Manolete Partners profits surge 40% as insolvency activity gains pace

UK insolvency litigation financing company Manolete Partners (AIM:MANO) booked bumper full-year financial results, with the increased number of insolvencies likely offering the company an unusual range of opportunities.

The company was given a boost by a 36% year-on-year jump in revenues, up to £18.7 million, alongside a 139% increase in new core investments in UK insolvency cases, and an impressive ROI of 173%.

The saw Manolete Partners’ EBIT bounce by 36%, while gross profit soared 43% and profit after tax jumped 38% to £7.6 million.

The situation for Manolete shareholders was even more rosy. While diluted EPS spiked 70% to 17.00p, the company’s final dividend doubled year-on-year, to 3.00p a share.

Speaking on the company’s busy year and the opportunities business closures will offer the company going forwards, Manolete Partners CEO Stephen Cooklin commented:

“Despite the challenges of COVID-19, the activity levels within the business are at record levels, highlighted by the 47 new case investments (124% more than the same period last year) and 23 case completions (up from four in the same period last year) that the team has transacted in the first quarter of FY21. New case enquiries are also at all-time record levels, running at around double the rate we had this time last year. We entered FY21 with £8.4m of gross cash, a positive net cash balance and £12m of our HSBC Revolving Credit Facility unutilised. All these factors firmly underpin our confidence in the current and future trading performance of the business.

“With the widely reported economic disruption likely to ensue, we expect new case enquiries to increase over the foreseeable future and we will continue working to deliver outstanding returns to both insolvent estates and investors.”

Following the update, Manolete Partners shares rallied 6.87% or 35.05p, to 545.05p per share 12:28 BST 03/07/20. This is up on the company’s year-to-date nadir of 235.00p a share in March, but down from its high of 585.00p in mid-May.

The Group’s p/e ratio is 39.23, their dividend yield is modest at 0.09%.

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Senior Journalist at the UK Investor Magazine. Also a contributing writer at the Investment Observer, UK Property Journal and UK Startup Magazine. Postgraduate of King's College London with a specialisation in Business Ethics. Interested in Development Economics and David Hume.