to participate in near-term opportunities such as acquisition of WIP books.  The trading update is in line with a fall in new cases post COVID 19 but increased collections. Longer hire periods are mitigating the effect of the reduction in new cases. There remains some uncertainty as to the eventual impact od COVID 19.


  • Estimates Pre tax profit growth to Dec 19 results, which have been delayed is 46% to £23m. Modest growth to £23.5m is anticipated in the current year.


  • Valuation PE 8.1X on Dec 19 numbers.


  • Conclusion Last year’s profit equates to a 47% IRR. With a potential windfall from the VW emissions case in perhaps 2021 bolstered by recent judgements against VW in Germany the shares are very cheap and I expect will do very well. It is un nerving that there is director selling too. But there are lots of reasons for selling and only one for buying. But I can’t see any reasons mentioned for the director sales.