Manolete Partners - Trading Update

29 April 2025

Manolete Partners PLC

("Manolete" or the "Company")

Trading Update

Revenues and EBIT ahead of forecast plus strong cash generation

Manolete Partners Plc (AIM:MANO), the leading quoted UK insolvency litigation financing company, is pleased to provide the following update on its trading and business for the year ending 31 March 2025 ("FY25").

All figures contained in this announcement remain subject to audit.

Highlights for FY25:

·      Record new case investments of 282 (FY24: 276)¹

·      Record new case referrals of 896 (FY24: 731)

·      Record volume of case completions at 272 cases (FY24: 251)

·      Gross cash recoveries of £25.6m (FY24: £17.7m)

·      Net cash income from completed cases £13.3m (FY24: £10.8m)

·      Estimated total revenue of £30.8m (FY24: £26.3m)

·      EBIT of £3.2m (FY24: £2.5m)

·      Net Debt £11.1m (FY24: £12.3m)

·      New bank facilities agreed with HSBC

Steven Cooklin, Chief Executive Officer, commented: "The past year has seen Manolete achieve record KPIs across all key metrics of the business and outperform market forecasts. Given the strong tailwinds presented by the challenging UK and global business environments, we expect to build upon those achievements in the forthcoming year."

1.   Record New Case Investments: 282 new cases

Excluding the one-off effect of the Barclays Bounce Back Loan Pilot ("BBBLP"), the number of new case investments in FY25 was 282, 2% higher than FY24's previous record number of 276.

Two further BBBLP cases were signed in FY25 (FY24: 35).

2.   Record New Case Referrals: 896 new referrals

There were 896 new case referrals recorded in FY25 (zero new BBBLP cases), a new record number that was 23% ahead of the 731 referrals reported in FY24 (excluding two BBBLP cases).

3.   Record Volume of Case Completions: 272 cases completed

In FY25, Manolete completed a new record number of 272 cases, 8% higher than last year's previous record number of 251. The estimated Money Multiple on the 272 cases was 2.1x (FY24: 2.4x).

Manolete's average Realised Revenue per completed case for FY25 was £108k, 12.5% higher than the average Realised Revenue per completed case for FY24 of £96k. The continued positive trend towards larger average case sizes is in line with the Board's previously stated expectation that average case completion sizes would likely increase as the number of medium and large company insolvencies returned to their normal levels in the UK insolvency market following the withdrawal of the UK Government's significant financial support to businesses over the Covid period of March 2020 - April 2022, as well as the temporary suspension of key insolvency laws during that same period.

The Manolete Board's strategy remains the same: to drive both elements of our revenues: higher volumes and higher average case sizes.

4.   Gross Cash Recoveries: £25.6m

In FY25, Manolete received gross cash recoveries (cash received on completed cases before payments to insolvent estates and associated legal costs) from completed cases of £25.6m, 45% higher than the £17.7m recorded for FY24. The £25.6m of gross cash generation was spread across 373 separate completed cases (i.e. cases completed in prior years as well as in the current financial year) (FY24: 309), highlighting the attractive high volume low value element of Manolete's business model.

5.   Net cash income from completed cases £13.3m

In FY25, net cash income from completed cases was £13.3m, 23% higher than the £10.8m recorded in FY24.

After the payment of all Company overheads, net cash income was £7.5m, 50% higher than the £5.0m recorded in FY24. That positive cash inflow enabled the Company to organically finance all ongoing cases and all new case investments, which amounted to £5.5m for FY25 (FY24: £6.3m), leaving a cash surplus of £2.0m (FY24: negative £1.4m).

6.   Revenue and Profit Estimate for FY25

Revenue Estimate

Manolete expects to report a 17% increase in total revenues to £30.8m for FY25m (FY24: £26.3m). This is the result of the record level of Realised Revenues on completed cases of £29.5m (FY24: £24.2m). Realised Revenues are expected to account for 96% of total revenues in FY25 and Unrealised Revenues for 4% of the total revenues (FY24: 92% and 8%, respectively).

The FY25 Realised Revenues of £29.5m were 13% ahead of market expectations.²

Profit Estimate

Subject to audit, the Company expects to report an EBIT of £3.2m for FY25, 28% higher than the £2.5m recorded for FY24 and a Profit Before Taxation ("PBT") of £1.6m, 60% higher than the £1.0m recorded for FY24.

The Realised EBIT (i.e. excluding all Unrealised Profits) for FY25 is expected to be £2.0m and the Realised PBT (excluding all Unrealised Profits) for FY25 is expected to be  £0.3m, both of which are ahead of market expectations.²

7.   Net Debt and New Bank Facility

The following table summarises the Net Debt position of the Company as at the respective year ends for FY24 and FY25:

As announced on 28 March 2025, the Company has recently secured a new long term £17.5m Revolving Credit Facility with HSBC UK Bank Plc.

8.   Outlook

The Company enjoyed a record FY25 in terms of all its key operating metrics and finished the year with 438 live cases in progress (FY24: 418) with an estimated Net Book Value of £41.8m (FY24: £40.2m) which gives the Board confidence in the prospects for the current financial year. In anticipation of another busy year ahead, the Company will welcome two new senior level hires into the existing 15-strong in-house legal team during the first four months of the new trading year.

The most recent commentary on the insolvency market published this month by the UK Insolvency Service stated that "Company insolvencies over the past 12 months have been slightly lower than in 2023, which saw a 30-year high annual number, but have remained high relative to historical levels."

Sources: Insolvency Service (compulsory liquidations only); Companies House (all other insolvency procedures)

The UK business sector now faces significant taxation and employment cost increases, cost of living challenges and international tariff changes.

The above factors underpin the Manolete Board's confidence in the prospects for the Company's business over the foreseeable future.

The information contained within this announcement is deemed to constitute inside information as stipulated under the retained EU law version of the Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK law by virtue of the European Union (Withdrawal) Act 2018. The information is disclosed in accordance with the Company's obligations under Article 17 of the UK MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

All FY25 figures quoted in this paper are draft and subject to external year-end audit ahead of the final Year-End Results announcement.

1 Figures exclude cases relating to the Barclays Bounce Back Loan Pilot ("BBBLP").

2 The Board believes that the estimates for the Company for FY25 are: Realised Revenue: £26.1m; Realised EBIT: £0.9m and Realised PBT of: £(0.5)m.

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