Anexo Group plc
Anexo Group plc

Anexo Group plc share price, company news, analysis and interviews

Anexo Group is a specialist integrated credit hire and legal services group focused on providing replacement vehicles and associated legal services to impecunious customers* who have been involved in a non-fault accident.

Anexo’s clients typically do not have options to access a replacement vehicle which allows the Group to charge credit hire rather than spot hire rates, recovering these charges from the at-fault insurer at no upfront cost to the client.

The Group has developed an integrated business model with a dedicated field sales team generating almost all of the Group’s Road Traffic Accident customers from a network of approximately 1,150 active introducers. The Group provides an integrated end to end service to the customer including the provision of a credit hire vehicle, upfront settlement of repair and recovery charges through to the management and recovery of costs and the processing of any associated personal injury claim.

The Group currently comprises four business units under the two main reporting divisions – Credit Hire and Legal Services.

Anexo Group

*Impecunious – claimants that do not have immediate access to funds for replacement vehicle

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Anexo Group plc

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Anexo Group

Anexo Group continued strong performance of the group

Anexo Group plc (LON:ANX), the specialist integrated credit hire and legal services provider, has provided the following pre-close trading update for the year ended 31 December 2022 (‘FY-2022’) ahead of the release of its FY-2022 Final Results on 9 May 2023.

Performance for the Full Year ending 31 December 2022

·    Revenue is expected to be between £135.0 million and 137.0 million1

·    Profit before tax for the Group is expected to be between £24.0 and £26.0 million, at the upper end of this range broadly in line with market expectations1     

·      The Group remains focused on quality claims, high service standards and high success rates. The number of vehicles on the road as of 31st December 2022 was 1,730.

·    Bond Turner’s Housing Disrepair team has settled approximately 2,000 cases since inception and in excess of a further 3,000 cases are currently under management.

·    As at 31 December 2022, the Group’s overall net debt stood at £73.1 million (31 December 2021: £62.0 million)

1Subject to final audit

Current Trading

The Group’s credit hire division, EDGE, has continued its focus on quality claims, high service standards and high success rates. The adoption of this targeted approach has led to continued strength in the market, and an optimistic outlook for 2023.

The Group’s legal division, Bond Turner continues to benefit from the re-opening of the court system, which has seen an increase in cash collections, supporting further investment in new claims in credit hire, housing disrepair and emissions litigation. This trend is expected to continue through 2023 and cash collections are currently running at record levels.

The Housing Disrepair team continues to perform strongly; it is currently dealing with in excess of 3,000 cases and since inception has settled approximately 2,000 cases. The Board believes that the prospects for growth in this division are very positive.

The Board will give further guidance for the full year upon the release of the audited Final Results on 9 May 2023.

Mercedes Benz Class Action

The Group notes the judgment by the High Court granting a Group Litigation Order, handed down on 8 March 2023. The application, brought by Leigh Day and Pogust Goodhead, sought permission to launch a class action lawsuit against Mercedes Benz for alleged subversion of key air pollution tests by using special software to reduce emissions of nitrous oxides under test conditions.

Following the success of the application, the Board is pleased to confirm that the Group intends to pursue litigation against Mercedes and has already secured over 12,000 claims through internal resources and via social media. The Board will provide further details as and when appropriate.

Alan Sellers, Executive Chairman of Anexo Group, commented: “We are very pleased with the continued strong performance of the Group in the face of difficult economic conditions. Opportunities in credit hire, housing disrepair and emissions remain plentiful and we continue to concentrate on those cases which facilitate the most efficient return on our working capital. We look forward to updating shareholders further at our final results in May.”

Anexo Group

Anexo Group trading in line with management expectations

Anexo Group plc (LON:ANX), the specialist integrated credit hire and legal services provider, announced today the appointment of Zeus Capital Limited as Joint Broker, with immediate effect. This follows the completion of the acquisition of Arden Partners plc by Zeus Group Limited on 16 January 2023.

The Board also announced that trading across all its divisions remains in line with management expectations. The Group will provide further details in its pre-close trading update, to be released on 4 April 2023.

Anexo Group is a specialist integrated credit hire and legal services provider. The Group has created a unique business model by combining a direct capture Credit Hire business with a wholly owned Legal Services firm. The integrated business targets the impecunious not at fault motorist, referring to those who do not have the financial means or access to a replacement vehicle.

Through its dedicated Credit Hire sales team and network of over 1,100 active introducers around the UK, Anexo provides customers with an end-to-end service including the provision of Credit Hire vehicles, assistance with repair and recovery, and claims management services. The Group’s Legal Services division, Bond Turner, provides the legal support to maximise the recovery of costs through settlement or court action as well as the processing of any associated personal injury claim. Bond Turner is also involved in litigation relating to Housing Disrepair and emissions claims against major motor manufacturers.

Anexo Group

Anexo Group revenue increased 42% to £68.6 million

Anexo Group plc (AIM: ANX), the specialist integrated credit hire and legal services provider, has reported its Interim Results for the six months ended 30 June 2022 (‘H1 2022’ or the ‘period’)

Financial Highlights

  H1 2022 H1 2021 Movement 
Revenue £68.6 million £48.3 million +42.0%
Operating profit £16.1 million £10.4 million +54.8%
Profit before tax £13.6 million £8.9 million +52.8%
Net assets £137.8 million £117.8 million +17.0%
Cash collection £67.9 million £56.7 million +19.8%
Basic EPS 9.3 pence 6.1 pence +52.5%

· Revenue increased 42% to £68.6 million (H1 2021: £48.3 million) from increased vehicles on hire and growth in legal fee earners

· Operating profit increased 55% per cent to £16.1 million (H1 2021: £10.4 million) from improved cash collections, leverage of overhead, maximising opportunities within credit hire and an improved vehicle mix

· Cash collections from settled cases increased 20% to £67.9 million (H1 2021: £56.7 million) with strong sales growth driving an increase in Trade Receivables to £209.8 million (30 June 2021: £160.5 million, 31 December 2021: £188.1 million)

· Net debt (including lease liabilities) as 30 June 2022: £74.2 million (30 June 2021: £44.4 million, 31 December 2021: £62.0 million)

Operational Highlights

· The Group has shown robust growth across both its divisions with strong growth in Group vehicle numbers and high-quality senior fee earner recruitment in the legal division

· Vehicle numbers which grew rapidly in the first half of the year are now being carefully managed to maximise efficient use of working capital

· The number of Group vehicles on the road on 31st August 2022 was 1,828

· The proportion of the vehicle fleet composed of motorcycles continues to increase following the agreement with MCE Insurance in the fourth quarter of 2021

· Good progress is being made with the Volkswagen AG (“VW”) emissions case ahead of the scheduled court date in early 2023. The Group has committed the £2 million of funding raised at the end of 2021 towards the acquisition of Mercedes emissions cases. Total cumulative investment in both VW and Mercedes cases is £5.8 million, all of which has been expensed including £1.3 million in the first half of 2022 (H1 2021: £0.5 million)

· The Group’s burgeoning Housing Disrepair (“HDR”) business has gained significant traction in the first half, with approximately 2,300 cases overall, of which almost 600 settled in the first half of the year. HDR revenue more than doubled in the first half to £4.7 million (2021: £2.2 million), with profit of £2.4 million (2021 H1: £1.1 million).

Outlook

The Group has shown robust growth during the period and plans to optimise cash generation in the second half year. The Board has confidence in meeting market expectations for the year with a focus on improving the vehicle mix, building on the strong progress in Housing Disrepair and maximising the emissions opportunities.

KPIs  H1 2022 H1 2021 Movement
Number of vehicles on hire at the period end 1,947 1,740 +11.9%
Average number of vehicles on hire for the period  2,043  1,461 +39.8%
Completed vehicle hires 5,501 4,081 +34.8%
Number of hire cases settled 3,563 2,924 +21.9%
Number of new cases funded 5,082 4,208 +20.8%
Cash collections from settled cases (£’000s) 67,931 56,665 +19.9%
Legal staff employed at period end 633 578 +9.5%

Commenting on the Interim Results, Alan Sellers, Executive Chairman of Anexo Group plc, said:

“I am delighted to report that the Group has continued its strong performance during the first half of the year. Business activity in both our credit hire and legal services divisions has grown strongly.

“We are proud of the social value of the services we offer. Anexo provides assistance to people who find themselves in an invidious position through no fault of their own, whether through being deprived of an essential vehicle or through living in substandard housing conditions, along with the other problems which may be exacerbated by such situations. We remain committed to providing help to those who might otherwise be unable to obtain redress.

“We continue to manage our vehicle fleet carefully and to maximise cash collections by identifying appropriate hire opportunities, particularly within the motorcycle sector; this allows for more efficient use of working capital whilst also increasing the overall number of case settlements.

“The strong progress being made in housing disrepair and emissions will underpin the continued growth in the core business, and the Board remains confident in meeting market expectations for the year.”

Results Conference Call

An analyst conference call will be held at 09:30 BST today, 20 September 2022. Retail investors will also be able to listen to the call but will not be eligible to ask questions. A copy of the Interim Results presentation is available at the Group’s website: https://www.anexo-group.com/. Please contact Nick Dashwood Brown, Head of Investor Relations, at [email protected] if you would like to join the call.

An audio webcast of the conference call with analysts will be available after 12:00 BST today on the Company’s website: https://www.anexo-group.com/.

Executive Chairman’s Statement

On behalf of the Board, I am pleased to introduce Anexo’s results for the six-month period ended 30 June 2022. The Group has continued to demonstrate the effectiveness of its business model. Vehicle numbers within the credit hire division have grown, while increased case settlements within the legal services division have ensured a good rise in cash collections.

Demand for hire vehicles shows no signs of abating. We continue to recruit staff in targeted areas within the legal services division, while case settlements and cash collections continue to grow. This points to plenty of opportunities for the Group, albeit at lower levels of growth to ensure that cash generation can be further improved.

H1 2022 Group Performance

Anexo has delivered a strong performance across all key Group financial metrics and KPIs over the first six months of the year. Group revenues in H1 2022 increased by 42% to £68.6 million (H1 2021: £48.3 million) and profit before tax rose by 52% to £13.6 million (H1 2020: £8.9 million).

Credit Hire Division

Demand for vehicles has remained strong throughout the period following the decisive return of traffic levels to pre-pandemic levels. The average number of vehicles on the road during H1 2022 reached 2,043 (H1 2021: 1,461), a 40% increase on the prior year. The Group is committed to careful management of vehicle numbers to maximise efficient use of working capital; as a consequence, the overall number of vehicles on the road has been declining toward the end of the first half of the year and at the period end the number stood at 1,947. This still represents an 11.9% increase on the H1 2021 number but shows a reduction of 17.7% on the 2,366 vehicles on the road at the end of FY 2021.

This performance led to growth in Credit Hire revenue of 62%, up from £26.3 million in H1 2021 to £42.5 million in H1 2022. Profit before tax in the Credit Hire division rose by 36% to £10.9 million in H1 2022 (H1 2021: £8.0 million). Completed vehicle hires rose by 35% to 5,501 in H1 2022 (H1 2021: 4,081). This increase has been supported by the agreement with MCE Insurance announced on 25 November 2021 as well as by a number of protocols with insurance counterparties.

Legal Services Division

Credit Hire

The Group remains committed to its strategy of increasing its claim settlement capacity, thereby maximising cash collections. The number of senior fee earners employed at the end of H1 2022 rose by 41% to 247 (H1 2021: 175) and the overall number of legal staff rose from 578 in H1 2021 to 633 in H1 2022, an increase of 10%.

This investment has underpinned continued growth in cash collections, which rose 20% in H1 2021 to a total of £67.9 million (H1 2021: £56.7 million). Revenues from the Legal Services division, which strongly converts to cash, increased by 8.1% to £21.4 million in H1 2022 (H1 2021: £19.8 million). Profit before taxation rose from £1.5 million in H1 2021 to £2.5 million in H1 2022, an increase of 67%. The Group expects this revenue trend to continue as more of our staff reach maturity from a cash collection and settlement position.

Housing Disrepair

The Group’s Housing Disrepair (“HDR”) division continues to show significant growth. The number of ongoing claims currently stands at approximately 2,300 cases. HDR continues to require additional cash funding; this amounted to £0.3 million in the first half year, with profit of £2.4 million (2021 H1: £1.1 million).

Emissions Litigation

The advocacy team continues to act on behalf of a number of individuals in the pursuit of a claim against VW and its subsidiaries (the “VW Emissions case”). The Group announced on 26 May 2022 that it is engaged in approximately 13,000 cases. The Group remains in discussions with VW and its representatives around a possible settlement of these claims.

The Group continues to pursue other emissions cases, particularly in relation to Mercedes Benz. Total expenditure that has been expensed in the H1 2022 is £1.3 million (H1 2021: £0.5 million). The Group currently has approximately 4,000 Mercedes cases.

The Board believes there is a significant short-term opportunity to accelerate growth in emissions claims against specific vehicle manufacturers, as well as HDR claims. Accordingly, the Group has negotiated an increase in its loan agreement with Blazehill Capital, first announced on 11 May 2022, from £7.5 million to £15 million. The funds will be drawn down immediately to take advantage of this opportunity. The costs in targeting further emissions claims will be expensed in the normal way and the Group will update the market with details of emissions expenditure on a regular basis.

Dividend

The Board believes that the emissions opportunity warrants significantly increased investment over the next few months and has therefore resolved that the interests of the Group and its shareholders would be best served by paying an annual dividend following the announcement of the Group’s full year results.

Outlook

The Group has shown robust growth in the first half and plans to optimise cash generation in the second half year with a focus on improving the vehicle mix. The Board has confidence in meeting market expectations for the year with a focus on continuing the strong progress in Housing Disrepair and maximising the emissions opportunities. 

Alan Sellers

Executive Chairman

20 September 2022

Anexo Group

Anexo Group appoint Mark Fryer as Chief Financial Officer

Anexo Group plc (LON:ANX), the specialist integrated credit hire and legal services provider, announced the appointment of Mark Fryer as Chief Financial Officer on 26 July 2022. The necessary AIM Rules requirements have now been completed and the Board has now confirmed that Mark has been appointed a Director of the Group with immediate effect.

AIM disclosures:

Mark Rupert Maxwell Fryer (aged 55) does not own shares in the Group and has confirmed that there is no further information to be disclosed pursuant to paragraph (g) of Schedule 2 of the AIM Rules.

A list of Mark’s current directorships and partnerships together with those held within the last five years is set out below:

Current appointments Appointments in last 5 years
NONE AUGEAN INCINERATION LIMITED
AUGEAN LFT CLAIMS CO LIMITED
AUGEAN LIMITED
AUGEAN NORTH LIMITED
AUGEAN NORTH SEA SERVICES LIMITED
AUGEAN PROPERTY LIMITED
AUGEAN SOUTH LIMITED
AUGEAN TREATMENT LIMITED
AXIL INTEGRATED SERVICES LIMITED
COLT INDUSTRIAL SERVICES LIMITED
COLWALL CONSULTING LTDHITECH EQUIPMENT LIMITED
R N A INVESTMENTS LIMITED 

Notice of Interim Results

The Group will announce its Interim Results for the six months ended 30 June 2022 on 20 September 2022.

There will be a conference call for sell-side analysts at 09:30am on the day of results, which will be hosted by Alan Sellers (Executive Chairman) and Mark Fryer (CFO). Retail investors will also be able to listen to the call but will not be eligible to ask questions.

Please contact Nick Dashwood Brown, Head of Investor Relations, at [email protected] if you would like to receive the dial in details.

An audio webcast of the conference call with analysts will be made available on the Group’s investor relations website (

Interviews

Anexo Group deliver strong revenues with significant opportunities ahead (Interview)

Anexo Group plc (LON:ANX) Head of Investor Relations Nick Dashwood Brown joins DirectorsTalk Interviews to discuss a trading Update for the year ended 31st December 2021.

Nick explains why fleet had reached record numbers in the second half of 2021, how the motorcycle courier business is still growing, the impact court closer during Covid had, how the Housing Disrepair business developed since it was announced at the tail end of last year and opportunities arising from the “VW emissions” case.

https://vimeo.com/668525360

Anexo Group (LON: ANX) is a specialist integrated credit hire and legal services group focused on providing replacement vehicles to consumers who have been involved in a non-fault accident.

Anexo Group help address the problem of sub-standard housing with new housing disrepair team (Interview)

Anexo Group plc (LON:ANX) head of investor relations Nick Dashwood Brown joins DirectorsTalk Interviews to discuss the formation of a new team within its legal services division, Bond Turner, to deal with claims arising from housing disrepair.

Nick explains the types of Housing Disrepair they will be dealing with, legislation around this, how they will find claims, the potential market, the length of a typical claim and push back from landlords.

https://vimeo.com/655248848

Anexo Group is a specialist integrated credit hire and legal services group focused on providing replacement vehicles to consumers who have been involved in a non-fault accident.

Anexo Group plc growth trajectory accelerated by MCE contract (LON:ANX) (Interview)

Anexo Group plc (LON:ANX) Head of Investor Relations Nick Dashwood Brown joins DirectorsTalk Interviews to discuss latest string of news from the company.

Nick talks us through the KPIs that increased considerably in H1 2021, the impact of new increased debt facilities, how busy the company is from a credit hire perspective, the opening of courts, having signed a major agreement with a UK-based broker MCE Insurance the benefits this brings and Nicks view on why investors might consider investing in Anexo.

https://vimeo.com/651447772

Anexo Group (LON: ANX) is a specialist integrated credit hire and legal services group focused on providing replacement vehicles to consumers who have been involved in a non-fault accident.

Anexo Emissions

Anexo Group credit hire business growth continues (Analyst Interview)

Anexo Group plc (LON:ANX) is the topic of conversation when Ian Poulter, Head of Research at Progressive Research joins DirectorsTalk. Ian shares his thoughts on DBAY Investors’ acquisition of a 29% stake in the business, talks us through the main points from the trading update, the effects on cash flow and reminds us what was said about the VW emissions case.

https://vimeo.com/488186438

Anexo Group is a specialist integrated credit hire and legal services group focused on providing replacement vehicles and associated legal services to impecunious customers* who have been involved in a non-fault accident.

Anexo’s clients typically do not have options to access a replacement vehicle which allows the Group to charge credit hire rather than spot hire rates, recovering these charges from the at-fault insurer at no upfront cost to the client.

The Group has developed an integrated business model with a dedicated field sales team generating almost all of the Group’s Road Traffic Accident customers from a network of approximately 1,150 active introducers in 2017. The Group provides an integrated end to end service to the customer including the provision of a credit hire vehicle, upfront settlement of repair and recovery charges through to the management and recovery of costs and the processing of any associated personal injury claim.

Question & Answers

Anexo Group

Anexo Group analyst Institutional Research excited by the outlook for the group (LON:ANX)

Anexo Group plc (LON:ANX) is the topic of conversation when Institutional Research caught up with DirectorsTalk Managing Director Darren Turgel for an exclusive interview.

Q1: Anexo Group has this week announced its Interim Results for the six months ended 30 June 2022, what were the key takeaways?

A1: There’s momentum and to spare in this business, with 42% YoY sales growth in H1, operating profits up 55% and EPS +53%.

The Housing Disrepair business, which is a significant growth opportunity in our view, doubled in size during the period under review.

Vehicle hire numbers drove strong growth in credit hire and the company has flagged increasing cash generation in H2.

Q2: Has this changed your forecasts in any way?

A2: No change to the underlyings.  We have added a modest extra element to the interest charge, which seems only sensible given the inexorable upward direction of rates.

Q3: How do you view the outlook for Anexo Group?

A3: I am excited by the outlook for the group.  I think that the new developments, alongside the traditional business, are exceptionally well-placed. Housing Disrepair and Emissions are tapping into huge markets and returns in these areas are extremely compelling.

We await with interest the anticipated upcoming VW settlement, which we believe will set the scene for a new cycle of growth and added profitability for the company.

Upgrade

Anexo Group’s housing disrepair business to be a significant contributor to revenues in 2022 and beyond (LON:ANX)

Anexo Group plc (LON:ANX) Head of Investor Relations Nick Dashwood Brown caught up with DirectorsTalk for an exclusive interview to discuss record fleet numbers, motorcycle courier business, housing disrepair business and opportunities arising from the VW emissions case.

Q1: Nick, in Anexo Group’s update, you’ve said that fleet had reached record numbers in the second half of 2021. Why are the numbers so strong?

A1: Well, there’s a number of reasons for that. A lot of our business is in terms with motorcycles and specifically the motorcycle courier market, which has been very strong during the pandemic and certainly continued to be strong during the last part of 2021.

On top of that, we have seen some of the competition, and we don’t have a great deal of competition in what we do, they tend to be much smaller firms in terms of smaller high street solicitors., a lot of them withdrawing. This is partly as a consequence of COVID, but also partly because of the introduction to the civil liability act in May last year, which has restricted the amount of damages that people can get for whiplash claims.

On top of that, we’ve also got a deal with MCE, which is the largest motorcycle insurer in the UK, that’s our first direct referral deal and so we’re seeing some good quality cases coming through from those and they’re all motorcycle-driven.

Q2: So, is the motorcycle courier business still growing?

A2: It’s extremely strong and it’s been strong throughout the pandemic. I’m sure you are aware, both just what you can see and also anecdotally, the number of people getting things delivered has just exploded, that’s food, goods, whatever it may happen to be, online shopping, it’s very, very busy.

Interestingly, that’s not just in the urban areas, obviously we’re very strong in urban areas particularly in London but also you may have seen last year, sometime Deliveroo announced that they were expanding massively in provincial towns. So, anywhere where there’s people who want food delivered, whether that’s groceries or fast food or whatever it happens to be, all need deliveries from online shopping, there is demand there.

So yes, we think that’s a trend which is going to continue.

Q3: Did the closure of courts during the period have an impact on your business?

A3: It had an initial impact because obviously it took a while to get things up and running virtually. We found that most the court hearings can be heard either on the telephone or via Zoom, and that assumes that there’s technological capacity to do that.

I think where there may be difficulties where you’ve got a case where you need to have an expert witness, or you need an independent witness to attend, if you’ve got three-way or four-way conversations, that just becomes that little bit more difficult.

As the courts have been reopening, that has been very positive for our business, including that’s a trend that’s going to continue so I think we weathered it very well.

Q4: When we last spoke, we talked about the Housing Disrepair business. How has that developed since you announced it?

A4: It’s been extreme promising. Just a very quick statistic, you may be aware that there are about 4 million people living in social housing about, 4.4 million who are private renters, and this is a trend that’s going to increase clearly and has been increasing.

We’re very pleased with the progress that we’ve made and we announced it at the tail end of last year, and obviously we had a team already in place, but in terms of the cases we’ve got on the books, in terms of the settlements, those have both been very promising.

From an internal perspective, the amount of time it takes to settle the case is very encouraging, as is the relatively low amount of working capital, which it requires.

So, we think that this business is going to be a significant contributor to revenues in 2022 and beyond.

Q5: Are there other opportunities arising from the VW emissions case that Anexo Group was involved in?

A5: You’ll probably be aware that most major manufacturers are in a similar sort of position to VW and there is potentially litigation pending so we have been concentrating on the VW side of things, but we have been doing a lot of work on other manufacturers and those are all the main marks.

I would suggest that as the VW case moves through 2022 then certainly there are opportunities across the board to get involved in other manufacturers who were effectively doing the same thing as VW.

So, it’s something definitely that’s got a considerable amount of time to run and very significant opportunities for us.

Housing disrepair

Anexo Group tackling housing disrepair claims in social housing and private renting (LON:ANX)

Anexo Group plc (LON:ANX) Head of Investor Relations Nick Dashwood Brown caught up with DirectorsTalk for an exclusive interview to discuss it’s new housing disrepair team, legislation, how they find claims, the potential market and whether landlords are pushing back.

Q1: Anexo Group, this week, announced the formation of a new team within its legal services division, Bond Turner, to deal with claims arising from housing disrepair. Nick, what sort of housing disrepair are we actually talking about?

A1: There’s a number of different types of housing disrepair. Firstly, we are looking at dilapidation of property so there are a lot of properties out there where for instance, the windows are rotting and there’s drafts coming through there. There are other things which are not up to scratch, including some of the facilities are very outdated and possibly not working properly. On top of that, there’s obviously problems with damp and mold growth which are defined as a category 1 hazard and make houses unhealthy for the inhabitants.

Q2: Is there legislation around this?

A2: Number one in terms of legislation, there’s a thing called the Homes (Fitness for Human Habitation) Act, which came into force in 2019. That acts to ensure that rented houses and flats are fit for human habitation and, ultimately, the act gives more power to tenants to take action against landlords who are negligent in taking care of their responsibilities.

On top of that, there’s a government standard called the Decent Homes Standard and that’s defined by central government. This means a home is something which is acceptable for people to live in, which includes things like the facilities have to be of a reasonable age, it has to provide reasonable thermal comfort and that the facilities as such that you would expect to have in a house, which is rented either to adults or to children or a combination of both.

Q3: Now, you’re normally focused on non-fault accidents so how will you find your claims for this?

A3: There’s two primary ways of doing this.

Number one, we do social media campaigns, we’ve done these with a number of other issues in the past and those have proven to be very effective.

The second thing is of course, that there is a certain amount of overlap that a number of our customers, because we concentrate on the impious market in terms of non-fault accidents, it’s just a fact that a number of our customers will be an occupant of either social or rented private housing. Therefore there’s a certain amount of cross-referencing that goes on there and we do get some of our cases internally.

Q4: How big do you think the potential market is?

A4: Well, in terms of the Decent Homes Standard, about 500,000 social housing dwellings and about 1 million private rent dwellings don’t meet that standard. On top of that, about 200,000 social housing dwellings, and about 500,000 private rentals dwellings have what’s called a category 1 hazard, which is damp and mold growth.

So, add those together, it’s a reasonable number and, in theory, we’re looking at potentially 200,000/250,000 claims over the year and if we could get a very small market share of that, even a 1% share of that, would be very considerable in terms of the use of our team’s time and also potentially as a contribution to group revenues.

Q5: How long do you think a claim will take to settle?

A5: In terms of the claims to settle so far, and the team’s been up and running for a while, we are settling claims on a regular basis every month, it looks to us as though the settlement period is considerably less than the period, we tend to get for our credit hire business in terms of non-fault accidents.

So, I wouldn’t like to put a hard and task figure on it, but I would suggest somewhere between 200 and 220 days to settle, which is less than half of what a typical credit hire case would take.

It’s a relatively straightforward business in the sense that the surveyor’s report goes in, which is difficult to argue with and from then on, it’s a relatively straightforward process in terms of chasing it.

Q6: Finally, do Anexo Group get a lot of pushback then from landlords?

A6: We, we haven’t really so far. Some landlords are obviously negligent, some landlords are just, in my view and this is my own word and not the company’s, a bit inefficient and sometimes they need a reminder that things being done because something gets reported to them and they put something gets put on their to-do list and it doesn’t get done. Obviously, things have not been helped by the pandemic because obviously access to buildings has been restricted and getting workman to do the work has also been restricted.

By and large, I think it’s fair to say that if a problem is brought to a landlord’s attention, then it does get dealt with, and if they’re being dilatory in dealing with it, then there’s nothing like a solicitor’s letter to speed up the process.

So, by and large, we found that landlords, specifically commercial landlords within the social housing sector so housing associations, the one thing they don’t particularly want is bad publicity, which comes from not dealing with tenants problems.

Anexo Group

Anexo Group prospering with expanded business model and cash generation (LON:ANX)

Anexo Group plc (LON:ANX) Head of Investor Relations Nick Dashwood Brown caught up with DirectorsTalk for an exclusive interview to discuss their strong financial position, an increase in debt facilities, how busy they are from a credit hire perspective, the benefits of the courts reopening, the major contract with MCE insurance and why investor should be investing in the company.

Anexo Group is a specialist integrated credit hire and legal services group focused on providing replacement vehicles to consumers who have been involved in a non-fault accident. Joining me today to discuss the company’s latest string of news is Head of Investor Relations, Nick Dashwood Brown.

Q1: Nick, if we can start off with your strong financial position, you must be delighted that all your KPIs increased considerably in H1 2021?

A1: Yes, we’re very happy with the performance in the first half of the year. Obviously, we were affected, as every company was, by the pandemic but I’d like to stress that we actually survived the pandemic extremely well.

Both of our core businesses, the credit hire and legal services businesses are essential businesses under government guidelines and although we saw an initial drop in the number of vehicles on the road and initial decline in the number of cases being settled, we actually bounced back extremely strongly from that.

The first half figures show that actually the number of vehicles we had on hire in the first half was considerably in excess of the second half, we also settled more cases, and most importantly, we collected more cash.

Q2: You also recently announced an increase in your debt facilities, how will that impact on the business?

A2: We’re a growth company, we make no bones about it, we believe that we’re on a growth trajectory and it seems prudent at the time that we were offered extra facilities, both from Secure Trust, who offer facilities for direct accident management which is our credit hire site and HSBC who look after the Bond Turner legal services side.

Both are these were willing to extend our lending, we think that gives us the opportunity to put more vehicles on the road and also to recruit more legal staff. It’s a very straightforward equation, if we have more legal staff, we get more settlements, and more settlements equals more cash.

So, both of these were on very good terms and we’re happy to be able to utilize that to finance the growth of the company.

Q3: I think you touched on this earlier, but how busy are you now from a credit hire perspective?

A3: We’re very busy. If we were to plot this on a graph in terms of the number of vehicles on the road, in the first lockdown which of course seems a lifetime ago now, but March of 2020, we obviously saw a fairly sharp decline in the number of vehicles on the road, but that climbed back very quickly. We had a small decline again from a hire base at the end of last year when we had the second lockdown and into 2021, but ultimately, we’ve seen a big bounce back in this and in fact, we’re running at record levels at the moment.

The number of vehicles on the hire at the end of the first half was about 1,700 and we said in October that our numbers were up to about 2,000 and we’re certainly running well over 2,000 at the moment so it’s been extremely strong.

It’s worth bearing in mind that a lot of our customers are people who are involved in essential jobs, so they kept on working throughout the pandemic. We also do a lot of courier business, the majority of our motorcycles at 125cc or below and those are the kinds of vehicles which are used by the couriers who are delivering everybody’s parcels, food, whatever it happens to be, you can imagine the home delivery market has been extremely robust.

So ultimately, we have been and remain extremely busy in terms of the credit hire side.

Q4: Has it helped that the courts have now reopened Nick?

A4: Absolutely. Obviously, there was some difficulty with the courts being closed but cases continue to be heard either by phone or by zoom, but obviously there are a number of cases where you do need witnesses to appear, or you do need defendants or claimants to appear. Those obviously were postponed.

Now, we’re seeing the courts reopening bit by bit, I think we’d like to see them open a little bit faster, but actually broadly speaking, we are where we want to be in terms of the courts, being able to hear cases face-to-face. There is an argument that some cases can continue to be heard over the phone without necessarily being in person but certainly from our perspective, on the rare occasions you do get court, and don’t forget the majority of our cases settled before court, then it usually means that there’s disputes and therefore it’s much better heard face-to-face.

So, certainly the reopening of courts is a major positive for us and will continue to be so.

Q5: Now, just moving on to some more exciting and significant news, you announced last week that you’ve signed a major contract with UK-based broker MCE insurance. What does that partnership entail and how does it benefit the group?

A5: This is a departure for us in some ways, historically we’ve always got our cases through direct capture, in other words, we get our cases directly from the customer through our network and introducer garages of which are about 1,100 independent garages. They put our customers in touch with us.

This is the first time where we’ve gone for what you might call third-party capture so MCE Insurance, which is the largest, I believe, motorcycle insurance broker in the UK, we’re now going to be looking after all their non fault accident claims.

So, anybody who insures their bike with MCE, who’s involved in a non-fault accident, their business will come to us, both for the repair or replacement vehicle by a write-off and also for the claim against the actual motorist who damaged the vehicle or the cost of the write-off and, for that matter, their associated claims with things like personal injury and also various bits of personal equipment. Two examples of that:

1) If you get knocked off a motorcycle, you’re not going to get anything like whiplash, which no longer occurs due to the Civil Liability Act, if you get knocked over on a motorcycle, it’s going to hurt.

2) There are bits of personal equipment, which are unique to motorcycles, a full set of motorcycle leathers is expensive and if those are damaged by you being knocked off your bike in an accident that wasn’t your fault, then I don’t see why it should be your responsibility to replace them.

So, all of that is, is good news for us and it’s worth bearing in mind that roughly two thirds of our business is motorcycles as opposed to cars and commercial vehicles and that’s probably going to remain relatively steady. A lot of our motorcycle business is write-off business as opposed to repair business, normally, if you’ve got a relatively cheap motorbike and it’s knocked down the road, that’s going to tend to be a write-off, nobody’s going to repair that, and write-ups tend to better for us because obviously the hire periods are longer.

For a repair, the vehicle is on the road until such time as the vehicle is repaired and returned to the owner but obviously in a write-off case, the hire vehicle is on the road until we receive a settlement cheque for the insurance company, which can take considerably longer. So, it’s a useful commercial advantage for us.

This is a big deal for us, we’re very, very pleased with it, we believe that it will not only increase the number of vehicles on the road, but it’ll increase the quality of our claims, and it will certainly give us opportunities to build better relationships with the motorcycle community.

Q6: Just for investors looking for attractive growth companies, how would you now summarise why they should invest in Anexo Group?

A6: We are unique in what we do, there isn’t really anybody who does what we do. We provide a full service in terms of claims for non-fault accidents and that goes right the way through vehicles through to settlement of the legal claim against the at fault motorists.

This is a growth area; we believe that we’re not more than 2% of the market at the moment in terms of impecunious claims and just to remind your listeners impecunious means those people who do not have the wherewithal to provide themselves with a replacement vehicle. So, without our help, they’d be walking to work or taking the kids to school on the bus, so we believe we’re also providing a useful social function.

We are cheap against the market, the valuation is not demanding, we are also a legal services group, we’re an advocacy group as well as purely dealing with the insurance side of things so we’re heavily involved.

I think your listeners will be aware of the VW emissions case which is still unfolding at the moment, but we’re heavily involved in that and we’re also getting involved in housing disrepair. A lot of people in the UK are living in substandard housing, particularly in social housing, and this is something that we’re looking at expanding and working on putting together a team to take care of that.

So, there are a number of different strings to our bow in terms of the legal business, but in terms of exposure to a market which isn’t really going to go away, there’s always going to be people having accidents and there are always going to be people who have accident which aren’t their fault, and we’re preeminent in taking those cases on.

Analyst Notes & Comments

Anexo Group

Anexo Group analyst Institutional Research excited by the outlook for the group (LON:ANX)

Anexo Group plc (LON:ANX) is the topic of conversation when Institutional Research caught up with DirectorsTalk Managing Director Darren Turgel for an exclusive interview.

Q1: Anexo Group has this week announced its Interim Results for the six months ended 30 June 2022, what were the key takeaways?

A1: There’s momentum and to spare in this business, with 42% YoY sales growth in H1, operating profits up 55% and EPS +53%.

The Housing Disrepair business, which is a significant growth opportunity in our view, doubled in size during the period under review.

Vehicle hire numbers drove strong growth in credit hire and the company has flagged increasing cash generation in H2.

Q2: Has this changed your forecasts in any way?

A2: No change to the underlyings.  We have added a modest extra element to the interest charge, which seems only sensible given the inexorable upward direction of rates.

Q3: How do you view the outlook for Anexo Group?

A3: I am excited by the outlook for the group.  I think that the new developments, alongside the traditional business, are exceptionally well-placed. Housing Disrepair and Emissions are tapping into huge markets and returns in these areas are extremely compelling.

We await with interest the anticipated upcoming VW settlement, which we believe will set the scene for a new cycle of growth and added profitability for the company.

Anexo Group

Anexo Group Q&A with Arden Partners “outlook appears robust” (LON:ANX)

Anexo Group plc (LON:ANX) is the topic of conversation when Arden Partners’ Head of Research Andrew Simms caught up with DirectorsTalk for an exclusive interview.

Q1: Andy, Anexo Group has reported good 2020 results with a solid performance despite COVID, what were the key takeaways in your view?

A1: The Group has continued to invest in the credit hire and legal services businesses and the benefits of this should become much more clear as the COVID restrictions are removed. The exit from the credit hire market by competitors and the impending whiplash reforms provide potential market share gains and accelerating cash settlements from the legal services side will provide the capital to invest further in this growth.

Q2: How do you view the outlook and forecast for the company?

A2: The outlook appears robust, assuming an orderly exit from current and recent restrictions. The group’s credit hire business appears to be accelerating through 2021 and the increase in court proceedings and overall processing efficiency will enable increased activity through the second half of 2021 and in to 2022.

Q3: In terms of a valuation how would you describe Anexo Group?

A3: The stock trades on 9.2x P/E and only 1.2x P/BV which is effectively the value of the current backlog of credit hire cases the Group has on its books. This provides very little value for growth opportunities which the company can take advantage of, either in Credit Hire or adjacent areas, while the scale and financial outcome of the VW emissions cases remains unclear but represents a potential positive going forward.

Anexo Emissions

Anexo Group credit hire business growth continues (Analyst Interview)

Anexo Group plc (LON:ANX) is the topic of conversation when Ian Poulter, Head of Research at Progressive Research joins DirectorsTalk. Ian shares his thoughts on DBAY Investors’ acquisition of a 29% stake in the business, talks us through the main points from the trading update, the effects on cash flow and reminds us what was said about the VW emissions case.

https://vimeo.com/488186438

Anexo Group is a specialist integrated credit hire and legal services group focused on providing replacement vehicles and associated legal services to impecunious customers* who have been involved in a non-fault accident.

Anexo’s clients typically do not have options to access a replacement vehicle which allows the Group to charge credit hire rather than spot hire rates, recovering these charges from the at-fault insurer at no upfront cost to the client.

The Group has developed an integrated business model with a dedicated field sales team generating almost all of the Group’s Road Traffic Accident customers from a network of approximately 1,150 active introducers in 2017. The Group provides an integrated end to end service to the customer including the provision of a credit hire vehicle, upfront settlement of repair and recovery charges through to the management and recovery of costs and the processing of any associated personal injury claim.

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