REG - Manolete Partners - H1 Trading Update

Manolete PartnersAnnouncement

09/09/2022 07:00

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RNS Number : 8547Y  Manolete Partners PLC  09 September 2022

9 September 2022

THE INFORMATION COMMUNICATED IN THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014 ("MAR"). Steven Cooklin
Chief Executive Officer of Manolete Partners Plc is the person responsible for
this disclosure.

Manolete Partners Plc

("Manolete" or the "Company")

H1 Trading Update

Manolete Partners Plc (AIM: MANO), the leading listed insolvency litigation
financing firm in the UK, announces that it has received a rare adverse
decision in the High Court on one of its larger cases. While Manolete has
applied for permission to appeal this surprising decision, the Board has
decided to write down the full value of the case in its forthcoming results
for the six months ended 30 September 2022 ("FY23 Interim Results"). The
impact will be a reduction of £2.3m to pre-tax profits, of which the cash
costs paid out on this case to date are £636,756.

Separately, reflecting the widely reported deterioration and challenges
presenting in the UK macro-economic climate, the Board has taken a more
prudent view of the valuation of the Company's c.280 ongoing litigation case
investments.

As a combination of both of these factors, the Company expects to announce a
pre-tax loss of c.£5m in the FY23 Interim Results, the large majority of
which will be due to the adjustment of unrealised revenues and unrealised
profits.

Underlying business performance and cash generation

Despite these negative factors, the business continues to operate well, in
particular, gross cash generation from completed cases in the first five
months of the current trading year is at a record £15m. This compares to
£15.6m gross cash generation for the entire 12 months for the year ended 31
March 2022. This strong cash performance enabled the Company to repay a net
£3.7m of indebtedness during the first half of this financial year.
Furthermore, unaudited realised revenues, on completed cases, for the first
five months of FY23 were 175% higher at £10.6m (FY22: £3.9m).

From 1 April 2022, UK insolvency regulations returned to normal after a near
two-year suppression of insolvencies by the Government in response to the
Covid-19 pandemic. The benefits of this are now starting to flow into the
Company's key performance metrics, with new case enquiries already up 24%
compared to the whole of H1 FY22. The Company is also working closely with
blue-chip strategic financial services and Government entities, which may lead
to a material involvement in the recovery of monies loaned to UK SMEs under
the Bounce Back Loan schemes. The Company will provide a further update when
the FY23 Interim Results are published.

Steven Cooklin, CEO of Manolete commented: "The Board and our legal advisers
were surprised and disappointed by the very rare adverse initial judgment that
we received on one of our larger cases, a case that we originally signed up in
2019. For the first time in our 13-year history, we have applied for
permission to appeal that decision to the Court of Appeal. We have taken a
cautious stance by reducing the carrying value of that case to zero until we
know the final outcome of the appeal process. On the wider front, while we
have taken a deliberately prudent view on the latest valuation of the
portfolio of our 280 in-process cases, we note that our key forward-looking
performance indicator of 'new case enquiries' is now showing strong signs of
recovery. I am optimistic that the second half of this financial year and
beyond will see much improved trading results".

 

For further information, please contact:

Manolete Partners
Plc
via Instinctif Partners

Steven Cooklin (Chief Executive Officer)

Peel Hunt (NOMAD and Sole Broker)
    +44 (0)20 7418 8900

Paul Shackleton

Instinctif Partners (Financial PR)

Tim Linacre
                                     +44 (0)7949 939237

Victoria Hayns

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