Manolete Partners (MANO) H1 2025 earnings summary

Executive summary

• UK's leading insolvency litigation financing company with a 67% market share in the third-party funder segment.

• Achieved record case completions and cash generation in H1 FY25, with 137 completions and gross cash collected up 63% to £14.3m.

• Realised revenues hit a record £15.0m, up 60% year-over-year, driven by strong operational leverage.

• New case investment opportunities reached a record 437, up 27% from H1 FY24, indicating a strong pipeline.

• Recognized as a five-time winner of the TRI award and consistently top-ranked by Chambers for litigation support.

Financial highlights

• Realised revenue rose 60% to £15.0m in H1 FY25; total revenue up 28% to £14.4m.

• Gross cash generation from completed cases increased 63% to £14.3m.

• Gross profit fell 12% to £4.4m, with realised gross margin stable at 33% and operating margin at 5% (down from 14%).

• EBIT dropped 58% to £0.7m; PBT swung to a loss of £0.2m (H1 FY24: profit £0.9m) due to higher overheads and negative unrealised revenue.

• Net debt at £11.9m, with £0.6m cash and £12.5m drawn on HSBC RCF.

Outlook and guidance

• Case completions and cash generation expected to remain strong, with focus on increasing average realised revenue per case.

• Board aims to restore average realised revenue per completed case to pre-pandemic levels while maintaining high case volumes.

• Loan refinancing discussions with HSBC to begin in January 2025; exploring additional funding sources.

• No interim dividend is proposed for H1 FY25.

• The company is well positioned to benefit from high insolvency levels and challenging economic conditions.