Manolete Partners PLC on Tuesday reported a record number of new case investments in the current financial year driven by strong trading in the second half, as it expects to benefit from the UK government lifting insolvency protections for companies.
The London-based insolvency litigation financing company said the number of new case investments for the financial year to date is 246, 55% higher than the 159 new case investments for the whole of the previous financial year. The number is already the highest Manolete has ever recorded, as the company said it is set to benefit from the UK government lifting insolvency protections for companies, which will run out at the end of March.
As a result the company expects the pretax loss reported in the first half of the year to be reduced when full year results are released, although it did not specify by how much. It expects overall profitability to recover strongly for financial year 2024 and beyond.
While the first half of financial 2023 was impacted by the UK Government’s temporary suppression of UK insolvencies that only ended in March 2022, the second half saw new cases nearly double to 163 from 83, up 96% on the first half.
With two weeks left in the current financial year, Manolete said it had delivered record gross cash recoveries from completed cases of £26.2 million, 69% higher than the £15.5 million in the previous year.
By the end of February the company had generated £8.7 million of net cash, a 179% increase compared to the comparable period in 2022 of £3.1 million.
In the same period the firm generated £2.4 million of net free cash flow compared to a net outflow of £5.1 million in financial year 2022.
Manolete also highlighted the opportunity for increased business assisting in the recovery in misappropriated Bounce Back Loans. It has already worked on a pilot with Barclays and is now in advanced discussions with another major UK high street bank.
It described the BBL opportunity as ‘potentially highly significant.’
Terms of a revised covenant package relating to the revolving credit facility have now agreed with HSBC, the company added.
Shares in Manolete closed 1.8% higher at 262.00 pence in London on Tuesday.
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