REG - Anexo Group PLC - Final Results
06/06/2025 07:00
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RNS Number : 6824L Anexo Group PLC 06 June 2025
6 June 2025
Anexo Group plc
('Anexo' or the 'Group')
Final Results
"Continued focus on investment and sustainable growth across all Group
divisions"
Anexo Group plc (AIM: ANX), the specialist integrated credit hire and legal
services provider, announces its audited final results for the year ended 31
December 2024 (the 'period' or 'FY2024).
It should be noted that, as previously reported, the results for the year
ended 31 December 2023 ('FY2023') include the contribution from the agreement
reached with Volkswagen AG ('VW') in relation to the Emissions Claim. The
terms of the agreement (as announced on 5 June 2023) are subject to
confidentiality restrictions. The agreement resulted in revenues in FY2023
outside the normal course of historic business, which should be taken into
account when comparing the results of FY2023 and FY2024. The underlying
business on a normalised basis grew in FY2024 compared with FY2023.
To aid comparison of the FY2024 results with FY2023 we have provided a
divisional breakdown in trading performance below.
Financial Highlights
Revenues
· Credit Hire revenues increased by 22.9% to £70.4 million
(2023: £57.3 million) reflecting the ongoing diversification of the book
· Legal Services revenues reduced by 16.9% to £71.5 million
(2023: £86.0 million), noting the results for FY2023 include the impact of
the agreement reached with VW in relation to the Emissions Claim.
· Group revenue reduced by 1.0% to £141.9 million (2023:
£143.3 million, which included the impact of the agreement reached with VW in
the Emissions Claim).
Profit Before Taxation
· Credit Hire reported a 50.0% improvement in profit before
tax, reaching £9.9 million (2023: £6.6 million), reflecting both an increase
in, and diversification of, vehicle activity in the period and continued cost
control
· Legal Services profit before tax reached £7.6 million (2023:
£19.5 million) as the investment in staffing continued (a 9.4% increase in
headcount was reported in FY2024), whilst FY2023 included the impact of the
agreement reached with VW in the Emissions Claim
· Group profit before tax was reduced by 35.7% to £14.8
million (2023: £23.0 million). This reduction reflects the impact of the
agreement reached with VW in the Emissions Claim in 2023, additional costs of
£0.7 million associated with the refinancing agreed in 2024 which resulted in
a significant increase in the level of headroom within the Group, a decision
to make continued investment in staff, marketing costs, IT and infrastructure
within Legal Services for the future benefit of the business and the movement
in, and diversification of, vehicle activity within the Credit Hire Division
2024 2023 Movement
Revenues (1, 2) £141.9 million £143.3 million -1.0%
Profit before taxation (1) £14.8 million £23.0 million -35.7%
Cash collections £169.7 million £163.5 million +3.8%
Net debt £81.6 million £67.9 million +20.2%
Basic EPS (1) 9.9 pence 12.8 pence -22.7%
1. The results for FY2023 include the impact of the agreement reached with VW
in the Emissions Claim.
2. Note: Certain of the results and balances for FY2023 have been restated,
this had the impact of reducing opening reserves by £2.3 million, but had no
impact on the Statement of Total Comprehensive Income or Statement of Cash
Flows for FY2023. Further details are included in Note 1 below.
KPIs 2024 2023 % movement
Group
Total revenues (£'000s) (1 2) 141,878 143,308 -1.0%
Gross profit (£'000s) (1 2) 103,437 114,962 -10.0%
Operating profit (£000's) 25,469 39,773 -36.0%
Operating profit margin (%) (2) 18.0% 27.8% -9.8%
Cash collections from settled cases (£'000s) 169,720 163,530 +3.8%
Credit Hire
Revenues (£'000s) (2) 70,393 57,289 +22.9%
Vehicles on hire at the year-end (no) 1,552 2,409 -35.6%
Average vehicles on hire for the year (no) 1,877 1,904 -1.4%
Number of hire cases settled 8,767 8,967 -2.2%
New cases funded (no) 11,857 11,724 +1.1%
Legal Services
Revenues (£'000s) (1 2) 71,485 86,019 -16.9%
Legal staff at the period end (no) 768 702 +9.4%
Average number of legal staff (no) 758 696 +8.9%
Total senior fee earners at period end (no) 303 283 +7.1%
Average senior fee earners (no) 294 257 +14.4%
1. The results for FY2023 include the impact of the agreement reached with VW
in the Emissions Claim.
2. The results for FY2023 have been restated as set out above, further details
are included in Note 1 below.
Overview and Financial and Operational KPIs
2024 has been a year of targeted investment in a number of strategic areas.
This has focused on driving increased performance and shareholder value by
continuing the development of Bond Turner's staff and infrastructure across
all key divisions, including Housing Disrepair, Large Loss (Injury), class
actions (which includes emissions) and credit hire. Whilst credit hire remains
the most significant component of the Group, our internal focus has changed
slightly to look to drive additional value from the division; firstly, from
the generation of additional large loss opportunities, for which there are no
significant incremental costs; and secondly, from diversification of the claim
portfolio within credit hire.
It should be noted that, as previously reported, the results for 2023 include
the contribution from the agreement reached with Volkswagen AG ('VW') in
relation to the Emissions Claim. The terms of the agreement (as announced on 5
June 2023), which was subject to confidentiality restrictions, noted that the
agreement had resulted in a net positive cash position to Anexo of £7.2
million and revenues in that year being outside the normal course of historic
business. The claim should therefore be taken into account when comparing 2023
and 2024. The underlying Legal Services business on a like-for-like basis grew
in 2024 compared with 2023. It should also be noted that certain comparative
information has been re-stated as a result of the prior year adjustment set
out in Note 1 to the financial information.
The Group's success lies in the strength of Bond Turner and is supported by
ongoing investment in staff, and diversification of the credit hire book
alongside expanding revenues from its two other key divisions, targeting
growth but not at the expense of increasing levels of working capital and
debt. Cash collections improved throughout the year, deriving from credit hire
claims, housing disrepair claims and the serious injury and clinical and
professional negligence large loss teams. Overall cash collections increased
from £163.5 million in 2023 to £169.7 million in 2024. These figures exclude
the contribution from the agreement reached in June 2023 with VW referred to
above.
Revenues for Legal Services reduced from £86.0 million in 2023 to £71.5
million in 2024; these figures reflect the fact that 2023 included the impact
of the agreement of the Emission Claim in the year. On a like-for-like basis,
2024's revenues were above those reported for 2023. This improvement is even
more pleasing as the business continued to face disruption in the courts
system post-COVID, with delays and adjournments to court dates and hearings,
which have impacted turnover and hence profitability. The delays in the Civil
Court system are well publicised and are currently subject to a review by the
Justice Committee. The Company is playing an active and collaborative role in
that review with a Director having already given evidence before the
committee.
Following the agreement with VW, the Group continued its investment in claims
against other manufacturers, including Mercedes Benz, Vauxhall, BMW/ Mini,
Peugeot/Citroen and Nissan/Renault. During 2024, the Group invested a total of
£6.5 million in marketing, staff and other costs (2023: £4.3 million) and at
the end of 2024 had secured claims against Mercedes Benz (where court
proceedings have been issued) from approximately 12,000 clients, and a further
24,000 claims against other manufacturers. These costs which are included
within Administrative Expenses in the Income Statement, contribute
significantly to the development and ultimate success of the claims. New claim
acquisition and marketing has now ceased. Favourable settlement of these
claims would be expected to enhance the Company's revenue, profitability and
cashflows although the certainty, quantum and timing of any negotiations or
settlement remains uncertain.
Staff numbers within Bond Turner continued to grow, driving improvements in
performance and cash collections with an increased focus on both developing
our own staff but recruiting where necessary to increase settlement capacity.
This growth was particularly notable within the housing disrepair and large
injury teams, where staff numbers increased from 69 and 77 respectively at the
end of 2023 to 84 and 100 at the end of 2024 (an increase of 21.7% and 29.9%
respectively). Staff numbers in the Legal Services division reached a total of
768 at the end of December 2024, a 9.4% rise from 2023.
In addition, the business continues to increase its footprint within the field
of professional and clinical negligence and large and catastrophic personal
injury case book. A new head of clinical negligence has recently been
recruited, and the Group is delighted to have attracted a highly experienced,
commercially minded and sought after individual which bodes well for future
success. Further recruitment of senior people continues to take place across
the large and personal injury departments. The Group is able to draw upon its
significant marketing capability and nationwide footprint to generate claims
effectively.
Opportunities for new work within the Credit Hire division continued to be
buoyant. Management continued the active management of claims and sought to
diversify the business, expanding the provision of vehicles on a credit hire
basis to taxi drivers who had been involved in non-fault accidents. The Group,
with its decades of experience, has given careful and strategic consideration
to the diversification of its offering between cars, motorbikes, vans, taxis
and bicycles, concentrating on those claims that generate the best value for
the Group as a whole, alongside ensuring that the demands and needs of its
clients are satisfied. This diversification led to overall vehicle numbers
being reduced from 2,409 at the end of 2023 to 1,772 at the end of June 2024
and 1,552 at the end of 2024. This reduction in 2024 is expected to have a
positive impact on settlements in 2025 and beyond. The readjustment is
intended to position the business well for future opportunities within each
sector. The diversification is also expected and indeed has already started to
open avenues for high value personal injury work where there is no associated
credit hire.
Having diversified the book of business and actively managed claim numbers
during the year, the strong start to 2024 in terms of vehicle activity
resulted in an increase in revenues in the year, rising from £57.3 million in
2023 to £70.4 million in 2024. The focus for the majority of the year was
very much on cash generation and our ability to manage claim volumes
underlines the robust health of the core business. A number of factors
contributed to the increase in revenue including the diversification of the
credit hire book. As for many years, all claims generated are passed for
recovery to the experienced legal team at Bond Turner, who have shown their
strength in driving case settlements in a period where court delays and
adjournment are now the norm; the impact of these external factors has seen
little improvement during 2024.
2024 also saw the Group replace, or agree enhancements to, its key funding
facilities. In August 2024, the Group agreed a £30.0 million, three year
committed, loan facility with Callodine Commercial Finance LLC. The Group has
drawn down £20.0 million of this facility, to provide further headroom and to
repay the loan provided by Blazehill Capital Limited. This refinancing has
significantly reduced the overall cost of capital to the Group, as has an
agreement to increase the funding available under the facility provided by
Secure Trust Bank PLC. Secure Trust has extended and increased the funding
period, the effect of which was to provide an additional £5.0 million of
funding for the Group within the £40.0 million facility limit previously
agreed. Both facilities are committed through to July 2027.
In October 2024, the Group secured a £16.0 million revolving credit facility
from Lloyds Bank PLC, of which £13.5 million has been drawn down to increase
headroom and repay the facility formerly provided by HSBC Bank PLC (£10.0
million). This facility is also committed for a three year period with no
repayments due until that date.
The Group has a number of opportunities for growth in 2025, not only from the
current divisions but from wider opportunities in the legal services sector
including the growth of higher value personal injury work and continued
diversification of the credit hire book. The Board believes that there are
significant opportunities to manage the overall Group to ensure it maximises
shareholder value by continuing to seize opportunities for growth as they
present themselves without the need for significant increases in debt funding.
We have provided certain data and statistics below and on the following pages
to give further detail around the trading and operational performance of the
Group. The measures presented are those which management believes provide the
best reflection of performance.
Commenting on the Final Results, Alan Sellers, Executive Chairman of Anexo
Group plc, said: "The Board is very pleased with these results, which
demonstrate our continued commitment to sustainable investment across our
divisions, enabling appropriate growth while managing our debt levels
efficiently.
We are immensely proud to be able to offer social justice and full legal
support to our clients and members of the public. 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. The credit hire and housing
disrepair teams continue to perform with both strength and a high level of
legal expertise, and carry out invaluable work for members of the public in
difficult situations, who would not otherwise have access to justice.
"The Group has multiple opportunities in its existing business in areas which
offer huge potential for growth. Our legal services division is involved in a
number of high-profile actions which will heighten its public profile and
reputation for expertise, while the credit hire division is benefitting from
our recent expansion into the taxi sector. The future for the Group is both
exciting and promising."
For further enquiries:
Anexo Group plc +44 (0) 151 227 3008
www.anexo-group.com
(https://url.avanan.click/v2/___https:/linkprotect.cudasvc.com/url?a=http%3a%2f%2fwww.anexo-group.com&c=E,1,2VvMEBrSiUaPTNwdIsBK8jkP_fdUyFVrWLLxR0wAGql_vkwAY3U2oRCufhm9xyE-fNKCwWcBggCo5S5hm40hrRyfi8xlgtixVodRcYv3SktEEdDB7bNjrNbMWPM,&typo=1___.YXAxZTpzaG9yZWNhcDphOm86MTQzYWI0ZWY5YjBmMzQ5ZjNmZDU4ODNkMDAxM2IyNzU6Njo4OTQzOjU2ZmNmODk3NGE4ODg3ZGI2MWQ1YWY2ZTc4YzBkZTY3OWU5NzcyYTFjNzM5ZmJhOWI5NmI3MzcyZGQ3ZWQyMzg6cDpGOk4)
Alan Sellers, Executive Chairman
Mark Bringloe, Chief Financial Officer
Nick Dashwood Brown, Head of Investor Relations
Shore Capital (Nomad & Broker) +44 (0) 20 7408 4090
Tom Griffiths / Sophie Collins (Corporate Advisory)
Guy Wiehahn (Corporate Broking)
Notes to Editors:
Anexo 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 1,100 plus 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 incorporates a number of other specialist legal divisions. One
deals with housing disrepair claims acting for clients living in conditions
where there is disrepair, damp and mould, and concentrates mainly on the
social housing sector. Another focuses on large loss claims, including
professional and clinical negligence and complex medical claims. Bond Turner
is also involved in group actions including diesel emissions and is currently
pursuing claims against Mercedes and several other major manufacturers.
The Group was admitted to trading on AIM in June 2018 with the ticker ANX. For
additional information please visit: www.anexo-group.com
(https://url.avanan.click/v2/___http:/www.anexo-group.com___.YXAxZTpzaG9yZWNhcDphOm86MTQzYWI0ZWY5YjBmMzQ5ZjNmZDU4ODNkMDAxM2IyNzU6NjphMzk1OjFkNDY5ZmYyYTYxOTcwNTY0NjE2OWYxZTI5MGE2MjUzMTlkMTYyZTllMTc4NGNkM2NkMDczY2YxYWIzM2VkMzM6cDpGOk4)
Chairman's Statement
On behalf of the Board, I am pleased to report a year of solid performance by
the Group, with each division of the Group performing in line with the Board's
expectations. As previously reported, the results for 2023 include the
contribution from the agreement reached with Volkswagen AG ('VW') in relation
to the Emissions Claim. The terms of the agreement (as announced on 5 June
2023) are subject to confidentiality restrictions. The agreement resulted in
revenues in 2023 outside the normal course of historic business, which should
be taken into account when comparing 2023 and 2024. The underlying Legal
Services business on a like-for-like basis grew in 2024 compared with 2023.
The Board continues to invest in diversifying the Group's activities by taking
advantage of the significant growth opportunities which are presenting
themselves and believes that the Group is well positioned for further strong
performance in 2025 and beyond. During 2024, investment included the continued
diversification of credit hire activity into the provision of taxis to drivers
involved in non-fault accidents as well as investment to increase its
footprint within large and catastrophic personal injury case books and
professional and clinical negligence. The Group continues to market its
services to prospective customers on a nationwide basis and offers an
accessible network to members of the public who require end-to-end solutions
for legal advice and support.
Group Performance
Anexo Group Plc has shown solid performance during 2024 with Group revenues
reported at £141.9 million (2023: £143.3 million, which included the impact
of the agreement in the Emissions Claim). The underlying business on a
like-for-like basis grew in 2024 compared with 2023. Gross profits reached
£103.4 million in 2024 compared to £115.0 million in 2023. Operating profit
reduced to £25.5 million in 2024 at a margin of 18.0% (2023: £39.8 million
at a margin of 27.8%), the reduction reflecting the impact of the Emissions
Claim in 2023, the continued investment in staff and marketing costs across
all aspects of the Legal Services division, and continued investment into the
ongoing diesel emissions claims (2024: £6.5 million; 2023: £4.3 million) and
costs associated with securing additional headroom for the Group across each
of the principal debt funding facilities.
An increase in revenue was reported for Credit Hire, increasing from £57.3
million in 2023 to £70.4 million in 2024. This improvement reflects the
diversification of claims activity towards claims generating best value for
the Group and servicing the needs of a diverse client base. This result was
even more pleasing as management continued the active management of claims
accepted resulting in a reduction of vehicles on the road at the year end
(2023: 2,409; 2024: 1,552). Revenue from Legal Services reduced from £86.0
million in 2023 to £71.5 million in 2024. As previously stated, 2023 included
the impact of the agreement in the Emissions Claim and the underlying business
on a normalised basis grew in 2024 compared with 2023.
During 2024, the Group has continued its focus on developing services outside
credit hire, further developing the housing disrepair and large loss teams
whilst recognising that credit hire remains the mainstream profit generator
for the Group. This focus has contributed to an increased level of case
settlements and therefore an increase in cash collections for the Group, which
rose by 3.8% to £169.7 million in 2024 (2023: £163.5 million). This figure
excludes the agreement in the Emissions Claim in 2023. This improvement is
even more pleasing as the business continued to face disruption in the courts
system post-COVID with delays and adjournments to court dates and hearings,
which have impacted turnover and hence profitability. The delays in the Civil
Court system are well publicised and are currently subject to a review by the
Justice Committee. The Company is playing an active and collaborative role in
that review with a Director having already given evidence before the
committee.
Credit Hire Division
Whilst the Group's Credit Hire division, Direct Accident Management Limited,
reported a slight increase in vehicle activity in the year against 2023, new
cases funded increased slightly from 11,724 in 2023 to 11,857 in 2023,
revenues increased from £57.3 million to £70.4 million (an increase of
22.9%). The growth in revenues, over and above the movement in vehicle
activity, reflects the decision to diversify the fleet towards those claims
generating best future value for the Group.
With the strong start to the year, which began with 2,409 vehicles on the
road, active management of claims activity resulted in a reduction of vehicles
on the road, ending the year at 1,552. Movements in the year resulted in the
average number of vehicles on hire remaining relatively consistent with that
seen in 2023, reaching 1,877 in 2024 (2023: 1,904).
Legal Services Division
The Group's Legal Services division, has continued its focus on both driving
cash collections across each of the three principal departments, with growth
in both housing disrepair and large loss contributing to the positive result
in the year, as well as continued investment in staffing and infrastructure.
Large loss remains a key focus for the business including our ability to
provide rehabilitation, support, legal advice and technical excellence to the
most seriously injured of clients.
This investment is expected to make a significant contribution to future
revenues and profitability. Revenues within the Legal Services division, which
strongly correlates to cash, reduced by 16.9% to £71.5 million (2023: £86.0
million, including the agreement in the Emissions Claim in June 2023). The
underlying business on a normalised basis grew in 2024 compared with 2023.
With increased opportunities across all divisions the Group has sought to
expand teams with strategic senior hires to support and develop their
respective teams to help drive case settlements. At the end of December 2024
staff numbers within Bond Turner stood at 768, a 9.4% increase on the 2023
figure of 702. Of these, a total of 303 were senior fee earners, up 7.1%
(2023: 283). The average number of staff rose from 696 in 2023 (of which 257
were senior fee earners) to 758 in 2023 (including 294 senior fee
earners).
Diesel Emissions
The Group has continued its investment in claims against manufacturers
including Mercedes Benz, Vauxhall, BMW/Mini, Peugeot/Citroen and
Renault/Nissan. By the end of 2024, the Group had secured claims against
Mercedes Benz (where court proceedings have been issued) from approximately
12,000 clients, and a further 22,000 claims against other manufacturers. New
claim acquisition and marketing has now ceased. Favourable settlement of these
claims would be expected to enhance the Company's revenue, profitability and
cashflows although the certainty, quantum and timing of any negotiations or
settlement remains uncertain.
In total, the Group invested £6.5 million in 2024 (2023: £4.3 million) in
both staffing and emission claims lead generation fees, both of which are
expensed in the income statement as incurred.
Housing Disrepair
The housing disrepair team has continued its expansion during 2024, with
revenues rising to £14.2 million, an increase of 11.8% over that reported in
2023 (£12.7 million). At the end of the year, the Group had a portfolio of
c4,500 ongoing claims (2023: c.3,900). Some £3.5 million was invested in
marketing costs in 2024 (2023: £3.8 million), all of which was expensed as
incurred, and with further investment planned in 2025, the housing disrepair
team has proven its potential to be a significant contributor to Group
earnings. We look forward to further growth in this sector.
Dividends
The Board is not recommending the payment of a final dividend (2023: total
dividend 1.5p per share, £1.8 million).
Corporate Governance
Anexo values corporate governance highly and the Board believes that effective
corporate governance is integral to the delivery of the Group's corporate
strategy, the generation of shareholder value and the safeguarding of our
shareholders' long-term interests.
As Chairman, I am responsible for the leadership of the Board and for ensuring
its effectiveness in all aspects of its role. The Board is responsible for
the Group's strategic development, monitoring and achievement of its business
objectives, oversight of risk and maintaining a system of effective corporate
governance. I will continue to draw upon my experience to help ensure that
the Board delivers maximum shareholder value.
Our Employees and Stakeholders
The strong performance of the Group reflects the dedication and quality of the
Group's employees. We rely on the skills, experience and commitment of our
team to drive the business forward. Their enthusiasm, innovation and
performance remain key assets of the Group and are vital to its future
success. On behalf of the Board, I would like to thank all of our employees,
clients, suppliers, business partners and shareholders for their continued
support over the last year.
Current Trading and Outlook
The Group has continued to invest in its people, particularly within the Legal
Services division, supporting the growth in the underlying level of cash
receipts for the Group. Whilst this investment impacted our reported financial
performance in 2024, the continued growth in headcount supporting ever
increasing case settlements will continue to contribute to growth in 2025 and
beyond.
Since the year end, trading across both Credit Hire and Legal Services has
been in line with management's expectations.
Future Developments
In the previous emissions action, Bond Turner's clients were not part of the
Group Litigation Order ('GLO'), which brought together a number of legal firms
acting for different claimants. In the current action, Bond Turner will form
part of the respective GLOs, which should facilitate a more efficient legal
process to achieve a quicker resolution to the cases.
Judgment was handed down in November 2024 from the preliminary issue trial
held in early October 2024, in the Mercedes Diesel Emissions Claim. The Court
found in favour of the claimants and whilst this decision is not definitive
for the success of the claims, it does strengthen the claimants' position and
was a significant victory in the litigation at that stage. A trial is
scheduled for October 2026 to address causation and loss issues. This trial
will involve all manufacturers.
Annual General Meeting
The Group's AGM will be held on 2 July 2025. The notice of the meeting
accompanies this Annual Report and Accounts.
Financial Review
Basis of Preparation
To provide comparability across reporting periods, the results within this
Financial Review are presented on an "adjusted basis", adjusting for the £0.2
million charge recorded for share-based payments in 2024, with no such charge
arising in 2023. It should also be noted that certain comparative information
has been re-stated as a result of the prior year adjustment set out in Note 1
below.
A reconciliation between adjusted and reported results is provided at the end
of this Financial Review.
Revenue
In 2024 Anexo reported revenues of £141.9 million, a reduction of 1.0% over
the prior year (2023: £143.3 million). As previously stated, 2023 was
impacted by the agreement reached in the Emissions Claim, the underlying
business on a normalised basis grew in 2024 compared with 2023.
Revenues for Credit Hire increased from £57.3 million in 2023 to £70.4
million in 2024 reflecting the impact of a diversification of the credit hire
book. During 2024, Direct Accident Management Limited, the Credit Hire
division, provided vehicles to 11,857 individuals (2023: 11,724).
Within Legal Services, revenues reduced from £86.0 million in 2023 to £71.5
million, reflecting the fact that 2023 included revenues from the agreement
reached in the Emissions Claim; the underlying business on a like for like
basis grew in 2024. This improvement is even more pleasing as the business
continued to face disruption in the courts system post-COVID with delays and
adjournments to court dates and hearings, which have impacted turnover and
hence profitability.
With investment in all areas of Bond Turner continuing into 2024, and the
continued maturity of the housing disrepair and large loss departments, the
Legal Services division reported revenue growth when excluding the impact of
the Emissions Claim from the 2023 result, details of which are subject to
confidentiality restrictions.
Gross Profits
Gross profits for the Group are reported at £103.4 million (at a margin of
72.9%) in 2024, reducing from £115.0 million in 2023 (at a margin of 80.2%).
The result for 2023 included the impact within Bond Turner of the agreement of
the Emissions Claim. It should be noted that staffing costs within Bond Turner
are reported within Administrative Expenses.
The Credit Hire Division reported gross profits of £36.3 million (at a margin
of 51.6%), increasing from £30.3 million (at a margin of 53.8%), this
movement being revenue related.
Operating Costs
Administrative expenses increased slightly year-on-year, reaching £69.0
million in 2024 (2023: £65.7 million). Staffing costs for Bond Turner
increased to £30.5 million (2023: £25.7 million), an increase of £4.8
million (15.7%); this increase was countered by savings in marketing and other
general overhead costs. Following the establishment of our housing disrepair
team in late 2020, some £3.5 million was invested in marketing costs in 2024
(2023: £3.8 million), all of which has been expensed as incurred.
Depreciation, amortisation and profit and loss on disposal totalled £8.8
million in 2024, a slight reduction from that seen in 2023 (£9.5 million).
Finance Costs
Finance costs reached £10.7 million in 2024, reducing from £16.7 million in
2023. 2024 included certain costs associated with the refinancing of each of
the major funding facilities of the Group (£0.7 million), the result of which
was to extend all facilities into 2027, improve headroom and reduce the
overall cost of capital to the Group. Finance costs in 2023 included payment
due to funders in respect of Emissions Claims.
Profit Before Tax
Profit before tax reached £14.8 million in 2024, falling from the level
reported in 2023 (£23.0 million). 2023 including the impact arising from the
agreement in the Emissions Claim.
Where we have provided adjusted figures, they are after the add-back of the
share-based payment charge in 2024; a reconciliation of the adjusted and
reported results is included below. Adjusted profit before tax reached £15.0
million in 2024, falling from the level reported in 2023 (£23.0 million)
which included the impact arising from the agreement in the Emissions Claim.
EPS and Dividend
Statutory basic EPS is 9.9 pence (2023: 12.8 pence). Statutory diluted EPS is
9.9 pence (2023: 12.8 pence). The adjusted EPS is 10.0 pence (2023: 12.8
pence). The adjusted diluted EPS is 10.0 pence (2023: 12.8 pence). The
adjusted figures exclude the effect of share-based payments. The detailed
calculation in support of the EPS data provided above is included below.
The Board is not recommending the payment of a final dividend (2023: total
dividend 1.5p per share, £1.8 million).
Group Statement of Financial Position
The Group's net assets position is dominated by the balances held within trade
and other receivables. These balances include credit hire and credit repair
receivables, together with disbursements paid in advance which support the
portfolio of ongoing claims. Following improvements in the level of cash
collected in the year, countered by increases in claim volumes and the value
of individual claims generated, the carrying claim value of trade receivables
and assets on the credit hire ledger totalled £173.6 million in 2024,
increasing from £159.5 million in 2023. In accordance with our income
recognition policies, a provision is made to reduce the carrying value to
amounts that are expected to be settled giving a portfolio of claims for
settlement into 2025 and beyond for which the associated acceptance costs have
been written off as incurred.
In addition, the Group has a total of £76.3 million reported as accrued
income (2023: £70.1 million) which represents the value attributed to those
ongoing hires and claims at the year end, alongside growth in the number of
ongoing claims within the housing disrepair and large loss teams where
investment has increased year on year as have the ongoing number of claims,
noting value is only attributed to those claims where we have secured an
admission of liability.
The diversification of the credit hire book in 2024 reduced the reliance on
motorcycle claims and hence the requirement for additional capital expenditure
that would have ordinarily been required; total additions of property, plant,
equipment and right of use assets reached £10.6 million in 2024 (2023: £11.6
million). The fleet continues to be largely externally financed.
Trade and other payables, including tax and social security increased to
£16.1 million at 31 December 2024 compared to £14.5 million at 31 December
2023. The provision for costs that may be payable under an indemnity contract
at 31 December 2024 was £3.6 million (2023: £3.2 million).
Net assets at 31 December 2024 reached £167.5 million (2023: £157.4
million).
Net Debt, Cash and Financing
Following a year of investment, net debt increased to £81.6 million at 31
December 2024 (31 December 2023: £67.9 million) and comprised cash balances
at 31 December 2024 of £11.3 million (2023: £8.4 million), plus borrowings
which increased during the year, the movement being in line with management's
expectations and following the refinance of each of the Group's primary
funding facilities in the year.
The total debt balance reached £92.9 million in 2024, increasing from £76.4
million at the end of 2023; these balances include lease liabilities including
those recognised in line with IFRS16 (2024: £14.9 million; 2023: £14.3
million). The Group has a number of funding relationships and facilities to
support its working capital and investment requirements, including an invoice
discounting facility within Direct Accident Management Limited (secured on the
credit hire and repair receivables) and a loan from Callodine Commercial
Finance LLC, which is non amortising and committed for a three year period
through to August 2027, lease facilities to support the acquisition of the
fleet and a revolving credit facility within Bond Turner Limited which is due
for renewal in October 2027. Further details are included below.
Having considered the Group's current trading performance, cash flows and
headroom within our current debt facilities, maturity of those facilities, the
Directors have concluded that it is appropriate to prepare the Group and the
Company's financial statements on a going concern basis. Further details are
included below.
Cash Flow
Notwithstanding the continued delays in the court system, we have continued to
invest in talent and grow our settlement capacity throughout Bond Turner,
across each of the Credit Hire, housing disrepair and more recently the large
loss teams. As we have previously reported, increasing numbers of senior fee
earners drives increased settlement and cash collections as it is mainly these
staff that negotiate and settle claims on behalf of the Group. The number of
senior fee earners increased from 283 to 303 during 2024 (an increase of 7%)
with strategic recruitment of high-quality staff a continued focus. More
recently, this investment has sought to continue to diversify the activities
of the Group and headcount with the housing disrepair team, where the number
of staff increased in number from 69 at 31 December 2023 to 84 at 31 December
2024 (an increase of 21.7%); and the large loss team, where the number of
staff increased in number from 77 at 31 December 2023 to 100 at 31 December
2024 (an increase of 29.9%).
Cash collections for the Group (excluding settlements for our clients and the
contribution from the agreement of the Emissions Claim in 2023), a key metric
for the Group, increased from £163.5 million in 2023 to £169.7 million in
2024, an increase of 3.8%.
These improvements, countered by an investment in a record number of new
claims, resulted in a net cash outflow from operating activities of £4.9
million in 2024 (2023: net cash inflow: £17.4 million), the primary
difference being the level of funds invested in trade and other receivables
which increased to an investment of £21.3 million in 2024 (2023: cash
outflow: £12.1 million) reflecting the growth in claim numbers in the year as
well as the increase in average value as we have diversified the book to the
most valuable claims for the Group where there is plentiful need and demand.
It should also be noted that 2023 was impacted by the agreement reached in the
Emissions Claim.
The refinancing of the three primary facilities of the Group, providing
investment capital and additional headroom to the Group resulted in net debt
reaching £81.6 million at 31 December 2024 (31 December 2023: £67.9
million).
Reconciliation of Adjusted and Reported IFRS Results
In establishing the adjusted operating profit, the adjusted results for 2024
include a charge of £0.2 million related to share-based payments awards made
in the current year which will vest in future periods.
A reconciliation between adjusted and reported results is provided below:
Year to 31 December 2024
Adjusted Share-based payment £'000s Reported
£'000s £'000s
Revenue 141,878 - 141,878
Gross profit 103,437 - 103,437
Other operating costs (net) (77,792) (176) (77,968)
Operating profit 25,645 (176) 25,469
Finance costs (net) (10,676) - (10,676)
Profit before tax 14,969 (176) 14,793
Profit after tax 11,875 (176) 11,699
Year to 31 December 2023 (Restated)
Adjusted Share-based payment £'000s Reported
£'000s £'000s
Revenue 143,308 - 143,308
Gross profit 114,962 - 114,962
Other operating costs (net) (75,189) - (75,189)
Operating profit 39,773 - 39,773
Finance costs (net) (16,733) - (16,733)
Profit before tax 23,040 - 23,040
Profit after tax 15,121 - 15,121
Consolidated Statement of Total Comprehensive Income
for year ended 31 December 2024
2024 Restated
2023
Note £'000s £'000s
Revenue 141,878 143,308
Insurance service cost (1,569) (1,098)
Other cost of sales (36,872) (27,248)
Total cost of sales (38,441) (28,346)
Gross profit 103,437 114,962
Depreciation & profit / loss on disposal of property, plant and equipment 4 (8,727) (9,439)
Amortisation 4 (57) (69)
Share based payment charge (176) -
Increase in provision for impairment of trade receivables (311) (1,079)
Other administrative expenses (68,697) (64,602)
Total administrative expenses (77,968) (75,189)
Operating profit 4 25,469 39,773
Finance costs (10,676) (16,733)
Profit before tax 14,793 23,040
Taxation (3,094) (7,919)
Profit and total comprehensive income for the year attributable to the owners 11,699 15,121
of the company
Earnings per share
Basic earnings per share (pence) 5 9.9 12.8
Diluted earnings per share (pence) 5 9.9 12.8
The above results were derived from continuing operations.
Consolidated Statement of Financial Position
as at 31 December 2024
2024 Restated
2023
Assets Note £'000s £'000s
Non-current assets
Property, plant and equipment 6 1,378 1,813
Right of use assets 6 14,152 13,886
Intangible assets 312 34
Deferred tax assets 112 112
15,954 15,845
Current assets
Trade and other receivables 7 255,670 234,409
Cash and cash equivalents 11,274 8,443
266,944 242,852
Total assets 282,898 258,697
Equity and liabilities
Equity
Share capital 59 59
Share premium 16,161 16,161
Share based payments reserve 176 -
Retained earnings 151,085 141,156
Equity attributable to the owners of the Company 167,481 157,376
Non-current liabilities
Other interest-bearing loans and borrowings 8 32,089 15,000
Lease liabilities 8 7,552 7,968
Insurance contract liability 9 2,684 2,456
Deferred tax liabilities - 32
42,325 25,456
Current liabilities
Other interest-bearing loans and borrowings 8 45,894 47,070
Lease liabilities 8 7,382 6,347
Insurance contract liability 9 893 766
Trade and other payables 16,065 14,457
Corporation tax liability 2,858 7,225
73,092 75,865
Total liabilities 115,417 101,321
Total equity and liabilities 282,898 258,697
Consolidated Statement of Changes in Equity
for the year ended 31 December 2024
Share Capital Share Based Payments Reserve Retained Earnings Total
Share Premium
£'000s £'000s £'000s £'000s £'000s
At 1 January 2023 59 16,161 - 130,127 146,347
Prior period adjustment (note 1) - - - (2,323) (2,323)
At 1 January 2023 (restated) 59 16,161 - 127,804 144,024
Profit for the year and total comprehensive income - - - 15,121 15,121
Dividends - - - (1,769) (1,769)
At 31 December 2023 (restated) 59 16,161 - 141,156 157,376
Profit for the year and total comprehensive income - - - 11,699 11,699
Share based payment charge - - 176 - 176
Dividends - - - (1,770) (1,770)
At 31 December 2024 59 16,161 176 151,085 167,481
Consolidated Statement of Cash Flows
for the year ended 31 December 2024
2024
2023
Note £'000s £'000s
Cash flows from operating activities
Profit for the year 11,699 15,121
Adjustments for:
Depreciation and profit / loss on disposal 4,6 8,727 9,439
Amortisation 57 69
Finance cost 10,676 16,733
Share based payment charge 176 -
Taxation 3,094 7,919
34,429 49,281
Working capital adjustments
Increase in trade and other receivables (21,260) (12,138)
Increase in trade and other payables 1,963 1,586
Cash generated from operations 15,132 38,729
Finance costs paid (12,571) (16,733)
Tax paid (7,493) (4,605)
Net cash (used in) / from operating activities (4,932) 17,391
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 2,038 757
Acquisition of property, plant and equipment (586) (1,277)
Investment in intangible fixed assets (335) (32)
Net cash from / (used in) investing activities 1,117 (552)
Cash flows from financing activities
Proceeds from new loans 60,937 20,409
Repayment of borrowings (43,128) (26,932)
Capital element of lease payments (9,393) (9,153)
Dividends paid (1,770) (1,769)
Net cash generated from / (used in) financing activities 6,646 (17,445)
Net increase / (decrease) in cash and cash equivalents 2,831 (606)
Cash and cash equivalents at 1 January 8,443 9,049
Cash and cash equivalents at 31 December 11,274 8,443
Notes to the Financial Information
for the year ended 31 December 2024
1. Basis of Preparation and Principal Activities
The financial information set out herein does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006.
The financial information for the year ended 31 December 2023 has been
extracted from the Company's audited financial statements which were approved
by the Board of Directors on 30 April 2024 and which, if adopted, will be
delivered to the Registrar of Companies for England and Wales.
Statutory accounts for the years ended 31 December 2024 and 31 December 2023
have been reported on by the auditor. Their reports for both years (i) were
unqualified; (ii) did not include a reference to any matters which the auditor
drew attention by way of emphasis without qualifying their audit report and
(iii) did not contain a statement under section 498(2) or 498 (3) of the
Companies Act 2006.
The information in this preliminary statement has been extracted from the
audited financial statements for the year ended 31 December 2024 and as such
does not contain all the information required to be disclosed in the financial
statements prepared in accordance with UK adopted International Accounting
Standards ('IAS').
The Company is a public limited company incorporated and domiciled in England
and whose shares are quoted on AIM, a market operated by The London Stock
Exchange.
The address of its registered office is 5th Floor, The Plaza, 100 Old Hall
Street, Liverpool, L3 9QJ.
Restatement of comparatives
In preparing the financial statements, the directors have reassessed the
application of the Group's accounting policies relating to the measurement and
presentation of revenue as follows.
The entity makes an adjustment for the estimation of recovery of revenue and
the asset on the credit hire ledger associated with credit hire services based
on historic recovery performance. In the prior period, the write-down of these
assets over four years old was recorded as a credit loss provision and charged
to administrative expenses rather than a reduction in revenue. Correcting this
error and adjusting the charge to be a reduction in revenue, rather than
charge to administrative expenses for the year ended 31 December 2023, has
resulted in a reduction in both revenues and administrative costs of £3.5m.
As such, there is no impact on the reported operating profit, net assets or
cash flows as a result of this restatement.
The Group arranges for the provision of after the event insurance contracts to
its customers for which it charges a fee for administrative services.
Previously, the Group reported revenues from the provision of insurance
contracts as a principal, however as the Group is not considered to be the
principal in the insurance contract, an adjustment of the basis of accounting
to that of agent has resulted in a reduction in revenue and cost of sales for
the year ended 31 December 2023 of £2.5 million. The correction of this error
had no impact on the reported operating profit, net assets or cash flows as a
result of this restatement.
Following a review of the Group's contractual arrangements it was identified
that an indemnity provided by the Group meets the definition of an insurance
contract under IFRS 17. As such, the Group's accounting policies have been
restated in the period to apply IFRS 17 with retrospective application in line
with the requirements of IAS 8. Previously, the Group accrued for known costs;
in accordance with IAS 37, the Group now records an insurance contract
liability for future expected cash outflows. The correction of this error has
resulted in a decrease in opening reserves at 1 January 2023 of c £2.3
million to reflect an increase in the provision for associated liabilities.
The adjustments identified above have been corrected by restating each of the
financial statement line items for the comparative period as follows:
Impact on Consolidated Statement of Comprehensive Income
As previously reported Adjustment to hire ledger assets Adjustment to insurance administration fees As
restated
Extract - Year ended 31 December 2023 £'000s £'000s £'000s £'000s
Revenue 149,334 (3,489) (2,537) 143,308
Insurance service cost - - (1,098) (1,098)
Cost of Sales (30,883) - 3,635 (27,248)
Administrative Costs (78,678) 3,489 - (75,189)
Profit before tax 23,040 - -- 23,040
Impact on Consolidated Statement of Financial Position at beginning of
earliest comparative period
As previously reported Provision for future insurance liabilities As
restated
Extract - As at 1 January 2023 £'000s £'000s £'000s
Current liabilities
Trade and other payables 13,225 (354) 12,871
Insurance contract liability
-
766
766
Corporation tax liability
4,456
(545)
3,911
Non-current liabilities
Insurance contract liability - 2,456 2,456
Total liabilities 99,886 2,323 102,209
Equity
Retained earnings 130,127 (2,323) 127,804
Impact on Consolidated Statement of Financial Position at end of earliest
comparative period
As previously reported Provision for future insurance liabilities As
restated
Extract - As at 31 December 2023 £'000s £'000s £'000s
Current liabilities
Trade and other payables 14,811 (354) 14,457
Insurance contract liability
-
766
766
Corporation tax liability
7,770
(545)
7,225
Non-current liabilities
Insurance contract liability - 2,456 2,456
Total liabilities 98,998 2,323 101,321
Equity
Retained earnings 143,479 (2,323) 141,156
There has been no impact on the Consolidated Statement of Cash Flows.
Going Concern
With activity levels being maintained in line with forecast in the early part
of FY25 and focus upon growth in revenue and performance without the need for
additional debt funding the Group is currently performing in line with
management expectations.
During 2024 the Group secured funding from a number of funders, the most
significant being Secure Trust Bank Plc, Lloyds Bank Plc and Callodine
Commercial Finance LLC. At the end of 2024, the Group's facilities included a
revolving credit facility of £16.0 million with Lloyds Bank Plc (due for
repayment in October 2027), an invoice discounting facility of £40.0 million
with Secure Trust Bank Plc (due for renewal in August 2027) and a loan
facility of £30.0 million from Callodine Commercial Finance LLC (due for
renewal in August 2027).
Each of the Group's banking arrangements are subject to monitoring through
financial performance measures or covenants. The performance measures
incorporated within the Secure Trust facility are there for monitoring
purposes and act as a guide for the Group to engage on a regular basis around
general financial performance and headroom, both from a cash and operational
perspective. All covenants within each of the three principal facilities were
met during 2024 and to date in 2025. Further details are set out below.
The continued management of claims activity against claim settlements,
alongside the additional headroom created from the recent refinancings set out
above, means that the Board remains confident that the Group is in a strong
financial position and is well placed to trade into 2025.
The Directors have prepared trading and cash flow forecasts for the period
ended 31 December 2027, against which the impact of various sensitivities have
been considered covering the level of cash receipts (we have sensitised cash
collections by 5% and 10% with and without management intervention which
included a reduction in the volume of work taken on). We note the forecasts do
not include any recovery from the ongoing emissions claims as there is no
certainty that a settlement in favour of Bond Turner's clients will be reached
in any of the emissions class actions currently ongoing, nor is there any
guarantee that such a settlement would include financial compensation. The
timeline for progress towards conclusion of the litigation is also unclear and
no assumptions as to revenue have been included in the Board's internal
forecasts.
Working capital management is considered to be the most critical aspect of the
Group's assessment.
The Group has the ability to improve cash flow and headroom through a number
of factors that are within the direct control of management, examples of which
could be by limiting the level of new business within Direct Accident
Management Limited or by managing the level of investment in people within
Bond Turner. These factors allow management to balance any potential shortfall
in cash receipts and headroom against forecast levels, something the Directors
have been doing for many years, with the result that the Group maintains
adequate headroom within its facilities. It is in that context that the
Directors have a reasonable expectation that the Group will have adequate cash
headroom.
The Group continues to trade profitably and early indications for growth in
the current year are positive. Accordingly, the Directors continue to adopt
the going concern basis in preparing the consolidated and the company
financial statements.
2. Critical Accounting Judgements and Key Sources of Estimation
Uncertainty
In the application of the Group's accounting policies, management is required
to make judgements, estimates and assumptions about the carrying value of
assets and liabilities that are not readily apparent from other sources. The
estimates and underlying assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of revision and prior periods if the revision affects both current and prior
periods.
The key sources of estimation uncertainty that have a significant effect on
the amounts recognised in the financial statements are described below.
Credit Hire
Due to the nature of the business, there are high levels of assets on the
credit hire ledger and accrued income where the balances reported at the
year-end are at risk of change.
Revenue is accrued on a daily basis, after adjustment on a portfolio basis for
an estimation of the settlement of credit hire charges based on historical
settlement rates. While historical settlement rates form the basis, these are
then considered in light of expected settlement activity. This policy also
assumes that claims which have settled historically are representative of the
assets on the credit hire ledger and accrued income in the balance sheet. This
assumption represents a significant judgement. The overall settlement
adjustment is made to ensure that revenue is only recognised to the extent
that it is highly probable that a significant reversal of revenue will not
occur upon settlement of a customer's claim. Revenue recognised is updated at
each reporting date and on settlement once the amount of the claim recovered
is known.
Based on historical settlement data, the directors consider the risk of credit
loss due to default by an insurer in respect of an agreed amount to be
immaterial.
Due the factors described above, determining the settlement adjustment to
revenue, accrued income and assets on the credit hire ledger involves a high
degree of estimation uncertainty which could result in a range of values of
adjustment which vary by multiples of materiality. The settlement percentages
are sensitive to these estimates. If the settlement percentages applied in
calculating revenue were reduced by 1% it would reduce credit hire revenue and
assets on the credit hire ledger (£70.4 million and £139.9 million
respectively) by £3.0 million. (2023: by £2.6 million, credit hire revenue
being £57.3 million and assets on the credit hire ledger £128.6 million).
The Board consider that these estimates are subject to variation which may
vary from between 1% and 6% (at 6% credit hire revenue and assets on the
credit hire ledger would reduce by £17.7 million (2023: £15.8 million)). A
6% reduction is an approximation that is consistent with the period over the
pandemic where settlements were lower due to courts being closed. This is
considered to be a cautious downside based on more recent settlement
experience and operational changes to the business to facilitate improvements
in settlement rates and period.
Legal Services
The Group carries an element of accrued income for legal costs, the valuation
of which reflects the estimated level of recovery on successful settlement by
reference to the lowest level of fees payable by reference to the stage of
completion of those credit hire cases. Where we have not had an admission of
liability no value is attributed to those case files.
Accrued income is also recognised in respect of serious injury and housing
disrepair claims, only where we have an admission of liability and by
reference to the work undertaken in pursuing a settlement for our clients,
taking into account the risk associated with the individual claim and expected
future value of fees from those claims on a claim-by-claim basis.
For both credit hire and legal services, the historical settlement rates used
in determining the carrying value may differ from the rates at which claims
ultimately settle. This represents an area of key estimation uncertainty for
the Group.
Embedded Derivatives
An embedded derivative is a component of a hybrid contract that also includes
a non-derivative host - with the effect that some of the cash flows of the
combined instrument vary in a way similar to a stand-alone derivative.
Derivatives embedded in hybrid contracts with hosts that are not financial
assets within the scope of IFRS 9 (e.g. financial liabilities) are treated as
separate derivatives when they meet the definition of a derivative, their
risks and characteristics are not closely related to those of the host
contracts and the host contracts are not measured at fair value through profit
or loss.
Derivatives are recognised initially at fair value at the date a derivative
contract is entered into and are subsequently remeasured to their fair value
at each reporting date. The resulting gain or loss is recognised in profit or
loss immediately. Certain loan instruments include embedded derivatives
relating to the future settlement of emissions claims. The directors estimate
the fair value of the derivatives at 31 December 2024 to be immaterial due to
the significant uncertainty in the proceeds from a successful outcome to those
claims.
Insurance Contract Liability
The Group enters an indemnity which transfers insurance risk in respect of
some after the event insurance contracts back to the Group. In certain
circumstances, this indemnity, may require payment to a third party. The Group
has used the residual approach to estimate the stand-alone selling price for
the indemnity service. The residual approach estimates the stand-alone selling
price as the remainder of the transaction price after deducting the sum of the
stand-alone selling prices of the other services in the contract. In this
context, the residual value of the indemnity provided and therefore the
premium received (insurance revenue) is assumed to be immaterial. As a
consequence, no contractual service margin is assumed and the contract is
onerous from an IFRS 17 perspective.
The Group holds a liability for remaining coverage in respect of the loss
component for this contract which represents the estimated cost of current
in-force cases which are expected to settle unfavourably and thus result in
payment to a third party. The provision is based on a best estimate view of
the fulfilment cash flows with no risk adjustment as the economic burden of
the non-financial risk borne by the Group is considered to be immaterial. The
best estimate of the fulfilment cash flows is estimated using historic
experience of losses as this is assumed to be representative of the cases that
will be settled in the future. The rate of loss is c1%, (ie 1% of claims
result in a cash outflow);a 10% increase in that rate of expected losses would
increase the provision and the insurance service cost by approximately
£553,000.
The liability for remaining coverage is not discounted as the effect of
discounting would be immaterial to the Group's results. The insurance
liability also includes provision for known claims at the balance sheet date.
The related expense to this insurance contract liability (i.e. the insurance
service expense) has been presented on the face of the Statement of Total
Comprehensive Income as part of cost of sales.
3. Segmental Reporting
The Group's reportable segments are as follows:
· the provision of credit hire vehicles to individuals who have
had a non-fault accident, and
· associated legal services in the support of the individual
provided with a vehicle by the Group and other legal service activities, which
includes the large loss department and any balance or trading associated with
emissions.
Management monitors the operating results of business segments separately for
the purpose of making decisions about resources to be allocated and of
assessing performance.
Year ended 31 December 2024
Credit Hire Other Legal Services * Consolidated
Group & Central Costs
Housing Disrepair *
£'000s £'000s £'000s £'000s £'000s
Revenues
Third party 70,393 57,308 14,177 - 141,878
Total revenues 70,393 57,308 14,177 - 141,878
Staff costs 10,892 27,214 4,342 1,399 43,847
Profit before taxation 9,903 3,996 3,620 (2,726) 14,793
Net cash (used in) / generated from operations 875 (2,119) 933 (2,726) (3,037)
Depreciation, amortisation and gain on disposal of property, plant and 7,196 1,590 - - 8,786
equipment
Non current assets 10,782 5,172 - - 15,954
Segment assets 188,930 78,141 15,091 736 282,898
Capital expenditure 1,284 187 - - 1,471
Segment liabilities 58,050 52,105 - 5,262 115,417
Year ended 31 December 2023 - Restated
Credit Hire Other Legal Services * Group & Central Costs Consolidated
Housing Disrepair *
£'000s £'000s £'000s £'000s £'000s
Revenues
Third party 57,289 73,338 12,681 - 143,308
Total revenues 57,289 73,338 12,681 - 143,308
Staff costs 12,670 24,335 2,468 1,051 40,524
Profit before taxation 6,580 13,048 6,416 (3,004) 23,040
Net cash from operations 11,434 5,642 3,067 (2,752) 17,391
Depreciation, amortisation and gain on disposal of property, plant and 8,076 1,432 - - 9,508
equipment
Non current assets 10,595 5,250 - - 15,845
Segment assets 177,346 68,131 12,454 766 258,697
Capital expenditure 872 405 - - 1,277
Segment liabilities 58,223 40,584 - 2,514 101,321
* Other Legal Services, housing disrepair and large loss, are subsets of Legal
Services. We have however, distinguished the performance of housing disrepair
from within Legal Services as this department of the Legal Services segment is
an area where the Group is investing heavily, is a focus for the Group at
present and into the future and allows readers of the financial statements to
understand the contribution housing disrepair has to the overall Group
performance. The housing disrepair division continues to grow and as the
results become more significant to the overall Group performance this division
may well become a reportable segment, in accordance with IFRS 8, in its own
right, this could be reported in the 2025 financial statements.
4. Operating Profit
Operating profit is arrived at after charging:
2024 2023
£'000s £'000s
Depreciation on owned assets 699 810
Depreciation on right of use assets 7,978 7,915
Amortisation 57 69
Increase in provision for impairment of trade receivables 1,327 1,079
Share based payment charge 176 -
Short term lease expenses 1,102 854
Loss on disposal of property, plant and equipment 50 714
There were no non-recurring costs in the year ended 31 December 2024 or 2023.
5. Earnings Per Share
2024 2023
Number of shares: No. No.
Weighted number of ordinary shares outstanding 117,990,294 117,990,294
Effect of dilutive options - -
Weighted number of ordinary shares outstanding - diluted 117,990,294 117,990,294
Share options awarded in 2024 are not dilutive as they would not have been
exercisable if the performance period had ended on 31 December 2024.
Earnings: £'000s £'000s
Profit basic and diluted 11,699 15,121
Profit adjusted and diluted 11,875 15,121
Earnings per share: Pence Pence
Basic earnings per share 9.9 12.8
Adjusted earnings per share 10.0 12.8
Diluted earnings per share 9.9 12.8
Adjusted diluted earnings per share 10.0 12.8
The Directors believe that the adjusted profit after tax and the adjusted
earnings per share measures provide additional useful information for
shareholders on the underlying performance of the business. The results for
2024 have been adjusted for the £0.2 million charge recorded for share-based
payments in 2024, with no such charge arising in 2023. These measures are
consistent with how underlying business performance is measured internally.
The adjusted profit after tax measure is not a recognised profit measure under
IFRS and may not be directly comparable with adjusted profit measures used by
other companies. A reconciliation between adjusted and reported results is
provided above.
6. Property, Plant and Equipment
Fixtures,
Right of Property fittings & Office
use assets improvements Equipment equipment Total
£'000s £'000s £'000s £'000s £'000s
Cost
At 1 January 2023 27,986 637 3,444 918 32,985
Additions 10,920 - 401 273 11,594
Disposals (12,148) (409) (160) (408) (13,125)
At 31 December 2023 26,758 228 3,685 783 31,454
Additions 10,332 53 187 24 10,596
Disposals (11,731) - (751) - (12,482)
At 31 December 2024 25,359 281 3,121 807 29,568
Depreciation
At 1 January 2023 15,329 357 2,014 556 18,256
Charge for year 7,915 36 634 140 8,725
Eliminated on disposal (10,372) (333) (121) (400) (11,226)
At 31 December 2023 12,872 60 2,527 296 15,755
Charge for the year 7,978 22 529 148 8,677
Eliminated on disposal (9,643) - (751) - (10,394)
At 31 December 2024 11,207 82 2,305 444 14,038
Carrying amount
At 31 December 2024 14,152 199 816 363 15,530
At 31 December 2023 13,886 168 1,158 487 15,699
Motor Vehicles are all financed and as such are included in the right of use
assets column above.
Property, plant and equipment includes right-of-use assets with carrying
amounts as follows:
Land and Motor Total
Buildings Vehicles
£000 £000 £000
Right-of-use assets
At 1 January 2023 3,330 9,327 12,657
Depreciation charge for the year (1,095) (6,820) (7,915)
Additions to right-of use assets - 10,920 10,920
Disposals of right-of-use assets - (1,776) (1,776)
At 31 December 2023 2,235 11,651 13,886
Depreciation charge for the year (1,377) (6,601) (7,978)
Additions to right-of-use assets 2,177 8,155 10,332
Disposals of right-of-use assets - (2,088) (2,088)
At 31 December 2024 3,035 11,117 14,152
7. Trade and Other Receivables
2024 2023
£'000s £'000s
Assets on the credit hire ledger before expected credit loss 139,852 128,592
Trade receivables 35,982 33,203
Provision for impairment of trade receivables and assets on the credit hire (2,160) (2,258)
ledger
Net trade receivables and assets on the credit hire ledger 173,674 159,537
Accrued income 76,279 70,091
Prepayments 2,177 1,407
Tax and social security - 449
Other receivables 3,540 2,925
255,670 234,409
When measuring revenue, an adjustment is made to the value of a claim to
reflect the expected settlement which is supported by historical data. Revenue
recognised is updated at each reporting date and on settlement once the amount
of the claim recovered is known or the claim has been written off.
Whilst credit risk is considered to be low, the market risks inherent in the
business pertaining to the nature of legal and court cases and ageing thereof
is a significant factor in the initial measurement of assets on the credit
hire ledger. A provision for impairment is recorded in respect of
disbursements when there is no reasonable expectation of recovery.
Accrued income, which is stated net of allowances for credit loss, includes
the value of hires that have not yet been invoiced, legal fees in respect of
hires that have not yet reached a conclusion and fees in respect of other
client cases where liability has been admitted and collection of revenue is
considered probable. The increase in the year reflects the increase in claim
volumes accepted in respect of credit hire, housing disrepair and large loss.
Average gross debtor days calculated on a count back basis were 447 at 31
December 2024 and 475 at 31 December 2023.
Age of net trade receivables and assets on the credit hire ledger
2024 2023
£'000s £'000s
Within 1 year 96,542 84,652
1 to 2 years 44,084 42,406
2 to 3 years 21,899 19,258
3 to 4 years 8,806 9,976
Over 4 years 2,343 3,245
173,674 159,537
Average age (days) 447 475
The provision for impairment of trade receivables is the difference between
the carrying value and the present value of the expected proceeds taking into
account the credit risk associated with non-collection. The Directors consider
that the fair value of trade and other receivables is not materially different
from the carrying value.
Movement in provision for impairment of trade receivables
2024 2023
£'000s £'000s
Opening balance 2,258 1,389
Increase in provision 1,327 1,079
Utilised in the year (1,425) (210)
Closing Balance 2,160 2,258
8. Borrowings
2024
2023
£'000s £'000s
Non-current loans and borrowings
Lease liabilities 7,552 7,968
Revolving credit facility 13,229 -
Other borrowings 18,860 15,000
39,641 22,968
Current loans and borrowings
Lease liabilities 7,382 6,347
Invoice discounting facility 33,077 27,858
Revolving credit facility - 10,000
Other borrowings 12,817 9,212
53,276 53,417
Total borrowings 92,917 76,385
Direct Accident Management Limited uses an invoice discounting facility which
is secured on the trade receivables of that company. During 2024 Secure Trust
has extended and increased the funding period from 12 to 18 months, adding
£5.0 million to availability, within the £40.0 million facility limit
previously agreed, the facility is committed through to July 2027. Security
held in relation to the facility includes a debenture over all assets of
Direct Accident Management Limited dated 11 October 2016, extended to cover
the assets of Anexo Group Plc and Edge Vehicles Rentals Group Limited from 20
June 2018 and 28 June 2018 respectively, as well as a cross corporate
guarantee with Professional and Legal Services Limited dated 21 February 2018.
At the end of December 2024, Direct Accident Management Limited has
availability within the invoice discounting facility of £3.9 million (2023:
£2.3 million).
Direct Accident Management Limited is also party to a number of leases which
are secured over the respective assets funded.
During the year, Bond Turner Limited replaced the revolving credit facility
provided by HSBC Bank Plc with a £16.0 million revolving credit facility
provided by Lloyds Bank Plc. The revolving credit facility is secured by way
of a fixed charge dated 3 October 2024, over all present and future property,
assets and rights (including uncalled capital) of Bond Turner Limited, with a
cross company guarantee provided by Anexo Group Plc. The loan is structured as
a revolving credit facility which is committed for a three-year period, until
2 October 2027, with no associated repayments due before that date. Interest
is charged at 2.5% over the official Base Rate of the Bank of England. £13.5
million of the Lloyds facility was drawn as at 31 December 2024, £10.0
million of the HSBC facility was drawn down as at 31 December 2023.
In November 2021 a £3.0 million loan was sourced from certain of the
principal shareholders and directors of the Group to support the investment in
2023 of the Mercedes Benz emissions claim. The terms of the loan are that
interest accrues at the rate of 10% per annum, with maturity two years from
the date of receipt of funding. In addition to the interest charges the loan
attracts a share of the proceeds to be determined by reference to the level of
fees generated for the Group. Having reached an agreement in the Emissions
Claim, the loan, interest and share of proceeds was repaid in the period to 31
December 2023, a final amount will be payable upon successful conclusion of
the Mercedes Benz emissions claim. This represents an embedded derivative
liability, the fair value of which is £Nil due to the significant uncertainty
inherent in the ongoing claim.
In March 2022 the Group secured a loan of £7.5 million from Blazehill Capital
Finance Limited, with an additional £7.5 million drawn in September 2022, the
total balance drawn at 31 December 2023 was £15.0 million. In August 2024,
the Blazehill loan was repaid in full from funds drawn from a £30.0 million
facility secured from Callodine Commercial Finance LLC. The Callodine facility
is non amortising and committed for a three-year period to August 2027. The
facility is secured by way of a fixed charge dated 14 August 2024, over all
present and future property, assets and rights (including uncalled capital) of
Direct Accident Management Limited, extended to cover Anexo Group Plc on 14
August 2024. At 31 December 2024, £20.0 million of the Callodine facility had
been drawn down.
In June 2023 a loan of £2.8 million was sourced from a specialist funder and
certain of the principal shareholders and directors of the Group to support
the ongoing investment in 2023 in emissions opportunities, a further £0.7
million of funding was provided in January 2024. The terms of the loan are
that interest accrues at the rate of 10% per annum, with maturity two years
from the date of receipt of funding. In addition to the interest charges the
loan attracts a share of the proceeds generated for the Group. The total
balance outstanding at 31 December 2024 was £3.5 million (2023: £2.8
million). The fair value of the embedded derivative liability relating to the
proceeds from the future settlement of emissions claims is immaterial due to
the significant uncertainty inherent in ongoing claims.
In August 2023, the Group secured a loan of £4.6 million from Premium Credit,
the loan is unsecured and amortising over a 12-month period. The loan was
fully repaid during 2024, at 31 December 2023 the amount outstanding was £2.8
million.
In July 2024, the Group secured a loan of £7.8 million from Premium Credit,
the loan is unsecured and amortising over a 12-month period. At 31 December
2024 the amount outstanding was £4.8 million.
The Group's banking arrangements provided by Secure Trust Bank Plc, Lloyds
Bank Plc and Callodine Commercial Finance LLC are subject to monitoring
through financial performance measures or covenants.
The Secure Trust facility include the following covenants, all of which are
tested monthly:
· A number of individual measures focussed on the relationship between
cash collections and funding levels
· Settlement rates
· Hire periods
· Disbursement spending
· Vehicle numbers and utilisation
· Minimum Group liquidity to exceed £5.0 million at any time
· Group EBITDA to be not less than 80% of forecast
The Callodine facility includes a covenant between the carrying value of the
Direct Accident management Limited hire ledger aged within 18 months and the
gross value, the ratio to exceed 35.0%.
The Lloyds facility includes the following covenants, which are tested
quarterly for a rolling 12-month period on the results for Bond Turner
Limited:
· Net worth to exceed 100% of the target
· Net borrowings to be below £19.0 million
· Gearing (being the relationship between net debt and net worth) to be
below 50%
· Interest cover (the relationship between EBITDA and finance charges)
to exceed 400%
· Leverage (being the relationship between EBITDA and net debt) to be
below 200%
· Debt cover (being the relationship between net debt and disbursements
and WIP) to be below 60%
During 2024 there were no breaches within any of the Blazehill, HSBC, Secure
Trust, Callodine or Lloyds facilities, all such covenants being met during the
year.
Changes in liabilities arising from financing activities
Invoice discounting facility £'000s
Lease liabilities £'000s Other borrowings £'000s Total borrowings £'000s
Balance at 1 January 2023 30,562 13,579 38,032 82,173
Cash flows
Proceeds from new loans - - 20,409 20,409
Repayment of borrowings (2,704) - (24,228) (26,932)
Capital element of lease payments - (9,153) - (9,153)
Non-cash changes * - 9,888 - 9,888
Balance at 31 December 2023 27,858 14,314 34,213 76,385
Cash flows
Proceeds from new loans 5,892 - 55,045 60,937
Finance costs (588) - (1,651) (2,239)
Repayment of borrowings (188) - (42,940) (43,128)
Capital element of lease payments - (9,392) - (9,392)
Non-cash changes * 103 10,012 239 10,354
Balance at 31 December 2024 33,077 14,934 44,906 92,917
* This balance includes £10.0 million (2023: £9.9 million) of new vehicle
leases entered into during the year and included in debt under IFRS 16.
9. Insurance Contract Liability
2024 Restated
2023
£'000s £'000s
Opening balance 3,222 3,222
Increase in provision 1,568 1,089
Utilised in the year (1,213) (1,089)
Closing Balance 3,577 3,222
Split as to:
Current liabilities 893 766
Non-current liabilities 2,684 2,456
3,577 3,222
The provision at 31 December 2024 includes £455,000 in respect of known
liabilities (31 December 2023: £354,000).
The increase in the provision of £1.6 million (2023: £1.1 million)
represents the loss component for new cases added during the year. This
movement has been included within insurance service expense and has been
recognised in the statement of total comprehensive income as part of cost of
sales. The utilisation in the year of £1.2 million (2023: £1.1 million)
represents the actual incurred claims in the year i.e. the actual cases
finalised and settled in the year.
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