Manolete returns to profit as completion volumes run at record highs

18th Apr 2024 10:37

(Sharecast News) - Insolvency litigator Manolete Partners said on Thursday that it has seen "strong momentum" and a return to profit through a combination of new case investment and case completion volumes running at record highs and an increasing bias towards larger cases.

Manolete stated that a combination of "strong cash recoveries" and a new covenant package had provided it with a "strong and efficient financing platform" to exploit self-generated opportunities.

The AIM-listed group delivered a 26% increase in overall revenues to £26.3m and now expects to report a pre-tax profit of roughly £2.5m, compared to a pre-tax loss of £3.1m in FY23.

Chief executive Steven Cooklin said: "During FY24, the UK insolvency market showed it was fully rehabilitated from the temporary two-year suppression of insolvencies that the Government had enacted during the Covid-19 pandemic. Significantly higher prevalent interest rates, heightened concerns over geopolitical conflicts in Eastern Europe and the Middle East and the withdrawal of the large-scale financial supports provided by the Government to UK businesses during the Covid-19 period, has resulted in the highest level of UK insolvencies for 30 years. Insolvency Service statistics from January 2024 show the number of Creditor Voluntary Liquidations, the largest constituent part of the UK insolvency market, in 2023 was at its highest level since 1960."

Conklin said these factors had led to a "substantial and sustained rebound" in the number of Manolete's case enquiries and new case investments in the first half, a trend that has continued into the second.

He also noted that an agreed-upon amended financing package with HSBC and "the robust organic cash generative nature of the Manolete business", provided a "strong and efficient financing platform" for the business to take advantage of these "attractive market conditions".

As of 1035 BST, Manolete shares had surged 21.02% to 148.25p.

Reporting by Iain Gilbert at Sharecast.com