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Analyst comment for​ Manolete Partners

07:51, 21st September 2021

Its great when one's investment thesis starts to play out relatively quickly.

For the past 3 months, I've talked exclusively 3x on Vox Markets about the substantial value & hidden growth potential at Manolete Partners Plc FOLLOW. The UK's #1 'Insolvency Litigation Funder' - enjoying a >50% share of the 3rd-party funded sector.

Ok, but why am I bullish on the stock?

Well, firstly my eldest daughter works in 'business restructuring / insolvency' - & after experiencing a quiet period in H1'21, is now extremely busy.

Next this is super specialist stuff, with #MANO possessing deep vertical expertise. Buying cases from say Insolvency Practitioners, which fit its core USPs, strengths & knowledge base. Meaning Manolete Partners Plc are in a much better position to price risk than anyone else.

Moreover, typically the historical RoI's of such cases have been >100%, and very few ever have to go to trial (Est <5%).

Plus the working capital profile is attractive too. In fact from the point of buying a case, it typically takes on average just 2 years to settle the dispute with the defendant & collect all the agreed cash.

Hence with the government now lifting the moratorium on medium/large company insolvencies from 1st Oct’21. Then I could see (by say Spring 2022), a deluge in new business wins for Manolete Partners Plc, alongside a shortening of case settlement times, as the firm picks off 'low hanging fruit', the economy normalises & the industry's huge backlog is gradually whittled down.

Lastly wrt valuation, I estimate #MANO should be able to achieve £13m-£15m of sustainable EBIT over the next 3 years. Which on a 13x-15x multiple would generate a theoretical price of >400p/share vs today.

CEO & founder Steven Cooklin saying today: "FY21 trading has been in line with FY22 expectations (Mar y/e). With the recent [phasing-out of the UK's] temporary [Insolvency] measures from 1st Oct, we expect to see a return to more normal conditions in H2 & beyond. And are very well positioned for long term profitable growth."

Onwards & upwards.

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The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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