REG - Manolete Partners - Full Year Results
Thu 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250626:nRSZ4499Oa&default-theme=true
RNS Number : 4499O Manolete Partners PLC 26 June 2025
26 June 2025
MANOLETE PARTNERS PLC
("Manolete" or the "Company")
Audited results for the year ended 31 March 2025
Strong momentum continues with significant macro-economic tailwinds supporting
growth.
Manolete (AIM:MANO), the leading UK-listed insolvency litigation financing
company, today announces its audited results for the year ended 31 March 2025
("FY25").
Steven Cooklin, Chief Executive Officer, commented:
"We are delighted to report our highest ever revenues of £30.5m for FY25 and
a strong increase in profitability, well ahead of market forecasts 1 (#_ftn1)
. Cash generation has also been particularly impressive with a 45% increase in
gross cash receipts for the year. In FY25 we also recorded lifetime highs in
the number of new case referrals from Manolete's nationwide proprietary
referral network. FY26 has got off to a strong start with new case signings
already 27% higher than the whole of Q1 FY25 and further concrete evidence of
larger average case sizes feeding into our portfolio of more recent case
signings. The continued strong tailwinds of challenging market conditions
faced by many UK corporates provide the Board with optimism for further good
progress in the new financial year."
Financial (statutory and non-statutory) highlights:
· Record total revenues £30.5m, an increase of 16% (FY24:
£26.3m) 2 (#_ftn2)
· Realised revenues on completed cases were £29.5m, an increase of
22% (FY24: £24.2m).
· 97% of total revenues represented by realised revenues on fully
completed cases (FY24: 92%).
· EBIT increased by 19% to £3.0m (FY24: £2.5m).
· Realised EBIT (excluding all Unrealised Profits) increased to
£2.0m in FY25 from £0.4m in FY24.
· Gross cash receipts from completed cases were £25.6m, an
increase of 45% (FY24: £17.7m).
· The Company's net cash income from completed cases (after all
legal costs and payments to Insolvent Estates) was £15.2m, an increase of 40%
(FY24: £10.8m).
· Cash generated from operations (after all completed case costs
and all overheads but before new case investments, interest and taxation) was
£9.4m (FY24: £5.0m).
· As at 31 March 2025, the Company had cash balances of £0.7m and
net borrowings of £11.8m resulting in a net debt of £11.1m (FY24: £12.3m
resulting from £1.4m cash balances and £13.7m net borrowings).
· As reported on 4 February 2025, the Competition Appeal Tribunal
has now set a trial window in September 2026 for the hearing for the next wave
of Truck Cartel claims. The Company is seeking to secure a position in that
next claimant group, for all of its claims that are not settled, before that
next wave trial commences.
Operational highlights:
· A record number of new case investments in UK insolvency cases
(excluding Bounce Back Loan Pilot 'BBLP), an increase of 2%: 282 in FY25
(FY24: 276).
· A record number of 291 cases were completed in FY25 (FY24: 251
cases), with an average duration per case of 16.4 months (FY24: 13.2 months),
generating a Money Multiple of 2.1x (FY24: 1.9x) (based on unaudited internal
management information).
· Further progress has been made in the Average Realised Revenue
per Completed Case ("ARRCC") with an ARRCC of £101k in FY25, 5% higher than
the £96k for FY24. A large number of smaller cases completed in FY25
(including from the first phase of the Barclays Bounce Back Loan Pilot
("BBBLP"), which suppressed the FY25 ARRCC. Excluding the BBBLP cases the
ARRCC for FY25 was £110k (FY24: £103k), which represents a clearer picture
on the Company's core business.
· ROI of 130% and Money Multiple of 2.1x from 1,217 completed cases
since inception (based on unaudited internal management information).
· Average case duration across the full lifetime portfolio of 1,217
completed cases is 13.8 months.
· Live cases remained steady: 419 in process as at 31 March 2025
(418 as at 31 March 2024).
Current Trading and Outlook
The Company has made a good start to the new financial year FY26. Based on
internal unaudited management information, as at 20 June 2025 the Company had
already signed 56 new case investments, 27% more than the 44 signed for the
whole of the first quarter of the last financial year (quarter ended 30 June
2024). During the same period the Company has completed 46 cases. Therefore,
the number of live cases in progress as at 20 June 2025 was 429.
The most recently available UK Insolvency Service report for May 2025
(published on 20 June 2025) shows that the number of UK corporate insolvencies
remains at elevated levels compared to the levels experienced prior to the
Covid-19 pandemic.
Sources: Insolvency Service (compulsory liquidations only); Companies House
(all other insolvency procedures)
In the same May 2025 Insolvency Service report, the Insolvency Service states
"While the insolvency rate has increased since the lows seen in 2020 and 2021,
it remains much lower than the peak of 113.1 per 10,000 companies seen during
the 2008-09 recession. This is because the number of companies on the
effective register has more than doubled over this period." This is
potentially an indication for further increases in the number of UK company
insolvencies in the foreseeable future and this graph puts that statement in
some context.
A copy of the annual report and accounts will be available on the Company's
website shortly and will be posted to shareholders in due course.
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information is
disclosed in accordance with the Company's obligations under Article 17 of the
UK MAR. Upon the publication of this announcement, this inside information is
now considered to be in the public domain.
For further information please contact:
Manolete Partners via Instinctif Partners
Steven Cooklin (Chief Executive Officer)
Canaccord Genuity (NOMAD and Broker) +44 (0)20 7523 8000
Stuart Andrews
Instinctif Partners manolete@instinctif.com (mailto:manolete@instinctif.com)
Hannah Scott, Gus Chipungu +44 (0)20 7457 2020
Chairman's Statement
I am delighted to present my fourth report as your Chairman.
Overview
The UK litigation finance sector has continued to mature with increasing
recognition of its role in widening access to justice for creditors.
On reflecting on the Company's performance in the last twelve months, I am
pleased to report on a year where we as a team have demonstrated our
resilience and in addition taken advantage of new emerging opportunities.
In March 2025, we signed a new 3.25-year Revolving Credit Facility ("RCF")
with our existing long-term provider, HSBC UK Bank Plc. The RCF provides the
same level of facility as the previous arrangement, at £17.5m but on improved
terms with the option to extend by an additional year.
Corporate insolvencies remain high, as we show an increase in operating
profitability. The trends for the business give me and the Board considerable
optimism that the Company can take full advantage of attractive market
conditions. Overall, the business is very well-positioned in the insolvency
litigation financing market for long-term profitable growth.
Financial results
Revenues for the year to 31 March 2025 increased by 16% to £30.5m (FY24:
£26.3m). The Company has reported an operating profit of £3.0m for FY25
compared to the operating profit of £2.5m reported for FY24.
Cash generation was particularly strong in FY25 with gross cash recoveries
from completed cases of £25.6m, (FY24: £17.7m), representing an increase of
45%.
Strategy
Since I became Chairman in September 2021, there has not been a significant
change in strategic focus for the Company; the Board has taken a consistent
approach based on the strengths of Manolete's business model. I am proud to
say our Company has continued to demonstrate strength and adaptability.
The Board has navigated a challenging landscape post Covid, with careful
decision-making and a firm commitment to our long-term goals. The Board
remains committed to supporting the legal team to achieve higher case volumes
and higher average case sizes within our insolvency litigation investment
portfolio.
I am pleased to see net debt has fallen to £11.1m, as at the year-end of 31
March 2025, down from £12.3m.
The Company has maintained its position as the only litigation finance company
to enjoy long-term strategic partnership agreements with: R3 (the insolvency
industry trade body); the Institute of Chartered Accountants in England and
Wales and the Insolvency Practitioners Association. Consequently, Manolete has
been able to effectively promote and consolidate more business development
opportunities in the insolvency sector.
Dividend
The Board has reviewed the dividend policy and is recommending no dividend is
awarded in respect of this financial year (FY24: nil). The priority of the
Company is to retain cash reserves for investment in current and future cases
and further reduce net debt.
Corporate Governance
The Board of Directors is committed to good corporate governance. We engender
a culture of mutual respect at all levels of the company and have established
Manolete as a highly trusted brand in the insolvency sector. The Company has
adopted the ten principles of the 2023 Version of the Corporate Governance
Code as set out by the Quoted Companies Alliance.
People
On behalf of the Board and our shareholders, I would like to pay tribute to a
team of highly committed and talented colleagues for their remarkable
achievements during a successful year. I attended one of the regular meetings
of the legal, net worth and business development teams during the year and was
greatly impressed by the camaraderie and cohesion which plays a fundamental
role in the success and efficiency of the business.
Board
I would like to acknowledge the valuable contribution of Mark Tavener who left
the Board as Chief Financial Officer in April 2025. We are currently deeply
engaged in identifying the best replacement possible. As Chairman, I will
ensure that any changes to the Board will maintain the necessary spread of
proficiency and balance particularly in legal and accounting expertise.
Outlook
Our optimism in the Company's future performance is rooted in our resilient
team of lawyers who have attracted a record number of referrals. We also have
a record number of live cases with a fair value of £41.5m (FY24: £40.2m).
The company's increased revenue is based on cases signed which in turn is
derived from case referrals which were up nearly a quarter on last year. This
measure shows that the fundamental strengths of the business are as strong as
they have ever been.
Recent figures published by Companies House showed the overall rate of
liquidations, including both voluntary and insolvencies, rose to a record high
in 2024/5.
So, we remain most encouraged about the continued favourable market conditions
which gives every indication of a strong flow of higher value insolvency cases
to come.
Lord Leigh
Non-Executive Chairman
25 June 2025
CEO's Statement
The recent UK Insolvency Service commentary on UK company insolvency
statistics (published March 2025) provides a useful summary of the current
status of the UK insolvency market: "company insolvencies over the past year
have been slightly lower than in 2023, which saw a 30-year high annual number,
but have remained high relative to historical levels."
The graph below provides further detail:
Sources: Insolvency Service March 2025 (compulsory liquidations only);
Companies House (all other insolvency procedures)
The data in the graph helpfully starts just prior to the onset of Covid-19. It
then indicates a sharp fall in the number of UK company insolvencies which
continued for around 18 months (due to the temporary suspension of key UK
insolvency laws and around £600 Billion of UK Government financial support to
the UK business sector).
Since February 2022, the insolvency market has not only recovered to its
pre-pandemic level, but it has also strongly exceeded that level and for the
last three years has remained at or around that "30-year high annual number",
as quoted above.
The drivers for that increase have been:
1. The ending of the temporary suspension of UK insolvency laws in
April 2022.
2. The ending of the large financial business support programme of the
previous Government.
3. High levels of inflation leading to high interest rate rises albeit
now falling since mid-2024.
4. Persistent core inflation above the Bank of England's target,
leading to slower than expected reductions in UK interest rates.
The UK business sector now also faces significant tax and employment cost
increases, cost of living challenges and international tariff changes.
The combination of all the above factors explains the continuing improved
performance of the Manolete business (which is focused almost exclusively on
the UK insolvency claims market).
Manolete's Business Performance in FY25
New Case Referrals
Manolete's new case referrals mainly originate from insolvency practices and
also from insolvency and restructuring departments within solicitor firms.
This graph shows the strong and growing trend of this important key
performance indicator since the end of the Covid crisis.
Source: Company information
The case referrals above exclude the referrals from the Barclays Bounce Back
Loan Pilot ("BBBLP") as that appears to be increasingly a one-off event, which
would otherwise mask the underlying trends in the core Manolete business.
There were 896 new case referrals recorded FY25 (zero new BBBLP cases), a new
record number which was 23% ahead of the 731 referrals reported in FY24
(excluding two BBBLP cases).
New Case Investments
On an annual basis, the number of new case investments in FY25 was 282, 2%
higher than FY24's previous record number of 276 (figures again exclude the
BBBLP cases). The signing of new case investments tends to lag the movements
in the overall UK insolvency market by around seven to nine months. The
continued elevated levels of total UK company insolvencies presents good
visibility for future new cases.
Investment Returns
In FY25 the Company completed a record volume of 291 cases, 16% higher than
251 recorded in FY24.
Manolete's average Realised Revenue per completed case for FY25 was £101k,
5.5% higher than the average Realised Revenue per completed case for FY24 of
£96k. The continued positive trend towards larger average case sizes is in
line with the Board's previously stated expectation that average case
completion sizes would likely increase as the number of medium and large
company insolvencies returned to their normal levels in the UK insolvency
market. This follows the withdrawal of the UK Government's significant
financial support to businesses over the Covid period of March 2020 - April
2022, as well as the temporary suspension of key insolvency laws during that
same period.
Our investment track record, by vintage, continues to demonstrate outstanding
results. Manolete's model is characterised by short case durations, high ROIs
(Return on Investment), exceptional Money Multiples and IRRs. The Company
calculates case duration from the date we sign the investment agreement to the
date the case is legally concluded. On average, cash collection takes around
12 months after legal completion.
(i) The vintages table excludes 22 cartel cases and is net of deductions for
bad debt provisions (excluding ECL provisions).
(ii) Ongoing cases includes partial realisations.
(iii) The large case completion in FY21 is presented net of discounting.
(iv) IRR's are presented for vintages where there are 12 or more months of
historical cashflow information.
Note: Vintages table above is unaudited
Profit and Loss Account Impact
The key performance indicators shown above had a strongly positive impact on
the Company's financial performance in FY25:
· Total revenues were 16% higher at £30.5m (FY24: £26.3m)
· Operating profit was 19% higher at £3.0m (FY24: £2.5m)
Cashflow and Net Debt
In FY25, Manolete received gross cash recoveries (cash received on completed
cases before payments to Insolvent Estates and associated legal costs) from
completed cases of £25.6m, 45% higher than the £17.7m recorded for FY24. The
£25.6m of gross cash generation was spread across 399 separate completed
cases (i.e. cases completed in prior years as well as in the current financial
year) (FY24: 309), highlighting the attractive 'high volume low value' element
of Manolete's business model.
In FY25, net cash income from completed cases was £15.2m, 41% higher than the
£10.8m recorded in FY24. After the payment of all Company overheads, net cash
income was £9.4m, 88% higher than the £5.0m recorded in FY24. That positive
cash inflow enabled the Company to organically finance all ongoing cases and
all new case investments, which amounted to £6.9m for FY25 (FY24: £6.3m),
leaving a cash surplus of £2.5m (FY24: negative £1.4m).
The Company's net debt as at 31 March 2025 was £11.1m compared to £12.3m as
at the previous year end of 31 March 2024.
On the 28 March 2025, the Company announced it had signed a new Revolving
Credit Facility ("RCF") with its existing long-term provider, HSBC UK Bank Plc
("HSBC"). The new RCF provides Manolete with the same level of facility as the
previous arrangement, at £17.5m. However, the margin charged to Manolete by
HSBC on the new RCF is at a reduced rate of 4.0% (previously 4.7%) over the
Sterling Overnight Index Average (SONIA) and has a reduced non-utilisation
fee, from 1.88% to 1.60%. The new RCF is a 3.25-year facility with an initial
maturity of 27 June 2028. Manolete has the option to further extend the
facility on its current terms by an additional year. The covenants remain
unchanged except for the Asset Cover covenant which has been relaxed for 6
months from 28 March 2025.
Industry Recognition
The Company has been named, for the fifth time in succession, as the only
company in the insolvency litigation funding sector to be ranked in Band 1 of
the legal industry's prestigious Chambers Guide. The Band 1 ranking is a great
testament to the tremendous work of all the Company's employees.
Current Trading
With strong tailwinds supporting the business, FY26 has started well, with new
case referrals remaining at the elevated levels which were achieved throughout
FY25.
People and Stakeholders
In anticipation of another busy year ahead, since the start of FY26, the
Company has added two new senior level lawyers to its in-house legal team,
which takes the total number in that team to seventeen.
I am always very grateful for the skill and dedication of Manolete's
exceptional team.
Steven Cooklin
Chief Executive Officer
25 June 2025
Finance Statement
I am pleased to give my review of the Company's results for the year to 31
March 2025.
Financial overview: 31 March 2025 31 March 2024 YoY
Financial KPI £000s £000s %
Revenue 30,481 26,295 16%
Gross profit 10,431 10,145 3%
Gross margin % 34.2% 38.6%
Operating profit 2,968 2,501 19%
Operating profit margin % 10% 10%
Profit after tax 893 933 (4%)
Investment valuation 41,450 40,196 3%
Non-financial KPIs
New cases* 282 276
Completed cases** 291 251
Live cases at year end*** 419 418
* Excluding the one-off effect of the BBLP
**including 7 partially completed cases (7 partial completions FY24)
***including 22 cartel cases and 12 BBL cases in FY25 (22 cartel cases and 41
BBL cases in FY24)
Revenue 31 March 2025 31 March 2024
£000s % £000s %
Realised revenue 29,475 97 24,183 92
Unrealised revenue 1,006 3 2,112 8
Revenue 30,481 26,295
31 March 2025 31 March 2024 YOY
£000s £000s %
Realised Gross Profit 9,425 8,031 17
Realised Gross Margin 32.0% 33.2%
Revenues can be classified into realised revenue (actual completions) of
£29.5m in FY25 (FY24: £24.2m) and unrealised revenue (movements in
valuations of new and live cases net of previously recognised gains on
realised cases) of £1.0m in FY25 (FY24: £2.1m).
Realised revenue increased by 22% to £29.5m (FY24: £24.2m) driven by a
record number of case completions of 291 (FY24: 251).
Unrealised revenue of £1.0m FY25 (FY24: £2.1m) reflects the high volume of
completions in the year which are removed from unrealised revenue and recorded
as realised revenue as well as valuations of new cases throughout the year.
Gross profit of £10.4m in FY25 (FY24: £10.1m) represents an increase of 3%
compared to the previous year.
Administrative expenses
31 March 2025 31 March 2024 YoY
growth
£000s £000s %
Wages and salaries 4,338 4,482 (3%)
Bad debt expense 1,343 1,362 (1%)
Professional fees 718 669 7%
Marketing 323 365 (12%)
Other costs, including office costs 741 766 (3%)
Administrative costs 7,463 7,644 (2%)
Administrative expenses stayed in line with the previous year at £7.5m in
FY25 (FY24: £7.6m).
Bad debt expense decreased by 1% to £1.3m (FY24: £1.4m) following a thorough
review of receivables and the expected credit loss calculation. The bad debt
expense primarily relates to a small number of debtors who have either entered
into bankruptcy or whose assets are no longer viable targets.
Professional fee expenses of £0.7m (FY24: £0.7m) have increased by 7% due to
increased spending on corporate advisory whilst also consisting of mostly
recurring items such as audit, tax and PR services (all of which have broadly
stayed in line with the previous year).
Marketing costs of £0.3m (FY24: £0.4m) have stabilised following a complete
review on what business development activities best benefit the company.
Other costs of £0.7m (FY24: £0.8m), primarily relate to rental costs of
office space in London, Durham and Manchester as well as travelling and
entertainment costs.
Operating profit
The Company reported an operating profit of £3.0m in FY25 (FY24: £2.5m).
Finance expense
Finance expense increased to £1.6m FY25 (FY24: £1.5m). The Company paid a
margin of 4.7% above SONIA in the financial year which has decreased to 4.0%
above SONIA following the signing of a new RCF facility in March 2025. The
Company also paid a 0.7% commitment fee on any unused facility with HSBC. As
at 31 March 2025, £12.5m of the £17.5m HSBC facility had been drawn down
(FY24: £13.7m).
Profit after tax
Profit after tax of £0.9m was recorded in FY25 (FY24: £0.9m). The post-tax
margin has decreased slightly from 3.5% to 2.9%.
Earnings per share
As disclosed in Note 11, earnings per share decreased from 2.1 pence to 2.0
pence.
Balance sheet - Investment in Cases
The Company was managing 419 live case investments as at 31 March 2025,
compared to 418 live cases as at 31 March 2024, a net increase of 1 case. The
total fair value of the 419 live cases amounted to £41.5m as at 31 March 2025
an increase of 3% (FY24: £40.2m). The valuation includes the investment in
the cartel cases as at 31 March 2025 of £15.4m, which remains relevantly
unchanged from FY24 valuation of £15.1m, the increase relates to an increase
in prepaid costs. Investment in cases is shown at fair value, based on the
Company's estimate of the future realised profit.
Management amend valuations of cases each month end, following discussion on a
case-by-case basis with the in-house legal team, to accurately reflect
management's view of fair value. In addition, at the interim and final
reporting periods, a sample of material valuations are corroborated with the
external lawyers working on the case and an independent legal expert, who
provide updated legal opinions as to the current status of the case. The
Company does not capitalise any of its internal costs, such as salaries, these
are fully expensed to the Statement of Comprehensive Income as incurred.
Cash Flows 31 March 2025 31 March 2024
£000s £000s
Gross cash receipts 25,634 17,730
IP share & legal costs on completed cases (10,471) (6,900)
Cashflows from completed cases 15,163 10,830
Overheads (5,770) (5,865)
Net cash generated from operations before investment in cases and corporation 9,393 4,965
tax
Corporation tax - -
Net cash generated from operations after corporation tax and before investment 9,393 4,965
in new cases
Investment in cases (6,865) (6,355)
Net cash generated from/(used in) operations 2,528 (1,390)
% growth in case cash investments 8% 9%
Gross cash receipts
Gross cash receipts of £25.6m in FY25 were higher than the previous year
(FY24: £17.7m) by 45% due to the high level of completions of the past
several years. Importantly, cash generated from operations before investment
in cases and corporation tax remains a strong positive cash inflow of £9.4m
in FY25 (FY24: £5.0m) which has been reinvested in the portfolio and used to
reduce debt.
Cash receipts are being generated both from payment schedules of prior year
completions as well as from current year case completions.
The graph below shows the growth in gross cash generation (including both IP
share and Manolete share of cash receipts) year on year. As the business
matures, a key characteristic is its ability to generate cash and ultimately
be self-funding.
Overheads & Corporation Tax (cash)
Excluding non-cash items (including bad debt expense), spending incurred on
overheads has stayed broadly in line with the previous year as £5.8m (FY24:
£5.9m).
The Company has benefited from brought forward tax losses and no corporation
tax is expected to become payable in respect of FY25.
Investment in cases
We have continued to invest in existing and new cases with total capital of
£6.9m deployed during FY25 (FY24: £6.3m) which has been funded through cash
receipts from completed cases.
Working Capital
Movement of £0.8m into working capital during FY25 was primarily due to
increased trade payables and accrued expenses. Debtor days on a basic basis
decreased to 433 in FY25 (FY24: 497) due to an improvement on payments terms
of settlements.
31 March 2025 31 March 2024
Net working capital £000s £000s
Net working capital 17,146 17,956
Change in net working capital 809 (1,841)
DSO (Days sales outstanding) basic 433 497
DSO countback 335 335
Debt Financing
As at 31 March 2025 the Company had drawn down £12.5m (FY24: £13.7m) of its
£17.5m HSBC loan facility and has continued to deploy loan capital during the
year to finance investment in cases. The Company held cash reserves of £0.7m
as at 31 March 2025 which are available to deploy on new case investment.
The Company has met all its covenants in FY25.
On the 28 March 2025 a new loan facility was announced for £17.5m with HSBC.
As part of the agreement, interest charges have decreased from 4.7% margin
above SONIA to 4.0%. The loan facility is for 39 months expiring on 27 June
2028 with the option to extend by a year.
Rachel Lindley-Janes
Head of Finance
25 June 2025
Strategic Report
The Directors present their strategic report for the year ended 31 March 2025.
Strategy and Business Model
The Company's strategy for growth and its business model are described in
detail on the Company's website, www.manolete-partners.com
(http://www.manolete-partners.com) and at the start of this annual report.
On pages 21 to 22, we have set out the principal risks which may present
challenges in executing the business model and delivering the strategy.
Supported by the strong tailwinds of high levels of UK company insolvencies,
year-on-year revenues increased by 16%, driven by an increase in realised
revenues. Operating profits were 18% higher at £3.0m and net assets increased
2% to £41.5m.
The number of employees was 29 (FY24: 29) at the end of the financial year.
Despite recruitment challenges in some areas of the UK, the Company is not
experiencing any problems attracting new recruits and has two new members of
the legal team joining in the early months of FY26 as demand has increased
significantly for our UK insolvency litigation financing products.
The business has grown significantly following the difficult trading
conditions of the Covid crisis. At the financial year-end the cumulative
number of signed litigation investments had grown to 1,635 cases, with a
record 419 live, in-progress cases as at 31 March 2025.
Year Ended Year Ended % change
31 March 2025 31 March 2024
Financials £000s £000s
Realised revenue 29,475 24,183 22%
Unrealised revenue 1,006 2,112 (52%)
Total revenue 30,481 26,295 16%
Gross profit 10,431 10,145 3%
Operating profit 2,968 2,501 19%
Profit after tax 893 933 (4%)
Value of investments 41,450 40,196 3%
Non-financial KPIs
Number of lifetime signed litigation investments 1,635 1,351 21%
Live cases at end of reporting period 419 418 0%
New cases (excluding BBBLP cases) 282 276 2%
Completed cases 291 251 16%
The movements in key performance indicators is analysed in the Report of the
Chief Executive Officer on pages 12 to 15 and the Finance Report on pages 16
to 19.
Outlook and Current Trading
We are confident we have invested in a portfolio of cases which will produce
attractive returns for the Company. There is strong and continuing evidence
that the average size of cases is now trending back to the significantly
higher level that the Company enjoyed prior to the Covid crisis.
The Board has considered the going concern status of the business in relation
to the general wider economic environment and has concluded it is appropriate
for the accounts to be prepared on a going concern basis. Further detail on
the Board's consideration of going concern is included on page 49.
The Board believes that the business is now well-positioned to take advantage
of the strong tailwinds that have started to drive its resumed growth
trajectory.
The Company has made a good start to FY26 and we look forward to a promising
future.
Statement of Comprehensive Income
31 March 31 March
2025 2024
Note £'000s £'000s
Revenue 4 30,481 26,295
Cost of sales (20,050) (16,150)
Gross profit 10,431 10,145
Administrative expenses 8 (7,463) (7,644)
Operating profit 6 2,968 2,501
Finance income 9 22 16
Finance expense 9 (1,643) (1,479)
Profit before tax 1,347 1,038
Taxation 10 (454) (105)
Profit and total comprehensive income for the year 893 933
Earnings per share
Basic (pence per share) 11 2.04p 2.11p
Diluted (pence per share) 11 2.01p 2.07p
The above results were derived from continuing operations.
The notes at the end of this announcement form part of these financial
statements.
Statement of financial position
Company Number: 07660874 31 March 31 March
2025 2024
Note £'000s £'000s
Non-current assets
Investments 12 11,340 11,293
Trade and other receivables 13 12,190 14,203
Deferred tax asset 16 278 938
Total non-current assets 23,808 26,434
Current assets
Investments 12 30,110 28,903
Trade and other receivables 13 19,372 15,077
Cash and cash equivalents 14 692 1,452
Total current assets 50,174 45,432
Total assets 73,982 71,866
EQUITY AND LIABILITIES
Equity
Share capital 18 175 175
Share premium 19 157 157
Share based payment reserve 19 1,153 1,076
Retained earnings 19 39,956 39,063
Total equity 41,441 40,471
Non-current liabilities
Trade and other payables 15 7,584 8,434
Borrowings 17 11,762 13,726
Total non-current liabilities 19,346 22,160
Current liabilities
Trade and other payables 15 13.195 9,235
Total current liabilities 13,195 9,235
Total liabilities 32,541 31,395
Total equity and liabilities 73,982 71,866
The notes at the end of this announcement form part of these financial
statements.
The financial statements were approved by the Board of Directors and
authorised for issue on 26 June 2025.
Steven Cooklin
Chief Executive Officer
Statement of Changes in Equity
Share capital Share premium Share based Retained earnings Total Equity
payment reserve
£'000s £'000s £'000s £'000s £'000s
As at 1 April 2023 175 157 699 38,130 39,161
Comprehensive income
Profit for the year - - - 933 933
Transactions with owners
Share based payment expense - - 336 - 336
Deferred tax on share-based payments - - 41 - 41
As at 31 March 2024 175 157 1,076 39,063 40,471
Comprehensive income
Profit for the year - - - 893 893
Transactions with owners
Share based payment expense - - 283 - 283
Deferred tax on share-based payments - - (206) - (206)
As at 31 March 2025 175 157 1,153 39,956 41,441
The notes at the end of this announcement form part of these financial
statements.
Statement of Cash Flows
31 March 31 March
2025 2024
Note £'000s £'000s
Profit before tax 1,347 1,038
Adjustments for non-cash items: 23 7,515 4,420
Operating cashflows before movements in working capital 8,862 5,458
Changes in working capital:
Net increase in trade and other receivables (2,283) (4,901)
Net increase in trade and other payables 2,814 4,408
Net cash generated from operations before corporation tax and investments 9,393 4,965
Investment in cases 12 (6,865) (6,355)
Net cash generated from/(used in) operating activities 2,528 (1,390)
Cash flows from investing activities
Finance income received 9 22 16
Net cash generated from investing activities 22 16
Cash flows from financing activities
Proceeds from borrowings 17 500 3,250
Repayments of borrowings (1,750) -
Interest paid (1,330) (1,060)
Loan arrangement fees (730) -
Net cash generated (used in)/from financing activities (3,310) 2,190
Net (decrease)/increase in cash and cash equivalents (760) 816
Cash and cash equivalents at the beginning of the year 1,452 636
Cash and cash equivalents at the end of the year 692 1,452
The notes at the end of this announcement form part of these financial
statements.
Notes forming part of the Financial Statements
1. Company information
Manolete Partners PLC (the "Company") is a public company limited by shares
incorporated in England and Wales. The Company is domiciled in England and its
registered office is 2-4 Packhorse Road, Gerrards Cross, Buckinghamshire, SL9
7QE. The Company's ordinary shares are traded on the AIM Market.
The principal activity of the Company is that of acquiring and funding
insolvency litigation cases.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these
financial statements are set out below. The policies have been consistently
applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation
The financial statements have been properly prepared in accordance with UK
adopted International Accounting Standards and in conformity with the
requirements of the Companies Act 2006. Under company law the directors must
not approve the financial statements unless they are satisfied that they give
a true and fair view of the state of affairs the Company and of the profit or
loss of the Company for that period.
Measurement bases
The financial statements have been prepared under the historical cost
convention except for investments in insolvency litigation cases which are
held at fair value through profit or loss. Historical cost is generally based
on the fair value of the consideration given in exchange for assets.
The preparation of the financial statements in compliance with UK adopted
International Accounting Standards requires the use of certain critical
accounting estimates and management judgements in applying the accounting
policies. The significant estimates and judgements that have been made and
their effect is disclosed in note 3.
2.2 Going concern
The Company achieved an improved performance in the year, reporting profit
before tax of £1.3m, cash generated from operations (before new investments)
of £9.4m and net current assets at 31 March 2025 of £37.0m.
Given current trading levels, in particular new cases volumes being signed
with a steady flow of completions along with the general level of insolvencies
in the economy as a whole, the Directors of the Company have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future and for at least one year from the date
of the signed financial statements.
Management has updated its forecasts for the business with particular focus
on the next 12 months and based on current trading levels and the existing
HSBC debt financing, the Directors are of the opinion that the Company has
adequate financial resources to continue in operation and meet its liabilities
as they fall due, for the foreseeable future.
The HSBC RCF loan was renewed on the 27(th) March 2025 for a term of 39 months
with the opportunity to extend by a further year, The facility is for £17.5m.
At the date of signing the financial statements, the balance drawn on the RCF
is £13.5m. The Company met all its covenants in FY25 and the Company is
forecast to operate within the terms of the covenants for the next 12 months
from signing.
Whilst no equity funding is being sought, it remains an option in the future
for the Company should additional growth funding be required as the number of
cases in the portfolio increases.
These sources of finance, along with a profitable forecast for trading and
cash generation for the next 12 months and with mitigating actions available
to the directors, if short-term cash was needed to be generated, has led the
Directors to conclude that it is appropriate to adopt the going concern basis
in preparing the financial statements.
For these reasons, they continue to adopt the going concern basis in preparing
the Company's financial statements.
2.3 Functional and presentation currency
The financial information is presented in the functional currency, pounds
sterling ("£") except where otherwise indicated.
2.4 New standards, amendments and interpretations
New and amended IFRS Standards that are effective for the current year:
During the current year, the Company adopted all new and revised standards and
interpretations issued by the International Accounting Standards Board and the
International Financial Reporting Interpretations Committee and that are
endorsed by the UK that are effective for annual accounting periods beginning
on or after 1 January 2024. None of them had a material impact on the
financial statements.
- IAS 1 Presentation of Financial Statements (Amendments to
Classification of Liabilities as Current or Non-current) (Effective from the
year ending 31 March 2025)
The amendments clarify that liabilities are classified as either current or
non-current, depending on the rights that exist at the end of the reporting
period. Classification is unaffected by the expectations of the entity or
events after the reporting date. The amendment also clarifies what IAS 1 means
when it refers to the 'settlement' of a liability.
- IAS 1 Presentation of Financial Statements (Amendment to
Non-current liabilities with covenants). (Effective from the year ending 31
March 2025)
The amendments improved the information an entity provides when its right to
defer settlement of a liability for at least 12 months is subject to
compliance with covenants.
New and revised IFRS Standards in issue but not yet effective:
The following relevant IFRSs and amendments have been issued by the IASB but
are not effective until a future period.
- Amendments to the Classification and Measurement of Financial
Instruments (Amendments to IFRS 9 Financial Instruments) (periods commencing 1
January 2026) *
- Annual Improvements to IFRS Volume 11 (Amendments to IFRS 1
First-Time Adoption of IFRS; IFRS 7 Financial Instruments Disclosures; IFRS 9
Financial Instruments; IFRS 10 Consolidated Financial Statements and IAS 7
Statement of Cash Flows) (periods commencing 1 January 2026) *
- IFRS 18 Presentation and Disclosure in Financial Statements
(periods commencing 1 January 2027) *
- IFRS 19 Subsidiaries without Public Accountability: Disclosures
(periods commencing 1 January 2027) *
*Not yet endorsed by the UK Endorsement Board.
The Board are currently assessing the impact of these new amendments on the
company's financial reporting for future periods. However, the board does
not expect any of the above to have a material impact on future results except
for IFRS 18 which is expected to result in a change to the presentation of
certain primary statements.
2.5 Revenue recognition
Revenue comprises two elements: the movement in fair value of investments and
realised consideration.
Realised consideration occurs when a case is settled or a Court judgement
received. This is an agreed upon and documented figure.
The movement in the fair value of investments is recognised as unrealised
gains within revenue. This is Management's assessment of the increase or
decrease in valuation of an open case, the inclusion of value for a new case
and the removal of the fair value of a completed case. These valuations are
estimated following the progress of a case towards completion and also reflect
the judgement of the legal team working on the case (see Note 3. Significant
Judgements and Estimates). Hence, unrealised revenue is the movement in the
fair value of the investments in open cases over a period of time, net of
eliminations of the previously recorded fair value of completed cases.
When a case is completed the carrying value is a deduction to unrealised
income and the actual settlement value is recorded as realised revenue.
Revenue recognition differs between a purchased case, where full recognition
of the settlement is recognised as revenue (including the insolvent estate's
share) and a funded case where only the Company's share of a settlement is
recognised as revenue. This differing treatment arises because the Company
owns the rights to the purchased case.
As revenue relates entirely to the management of financial assets, revenue is
recognised under the classification and measurement provisions of IFRS 9.
2.6 Finance expense and income
Finance expense
Finance expense comprises interest on bank loans and other interest payable.
Interest on bank loans and other interest is charged to the Statement of
Comprehensive Income over the term of the debt using the effective interest
rate method so that the amount charged is at a constant rate on the carrying
amount. Issue costs are initially recognised as a reduction in the proceeds of
the associated capital instrument. Finance expenses also include costs
associated with loan renewal fees, covenant amendments and unutilised fees.
Finance income
Finance income comprises interest receivable on funds invested and other
interest receivable. Interest income is recognised in profit or loss as it
accrues using the effective interest method.
2.7 Employee benefits: Pension obligations
The Company operates a defined contribution plan. A defined contribution plan
is a pension plan under which the Company pays fixed contributions into a
separate entity. The Company has no legal or constructive obligations to pay
further contributions if the fund does not hold sufficient assets to pay all
employees the benefits relating to employee service in the current and prior
periods.
The Company has no further payment obligations once the contributions have
been paid. The contributions are recognised as employee benefit expense when
they are due. Prepaid contributions are recognised as an asset to the extent
that a cash refund or a reduction in the future payments is available.
2.8 Financial assets
Classification
The Company classifies its financial assets at amortised cost or fair value
through profit or loss. Financial assets do not comprise prepayments.
Management determines the classification of its financial assets at initial
recognition.
Financial assets at amortised cost
The Company's financial assets held at amortised cost comprise trade and other
receivables and cash in the Statement of Financial Position.
These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise principally
through the provision of services to customers (e.g. trade receivables) but
also incorporate other types of contractual monetary assets. They are
initially recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue and are subsequently carried at
amortised cost using the effective interest method, less provision for
impairment.
Impairment of financial assets
Impairment provisions are recognised when there is objective evidence (such as
significant financial difficulties on the part of the counterparty or default
or significant delay in payment) that the Company will be unable to collect
all of the amounts due under the terms receivable, the amount of such a
provision being the difference between the net carrying amount and the present
value of the future expected cash flows associated with the impaired asset.
Impairment provisions for trade receivables are recognised specifically
against receivables where Management have identified default or delays to
payment in addition to the simplified approach within IFRS 9 using lifetime
expected credit losses. The Company applies the simplified approach in
providing for expected credit losses under IFRS 9 which allows the use of the
lifetime expected credit loss provision for all trade receivables. In
measuring the expected credit losses, trade receivables have been stratified
by settlement type and days past due. Expected lifetime credit loss rates are
based on payment profiles of completed cases from April 2022 to February 2025.
For trade receivables which are reported net, such provisions are recorded in
a separate provision account with the loss being recognised within
administrative expenses in the Statement of Comprehensive Income. On
confirmation that the trade receivables will not be collectable, the gross
carrying value of the asset is written off against the associated provision.
Investments
Investments in cases are categorised at fair value through profit or loss.
Fair values are determined on the specifics of each investment and will
typically change upon an investment progressing through a key stage in the
litigation or arbitration process in a manner that, in the Directors' opinion,
would result in a third party being prepared to pay an amount different to the
original sum invested for the Company's rights in connection with the
investment. Positive material progression of an investment will give rise to
an increase in fair value and an adverse progression a decrease. Management
identifies and selects a number of material case valuations for external
opinion. As such at any year-end, the valuation of a sample of material
investments was underpinned by an external legal opinion, which supports the
Directors' valuation.
The cartel cases are classified as non-current investments, with the exception
of those which have entered into discussions, as they are long-term in nature
where settlement will involve a considerable level of analysis, negotiation
and legal process that is expected by Management to exceed 12 months. All
other cases are classified as current assets as the Company policy is to reach
a timely settlement on these cases in order to re-cycle working capital and
this is expected to be within 12 months (although this can vary case to case
and year to year, the average age of settled cases in FY25 in 16.4 months).
Valuation of investments
Determining the value of purchased and funded litigation requires an
estimation of the value of such assets upon acquisition and at each reporting
date. The future income generation of such litigation is estimated from known
information and the opinion of external senior specialist counsel and
solicitors in select cases. Valuations of each case, at the balance sheet
date, are therefore arrived at by the Directors, considering Counsel's, or
external lawyer's, assessment of the chances of a successful outcome, the
state of progress of the matter through the legal system and the Directors'
assessment of all other risks specific to the case.
Contract assets are initially recognised in respect of earned interest revenue
earned on completed cases but where the settlement will be paid to the Company
over a significant period of time (i.e. there is a significant financing
component implicit in the transaction). The unwinding of contract assets is
recognised within revenue.
2.9 Financial liabilities
The Company classifies its financial liabilities in the category of financial
liabilities at amortised cost. All financial liabilities are recognised in the
statement of financial position when the Company becomes a party to the
contractual provision of the instrument. Trade and other payables and
borrowings are included in this category.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently carried at amortised cost; any
difference between the proceeds (net of transaction costs) and the redemption
value is recognised in the income statement over the period of the borrowings
using the effective interest method.
Borrowings are de-recognised from the balance sheet when the obligation
specified in the contract is discharged, is cancelled or expires. The
difference between the carrying amount of a financial liability that has been
extinguished or transferred to another party and the consideration paid,
including any non-cash assets transferred or liabilities assumed, is
recognised in profit or loss as other operating income or finance costs.
Borrowings are classified as current liabilities unless the Company has an
unconditional right to defer settlement of the liability for at least 12
months after the reporting period.
Arrangement fees in relation to a £17.5m loan facility with HSBC agreed in
March 2025 have been capitalised and will be amortised over the length of the
agreement, initially 3.25 years.
These capitalised costs of £738,111 as at 31 March 2025 (31 March 2024:
£23,892) have been netted off against borrowings in the Statement of
Financial Position.
Trade and other payables
Trade and other payables are initially recognised at fair value and
subsequently measured at amortised cost. Accounts payable are classified as
current liabilities if payment is due within one year or less. If not, they
are presented as non-current liabilities.
Contract liabilities
Contract liabilities represent the Company's obligation to transfer goods or
services to a customer and are recognised when a customer pays consideration,
or when the Company recognises a receivable to reflect its unconditional right
to consideration (whichever is earlier) before the consolidated entity has
transferred the goods or services to the customer. The unwinding of contract
liabilities is recognised within Cost of Sales.
2.10 Share capital
Ordinary shares are classified as equity. There is one class of ordinary share
in issue, as detailed in note 18. Incremental costs directly attributable to
the issue of new shares are shown in share premium as a deduction from the
proceeds, net of tax.
2.11 Income tax
Income tax for the years presented comprises current and deferred tax. Income
tax is recognised in profit or loss except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Deferred income tax is recognised on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts. Deferred
income tax assets are recognised only to the extent that it is probable that
future taxable profit will be available against which the temporary
differences can be utilised
Temporary differences are not recognised if they arise from a) the initial
recognition of goodwill, and b) for the initial recognition of other assets or
liabilities in a transaction other than a business combination that at the
time of the transaction affects neither accounting nor taxable profit or loss.
The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted at the balance sheet date.
Deferred income tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred income taxes assets and liabilities relate to income
taxes levied by the same taxation authority on either the taxable entity or
different taxable entities where there is an intention to settle the balances
on a net basis.
2.12 Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that
are provided to employees in exchange for the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant
date. Fair value is independently determined using the Monte Carlo, Binomial
or Black Scholes pricing model which takes into account the exercise price,
the term of the option, the impact of dilution, the share price at grant date
and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together
with non-vesting conditions that do not determine whether the consolidated
entity receives the services that entitle the employees to receive payment. No
account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a
corresponding increase in equity over the vesting period. The cumulative
charge to profit or loss is calculated based on the grant date fair value of
the award, the best estimate of the number of awards that are likely to vest
and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting
date less amounts already recognised in previous periods.
3. Significant judgements and estimates
The preparation of the Company's financial statements under UK adopted
International Accounting Standards requires the directors to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the statement of financial position date, amounts reported for revenues and
expenses during the year, and the disclosure of contingent liabilities, at the
reporting date. However, uncertainty about these assumptions and estimates
could result in outcomes that could require a material adjustment to the
carrying amount of the assets or liability affected in the future.
Estimates and judgements are continually evaluated and are based on historical
experiences and other factors, including expectations of future events that
are believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the future. The
resulting accounting estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are detailed below.
Valuation of investments
Investments in cases are categorised as fair value through profit or loss.
Fair values are determined on the specifics of each investment and will
typically change upon an investment progressing through a key stage in the
litigation or arbitration process in a manner that, in the directors' opinion,
would result in a third party being prepared to pay an amount different to the
original sum invested for the company's rights in connection with the
investment. Due to the nature of Manolete's business model, an unrealised fair
value gain will be recognised on initial investment in a case. Thereafter,
positive material progression of an investment will give rise to an increase
in fair value and an adverse progression a decrease.
The key stages that an individual case passes through typically includes:
initial review on whether to make a purchase or funding offer, correspondence
from the Company in-house lawyer, usually via externally retained solicitors,
to the opposing party notifying them of the Company's assignment or funding of
the claim, a fully particularised Letter Before Action and an invitation to
without prejudice settlement meetings or mediation, if the opposing party does
not respond then legal proceedings are issued. Further evidence may be
gathered to support the claim. Eventually a court process may be entered into.
The progress of a case feeds into the directors' valuation of that case each
month, as set out below.
In accordance with IFRS 9 and IFRS 13, the Company is required to recognise
live case investments at fair value at the half year and year end reporting
periods, at 30 September and 31 March each year.
The Company undertakes the following steps:
• On a weekly basis, the internal legal team report developments into the
Investment Committee on a case-by-case basis in writing. Full reviews then
take place on a monthly basis to review progress on all live cases, on a
case-by-case basis.
• On a monthly basis, the directors adjust case fair values depending upon
objective case developments, for instance: an offer to settle, mediation
agreed, positive or negative legal advice. These adjustments to fair value may
be an increase or decrease in value or no change required;
• At reporting period ends, a sample of open case investments for which
written assessments are obtained from external solicitors or primary counsel
working on the case on behalf of the Company.
In all cases, a headline valuation is the starting point of a valuation from
which a discount is applied to reflect legal advice obtained, strength of
defendant's case, the likely amount a defendant might be able to pay to settle
the case, progress of the case through the legal process and settlement
offers.
Movements in fair value on investments in cases are included within revenue in
the Statement of Comprehensive Income. Fair value gains or losses are
unrealised until a final outcome or stage is reached. At the year-end there
were 419 open cases, of these 373 had a valuation of less than £100k. These
cases are not expected to have an individually material impact on the business
when they are settled. The remaining 46 cases make up £25.6m of the
Investments and are material to the business, the significant judgements and
estimates in their valuations at the balance sheet date were as follows:
1. Judgements:
1.1 The amount that cases are discounted to recognise cases being settled
before they are taken to Court, based on the facts of each case and
management's judgement of the likely outcome.
1.2 Litigation is inherently uncertain. The Company seeks to mitigate its risk
by: seeking to settle cases as early as possible. Nevertheless, the risk and
uncertainty can never be completely removed. The key inputs are: the headline
claim value, the likely settlement value, the opposing party's ability to pay
and the likely costs in achieving judgement. These inputs are inter-related to
an extent.
1.3 The Company accrues for future legal costs on the basis that cases will be
settled before trial which is how the vast majority of cases completed to date
have been settled. When it becomes clear a case will progress all the way to
trial then the additional costs are accrued at this point on a case-by-case
basis.
1.4 The Company classifies all legal cases (non-cartel) as current assets as
the intention and expectation is to reach a settlement within 12 months.
Cartel cases are classified as non-current assets as the legal process for
these Competition Law cases is a longer-term process except where settlement
negotiations have commenced.
2. Estimates:
2.1 All cases will be subject to the internal key stages and regular fair
value review processes as described above. For the avoidance of doubt, the
fair value review requires an estimate to be made by senior management based
upon the facts and progress of the case and their experience. For a sample
selected by Management , an external opinion is requested from counsel or a
solicitor who is working on the case which provides an independent description
of the merits of the case.
These assessments include various assumptions that could change over time and
lead to different assessments over the next 12 months.
2.2 Future legal costs have been estimated on the estimated time the case will
take to complete and whether it will go to Court. Future results could be
materially impacted if these original estimates change either positively or
negatively.
2.3 Recovery of debts is based on the Company's ability to recover assets
owned by the counterparty. Prior to case acceptance, a net worth review of the
defendant is undertaken to assess whether they own sufficient assets to
support the claim value. Cases that are settled without going to Court
typically recover in full, whilst those that result in Court cases are less
predictable in terms of full recovery.
2.4 The valuations assume that there is no recovery for interest and costs
except for the cartel cases which do assume a figure for both costs recovery
and interest charge. If cases go to Court and result in a judgement in the
Company's favour, it is likely that the Company will be awarded interest and
costs.
Sensitivity analysis has not been included in the financial statements, due to
the vast amount of inputs and number of variables which are inherently
specific to each case, making it impossible to provide meaningful data. Whilst
the Board considers the methodologies and assumptions adopted in the valuation
are supportable, reasonable and robust, because of the inherent uncertainty of
valuation, it is reasonably possible, on the basis of existing knowledge, that
outcomes within the next financial year are different from the assumptions
could require a material adjustment to the carrying amount of the £41.5m of
investments disclosed in the balance sheet (Note 12). However, as an
indication we note that a 10% increase/(decrease) in the fair value of our top
20 cases (excluding cartel cases) would result in an increase/(decrease) in
the fair value investment of +/- £0.9m.
Approach to cartel case valuation:
Following publication of the ruling in respect of an EU Competition test case
(the "BT / Royal Mail" case) we requested that our independent expert
valuation firm apply the assumptions contained within the test case ruling to
the valuation of Manolete's 22 cartel cases. Following the ruling and the
receipt of further case data, the directors consider that additional
discounting, or the use of a "tier based" system is no longer required and the
year-end valuation therefore represents Manolete's percentage ownership of the
overall case valuation. The cartel case carrying valuation as at 31 March 2025
was £15.4m (FY24 £15.1m).
Recoverability of trade receivables
The Company's business model involves the provision of services for credit.
The Company normally receives payment for services it has provided once a
claim has been pursued and settled or decided in Court. The average time from
taking on a case to settlement is c.13.8 months although this can vary
significantly from case to case. As part of the settlement agreement, the
timing of payment of the award by the defendant to the Company is agreed and
this is a legally binding document. Settlements can be received in full on the
day of settlement or (at Management's discretion) paid in instalments over a
defined settlement plan.
As such, Management applies a number of estimates and judgements in the
recording of trade receivables, for example: in relation to default judgements
Management assess the likely recoverability and do not necessarily recognise
the full judgement.
The Company applies the simplified approach in providing for expected credit
losses under IFRS 9 which allows the use of the lifetime expected credit loss
provision for all trade receivables. In measuring the expected credit losses,
trade receivables have been stratified by settlement type and days past due.
Expected lifetime expected credit loss rates are based on the payment profiles
of completed cases from April 2022 to February 2025. The Company attempts to
assess the probability of credit losses but seeks to mitigate its credit risk
by undertaking rigorous net worth checks before taking on a case. Occasionally
credit defaults do occur when counterparties default on an agreed settlement
payable by instalments. There is a concentration risk in relation to the trade
receivable of £5.9m which relates to a large case completion in FY21.
Repayments to date have been made according to the agreed schedule. Based on
Management's assessment of the receivable no provision has been recognised
against this balance.
Recovery of receivables is closely monitored by Management and action, where
appropriate, will be taken to pursue any overdue payments. The Company seeks
to obtain charging orders over the property of trade receivables as security
where possible. The receivables' ageing analysis is also evaluated on a
regular basis for potential doubtful debts. Where potential doubtful debts are
identified specific bad debt provisions are held against these. It is the
Directors' opinion that no further provision for doubtful debts is required.
Please see note 13 of the accounts.
Recoverability of deferred tax asset on unutilised tax losses
The Company has recognised a deferred tax asset of £278k (FY24: £938k) in
respect of estimated unutilised trading losses and temporary differences on
share options, which are available to carry forward against future taxable
profits. Management have considered whether, in their judgement, it is
probable (i.e. more likely than not) that sufficient taxable profits will be
generated such that an asset can be recognised. During the year the Company
reported a profit before tax of £1.3m which the asset has been utilised
against. The Board consider that the performance in FY24 and FY25 reflects a
recovery from the effects of temporary Covid-related business support measures
and therefore, having considered the Company's projections used for going
concern assessments, that it is probable that taxable profits will be
available against which to utilise the full £0.7m of available unutilised
losses.
4. Segmental reporting
During the year ended 31 March 2025, revenue was derived from cases funded on
behalf of the insolvent estate and cases purchased from the insolvent estate,
which are mostly undertaken within the UK. Where cases are funded, upon
conclusion, the Company has the right to its share of revenue; whereas for
purchased cases, it has the right to receive all revenue, from which a payment
to the insolvent estate is made. Revenues arising from funded cases and
purchased cases are considered one business segment and are considered to be
the one principal activity of the Company. All revenues derive from continuing
operations and are not seasonal in nature.
Net realised gains on investments in cases represents realised revenue on
completed cases.
Fair value movements include the increase / (decrease) in fair value of open
cases, the removal of the carrying fair value of realised cases (in the period
when a case is completed and recognised as realised revenue) and the addition
of the fair value of new cases.
31 March 2025 31 March 2024
£000s £000s
Net realised gains on investments in cases 29,475 24,183
Fair value movements (net of transfers to realisations) - Note 12 1,006 2,112
30,481 26,295
Net realised gains on investments includes £805k (FY24: £802k) in respect of
the unwinding of a discounted settlement receivable. See note 15 for further
detail.
31 March 2025 31 March 2024
£000s £000s
Arising from:
Purchased cases 29,807 26,985
Funded cases 674 (690)
30,481 26,295
5. Directors and employees
Staff costs for the Company during the year:
31 March 2025 31 March 2024
Staff costs (including directors): £000s £000s
Wages and salaries 3,438 3,562
Social security costs 454 436
Other pension costs and benefits 446 484
Total staff costs 4,338 4,482
The average monthly number of employees (including executive and non-executive
directors) employed by activity was:
31 March 31 March
2025 2024
No. No.
Directors (executive and non-executive) 6 6
Management and administration 23 23
Average headcount 29 29
The aggregate amount charged in the accounts for key management personnel
(including employer's National Insurance contributions), being the directors
of the company, were as follows:
31 March 31 March 2024
Directors' emoluments: 2025
£000s £000s
Short term employee benefits 1,602 1,554
Share based payments 109 247
1,711 1,801
Directors remuneration is detailed in the Remuneration report. The number of
directors to whom retirement benefits accrued was 3 (FY24: 3). No options were
exercised by directors in FY25 (FY24: no directors exercised options)
31 March 31 March 2024
2025
£000s £000s
Highest paid director:
Short term employee benefits 575 545
Share based payments 113 103
688 648
Management consider the directors to be the key management personnel. The total share based payment expense in the year attributable to the Board was £255k. (FY24: £247k).
6. Operating profit
Is stated after charging:
31 March 31 March
2025 2024
£000s £000s
Bad debts including expected credit loss expense 1,343 1,362
Share based payments 283 336
7. Auditor remuneration
Amounts payable to RSM UK Audit LLP in respect of the Interim audit for FY24
and Gravita II LLP in respect of the Year-end audit for FY25 and FY24 and the
interim audit of FY25 in respect of both audit and non-audit services are set
out below.
31 March 2025 31 March 2024
£000s £000s
Fee payable to Company's auditor and its associates for the statutory audit of 122 122
the Company's financial statements
Fees payable to Company's auditor and its associates for other services:
Interim agreed upon procedures (2024: RSM UK Audit LLP) 13 11
Total 135 133
8. Analysis of expenses by nature
Internal legal costs are included within administrative expenses whereas
external legal costs are either capitalised as Investments for open cases or
recognised as cost of sales on completed cases.
The breakdown by nature of administrative expenses is as follows:
31 March 2025 31 March 2024
£000s £000s
Staff costs, including pension and healthcare 4,338 4,482
costs
Bad debts including expected credit loss expenses 1,343 1,362
Professional fees 718 669
Marketing costs 323 365
Other costs, including office costs 741 766
Total administrative 7,463 7,644
expenses
9. Finance income and finance expense
31 March 2025 31 March 2024
£000s £000s
Bank interest 22 16
Total finance income 22 16
31 March 2025 31 March 2024
£000s £000s
Other loan interest 158 196
Bank loan charges 1,485 1,283
Total finance expense 1,643 1,479
10. Taxation
31 March 2025 31 March 2024
Analysis of charge/(credit) in year £000s £000s
Current tax charge on profits for the year - -
Adjustments in respect of prior periods - 735
Income tax charge - 735
Deferred tax charge/(credit) 454 (630)
Total tax charge 454 105
The tax charge for the year differs from the standard rate of corporation tax
in the UK of 25%. (FY24: 25%). The differences are explained below.
31 March 2025 31 March 2024
£000s £000s
Profit on ordinary activities before tax 1,347 1,038
Profit on ordinary activities multiplied by the rate of corporation tax in the 337 259
UK as above
Effects of:
Expenses not deductible 93 105
Adjustments to current tax in respect of previous periods - 735
Deferred tax charged directly to equity (206) 41
Temporary differences not recognised in the computation - (71)
Brought forward losses utilised in the year (430) (364)
Movement in temporary difference 660 -
Recognition of deferred tax asset not previously recognised - (600)
Total taxation charge 454 105
At 31 March 2025 the Company had estimated unutilised losses to carry forward
of £0.7m (FY24: £2.4m). A deferred tax asset of £278k in respect of
estimated tax losses of £0.7m has been recognised (see Note 16).
From 1 April 2023 the headline rate of UK corporation tax increased to 25% and
the deferred tax asset has been measured by reference to this rate. Losses
do not expire.
11. Earnings per share
The basic earnings per share is calculated by dividing the profit/(loss)
attributable to ordinary equity holders by the weighted average number of
ordinary shares outstanding during the year. Diluted earnings per share is
calculated by dividing the profit/(loss) after tax by the weighted average
number of shares in issue during the year, adjusted for potentially dilutive
share options.
The following reflects the income and share data used in the earnings per
share calculation:
31 March 31 March 2024
2025
£000s £000s
Profit for the period attributable to equity holders of the Company 894 933
Weighted average number of ordinary shares 43,777,359 44,135,972
Earnings per share 2.04p 2.11p
Basic Earnings Per Share is based on the profit for the year attributable to
the equity holders of the Company dividend by the weighted average number of
ordinary shares during the period.
31 March 31 March 2024
2025
£000s £000s
Profit for the period attributable to equity holders of the Company 894 933
Diluted weighted average number of ordinary shares 44,490,399 45,128,751
Diluted earnings per share 2.01p 2.07p
Reconciliation of number of shares and diluted shares at year end:
31 March 31 March 2024
2025
£000s £000s
Weighted average number of shares for Basic Earnings Per Share 43,777,359 43,761,305
Adjustments for calculation of Diluted Earnings Per Share:
Options over ordinary shares 713,040 1,366,751
Weighted average number of shares for Diluted Earnings Per Share 44,490,399 45,128,056
The earnings per share is diluted by options over ordinary shares, as detailed
in note 20.
12. Investments
Non-current investments and current asset investments comprise the costs
incurred in bringing funded and purchased cases to the position that they have
reached at the balance sheet date. In addition, where an event has occurred
that causes the Directors to revalue the amount invested, a fair value
adjustment is made by the Directors based on Counsel's and the Directors'
opinion, which can either be positive or negative (see Note 3 on accounting
estimates).
31 March 2025 31 March 2024
£000s £000s
As at 1 April 2024 40,196 36,462
Prepaid cost additions 6,865 6,355
Realised prepaid costs (6,617) (4,733)
Fair value movement (net of transfers to realisations) 1,006 2,112
As at 31 March 2025 41,450 40,196
12. Investments (continued)
31 March 2025 31 March 2024
£000s £000s
Current 30,110 28,903
Non-current 11,340 11,293
As at 31 March 2025 41,450 40,196
Analysis of fair value movements
31 March 2025 31 March 2024
£000s £000s
New case investments 10,090 12,325
Increase in existing case fair value (excl. cartel cases) 1,556 488
Decrease in existing case fair value (excl. cartel cases) (2,375) (3,982)
Case completions - transferred to realisations (8,245) (6,811)
Increase in fair value of cartel cases (20) 92
Fair value movement (net of transfers to realisations) 1,006 2,112
13. Trade and other receivables
31 March 2025 31 March 2024
£000s £000s
Amounts falling due in excess of one year:
Trade receivables 9,423 11,738
Contract asset 2,767 2,465
Total trade and other receivables due in excess of one year 12,190 14,203
Amounts falling due within one year:
Gross trade receivables 25,549 21,203
Less:
Specific provisions (5,043) (4,507)
Allowance for expected credit losses (1,321) (1,838)
Trade receivables 19,185 14,858
Prepayments 187 219
Total trade and other receivables due within one year 19,372 15,077
Trade receivables are amounts due from settled cases in the ordinary course of
business. Trade receivables are recognised initially at the amount of
consideration that is unconditional, unless they contain significant financing
components, when they are recognised at fair value. The Company holds the
trade receivables with the objective of collecting the contractual cash flows
and therefore measures them subsequently at amortised cost using the effective
interest method. Ageing of the expected credit loss allowance is included in
note 24.
The contract asset relates to the unwinding of the discounting applied to the
present value of the settlement of a large case which settled in FY21.
Unwinding income of £735k (FY24: £805k) and unwinding expense of £538k
(FY24: £578k) were recognised in the year in respect of this single large
case. No other receivables are discounted.
No impairment provision has been recognised in respect of the contract asset
as there is no past history of impairment losses and future losses are not
anticipated.
Movements in the allowance for expected credit losses (ECL) are as follows:
31 March 2025 31 March 2024
ECL Provision £000s £000s
At 1 April 2024 1,838 1,794
Increase in provisions for impairment (517) 44
As at 31 March 2025 1,321 1,838
The Company applies the simplified approach in providing for expected credit
losses under IFRS 9 which allows the use of the lifetime expected credit loss
provision for all trade receivables. In measuring the expected credit losses,
trade receivables have been stratified by settlement type and days past due.
Expected lifetime credit loss rates are based on the payment profiles of
completions from April 2022 to February 2025.
14. Cash and cash equivalents
31 March 2025 31 March 2024
£000s £000s
Cash at bank and in hand 692 1,452
All bank balances are denominated in pounds sterling.
15. Trade and other payables
31 March 2025 31 March
2024
£000s £000s
Amounts falling due in excess of one year:
Accruals - direct costs 5,600 6,651
Contract liability 1,984 1,783
Total trade and other payables due in excess of one year 7,584 8,434
Amounts falling due in one year:
Trade payables 1,450 1,325
Accruals - direct costs 10,332 6,714
Other creditors 1,280 1,058
Other taxation and social security 133 138
Total trade and other payables due within one year 13,195 9,235
Trade payables are unsecured and are usually paid within 30 days of
recognition. The carrying value of trade and other payables approximates their
fair value, as the impact of discounting is not significant except one large
case described below.
Accruals - direct costs relate primarily to accrued amounts due to Insolvency
Practitioners on the Company's completed cases and accrued legal costs of
completed cases. Of the £7.7m shown as non-current, £3.5m relates to the
amounts payable to the Insolvency Practitioner due in more than one year in
respect of the large case completion in FY21.
The contract liability relates to the unwinding of the discounting applied to
the present value of amounts payable to the insolvency practitioner following
the settlement of a large case settled in FY21.
16. Deferred tax asset
31 March 2025 31 March
2024
£000s £000s
At 1 April 2024 938 267
Deferred tax charged in the income statement for the period (454) 630
Deferred tax included directly in equity (206) 41
At 31 March 2025 278 938
Deferred tax has been charged to equity reserve where these movements in
deferred tax assets relate to releases and creation of share options.
Deferred tax assets are recognised in respect of:
31 March 2025 31 March
2024
£000s £000s
Unutilised losses carried forward 170 600
Temporary differences on share options 106 336
Other items 2 2
Total 278 938
At 31 March 2025 the Company had estimated unutilised losses to carry forward
of £0.7m (FY24: £2.4m). The losses are expected to be recoverable against
future profits.
17. Borrowings
31 March 2025 31 March 2024
£000s £000s
Non-current
Bank loans 11,762 13,726
Total non-current borrowings 11,762 13,726
Arrangement fees of £738,111 in relation to a £17.5m loan facility renewed
with HSBC in March 2025 are capitalised and amortised over the original length
of the loan facility, a period of 39 months. There is an option to extend for
a further year.
Gross borrowings are £12.5m as at 31 March 2025 (FY24: £13.7m) but are
presented net of HSBC set-up amortised costs of £738k above which are being
amortised over 39 months. Maturity analysis, interest rates and covenant
compliance of bank loans is included in note 24.
The Company agreed on 28 March 2025, a new RCF for £17.5m over an initial 39
month period to 28 June 2028, with an option to extend by a further year.
Under terms of the agreement, Steven Cooklin is required to maintain a minimum
shareholding of 5% of the issued share capital of the Company and is subject
to a change in control clause such that no investor may hold more than 30% of
the voting rights of the Company.
Interest is charged on any utilised funds.
Reconciliation of liabilities arising from financing activities:
1 April Cash flows Non-cash changes 31 March 2025
2024
£000s £000s £000s £000s
Bank borrowings 13,726 (1,250) (714) 11,762
Total liabilities from financing activities 13,726 (1,250) (714) 11,762
1 April Cash flows Non-cash changes 31 March 2024
2023
£000s £000s £000s £000s
Bank borrowings 10,381 3,250 95 13,726
Total liabilities from financing activities 10,381 3,250 95 13,726
The Directors consider the carrying value of all financial liabilities to be
equivalent to their fair value.
18. Share capital
31 March 2025 31 March 2024
Allotted and issued No. No.
Ordinary shares of £0.004 each 43,761,305 43,761,305
Voting rights
The holders of ordinary shares are entitled to one voting right per share.
Dividends
The holders of ordinary shares are entitled to dividends out of the profits of
the Company available for distribution.
19. Reserves
Share capital
Includes the Company's nominal share capital.
Share premium
Includes all premiums received on issue of share capital in excess of nominal
value.
Share based payment reserve
Includes amounts recognised for the fair value of share options in issue in
accordance with IFRS 2 plus the equity element of associated deferred tax
asset movements.
Retained earnings
Includes all current and prior periods retained profits and losses.
20. Share options
The Company operates a number of share-based payment schemes as follows:
CSOP Share Scheme
The Board has adopted the Manolete Partners Company Share Option Plan (CSOP)
to enable conditional share awards to be granted, which may be subject to
achievement of performance criteria and the awards are exercisable between
three and ten years following their grant. There are no cash-settlement
alternatives and the awards are therefore accounted for under IFRS 2 as equity
settled share-base payments.
In addition to CSOP share options, unapproved share options have also been
granted which do not qualify for the tax exempt criteria. These are detailed
below.
Year ended 31(st) March 2025
Grant date Vesting Exercise price £ Balance brought forward Granted during the year Exercised during the year Lapsed/ forfeited Balance carried forward
Date
21/11/2019 21/11/2021 1.12 370,806 - - - 370,806
08/07/2019 08/07/2022 4.45 50,557 - - (3,370) 47,187
29/11/2019 29/11/2022 4.65 16,127 - - (3,225) 12,902
09/12/2019 09/12/2022 4.30 193,781 - - - 193,781
27/07/2020 27/07/2023 4.15 14,456 - - (7,228) 7,228
16/11/2022 16/11/2025 2.58 34,950 - - - 34,950
26/11/2024 26/11/2027 0.98 - 122,448 - - 122,448
680,677 122,448 - (13,823) 789,302
Exercisable at the end of the year 631,904
Weighted average exercise price 2.50 0.98 - 4.34 2.23
Year ended 31(st) March 2024
Grant date Vesting Exercise Balance brought forward Granted during the year Exercised during the year Lapsed/ forfeited Balance carried forward
Date Price £
21/11/2019 21/11/2021 1.12 370,806 - - - 370,806
08/07/2019 08/07/2022 4.45 50,557 - - - 50,557
29/11/2019 29/11/2022 4.65 16,127 - - - 16,127
09/12/2019 09/12/2022 4.30 193,781 - - - 193,781
27/07/2020 27/07/2023 4.15 14,456 - - - 14,456
16/11/2022 16/11/2025 2.58 34,950 - - - 34,950
680,677 - - - 680,677
Exercisable at the end of the year 645,727
Weighted average exercise price 2.50 - - - 2.50
Options outstanding as at 31 March 2025 are exercisable at prices ranging
between £0.98 and £4.65 (FY24 £1.12 and £4.65) and the weighted average
contractual life of the options outstanding at the reporting date is 64 months
(FY24: 67 months) as analysed in the table below:
Number of Weighted average remaining contractual life (months)
share options
Exercise price range FY25 FY24 FY25 FY24
£0.98 - £1.99 493,254 370,806 67 63
£2.00 - £3.99 34,950 34,950 92 68
£4.00 - £4.65 261,098 274,921 56 104
789,302 680,677 64 67
Number of Average exercise price £
share options
FY25 FY24 FY25 FY24
CSOP Options 277,563 168,938 2.05 3.01
Unapproved Options 511,739 511,739 2.32 2.32
Total 789,302 680,677 2.23 2.50
Fair value calculations
The fair value of the CSOP share options plans are calculated at the date of
the grant using the Black-Scholes option pricing model. Expected volatility
was determined by calculating the historical volatility of the Company's share
price over an appropriate period. The charge recognised in profit or loss in
regard to CSOP and unapproved options was £24,013 (FY24: £10,749).
Long-term incentive plan
In FY21 the Company introduced an equity-settled long-term incentive plan
(LTIP) scheme for the executive directors. Performance is measured at the end
of the three-year performance period. The awards granted in FY25 are measured
equally across three criteria; EPS, Share price and strategic performance.
Options awarded will expire ten years from the date of grant and are issued at
the nominal value of the Company's share capital of £0.004p but the Company's
remuneration committee may waive the requirement at their discretion.
The following table summarises the movements in LTIP options during the year:
Year ended 31(st) March 2025
Grant date Vesting Date Exercise price £ Balance brought forward Granted during the year Exercised during the year Lapsed/ forfeited Balance carried forward
30/09/2020 30/03/2022 0.004 53,333 - - (53,333) -
30/09/2020 30/09/2023 0.004 321,334 - - (321,334) -
02/12/2021 02/12/2024 0.004 357,806 - - (357,806) -
29/07/2022 29/07/2025 0.004 349,800 - - - 349,800
29/07/2022 29/07/2023 0.004 16,054 - - - 16,054
18/07/2023 18/07/2026 0.004 475,914 - - - 475,587
18/09/2024 18/09/2027 0.004 - 600,000 - - 600,000
1,573,914 600,000 - (732,473) 1,441,441
Exercisable at the end of the year -
Weighted average exercise price 0.004 0.004 - 0.004 1,441,441
Year ended 31(st) March 2024
Grant date Vesting Date Exercise price £ Balance brought forward Granted during the year Exercised during the year Lapsed/ forfeited Balance carried forward
30/09/2020 30/03/2022 0.004 53,333 - - - 53,333
30/09/2020 30/09/2023 0.004 321,334 - - - 321,334
02/12/2021 02/12/2024 0.004 357,806 - - - 357,806
29/07/2022 29/07/2025 0.004 349,800 - - - 349,800
29/07/2022 29/07/2023 0.004 16,054 - - - 16,054
18/07/2023 18/07/2026 0.004 - 475,587 - - 475,914
1,098,327 475,587 - - 1,573,914
Exercisable at the end of the year -
Weighted average exercise price 0.004 0.004 - - 0.004
No options were exercised during the period and no options were modified. The
weighted average remaining contractual life of these options is 102 months
(FY24: 96 months). No LTIP options were in issue prior to the 1 April 2020.
Fair value calculations
The fair value of the LTIP share options plans are calculated at the date of
the grant using the Monte-Carlo and Binomial simulation pricing models.
Expected volatility was determined by calculating the historical volatility of
the Company's share price over an appropriate period. The following table
presents the inputs used in the option pricing model for the share options
granted in the years ended 31 March 2025 and 31 March 2024 based on the
information at the date of grant:
Grant date of award Share price at grant date Exercise price Expected volatility Dividend yield Risk-free interest rate Fair value at grant date
18/07/2023 2.08 0.004 46.5% 0% 4.77% 0.64
18/09/2024 1.07 0.004 41.7% 0% 3.65% 0.28
LTIP awards granted during the year ended 31 March 2025 are subject to the
Earnings Per Share performance, Strategy performance and share price
conditions. At each reporting date, the Board consider the likelihood of
vesting conditions being met in determining the charge to be record in the
profit or loss, with the exception of LTIPs carrying a market condition where
the likelihood of achieving the target share price is not revisited after
grant. During the year it was determined that LTIP awards granted in FY21 and
FY22 failed to vest and so were treated as lapsed. After accounting for the
write back the accumulated charge for LTIPs which failed to vest, the net
charge recognised in the profit or loss was £109,223 (FY24: £247,349).
2 Year Share Scheme
In FY24, the Company introduced a 2 year share scheme for the employees of the
organisation (excluding Directors). Share options are awarded in respect of
the financial year, following approval by the Remuneration Committee, and
based on an individual's performance. These share options vest after 2 years
of continued good performance in the Company. Once vested, the options can be
exercised until 10 years from the grant date. The options are equity settled.
The options were valued using the intrinsic value model, being the difference
between the Company's share price at the date of the grant and the exercise
price which is the nominal value of a share.
The following table summarises the movements in 2 Year Share Scheme options
during the year:
Year ended 31(st) March 2025
Grant date Vesting Date Exercise price Balance brought forward Granted during the year Exercised during the year Lapsed/ forfeited Balance carried forward
29/06/2023 29/06/2025 0.004 87,167 - - (8,381) 78,786
18/09/2024 18/09/2026 0.004 - 177,273 - - 177,273
87,167 177,273 - (8,381) 256,059
Exercisable at the end of the year -
Weighted average exercise price 0.004 0.004 - 0.004 0.004
Year ended 31(st) March 2024
Grant date Vesting Date Exercise price Balance brought forward Granted during the year Exercised during the year Lapsed/ forfeited Balance carried forward
29/06/2023 29/06/2025 0.004 - 87,167 - - 87,167
- 87,167 - - 87,167
Exercisable at the end of the year -
Weighted average exercise price - 0.004 - - 0.004
No options were exercised during the period and no options were modified. The
weighted average remaining contractual life of these options is 277 months
(FY24: 356 months). The charge recognised in the profit or loss in respect of
2 year share schemes was £149,317 (FY24: £78,011).
21. Retirement benefits
The Company operates a defined contribution pension scheme for all qualifying
employees. During the year, the Company charged £103,211 (FY24: £99,669) as
employer's pension contributions. The outstanding pension creditor as at 31
March 2025 was £8,111 (FY24: £8,227).
22. Financial instruments - classification and measurement
Financial assets
Financial assets measured at amortised cost comprise trade receivables,
contract assets and cash, as follows:
31 March 2025 31 March 2024
£000s £000s
Trade receivables 28,609 26,596
Contract assets 2,767 2,465
Cash and cash equivalents 692 1,452
Total 32,068 30,513
Financial assets measured at fair value through profit or loss comprise of
investments;
31 March 2025 31 March 2024
£000s £000s
Investments 41,450 40,196
Total 41,450 40,196
Financial liabilities
Financial liabilities measured at amortised cost comprise of trade and other
payables and bank loans, as follows:
31 March 31 March
2025 2024
£000s £000s
Trade and other payables 20,780 17,669
Bank loans 11,762 13,726
Total 32,542 31,395
Fair value
The fair value of investments is determined as set out in the accounting
policies in Note 2. The fair value hierarchy of financial instruments measured
at fair value is provided below:
31st March 2025 Level 1 Level 2 Level 3
£000s £000s £000s
Investments - - 41,450
Total - - 41,450
31st March 2024 Level 1 Level 2 Level 3
£000s £000s £000s
Investments - - 40,196
Total - - 40,196
23. Cashflow information
(A) Non-cash adjustments to cashflows generated from operations
31 March 31 March
2025 2024
£000s £000s
Fair value movements (1,006) (2,112)
Legal costs on realised cases 6,617 4,733
Finance expense 1,643 1,479
Share based payments 283 336
Finance income (22) (16)
Non-cash adjustments to cashflows generated from operations 7,515 4,420
(B) Net debt
31 March 31 March
2025 2024
£000s £000s
Cash and cash equivalents 692 1,452
Borrowings - repayable after one year (11,762) (13,726)
Net debt (11,070) (12,274)
24. Financial instruments - risk management
The Company's activities expose it to a variety of financial risks: market
risk (including cash flow interest rate risk), investment risk, liquidity risk
and credit risk. Risk management is carried out by the Board of Directors. The
Company uses financial instruments to provide flexibility regarding its
working capital requirements and to enable it to manage specific financial
risks to which it is exposed.
The Company finances its operations through a mixture of equity finance, bank
debt, cash and liquid resources and various items such as trade receivables
and trade payables which arise directly from the Company's operations.
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows
associated with the instrument will fluctuate due to changes in market
interest rates. Interest bearing assets including cash and cash equivalents
are short-term liquid assets. It is the Company's policy to settle trade
payables within the credit terms allowed and the Company does therefore not
incur interest on overdue balances. No sensitivity analysis has been
prepared as the impact on the financial statements would not be significant.
The interest rate profile of the Company's borrowings is shown below:
31 March 31 March
2025 2024
Debt Interest Debt Interest
£000s Rate £000s Rate
Floating rate borrowings
Bank loans 12,500 SONIA and Margin of 4.0% 13,750 SONIA and Margin of 4.7%
Sensitivity to variable interest rates
Interest charged on the bank loan is a variable rate and is therefore
sensitive to the movements in UK interest rates. Whilst interest rates have
increased over the last 12 months it is now expected that UK interest rates
will decrease over the next 12 months. The Company has considered interest
rate hedges but has decided not to purchase such an instrument due to the high
cost involved.
Liquidity risk
The Company seeks to maintain sufficient cash balances. Management reviews
cash flow forecasts on a regular basis to determine whether the Company has
sufficient cash reserves to meet future working capital requirements and to
take advantage of business opportunities.
Unused borrowing facilities at the reporting date:
31 March 2025 31 March 2024
£000s £000s
Bank loans 5,000 3,750
The following table details the Company's remaining contractual maturity for
the Company's financial liabilities with agreed maturity periods. The table is
presented based on the undiscounted cashflows of the financial liabilities
based on the earliest date on which the Company can be required to pay which
may differ from the carrying liabilities at the reporting date.
Bank covenants were met during FY25.
At 31 March 2025 Less than one year Between 1 and 2 years Between 2 and 5 years Greater than 5 years Total contractual cashflows Carrying amount of liabilities
£000s £000s £000s £000s £000s £000s
Trade and other payables 13,425 2,248 3,273 801 19,746 20,097
Bank borrowings - - 12,500 - 12,500 11,762
Total 13,425 2,248 15,773 801 32,246 31,859
At 31 March 2024 Less than one year Between 1 and 2 years Between 2 and 5 years Greater than 5 years Total contractual cashflows Carrying amount of liabilities
£000s £000s £000s £000s £000s £000s
Trade and other payables 9,622 2,686 4,310 1,170 17,788 17,669
Bank borrowings - 13,750 - - 13,750 13,726
Total 9,622 16,436 4,310 1,170 31,538 31,395
Capital risk management
The Company is both equity and debt funded, and these two elements combine to
make up the capital structure of the business. Equity comprises share capital,
share premium and retained earnings and is equal to the amount shown as
'Equity' in the balance sheet. Debt comprises bank loans which are set out in
further detail above and in note 17. The Company initially raised funds
through an IPO in December 2018 and has drawn down £12.5m of a HSBC loan
facility (FY24: £13.75m), the total facility is a £17.5m revolving credit
facility with HSBC.
The Company's current objectives when maintaining capital are to:
· Safeguard the Company's ability to operate as a going concern so
that it can continue to pursue its growth plans.
· Provide a reasonable expectation of future returns to
shareholders.
· Maintain adequate financial flexibility to preserve its ability
to meet financial obligations, both current and long term.
The Company sets the amount of capital it requires in proportion to risk. The
Company manages its capital structure and adjusts it in the light of changes
in economic conditions and the risk characteristics of underlying assets. In
order to maintain or adjust the capital structure, the Company may issue new
shares or sell assets to reduce debt.
During the year ended 31 March 2025 the Company's strategy remained unchanged.
Credit risk and impairment
Credit risk refers to the risk that a counterparty will default on its
contractual obligations resulting in financial loss to the Company. The
maximum exposure to credit risk is the carrying value of its financial assets
recognised at the reporting date, as summarised below:
31 March 2025 31 March 2024
£000s £000s
Trade receivables 28,608 26,596
Contract asset 2,767 2,465
Cash and cash equivalents 692 1,452
Total maximum exposure 32,067 30,513
No expected credit loss ("ECL") provision is raised against bank balances or
against the contract asset as management consider credit risk in both cases to
be immaterial based on historical experience.
The Company applies the simplified approach in providing for expected credit
losses under IFRS 9 which allows the use of the lifetime expected credit loss
provision for all trade receivables. In measuring the expected credit losses,
trade receivables have been stratified by settlement type and days past due.
Expected lifetime credit loss rates are based on the payment profiles of
receivables from April 2022 to February 2025.
The Company attempts to assess the probability of credit losses but seeks to
mitigate its credit risk by undertaking rigorous net worth checks before
taking on a new case. Occasionally, credit defaults do occur when
counterparties default on an agreed settlement, payable by instalments.
There is a concentration risk in relation to the trade receivable of £5.9m in
relation to a single case which completed in FY21. Repayments to date have
been made according to the agreed schedule. Excluding this balance, the
Company does not consider any concentration of risk within either trade or
contract asset to be significant. The Company seeks to obtain charging orders
over the property of trade receivables as security where possible. The
receivables' ageing analysis is also evaluated on a regular basis for
potential specific provisions in relation to trade receivables. It is the
Directors' opinion that no further specific provisions are required.
The following table contains an analysis of the Company's total gross trade
receivables segmented by settlement type.
31 March 2025 31 March 2024
£000s £000s
Settlement agreements 22,681 23,805
Judgements 7,248 4,629
Specific provisions 5,043 4,507
Gross carrying amount 34,972 32,941
Loss allowance (6,363) (6,345)
Trade receivables carrying amount 28,609 26,596
Analysis of trade receivables stratified by settlement type, is as follows:
Past due at 31 March 2025 Current 0-1 1-3 months 3-6 months 6-12 months >12 months Total
£000s months £000s £000s £000s £000s £000s
£000s
Gross receivables
Settlement agreements 17,736 657 297 214 2,048 2,998 23,950
Judgements 2,206 138 2,158 496 947 5,077 11,022
Total 19,942 795 2,455 710 2,995 8,075 34,972
Loss allowance
Settlement agreements - ECL (253) (19) (37) (32) (44) (241) (626)
Judgements - ECL (311) (64) (5) (77) - (238) (695)
Settlement agreements - Specific provisions (117) (7) (15) (22) (422) (687) (1,270)
Judgements - Specific provisions (64) (2) (6) (8) (317) (3,376) (3,773)
Total (745) (92) (63) (139) (783) (4,542) (6,364)
Expected loss rate %
Settlement agreements 2% 5% 13% 16% 23% 39% 20%
Judgements* 34% 47% 47% 49% 57% 58% 50%
Total 4% 11% 3% 19% 26% 56% 18%
*Expected judgement loss rates are shown net of deductions where the Company
has secured charging orders over properties owned by the debtors.
Expected credit loss ("ECL") rates have been calculated with reference to past
history of credit losses within each ageing category. Management has sought to
amend the rates if there are known future macroeconomic events that may alter
those historical rates.
In respect of certain aged debtors, the Company may hold restrictions on a
defendant's property sales and a charge over a defendant's property. Where
significant assets are held by a defendant the Company may choose not to
record an ECL or specific provision on the exposure of an aged debtor.
Judgements are handed down by a judge and are imposed on a defendant, the
adversarial nature of the arrangement results in these balances being more
difficult to collect, often requiring the forced sale of a defendant's asset
which can take time to achieve.
The Company fully writes off an aged debtor when it believes that there are no
prospects of recovery.
Credit risk on cash and cash equivalents is considered to be very low as the
Company's banks hold Fitch credit ratings of A or above.
Investment risk
Investment risk refers to the risk that the Company's case investments may
increase or decrease in value.
Sensitivity analysis has not been included in the financial statements, due to
the vast number of inputs and number of variables which are inherently
specific to each case, making it impossible to provide meaningful data. Whilst
the Board considered the methodologies and assumptions adopted in the
valuation are supportable, reasonable and robust, because of the inherent
uncertainty of valuation, it is reasonably possible, on the basis of existing
knowledge that outcomes within the next financial year that are different from
the assumptions could require a material adjustment to the carrying amount of
the £41.5m of investments disclosed in the balance sheet. However, as an
indication we note that a 10% increase/(decrease) in the fair value or our top
20 cases (excluding Cartel cases) would result in an increase/(decrease) in
the fair value investment of +/- £0.9m.
Currency risk
The Company is not exposed to any currency risk at present.
25. Related party transactions
Director and key management remuneration is disclosed in Note 5.
Lord Leigh, a Non-Executive Director of the Company, is a senior partner at
Cavendish Corporate Finance LLP. The Company paid Cavendish Corporate Finance
LLP £595,000 (FY24: £20,000) for the provision of consultancy services. The
Company owed £525,000 to Cavendish Corporate Finance LLP as at 31 March 2025
(FY24: £nil).
26. Ultimate controlling party
The Company has no ultimate controlling party.
1 (#_ftnref1) The Board believes that the market forecast estimates for the
Company for FY25 are: Realised Revenue: £26.1m; Realised EBIT: £0.9m and
Realised PBT of: £(0.5)m.
2 (#_ftnref2) The audited results differ from the Trading Update released on
29 April 2025 as the Board has deemed an additional 19 small Barclays BBL
Pilot cases be aborted for commercial reasons with a consequential reduction
in revenue from £30.8m to £30.5m.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR FLFVDRIIEFIERecent news on Manolete Partners
See all newsREG - Manolete Partners - Full Year Results
AnnouncementRCS - Manolete Partners - Manolete ranked in Band 1 by Chambers
AnnouncementREG - Manolete Partners - Holding(s) in Company
AnnouncementREG - Manolete Partners - Notice of Results
AnnouncementREG - Manolete Partners - Block Listing Six Monthly Return
Announcement