REG - Manolete Partners - Half-year Report
19/11/2024 07:00
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RNS Number : 7022M Manolete Partners PLC 19 November 2024
19 November 2024
MANOLETE PARTNERS PLC
("Manolete" or the "Company")
Half-year results for the six months ended 30 September 2024
Manolete (AIM:MANO), the leading UK-listed insolvency litigation financing
company, today announces its unaudited results for the six months ended 30
September 2024.
Steven Cooklin, Chief Executive Officer, commented:
"These are a strong set of results, particularly in terms of organic cash
generation. In this six-month period, gross cash collected rose 63% to a new
record at £14.3m. That strong organic cash generation comfortably covered all
cash operating costs, as well as all cash costs of financing the ongoing
portfolio of 413 live cases, enabling Manolete to reduce net debt by £1.25m
to £11.9m as at 30 September 2024.
As a consequence of Manolete completing a record number of 137 case
completions, realised revenues rose by 60% to a further record high of £15m.
That is a strong indicator of further, and similarly high levels, of near-term
future cash generation. A record pipeline of 437 new case investment
opportunities were received in this latest six-month trading period,
underpinning the further strong growth prospects for the business.
The record £14.3.m gross cash was collected from 253 separate completed
cases, highlighting the highly granular and diversified profile of Manolete's
income stream.
Manolete has generated a Compound Average Growth Rate of 39% in gross cash
receipts over the last five H1 trading periods: from H1 FY20 up to and
including the current H1 FY25. The resilience of the Manolete business model,
even after the extraordinary pressures presented by the extended Covid period,
is now clear to see.
This generated net cash income of £7.6m in H1 FY25 (after payment of all
legal costs and all payments made to the numerous insolvent estates on those
completed cases), an increase of 66% over the comparative six-month period for
the prior year. Net cash income not only exceeded by £4.5m all the cash
overheads required to run the Company, it also exceeded all the costs of
running Manolete's ongoing 413 cases, including the 126 new case investments
made in H1 FY25.
The Company recorded its highest ever realised revenues for H1 FY25 of
£15.0m, exceeding H1 FY24 by 60%. On average, Manolete receives all the cash
owed to it by the defendants of completed cases within approximately 12 months
of the cases being legally completed. This impressive 60% rise in realised
revenues therefore provides good near-term visibility for a continuation of
Manolete's strong, and well-established, track record of organic, operational
cash generation.
New case investment opportunities arise daily from our wide-ranging,
proprietary, UK referral network of insolvency practitioner firms and
specialist insolvency and restructuring solicitor practices. We are delighted
to report that the referrals for H1 FY25 reached a new H1 company record of
437. A 27% higher volume than in H1 FY24, which was itself a new record for
the Company this time last year. That points to a very healthy pipeline as we
move forward into the second half of the trading year."
Financial highlights:
· Total revenues increased by 28% to £14.4m from H1 FY24 (£11.2m)
as a result of the outstanding delivery of realised revenues generated in the
six months to 30th September 2024.
· Realised revenues achieved a record level of £15.0m in H1 FY25,
a notable increase of 60% on H1 FY24 (£9.4m). This provides good visibility
of near-term further strong cash generation, as on average Manolete collects
all cash on settled cases within approximately 12 months of the legal
settlement of those cases
· Unrealised revenue in H1 FY25 was £(633k) compared to £1.8m for
the comparative H1 FY24. This was due to: (1) the record number of 137 case
completions in H1 FY25, which resulted in a beneficial movement from
Unrealised revenues to Realised revenues; and (2) the current lower average
fair value of new case investments made relative to the higher fair value of
the completed cases. The latter point also explains the main reason for the
marginally lower gross profit reported of £4.4m in this period, H1 FY25,
compared to £5.0m in H1 FY24.
· EBIT for H1 FY25 was £0.7m compared to H1 FY24 of £1.6m. As
well as the reduced Gross profit contribution explained above, staff costs
increased by £165k to £2.3m and based on the standard formula used by the
Company to calculate Expected Credit Losses, ("ECL"), generated a charge of
£140k (H1 FY24: £nil) due to trade debtors rising to £26.8m as at 30
September 2024, compared to £21.7m as at 30 September 2023. The trade debtor
increase was driven by the outstanding record level of £15.0m Realised
revenues achieved in H1 FY25.
· Loss Before Tax was (£0.2m) compared to a Profit Before Tax of
£0.9m in H1 FY24, due to the above factors together with a lower corporation
tax charge being largely offset by higher interest costs.
· Basic earnings per share (0.5) pence (H1 FY24: 1.4 pence).
· Gross cash generated from completed cases increased 63% to
£14.3m in the 6 months to 30 September 2024 (H1 FY24: £8.7m). 5-year H1
CAGR: 39%.
· Cash income from completed cases after payments of all legal
costs and payments to Insolvent Estates rose by 66% to £7.6m (H1 FY24:
£4.6m). 5-year H1 CAGR: 46%.
· Net cashflow after all operating costs but before new case
investments rose by 193% to £4.5m (H1 FY24: £1.5m). 5-year H1 CAGR: 126%.
· Net assets as at 30 September 2024 were £40.5m (H1 FY24:
£39.8m). Net debt was reduced to £11.9m and comprises borrowings of £12.5m,
offset by cash balances of £0.6m. (Net debt as 31 March 2024 was £12.3m.)
· £5m of the £17.5m HSBC Revolving Credit Facility remains
available for use, as at 30 September 2024. That figure does not take into
account the Company's available cash balances referred to above.
Operational highlights:
· Ongoing delivery of record realised returns: 137 case completions
in H1 FY25 representing a 18% increase (116 case realisations in H1 FY24),
generating gross settlement proceeds receivable of £13.9m for H1 FY25, which
is 51% higher than the H1 FY24 figure of £9.2m. This very strong increase in
case settlements provides visibility for further high levels of cash income,
as it takes the Company, on average, around 12 months to collect in all cash
from previously completed cases.
· The average realised revenue per completed case ("ARRCC") for H1
FY25 was £109k, compared to the ARRCC of £81k for H1 FY24. That 35% increase
in ARRCC is an important and an encouraging Key Performance Indicator for the
Company. Before the onset and impact of the Covid pandemic in 2020, the
Company was achieving an ARRCC of approximately £200k. Progress back to that
ARRCC level, together with the Company maintaining its recent high case
acquisition and case completion volumes, would lead to a material
transformation of Company profitability.
· The 137 cases completed in H1 FY25 had an average case duration
of 15.7 months. This was higher than the average case duration of 11.5 months
for the 118 cases completed in H1 FY24, because in H1 FY25 Manolete was able
to complete a relatively higher number of older cases, as evidenced by the
Vintages Table below.
· Average case duration across Manolete's full lifetime portfolio
of 1,064 completed cases, as at 30 September 2024 was 13.3 months (H1 FY24:
12.7 months).
· Excluding the Barclays Bounce Back Loan ("BBL") pilot cases, new
case investments remained at historically elevated levels of 126 for H1 FY25
(H1 FY24: 146 new case investments).
· New case enquiries (again excluding just two Barclays BBL pilot
cases from the H1 FY24 figure) achieved another new Company record of 437 in
H1 FY25, 27% higher than the H1 FY24 figure of 343. This excellent KPI is a
strong indicator of future business performance and activity levels.
· Stable portfolio of live cases: 413 in progress as at 30
September 2024 (417 as at 30 September 2023) which includes 35 live BBLs.
· Excluding the Truck Cartel cases, all vintages up to and
including the 2019 vintage have now been fully, and legally completed. Only
one case remains ongoing in the 2020 vintage. 72% of the Company's live cases
have been signed in the last 18 months.
· The Truck Cartel cases continue to progress well. As previously
reported, settlement discussions, to varying degrees of progress, continue
with a number of Defendant manufacturers. Further updates will be provided as
concrete outcomes emerge.
· The Company awaits the appointment of the new Labour Government's
Covid Corruption Commissioner and hopes that appointment will set the clear
direction of any further potential material involvement for Manolete in the
Government's BBL recovery programme.
· The Board proposes no interim dividend for H1 FY25 (H1 FY24:
£nil).
For further information, please contact:
Manolete Partners Plc via Instinctif Partners
Steven Cooklin (Chief Executive Officer)
Canaccord Genuity Limited (NOMAD and Sole Broker)
Emma Gabriel +44 (0)207 523 8000
Instinctif Partners (Financial PR)
Instinctif Partners manolete@instinctif.com (mailto:manolete@instinctif.com)
Hannah Scott +44 (0)20 7457 2020
Chief Executive Officer's Statement
Introduction
I am pleased to present our unaudited statements for the six months ended 30
September 2024 ("H1 FY25").
Manolete is the leading UK quoted company in the insolvency litigation finance
market, a sector which plays an important role in returning funds to
creditors, particularly HMRC.
The UK Insolvency Market
April 2022 was a major inflexion point for Manolete. The Conservative
Government of the time ended its Covid era temporary suspension of a number of
significant UK insolvency laws and also curtailed its very significant
financial support provided to UK companies, causing the UK insolvency market
to rebound very positively. In addition, UK companies were faced with a new
economic environment, marked by high inflation, high interest rates and supply
chain issues, factors which still impact UK businesses today. Added to those
pressures, businesses are now also challenged by the recently announced
increases in Employer National Insurance Contribution rates, above inflation
labour pay rises and more stringent labour laws.
Source: UK Insolvency Service 18 October 2024
The overall UK insolvency market is now the most buoyant it has been since the
2008/09 financial crisis, with the level of Creditor Voluntary Liquidations
("CVLs") - by far the largest element of the insolvency market - at its
highest levels recorded by the Insolvency Service since 1960. As anticipated
by the Company, it can be seen from the graphic above, these high levels of
insolvency activity persist. The Board of Manolete believes that these
conditions will continue to drive elevated levels of UK insolvencies, for the
reasonably foreseeable future.
Company Performance
As the leading operator in the specialist area of UK Insolvency Litigation
Finance, it is unsurprising that the unprecedented gyrations in the UK
insolvency market, over the last five years, are mirrored in Manolete's
financial and operating performance, albeit with an average 12-month time
delay.
New Case Enquiries
The new case enquiries graphic depicted below, represents the levels of new
case investment opportunities referred to Manolete between 1 April 2018 and up
to and including 30 September 2024. The graph closely mirrors the shape of the
UK insolvency market trends, shown above, with a relatively short time lag, as
Office Holders (Liquidators, Administrators and Trustees in Bankruptcy)
naturally require a reasonable period of time to investigate their new
appointments before they are in position to present potential case
opportunities to Manolete.
Source: Company Data
For this latest interim period, new case enquiries were 27% higher than the
corresponding first half period last year (please note that in order to best
present the important underlying, sustainable trends, we have excluded the
large block of 106 new case enquiries related to the Barclays BBL Pilot in H1
FY23 and the two further Barclays BBL Pilot case enquiries in H1 FY24, as
there is no guarantee that this activity was more than an exceptional one-off
project. Further details follow below.
The 437 new case enquiries in H1 FY25 were 13% ahead of the Company's previous
record of 388 in H2 FY24 and far in excess of the levels experienced before
the pandemic impact in H2 FY21.
New Signed Cases
In H1 FY25, the level of new signed case investments continued to exceed the
pre-pandemic level by some margin (as above we have excluded the exceptional
Barclays BBL Pilot cases. One further Barclays BBL Pilot case was signed in H1
FY25).
The single anomaly in the otherwise strong key performance indicators, was
that the first quarter of FY25 delivered just 44 new signed cases. Much more
positively, Q2 FY25 rebounded very strongly to 81 and that positive trend has
continued into Q3 FY25, with 31 new case investments signed in October 2024.
As in prior years the lower volumes in Q1 FY25 were due to Insolvency
Practitioners ("IPs") and their staff being very busy attending to Members
Voluntary Liquidations ("MVLs"), at around the time that the tax year ended on
5 April each year. MVLs are solvent liquidations of companies by their
shareholders (rather than creditors) as they usually relate to tax planning
issues. Furthermore, this factor was exacerbated this year, because of the
further certainty of a UK General Election looming at some time later in the
calendar year 2024. Therefore the MVL activity appears to have been
exceptionally, but understandably, strong in Q1 FY25, leading to a short
temporary loss of IP focus on insolvency litigation claims. It was pleasing to
see a very strong recovery of this key performance indictor in Q2 FY25 and
beyond.
Case Completions
H1 FY25 saw an outstanding, record level of 137 full legal case completion, an
18% increase over the 116 case completions recorded for H1 FY24.
The aggregate gross settlement proceeds receivable from those 137 legally
binding case completions in H1 FY25 was an impressive £13.9m as that is 44%
higher than the H1 FY24 figure of £9.2m. This very strong increase in the
aggregate value of case settlements is a highly reliable indicator for future,
near term, cash collection, as it takes the Company, on average, around 12
months to collect in all legally agreed cash receivables on its completed
cases.
The Manolete Board has been keen to highlight that as the Company emerged from
the Covid downturn, newly signed case volumes recovered very positively but
the average realised revenue value per case was significantly lower than
Manolete had been achieving prior to the onset of the Covid pandemic. This was
because the first large wave of high insolvency levels featured a
disproportionately larger number of smaller UK companies as they typically
have less robust balance sheets, fewer financing options and are therefore
less likely to withstand insolvency pressures. The level of UK Administration
insolvencies (a good indicator of larger company insolvencies as they favour
the Administration insolvency route) has only reached the higher pre-pandemic
levels in the last 9 months or so and the rate of increase in Administrations
has been far more gradual than the very sharp increase in CVLs, the latter
being the typical route to insolvency for smaller and medium size companies.
The size of claim referred to Manolete, ends to be determined by the size of
economic entity from which the claim emanates.
Prior to the start of Covid in March/April 2020, Manolete achieved an average
realised revenue per completed case ("ARRCC") of around £200k. That is close
to the approximate market norm for the size of an average UK insolvency
litigation case where cases tend to settle at approximately half of £500k
average headline claim value. It is therefore encouraging that in H1 FY25 the
ARRCC was £109k, a 35% increase from HY FY24 ARRCC of £81k. For the full 12
months of FY24 the ARRCC was £94k. Therefore, the H1 FY25 ARRCC is 16% above
the full 12-month FY24 ARRCC. These are important and encouraging but still
early trends pointing to an increasing ARRCC. The ARRCC is a highly important
factor in determining the financial outturn of the Company for any given
period. In any analysis of any sector of the Law, one should not draw
definitive conclusions based on the results of just six months data. This
trend requires analysis over a longer and statistically more significant
period of time.
Average case durations (the time it takes from Manolete signing a new case
investment to legally completing it) for the 137 cases completed in H1 FY25
increased to 15.7 months from 11.5 months for H1 FY24. The H1 FY25 period
featured the welcome completion of a relatively larger number of older vintage
cases compared to the H1 FY24 period.
Revenues and Profit
The Company recorded its highest ever realised revenues of £15.0m in H1 FY25,
exceeding H1 FY24's £9.4m by an impressive 60%. On average, Manolete receives
all the cash owed to it by the defendants of completed cases within around 12
months of the case being legally completed. That provides excellent near-term
visibility and therefore a reasonable expectation for the continuation of the
Company's strong and now clearly well-established track record of cash
generation.
The Company's H1 FY25 movement on unrealised revenues (which are also
technically the same as the Company's unrealised gross profit) showed a
negative movement of £633k compared to a positive £1.8m movement in H1 FY24.
The primary reasons for this were: (1) the record level of case completions in
H1 FY25 which cause a beneficial movement from "unrealised" to "realised"
revenues and "unrealised" to "realised" gross profit; (2) the ARRCC factor
explained above. The new cases being added to the Company's case portfolio
have on average been the (internally estimated) relatively smaller cases
compared to those many cases that were completed in the last 6-month trading
period. However, as stated above, the Company has not only achieved strong
levels of new signed cases, there are also early indications of a recovery in
ARRCC, back towards the attractive pre-pandemic ARRCC level.
Referring now to the Company's reported Operating Profit: while the CFO Report
below analyses this in greater detail, it is the product of the multiple
factors covered above that combine to produce the operating profit of £658k
for H1 FY25, a 58% decrease compared to the £1.6m reported for H1 FY24. The
main factor supressing the current level of profitability continues to be the
lower fair value our in-house legal team (who are the principal drivers of the
fair value of the in-process, live cases in Manolete's case investment
portfolio at any one time) attribute to those more recent ongoing cases,
compared to the comparative previous financial period of H1 FY24.
A continued improvement in the Company's ARRCC and a sustained performance in
the already high levels of case volumes, are the key to bringing a strong and
sustained recovery in the Company's profitability.
Cash Generation
Manolete's cash generation performance over the last several years and,
particularly this most recent H1 FY25 period, is the Company's most
outstanding and important achievement as cash generation is the paramount
performance benchmark for most corporate entities.
(i) Gross Cash
In the first six months of this current trading year, Manolete reported gross
cash received from completed cases of £14.3m, an increase of 63%, compared to
the corresponding period H1 FY24 of £8.7m.
Starting from the first full financial year following the Company's IPO on AIM
in December 2018 (FY20), Manolete's gross cash generation is now very well
established. Over the six-year period of first half trading results that are
covered by the graph below, the Company has delivered an impressive Compound
Average Growth Rate ("CAGR") for gross cash collected of 39%.
Source: published accounts of Manolete Partners Plc.
Note*: H1 FY23 has been adjusted to exclude an exceptionally large funded,
one-off case that generated gross cash of £9.5m
(ii) Net Cash Received
A similarly impressive picture emerges from an analysis of Manolete's net cash
income collected from completed cases (which is the gross cash referred to
immediately above, but after the deduction of all payments of legal costs and
payments to Insolvent Estates on the completed cases in each respective period
- defined here as "Net Cash Received"). For H1 FY25 Manolete reported Net Cash
Received from completed cases of £7.6m, an increase of 66% compared to the
corresponding H1 FY24 of £4.6m. It is worth noting that the H1 FY25 Net Cash
Received figure of £7.6m exceeds the £5.9m of full year cash operating costs
of running the Company throughout the whole 12 months of FY24. The Board is
confident that the cash costs of operating the Company in this current full
year of FY25 will be similar to those of FY24. Therefore, the first six months
of Manolete's FY25 have generated significantly more cash than the costs of
running the Company for the entire 12 months - an excellent milestone
achievement.
Source: published accounts of Manolete Partners Plc.
Note*: H1 FY23 has been adjusted to exclude an exceptionally large funded,
one-off case that generated gross cash of £9.5m
Over the six-year period of first half trading results covered by the graph
above, the Company has delivered an impressive CAGR for Net Cash Received of
46%.
(iii) Net Operating Cash Received
Finally, one can see a similarly strong and consistent trend when analysing
Manolete's cash received before new case investments. This is the Net Cash
Received, as previously defined above, less all cash costs of operating the
entire Company in each of the respective first six-month periods of the
relevant financial years. This is defined here as "Net Operating Cash
Received".
For H1 FY25 Manolete reported Net Operating Cash Received of £4.4m, an
increase of 193% compared to the corresponding H1 FY24 of £1.5m.
As can be seen from the graph below, over the last four years, the Company has
been consistently delivering positive Net Operating Cash Received in the first
half trading results during that period. The Company's CAGR for Net Operating
Cash Received over the last four years is 126%.
Source: published accounts of Manolete Partners Plc.
Note*: H1 FY23 has been adjusted to exclude an exceptionally large funded,
one-off case that generated gross cash of £9.5m
For H1 FY25, the Net Operating Cash Received of £4.4m exceeded the costs of
financing the 413 ongoing live cases, which included the acquisition of 126
new case investments (including one new Barclays BBL Pilot case). That high
level of organically generated cash was then used to reduce the Company's net
debt.
Net Debt Reduced
HSBC provides the Company with a £17.5m Revolving Credit Facility ("RCF").
The strong cash generation delivered in H1 FY25 enabled the Company to repay
HSBC a net £1.25m (by comparison, in H1 FY24, the Company increased its
drawings from the HSBC RCF by an additional £2.5m). The Company's Net Debt as
at 30 September 2024 was reduced to £11.9m (at 30 September 2023 Net Debt was
£12.0m and at the most recent year ended 31 March 2024, Net Debt was
£12.3m).
Vintages Table
This table highlights some of the key performance features of Manolete's
business model. In H1 FY25, our in-house legal team was able to complete
several of the few remaining older cases that we had in the investment
portfolio. That had an effect of lengthening the average duration on cases
completed in H1 FY25. However, looking at the investment portfolio as a whole,
72% of the current in-process cases were signed in the last 18 months, which
demonstrates Manolete's impressive ability to realise cases, and generate cash
from them for further reinvestment in our specialist sector. That delivers
consistently very high returns on capital employed. Some of the key features
to note from the table below include:
1. Consistently high IRRs across 1,064 completed cases.
2. Fast case completions, at an average of 13.3 months per case (H1
FY24: 12.7 months per case) from the date of signing the investment agreement
to the date that the case is legally completed. Cash tends to be collected, on
average, over the following 12 months (H1 FY24: 12 months).
3. All cases completed for the 2019 vintage and earlier.
4. Only one of the 141 cases invested in the 2020 vintage remains
open.
Case Vintages as at 30 September 2024
Strategy, Outlook and Team
The Company ended H1 FY25 with 413 live cases in-progress (417 live cases at
the end of H1 FY24). The Directors believe that given the challenging
prevalent economic environment, featuring relatively high inflation,
significantly higher interest rates and historic record high levels of UK
insolvencies, the Company is well set to continue its growth trajectory.
From January 2023, the Company started to take assignments of cases from the
specialist recovery work it is undertaking with Barclays Bank plc on a range
of defaulted Bounce Back Loans ("BBLs") issued by Barclays. The Company awaits
the new Labour Government's appointment of a Covid Corruption Commissioner.
Following that appointment, the Company expects to learn whether it is likely,
or not, to have any further material involvement in the recovery of defaulted
BBLs.
As previously, and recently, reported, we have a number of potential
settlement discussions ongoing, at varying levels of progress, relating to our
Truck Cartel cases. Where settlements with truck manufacturer defendant
companies are not possible, Manolete will progress those cases to trial.
Our Board is always very grateful to the high quality, dedicated team of its
colleagues, across all the departments of Manolete.
Dividend
The Board recommends no interim dividend be proposed for the six months to 30
September 2024.
Steven Cooklin
Chief Executive Officer
Chief Financial Officer's Review
I am pleased to give my review of the Company's unaudited results for the half
year to 30 September 2024.
Trading summary
6 months 6 months
ended 30 September ended 30
2024 September
2023
Unaudited Unaudited
£'000s £'000s
Revenue 14,402 11,230
Cost of sales (10,013) (6,234)
Gross profit 4,389 4,996
Administrative expenses (3,731) (3,437)
Operating profit 658 1,559
KPI's
Gross profit margin % 30% 44%
Operating profit margin % 5% 14%
New cases (#) 126 179
Completed cases (#) 137 116
Live cases at period end (#) 413 417
The financial results for the 6 months to 30 September 2024 (H1 FY25) report
an Operating profit of £0.7m (H1 FY24 £1.6m). Revenue in H1 FY25 was
reported as £14.4m (H1 FY24 £11.2m) an increase of 28% on the same period in
the prior year.
Operationally, the business performed strongly and completed 137 cases in the
6-month period to 30 September 2024 (116 cases, H1 FY24) and signed, including
Barclays BBL cases, 126 new cases (179 new cases, H1 FY24) and continues to
realise cash proceeds from both historic and current year completed cases.
Revenue
6 months 6 months
ended 30 September ended 30
2024 September
2023
Unaudited Unaudited
£'000s £'000s
Realised revenue 15,035 9,401
Unrealised revenue (633) 1,829
Revenue 14,402 11,230
Mix %
Realised revenue 104% 84%
Unrealised revenue (4%) 16%
Revenue increased from £11.2m in H1 FY24 to £14.4m in H1 FY25, an increase
of 28%, which was a result of a higher number and value of case completions in
the 6-month period resulting in a record level of realised revenue. We look at
each realised and unrealised revenue separately:
Realised revenue increased from £9.4m H1 FY24 to £15.0m in H1 FY25, an
increase of 60%. This was a result of a higher number and value of completed
cases in the 6-month period, 137 completed cases at an average realised value
of £109k per case (H1 FY24, 116 completed cases at an average realised value
of £81k per case).
Unrealised revenue decreased to (£0.6m) H1 FY25 compared with a positive
£1.8m in H1 FY24. This was due to a high value of completions (a negative to
unrealised revenue) not being fully replaced by the value of new cases signed
in the 6-month period.
Gross profit
6 months 6 months
ended 30 September ended 30
2024 September
2023
Unaudited Unaudited
£'000s £'000s
Realised gross profit 5,022 3,167
Unrealised gross (loss)/profit (633) 1,829
Gross profit 4,389 4,996
Margin %
Realised gross profit 33% 34%
Unrealised gross profit (100%) 100%
Gross profit margin % 30% 44%
Gross profit decreased from £5.0m in H1 FY24 to £4.4m in H1 FY25, primarily
due to the positive contribution of Unrealised revenue in the prior year
period. Once again, we review realised and unrealised gross profit separately.
Realised gross profit increased to £5.0m H1 FY25 (£3.2m H1 FY24), due to the
large number of completions within the 6-month period. Realised gross profit
margins remained stable at 33% H1 FY25 compared to 34% H1 FY24.
Unrealised gross profit of (£0.6m) H1 FY25 was a result of the large number
of case completions (a deduction from unrealised revenue as they are
transferred to realised revenue) which were not fully matched by new cases
signed.
Administrative expenses
Administrative expenses increased by 8.6% to £3.7m in the six months to 30
September 2024 (H1 FY24: £3.4m) which is principally attributable to an
increase in staff costs by £165k, a result of annual staff salary increases.
Increase in bad debt expense represents an increase in the expected credit
loss in line with an increase in gross debtors as well as an in-depth review
into the Company's older debts.
Statutory operating profit
Operating profit decreased to £0.7m in H1 FY25 (H1 FY24: £1.6m) with an
operating profit margin of 5% (H1 FY24: 14%).
Finance expense
Finance expense increased to £859k in H1 FY25 (H1 FY24: £647k) as base
interest rates have been at a higher average rate than in the 6-month period
to 30 September 2023.
Dividend
No interim dividend is proposed for FY25 (FY24 interim dividend, nil).
Investment in cases
The Company was managing 413 live case investments (including Cartel cases) as
at 30 September 2024, compared to 417 live cases (including Cartel cases) as
at 30 September 2023. The total investment in cases amounted to £39.5m at 30
September 2024 (30 September 2023 value of £39.4m).
Investments in cases are shown at fair value, based on the Company's estimate
of the likely future realised gross profit. Management, following discussion
with the in-house legal team, on a case by case basis, amend the valuations of
cases each month to accurately reflect management's view of fair value. In
addition, at year end reporting periods, a sample of material valuations are
corroborated with the external lawyers working on the case who provide updated
legal opinions as to the current status of the case. The Company does not
capitalise any of its internal costs, these are fully expensed to the
Statement of Comprehensive income.
Trade and other receivables
Trade and other receivables have increased to £29.3m H1 FY25 from £24.3m H1
FY24, an increase of 20%, driven by a high number and value of case
completions. This amount is net of provision for bad debts.
Operational cashflows
6 months 6 months
ended 30 September ended 30
2024 September
2023
Unaudited Unaudited
£'000s £'000s
Gross cash receipts 14,271 8,739
IP share & legal costs on completed cases (6,678) (4,163)
Cashflows from completed cases 7,593 4,576
Overheads (3,145) (3,112)
Net cash generated from operations before investment in cases and corporation 4,448 1,464
tax
Corporation tax - -
Investment in cases (3,306) (3,193)
Net cash generated from / (used in) operations 1,142 (1,729)
Gross cash receipts of £14.3m in H1 FY25 (£8.7m H1 FY24) represents a strong
increase in cash generation in comparison with H1 FY24.
Cash generation was positive after payment of IP share and external legal
costs on those completed cases and after payment of overheads of (£3.1m) and
after investment in new and existing cases.
In this 6-month period, we only utilised our internally generated cash
resources to invest in new and existing cases.
Debt financing
The Company has Net debt of £11.9m with a drawn down balance of £12.5m
(£13.0m H1 FY24) of its £17.5m HSBC loan facility as at 30 September 2024
and continues to deploy loan capital, if required, to finance investment in
cases. During H1 FY25 the Company repaid a net £1.25m of its HSBC loan
facility (drew down £2.5m H1 FY24). The Company held cash reserves of £0.6m
as at 30(th) September 2024 and had £5.0m available of the £17.5m HSBC
facility. This facility and cash reserves will be used to fund future growth
in case volumes. The HSBC loan refinancing is due in June 2025, we are
scheduled to undertake discussions with HSBC from January 2025, we are also in
early-stage discussions with potential other lenders.
Mark Tavener
Chief Financial Officer
Unaudited Statement of Comprehensive Income for the period ended 30 September
2024
6 months ended 30 September 2024 6 months ended 30 September 2023 Year
ended 31 March
2024
Unaudited Unaudited Audited
Note £'000s £'000s £'000s
Revenue 3 14,402 11,230 26,295
Cost of sales (10,013) (6,234) (16,150)
Gross Profit / (Loss) 4,389 4,996 10,145
Administrative expenses 4 (3,731) (3,437) (7,644)
Operating Profit / (Loss) 658 1,559 2,501
Finance income 16 7 16
Finance expense 5 (859) (647) (1,479)
Profit / (Loss) before tax (185) 920 1,038
Taxation (33) (295) (105)
Profit / (Loss) and total comprehensive income for the year attributable to (218) 625 933
the equity owners of the Company
Earnings per share attributable to equity owners of the Company
Basic (£ per share) 11 (0.49p) 1.43p 2.11p
Diluted (£ per share) 11 (0.49p) 1.36p 2.07p
The above results were derived from continuing operations.
Unaudited Statement of Financial Position at 30 September 2024
Company Number: 07660874 30 September 2024 30 September 2023 31 March 2024
Unaudited Unaudited Audited
Note £'000s £'000s £'000s
Non-current assets
Investments 6 11,291 13,530 11,293
Trade and other receivables 9 12,078 11,606 14,203
Deferred tax asset 1,093 137 938
Total non-current assets 24,462 25,273 26,434
Current assets
Investments 6 28,251 25,905 28,903
Trade and other receivables 9 17,207 12,700 15,077
Corporation tax asset - 470 -
Cash and cash equivalents 636 949 1,452
Total current assets 46,094 40,024 45,432
Total assets 70,556 65,297 71,866
EQUITY AND LIABILITIES
Equity
Share capital 175 175 175
Share premium 157 157 157
Share based payment reserve 1,351 742 1,076
Retained earnings 38,845 38,755 39,063
Total equity attributable to the equity owners of the company 40,528 39,829 40,471
Non-current liabilities
Trade and other payables 10 7,643 7,019 8,434
Borrowings 12,500 12,928 13,726
Total non-current liabilities 20,143 19,947 22,160
Current liabilities
Trade and other payables 10 9,781 5,521 9,235
Current tax liabilities 104 - -
Total current liabilities 9,885 5,521 9,235
Total liabilities 30,028 25,468 31,395
Total equity and liabilities 70,556 65,297 71,866
The interim statements were approved by the Board of Directors and authorised
for issue on 19 November 2024.
Unaudited Statement of Changes in Equity for the period ended 30 September
2024
Share Capital Share Premium Share based payment reserve Retained Earnings Total Equity
£000s £000s £000s £000s £000s
As at 1 April 2023 (unaudited) 175 157 699 38,130 39,161
Comprehensive Income
Profit and total comprehensive income - - - 625 625
Transactions with owners
Share based payment expense - - 144 - 144
Share based payments exercised - - - -
Deferred tax on share-based payments - - (101) - (101)
Dividends - - - - -
As at 30 September 2023 (unaudited) 175 157 742 38,755 39,829
Comprehensive Income
Profit and total comprehensive income - - - 308 308
Transactions with owners
Share based payment expense - - 192 - 192
Share based payments exercised - - - - -
Deferred tax on share-based payments - - 142 - 142
Dividends - - - - -
As at 31 March 2024 (audited) 175 157 1,076 39,063 40,471
Comprehensive Income
Loss and total comprehensive income - - - (218) (218)
Transactions with owners
Share based payment expense - - 191 - 191
Share based payments exercised - - - - -
Deferred tax on share-based payments - - 84 - 84
Dividends - - - - -
As at 30 September 2024 (unaudited) 175 157 1,351 38,845 40,528
Unaudited Statement of Cashflows for the period ended 30 September 2024
6 months ended 30 September 2024 6 months ended 30 September 2023 Year ended 31 March 2024
Unaudited Unaudited Audited
Note £'000s £'000s £'000s
(Loss)/ Profit before tax (185) 920 1,038
Adjustments for other operating items:
Adjustments for non-cash items 8 4,993 4,895 4,420
Operating cashflows before movements in working capital 4,808 5,815 5,458
Changes in working capital:
Net (decrease) / increase in trade and other receivables (5) 72 (4,901)
Net (decrease) / increase in trade and other payables (355) (531) 4,408
Net cash generated from operations before corporation tax and investment in 4,448 5,356 4,965
cases
Corporation tax paid - - -
Investment in cases 6 (3,306) (7,085) (6,355)
Net cash generated / (used in) from operating activities 1,142 (1,729) (1,390)
Cash flows from investing activities
Finance income received 16 7 16
Net cash generated from investing activities 16 7 16
Cash flows from financing activities
(Repayments) / Proceeds from borrowings (1,250) 2,500 3,250
Interest paid (724) (464) (1,060)
Net cash (used in) / generated from financing activities (1,974) 2,036 2,190
Net increase / (decrease) in cash and cash equivalents (816) 313 816
Cash and cash equivalents at the beginning of the year 1,452 636 636
Cash and cash equivalents at the end of the period 636 949 1,452
Unaudited notes to the financial statements for the period ended 30 September
2024
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 Accounting policies
(a) Basis of preparation
The half-yearly financial statements do not constitute statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
The interim condensed financial statements for the six months ended 30
September 2024 have been prepared in accordance with IAS 34 Interim Financial
Reporting. The interim condensed financial statements do not include all the
information and disclosures required in the annual financial statements, and
should be read in conjunction with the Company's annual financial statements
as at 31 March 2024.
The statutory accounts for the year ended 31 March 2024 have been filed with
the Registrar of Companies at Companies House. The auditor's report on the
statutory accounts for the year ended 31 March 2024 was unqualified and did
not contain any statements under Section 498 (2) or (3) of the Companies Act
2006.
(b) Going concern
The interim financial statements relating to the Company have been prepared on
the going concern basis. The company has met each of its quarterly bank
covenants during the six months in H1 FY25.
After making appropriate enquires, 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 interim financial statements. In reaching this
conclusion, the Directors have considered the position with respect to
covenant compliance, short-term cash forecast, the general environment with
respect to number of insolvencies in the UK economy. For these reasons, they
continue to adopt the going concern basis in preparing the Company's interim
financial statements.
(c) 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 2(d).
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.
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 financing arrangements, revenue is recognised
under the classification and measurement provisions of IFRS 9.
(d) significant judgements and estimates
The preparation of the Company's interim financial statements in accordance
with 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 period, 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 liabilities
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 30 September 2024
there were 413 open cases, of these 369 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 44 cases make up £23.3m 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 £39.5m of
investments disclosed in the balance sheet (Note 6). 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 30 September
2024 was £15.0m (HY24 £15.2m).
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.13.3 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 December 2023. 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 £6.0m 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 9 of the interim accounts.
3 Segmental reporting
During the six months ended 30 September 2024, revenue was derived from cases
funded on behalf of the insolvent estate and cases purchased from the
insolvent estate, which are wholly 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. Revenue 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.
6 months ended 30 September 2024 6 months ended 30 September 2023 Year
ended 31 March
2024
Unaudited Unaudited Audited
£'000s £'000s £'000s
Net realised gains on investments in cases 15,035 9,402 24,183
Fair value movements (net of transfers to realisations) (633) 1,828 2,112
Revenue 14,402 11,230 26,295
Arising from:
Purchased cases 14,356 12,034 26,985
Funded cases 46 (804) (690)
Revenue 14,402 11,230 26,295
4 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:
6 months ended 30 September 2024 6 months ended 30 September 2023 Year
ended 31 March
2024
Unaudited Unaudited Audited
£'000s £'000s £'000s
Staff costs, including pension and healthcare 2,319 2,155 4,482
costs
Bad debts including expected credit losses 475 359 1,362
Professional fees 404 312 669
Marketing costs 194 232 365
Other costs, including office costs 339 379 766
Total administrative 3,731 3,437 7,644
expenses
5 Finance expense
6 months ended 30 September 2024 6 months ended 30 September 2023 Year
ended 31 March
2024
Unaudited Unaudited Audited
£'000s £'000s £'000s
Bank loan charges 758 548 1,283
Other loan interest 101 99 196
Total finance expense 859 647 1,479
6 Investments
Investments represent the expected gross profit generated on the Company's
ongoing portfolio of cases on settlement. This incorporates the expected gross
settlement less the costs incurred to initially purchase the claim, costs
incurred to date, expected future costs, and the share of net gain due to the
Insolvency Practitioner.
6 months ended 30 September 2024 6 months ended 30 September 2023 Year
ended 31 March
2024
Unaudited Unaudited Audited
£'000s £'000s £'000s
Investments brought forward 40,196 36,462 36,462
Prepaid cost additions on live cases 3,306 7,085 6,355
Realised prepaid costs (3,327) (5,940) (4,733)
Fair value movement (net of transfers to realisations) (633) 1,828 2,112
Total investments 39,542 39,435 40,196
Current 28,251 25,905 28,903
Non-current 11,291 13,530 11,293
Total investments 39,542 39,435 40,196
7 Analysis of fair value movements
6 months ended 30 September 2024 6 months ended 30 September 2023 Year
ended 31 March
2024
Unaudited Unaudited Audited
£'000s £'000s £'000s
New case investments 3,981 7,150 12,325
Increase in existing case fair value (exc. cartel cases) 2,117 506 488
Decrease in existing case fair value (exc. cartel cases) (2,602) (2,794) (3,982)
Case completions (4,115) (3,175) (6,811)
Increase in fair value attributable to Cartel cases (14) 141 92
Fair value movement (net of transfers to realisations) (633) 1,828 2,112
8 Non-cash adjustments to cashflows generated from operations
6 months ended 30 September 2024 6 months ended 30 September 2023 Year
ended 32 March
2024
Unaudited Unaudited Audited
£'000s £'000s £'000s
Fair value movements (net of transfers to realisations) 633 (1,828) (2,112)
Legal costs on realised cases 3,326 5,939 4,733
Finance expense 859 647 1,479
Share based payments 191 144 336
Finance income (16) (7) (16)
Non-cash adjustments to cashflows generated from operations 4,993 4,895 4,420
9 Trade and other
receivables
30 September 2024 30 September 2023 31 March
2024
Unaudited Unaudited Audited
£'000s £'000s £'000s
Amounts falling due in more than one year:
Trade 9,738 9,150 11,738
receivables
2,340 2,456 2,465
Contract asset
Trade and other receivables due in more than one year 12,078 11,606 14,203
Amounts falling due within one year:
Gross trade receivables 23,962 18,011 21,203
Less:
Specific provisions (4,832) (2,873) (4,507)
Allowance for expected credit loss (2,054) (2,577) (1,838)
Trade 17,076 12,561 14,858
receivables
Prepayments 131 139 219
Trade and other receivables due within one year 17,207 12,700 15,077
10 Trade and other payables
30 September 2024 30 September 2023 31 March
2024
Unaudited Unaudited Audited
£'000s £'000s £'000s
Amounts falling due in more than one year:
Accruals - direct costs 5,911 5,314 6,651
Contract liability 1,732 1,705 1,783
Total trade and other payables due in more than one year 7,643 7,019 8,434
Amounts falling due within one year:
Trade payables 907 611 1,325
Accruals - direct costs 7,797 4,226 6,714
Other creditors 950 562 1,058
Other taxation and social security 127 122 138
Total trade and other payables due within one year 9,781 5,521 9,235
11 Earnings Per Share
The Basic Earnings Per Share is calculated by dividing the profit attributable
to ordinary equity holders by the weighted average number of ordinary shares
outstanding during the period. Diluted Earnings Per Share is calculated by
dividing the profit after tax by the weighted average number of shares in
issue during the period, adjusted for potentially dilutive share options. The
following reflects the income and share data used in the Earnings Per Share
calculation:
6 months ended 30 September 2024 6 months ended 30 September 2023 Year
ended 31 March
2024
Unaudited Unaudited Audited
£'000s £'000s £'000s
Profit and total comprehensive income for the period attributable to the (218) 625 933
equity owners of the Company
Weighted average number of ordinary shares 44,135,972 43,761,305 44,135,972
Basic Earnings Per Share (0.49p) 1.43p 2.11p
Diluted weighted average number of ordinary shares 45,128,057 45,975,328 45,128,751
Diluted Earnings Per Share (0.49p) 1.36p 2.07p
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