Anexo Group says trading continues in line with expectations
(ANX ) has told investors ahead of its Annual General Meeting next Wednesday that overall trading continues to perform in line with management expectations.
The London-listed company, which provides specialist integrated credit hire and legal services, said it continues to recruit ‘high quality legal staff’ which it said is in line with its policy of expanding its headcount to drive increased case settlements and cash collection.
In particular, cash collections for Anexo’s legal services division during the first four months of FY21 are in line with management forecasts and 11.8% ahead of those in the FY20 period.
The company highlighted the progress within its legal services division, Bond Turner, as ‘particularly pleasing’ since the court system has yet to return to full operational capacity.
Meanwhile, EDGE, the Company’s Credit Hire division, has seen an increase in average vehicle hire numbers following the relaxation of the national lockdown, with the number of vehicles on hire for the first four months of FY21 8.5% ahead of the same period in FY20.
Addressing shareholders, the Group said it is maintaining its policy of controlling vehicle numbers in order to maximise cash collections.
In recent weeks, Anexo told investors that it had achieved its milestone of reaching net cash generation during the year ended 31 December 2020 after a period of ‘continued growth.’
Anexo said the business has continued to perform throughout ‘a period of significant uncertainty, improving vehicle numbers and cash collections to record levels during 2020, demonstrating the strength and resilience of the Group during the current COVID-19 crisis.’
Anexo highlighted that the expansion of the national vaccination programme as well as the relaxation of national lockdown from April 2021 has resulted in an increase in opportunities and vehicles on the road, which is said is consistent with the trends seen in 2020.
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Anexo achieved its stated milestone of net cash generation throughout FY20, a notable achievement given the disruption experienced over the period as a result of COVID-19.
Both the Company’s business divisions have remained fully operational throughout the 2020 and into 2021 while the Group believes its ongoing investment into its advocacy practice is forming “a solid foundation” for the business to generate new future revenues.
Analysts at Arden have reminded investors Anexo trades on 9.3x 2021 P/E and 6.6x EBITDA, but also only 1.2x P/BV which analysts believe this is too low considering the value stored in the 20,000 case backlog and the investments made in legal services to drive settlements.
Anexo’s accelerated investment in staff, while maintaining market expectations at the adjusted PBT level, is expected to add significant confidence to expectations in FY21.
Anexo is an integrated credit hire & legal services group that provides replacement vehicles and associated legal services to customers who have been involved in a non-fault accident.
In November 2020, the company told investors that the COVID-19 pandemic had led to a number of its competitors withdrawing from the market and, as a result, Anexo had been approached by a number of high-quality introducer garages looking for new partnerships.
The Group said it has leveraged this ‘unprecedented opportunity’ to expand its introducer network; resulting in the number of vehicles on the road during H2 2020 ‘consistently exceeding internal targets’. As at 10 November 2020, road vehicles stood at 1,902.
The company said it plans to work closely with the international Asset Management firm, DBAY, in order to continue the expansion of its Credit Hire and Legal Services divisions.
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