Manolete Partners (MANO) H2 2024 earnings summary

Executive summary

• Manolete Partners is the UK's leading insolvency litigation financing company, with a unique model of purchasing claims from insolvent companies, giving it full control over case management and settlements.

• The company has completed over 900 cases, generating settlements exceeding £136m over 16 years, with consistently high IRRs of 130% and ROIs of 116%.

• Manolete holds a dominant 67% share of the third-party funding (TPF) segment in the UK insolvency market, with nationwide coverage and a highly experienced in-house legal team.

• The business mix is now almost entirely comprised of purchased cases, with 95% of new investments in FY24 being purchased rather than funded.

Financial highlights

• FY24 total revenue rose 27% to £26.3m, with realised revenue at £24.2m (up from £21.9m adjusted in FY23) and positive unrealised revenue of £2.1m (vs. £(6.0)m in FY23).

• EBIT was £2.5m, a turnaround from a £3.1m loss in FY23; gross profit increased 176% to £10.1m, and gross margin improved to 39% from 18%.

• Net cash generated from completed cases was £10.8m, and cash at bank at year-end was £1.4m.

• Overheads increased 13% to £7.6m, reflecting team expansion and higher marketing spend.

• Debt drawn increased to £13.75m (from £10.5m), with £3.75m of the HSBC facility remaining unutilised.

Outlook and guidance

• In the first five months of FY25, Manolete received a record 348 case enquiries, 22% higher than the prior year period.

• 103 new case investments signed YTD FY25, with 116 cases completed for an aggregate value of £11.8m and gross cash receipts of £10.3m.

• The company expects a gradual return of larger cases (Administrations) and sequential settlements in cartel claims.

• Any significant new involvement in BBL recoveries will depend on decisions by the incoming "Covid Corruption Commissioner."