Interim Results

RNS Number : 8998K

Manolete Partners PLC

19 December 2018

 

19 December 2018

MANOLETE PARTNERS PLC

("Manolete" or the "Company")

Unaudited half-year results for the six months ended 30 September 2018

Maiden results in line with expectations

Manolete (AIM:MANO), a leading UK insolvency litigation financing company, today announces its unaudited results for the six months ended 30 September 2018.

Financial highlights:

·      Investment in cases up 75% to £13.9m (30 September 2017: £8.0m)

·      Revenue up 31% to £6.5m (H1 FY18: £4.9m)

·      Gross profit up 44% to £4.4m (H1 FY18: £3.1m)

·      EBIT up 52% to £3.3m (H1 FY18: £2.1m)

·      Profit after tax up 57% to £2.5m (H1 FY18: £1.6m)

·      Proforma earnings per share¹ up 56% to 5.6 pence (H1 FY18: 3.6 pence)

Operational highlights:

·      Investment into 31 new cases during H1 FY19 (H1 FY18: 21)

·      Ongoing delivery of realised returns: 12 case realisations in the period, generating gross proceeds of £5.5m

·      Average money multiple of 3.6 times for cases completed in H1 FY19

·      Average case duration across the full portfolio of 173 completed cases is 11 months

·      65% increase in live cases: 76 in process as at 30 September 2018 (46 as at 30 September 2017)

·      Roll-out of regional network with in-house lawyers recruited in: North West, South West and Southern regions of the UK

·      Exclusive 3-year sponsorship agreement signed this week with the ICAEW's Restructuring and Insolvency Community

·      Successful IPO on London Stock Exchange's AIM market raising net proceeds of £14.7m

·      Significantly increased capital capability and financial covenant - extension of revolving credit facility with HSBC from £10m to £20m at a maximum rate of LIBOR plus 2.75% plus £14.7m net IPO proceeds

Steven Cooklin, Chief Executive Officer, commented:

"We are delighted to announce our first set of interim results as a public company, following our AIM flotation earlier this month. This strong set of results is the latest milestone in our track record of delivering profitable growth, underpinned by our core ability to source and price complex legal risk. We achieved impressive double-digit growth in revenue and EBIT during the period, delivering continued outstanding investment returns yielding an average money multiple of 3.6x on completed cases.

"We look forward to working with many more insolvency practitioners and their lawyers, as we deploy the proceeds of the IPO, as well as the enhanced debt facility with HSBC, to accelerate our growth plans through financing more and larger insolvency cases, and to delivering stand-out returns for insolvency creditors and shareholders alike."

For further information please contact:

Manolete Partners                                                        

Steven Cooklin (Chief Executive Officer)                      via Instinctif Partners

Peel Hunt (NOMAD and Sole Broker)                        [phone]                                       

Guy Wiehahn

Adrian Haxby

Rishi Shah

Instinctif Partners                                                         [phone]

Giles Stewart

Rachel Cashmore

Lewis Hill

1 On a proforma basis: calculated on the basis of the shares in issue after completion of the IPO

CHIEF EXECUTIVE OFFICER'S STATEMENT

Introduction

I am pleased to present our unaudited interim statements for the first half year to 30 September 2018. This is our maiden set of financial results following our IPO and admission to AIM on 14 December 2018.

Manolete is one of the leading players in the high growth insolvency litigation finance market, a market buoyed by favourable policy tailwinds. As these interim results clearly demonstrate, we performed strongly in the period, delivering outstanding returns and maintaining the pace of our investments into new cases that meet our stringent selection criteria. I am particularly pleased that we delivered on our profitability targets against the backdrop of our IPO preparations.

Performance

In the first half, revenues increased 31% to £6.5m (H1 FY18: £4.9m), reflecting higher investment into new cases and the benefits of short duration case returns. Operating profit, adjusted for £21k of non-recurring IPO costs, increased 53% to £3.3m (H1 FY18: £2.1m), with margin improving from 43% to 50% reflecting the operating leverage built into our business model. Our business is profitable and we recorded pre-tax profits of £3.0m, compared to £1.9m in the comparable half year, an increase of 57%. Our pre-tax profit margin improved from 39% to 47%.

Investments

Two key factors set us apart in the litigation finance market: first, our ability to deliver rapid case realisation times and secondly, our long track record of successfully completed cases. In the first half, we completed ten cases and made significant additional recoveries on two cases that had been completed in the previous year, resulting in gross settlement proceeds of £5.5m (H1 FY18: £4.7m) with gross profit on realisations of £2.0m (H1 FY18: £1.6m). The average money multiple on these 10 cases was 3.6x. Money multiple is defined as the Company's gain on a case, plus the amount recovered in respect of its legal costs and initial payment to the Insolvent Estate, divided by the amount of those legal costs and the initial payment to the Insolvent Estate.

The fair value of our in-process case investments as at 30 September 2018 increased 75% to £13.9m (30 September 2017: £8.0m), reflecting in the main, the continued attractive case investment opportunities provided by our longstanding network of Insolvency Practitioners. We invested £1.6m in legal costs on live cases in the first half, compared to £0.8m in the first half of the previous year.

We continue to seek to have a balanced case portfolio by both size and type of case. In recent periods we have looked to move up the value chain and accept a larger proportion of higher return, higher value case investments. This strategy is underscored by the strength of our case track record and facilitated by our enhanced capital position following the proceeds raised on float together with the extension of our facility with HSBC.

Strategy/Team

Our strategy is to increase the number and average size of our new case investments. We believe this will be achieved by building on, as well as expanding, the wide network of established Insolvency Practitioner and Insolvency Lawyer contacts throughout the UK.

With one eye on the opportunities provided by our position in the litigation finance market we began the process of significantly strengthening our team. In the first half, we added a new in-house solicitor expert in insolvency cases to help us review and process inbound opportunities, with a further one due to join in January 2019. Our regional expansion plans continue to progress well, following the successful appointment in May 2018 of an in-house solicitor at Associate Director level covering the North West region. A further in-house lawyer for the South West region started with the Company this month and another is contracted to commence coverage of the Southern Region at the end of January 2019.

We believe that an increased regional presence will strengthen our relationships with Insolvency Practitioners and legal firms, which will lead to an increased volume of enquiries.  We are currently recruiting to extend our regional network and we believe that this in turn will lead to an increased market share.

Further underpinning our expansion strategy, this week we signed an exclusive three-year sponsorship contract, as the sole litigation funder sponsor for the Institute of Chartered Accountants in England and Wales (Restructuring and Insolvency Community). This provides the company with an excellent and exclusive sponsorship platform, over a long-term basis, with the largest single regulator of Insolvency Practitioners in the UK.

Board of Directors

We have made four new Board appointments, three of which occurred post the 30 September 2018 period end. Three independent Non-Executive Directors took up their appointments upon listing: Peter Bertram, our Chairman brings a wealth of Board experience from serving on several publicly listed companies for over twenty years; Dr Stephen Baister was Chief Bankruptcy Registrar from 2004 to 2017 and offers an expert understanding and appreciation of Insolvency Law; Lee Manning was a licensed insolvency practitioner with Deloitte LLP from 2004 to 2018 and brings an expert degree of proficiency in the insolvency sector. We believe that these combined appointments will add significant value to our business capability. At the Executive level, Patrick Lineen joined as CFO and helped guide us through the recent IPO process.

Dividend

The current intention of the Board is to adopt a progressive dividend policy. The Company intends to pay a final dividend only for the full year ending 31 March 2019 based on a payout ratio of 20 per cent. of profit after tax which will be used as the reference point for the progressive dividend policy (after adjusting for the undeclared interim dividend in the year). Going forward, the interim dividend is intended to be equal to approximately one third of the total dividend of the Company's prior financial year. Dividends will take into account the progressive nature of the dividend policy, distributable reserves and other applicable law and the trading performance of the business.

Outlook

Given the strength of our position in the specialist insolvency litigation market, our firmly established network of Insolvency Practitioners and our proven track record of delivering outstanding returns, we look forward to the second half and beyond with confidence and enthusiasm.

I would like to express my gratitude to my colleagues and business partners for all their hard work and support they have given to the Company.

Steven Cooklin

Chief Executive Officer

18 December 2018

CHIEF FINANCIAL OFFICER'S REVIEW

I am pleased to give my review of the Company's unaudited results for the first half year to 30 September 2018, which show strong growth compared to the first half of the previous year.

Revenue

The Company's revenue is split between realised and unrealised revenue, as follows:

	H1 FY19	H1 FY18
	£000s	£000s
Realised revenue	4,262	3,647
Unrealised gains on investments in cases	2,236	1,300
Total	6,498	4,947

Realised revenue grew 17% year-on-year to £4.3m. We have seen a good level of realisations, with 10 cases closing in the first half, together with additional recoveries of £0.8m on two cases that were legally completed in the previous year. At the time of the completion of these two cases, there was a significant degree of uncertainty on the level of additional recovery and as a result we did not recognise this additional revenue in the previous financial year.

Unrealised gains on investments grew by 72% to £2.2m, compared to the first half of FY 2018. This reflects both the development of existing case investments and the increase in new case investments in the period. Total investment increased 75% to £13.9m in the first half and there was a 65% increase in live cases at period end: as at 30 September 2017, there were 46 live cases in progress, whilst at 30 September 2018, 76 live cases were in process, five of which were completed in October 2018.

The mix of revenue has stayed broadly unchanged, with the majority being realised revenue. Realised revenue was 66% of total revenue, compared to 74% in the first half of FY 2018. The weighting towards realised revenue reflects our strategy of securing early settlements on many of our cases.  It should be noted that predicting when cases will reach a successful conclusion is very difficult and accordingly the blend between realised and unrealised gains will change from year to year.

When a case is fully completed, revenue is then recognised as realised and previously unrealised gains on that case are reversed.

Cost of sales

Cost of sales comprises legal costs on realised cases, the initial payments made to Insolvent Estates on our case investments (both purchased and funded) and payments to Insolvent Estates on successful realisations of purchased cases.

Gross profit

Gross profit grew 44% to £4.4m (H1 FY18: £3.1m).  Gross profit margin increased to 68% (H1 FY18: 62%). The growth in gross profit reflects the movement towards larger cases, in both realised and unrealised gains.

We analyse gross profit into the separate categories of funded and purchased cases. Our strategic preference is to purchase cases rather than to fund them. Generally, our Insolvency Practitioner clients, where possible, prefer the Company to purchase cases because this gives them and the Insolvent Estate fuller protection from any potential adverse costs. It also provides the Company with full operational control of the case through the litigation process. The first half gross profit analysis was skewed against this trend, principally due to the impact of three large funded cases, one of which was realised and the other two were unrealised.

	H1 FY19	%	H1 FY18	%
	£000s		£000s
Gross profit on funded cases	1,972	44	363	12
Gross profit on purchased cases	2,477	56	2,722	88
Total	4,449	100	3,085	100

Administrative expenses

Administrative expenses increased 24% to £1.2m in the first half (H1 FY18: £1.0m). Staff costs are the principal driver of the increase in administrative expenses, with the overall increase driven by higher staff numbers.

Statutory operating profit before non-recurring items (Earnings Before Interest and Tax)

Operating profit before non-recurring items grew by 53% to £3.3m in the first half (H1 FY18: £2.1m) with margin improving to 50% from 43%.

The Company incurred preliminary costs of £0.02m in connection with our Initial Public Offering on AIM, where trading began on 14 December 2018 and these have been shown as non-recurring items.

Finance costs

Gross debt increased from £2.3m as at 30 September 2017 to £5.0m as at 30 September 2018, reflecting increased new case investment. A loan of £2.3m was repaid on 31 January 2018 with borrowings from the new HSBC facility. The £5.0m HSBC debt is shown net of capitalised set-up costs of £0.6m. Finance costs increased at a much slower pace, by 11% from £0.2m to £0.22m. This reflects the significantly lower costs of debt achieved via the agreement of the HSBC facility in January 2018 with a margin of 1.75%-2.75%, compared to the interest rate of 11% on the loans that were outstanding as at 30 September 2017 which have since been repaid.

Profit after tax

Profit after tax has increased by 57% from £1.6m to £2.5m. The post-tax margin has increased from 32% to 38%.

Investment in cases

The company was managing 76 live case investments as at 30 September 2018, compared to 46 live cases as at 30 September 2017. The split between Purchased and Funded cases at these dates is as follows:

	As at 30 September 2018		As at 30 September 2017
Funded	17	22%	21	46%
Purchased	59	78%	25	54%
Total	76	100%	46	100%

The total investment in cases amounted to £13.9m at 30 September 2018, representing an increase of 75% from the value as at 30 September 2017 of £8.0m. Investment in cases is shown at valuation, including costs incurred. Live cases are shown at fair value, based on the Company's estimate of the likely future realised gross profit. Any material valuations (greater than £0.1m per individual case) are corroborated with the external lawyers working on the case who provide updated legal opinions at the year-end and the half year-end. The Company does not capitalise any of its internal costs, these are fully expensed to the Statement of Comprehensive Income as incurred. The average case value as at 30 September 2018 was £0.18m, compared to £0.17m as at 30 September 2017. The median case value as at 30 September 2018 remained broadly flat at £0.06m.

Trade receivables and cash conversion

Trade and other receivables have increased by 27% from £2.4m to £3.0m, broadly in line with the increase in revenues.

Many of the realisations achieved are paid by the debtor promptly, especially where the debtor is a large company, an insurance company or a wealthy individual. In some cases, the debtor is dependent on selling assets to realise cash to pay the Court award or settlement and hence cash realisation can, in these instances, be delayed for some months. Where appropriate, the Company will secure its position by obtaining charging orders over the relevant assets. In smaller cases, the Company sometimes accepts payments on an instalment arrangement. Based on realised revenue and receivables as at 30 September 2018, the Company is converting debtors into cash in 169 days, compared to 175 days for the first half of the previous year.

Borrowings and loans

The Company has been financed in the past by debt, equity and retained profits. Debt was principally provided by Moulton Goodies Ltd, its largest shareholder. In January 2018, the Company signed a £10m Revolving Credit Facility ("RCF") with HSBC and repaid the Moulton Goodies Ltd debt in full at that time. As previously noted, gross debt increased between 30 September 2017 and 30 September 2018 from £2.25m to £5m to finance the growth in investment in cases.

Post balance sheet subsequent events

On 14 December 2018, the Company completed an Initial Public Offering and its shares were issued on the Alternative Investment Market. This raised approximately £14.7m (after expenses) to enable the Company to pursue its growth strategy. Simultaneously, the RCF was increased to £20m. The balance on the RCF will be paid down shortly using the IPO proceeds but the RCF provides the Company with financial flexibility as it fulfils its growth strategy.

Patrick Lineen

Chief Financial Officer

18 December 2018
 

Manolete Partners Plc

Unaudited Statement of Comprehensive Income for the 6 months ended 30 September 2018

	Note	6 months ended 30 September 2018 Unaudited		6 months ended 30 September 2017 Unaudited	Year ended 31 March 2018 Audited
		£		£	£
Revenue	3	6,498,090		4,947,038	10,630,264
Cost of sales		(2,048,599)		(1,861,343)	(3,839,282)
Gross profit		4,449,491		3,085,695	6,790,982
Administrative expenses	4	(1,177,836)		(951,010)	(2,719,769)
Operating profit before non-recurring item		3,271,655		2,134,685	4,071,213
Non-recurring item - IPO costs	5	(20,527)		-	-
Operating profit after non-recurring item		3,251,128		2,134,685	4,071,213
Finance income	6	384		148	1,515
Finance charges	7	(219,172)		(197,926)	(379,542)
Profit before tax		3,032,340		1,936,907	3,693,186
Taxation		(573,843)		(371,024)	(432,392)
Profit and total comprehensive income for the period attributable to the equity owners of the company		2,458,497		1,565,883	3,260,794
Proforma earnings per share	10	5.6p		3.6p	7.5p

Proforma fully diluted earnings per share                    10                    5.6p                        3.6p                    7.4p

The results reflected above relate to continuing activities.

Manolete Partners Plc

Unaudited Statement of financial position as at 30 September 2018

Company Number: 07660874	Note	6 months ended 30 September 2018 Unaudited	6 months ended 30 September 2017 Unaudited	Year ended 31 March 2018 Audited
		£	£	£
Assets
Current assets
Investments	8	13,928,068	7,959,554	10,554,544
Trade and other receivables		3,007,200	2,376,371	2,973,274
Cash and cash equivalents		994,341	539,108	5,934,418
Total current assets		17,929,609	10,875,033	19,462,236
Total assets		17,929,609	10,875,033	19,462,236
Equity and liabilities
Equity
Share capital		99,600	98,300	99,600
Share premium		1,015,000	1,015,000	1,015,000
Retained earnings		9,100,325	4,946,917	6,641,828
Total equity attributable to the equity owners of the company		10,214,925	6,060,217	7,756,428
Non-current liabilities
Borrowings and loans		4,425,555	2,250,000	8,870,588
Total non-current liabilities		4,425,555	2,250,000	8,870,588
Current liabilities
Trade and other payables		3,289,129	2,439,816	2,830,220
Deferred tax liability		0	125,000	5,000
Total current liabilities		3,289,129	2,564,816	2,835,220
Total liabilities		7,714,684	4,814,816	11,705,808
Total equity and liabilities		17,929,609	10,875,033	19,462,236

The interim statements were approved by the Board of Directors and authorised for issue on

18 December 2018.

Manolete Partners Plc

Unaudited Statement of changes in equity as at 30 September 2018

Attributable to the equity owners of the company

	Share Capital	Share Premium	Retained Earnings	Total Equity
	£	£	£	£
As at 1 April 2017 (audited)	98,300	1,015,000	3,381,034	4,494,334
Profit and total comprehensive income for the period	-	-	1,565,883	1,565,883
As at 30 September 2017 (unaudited)	98,300	1,015,000	4,946,917	6,060,217
As at 1 October 2017 (unaudited)	98,300	1,015,000	4,946,917	6,060,217
Comprehensive Income
Profit and total comprehensive income for the period	-	-	1,694,911	1,694,911
Transactions with owners
Issue of ordinary shares	1,300	-	-	1,300
As at 31 March 2018 (audited)	99,600	1,015,000	6,641,828	7,756,428
As at 1 April 2018 (audited)	99,600	1,015,000	6,641,828	7,756,428
Comprehensive Income
Profit and total comprehensive income for the period	-	-	2,458,497	2,458,497
As at 30 September 2018 (unaudited)	99,600	1,015,000	9,100,325	10,214,925

Manolete Partners Plc

Unaudited Cash Flow Statement for the 6 months to 30 September 2018

	6 months ended 30 Sept 2018 Unaudited		6 months  ended 30 Sept 2017 Unaudited	Year Ended 31 Mar 2018 Audited
	£		£	£
Cash flows from operating activities
Profit before tax	3,032,340		1,936,907	3,693,186
Adjustments for non-cash/non-operating items:
Fair value movements	(2,236,500)		(1,300,010)	(3,905,000)
Legal costs and IP payments on realised cases	485,746		799,696	1,374,967
Finance income	(384)		(148)	(1,515)
Finance expense	219,172		197,926	379,542
Interest paid	-		-	437,387
	1,500,374		1,634,371	1,978,567
Changes in working capital:
(Increase) in trade and other receivables	(33,926)		(793,363)	(1,390,266)
(Decrease)/increase in trade and other payables	(119,934)		(406,342)	163,262
Cash flow generated from/(used in) operations	1,346,514		434,666	751,563
Taxation received	-		221,405	225,586
Net cash generated from/(used in) operating activities	1,346,514		656,071	977,149
Cash flows from investing activities
Investment in cases	(1,622,770)		(754,274)	(1,319,544)
Interest received	384		148	1,515
Net cash (used)/generated from investing activities	(1,622,386)		(754,126)	(1,318,029)
Cash flows from financing activities
Issue of ordinary share capital	-		-	1,300
Interest paid	(219,172)		(63,176)	(816,929)
Loans repaid	(4,445,033)		(800,000)	(3,050,000)
Loans received	-		-	8,870,588
Repayment of directors' loans	-		-	(230,000)
Net cash (used)/generated from financing activities	(4,664,205)		(863,176)	4,774,959
Net (decrease)/increase in cash and cash equivalents	(4,940,077)		(961,231)	4,434,079
Cash and cash equivalents at the beginning of the period	5,934,418		1,500,339	1,500,339
Cash and cash equivalents at the end of the period	994,341		539,108	5,934,418

MANOLETE PARTNERS PLC

Unaudited notes to the financial statements for the six months ended 30 September 2018

1    Company information

Manolete Partners PLC (the "Company") is a public company incorporated in England and Wales. The Company is domiciled in England and its registered office is 2-4 Packhorse Road, Gerrards Cross, Buckinghamshire, SL9 7QE.

The principal activity of the Company is that of acquiring and funding insolvency litigation.

2    Accounting policies

(a)     Basis of preparation

The consolidated half-yearly financial statements, do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2018 have been filed with the Registrar of Companies at Companies House. The auditor's report on the statutory accounts for the year ended 31 March 2018 was unqualified and did not contain any statements under Section 498 (2) or (3) of the Companies Act 2006.

The published financial statements for the year ended 31 March 2018 were prepared in accordance with International Financial Reporting Standards as adapted for use in the EU ("IFRS")

(b)  Going concern

The financial statements relating to the Company have been prepared on the going concern basis.

After making appropriate enquiries, the Directors of the Company have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and for at least one year from the date of the signed financial statements. For these reasons, they continue to adopt the going concern basis in preparing the Company's financial statements.

(c)  Revenue recognition

Revenue comprises of fair value of investments and realised consideration. Realised consideration occurs when a case is settled or a Court judgement received. Provisions are made where potential difficulties are envisaged on the enforcement of Court judgements. Unrealised gains are recognised as cases appreciate in value and settlements draws near.

As revenue relates entirely to financing arrangements, revenue is recognised under the classification and measurement provisions of IFRS 9.

(d)  Financial assets

Investments

Investments in cases are categorised at fair value through profit or loss. Fair values are determined on the specifics of each investment and will typically change upon an investment progressing through a key stage in the litigation or arbitration process in a manner that, in the Directors' opinion, would result in a third party being prepared to pay an amount different to the original sum invested for the company's rights in connection with the investment. Positive material progression of an investment will give rise to an increase in fair value and an adverse progression a decrease. The valuation of all investments over £100,000 each is confirmed by an external legal opinion, which supports the Directors' valuation.

Valuation of investments

Determining the value of purchased and funded litigation requires an estimation of the value of such assets upon acquisition and at the balance sheet date. The future income generation of such litigation is estimated from known information and the opinion of external senior specialist counsel. Valuations of each case, at the balance sheet date, are therefore arrived at by the Directors, considering counsel's assessment of the chances of a successful outcome, the state of progress of the matter through the legal system and the Directors' assessment of all other risks specific to the case.

3    Segmental reporting

During the six months ended 30 September 2018, the revenue was derived from cases funded on behalf of the insolvent estate and cases purchased from the insolvent estate. Where cases are funded, upon conclusion, the Company has the right to its share of revenue whereas for purchased cases, it has the right to receive all revenue from which a payment to the insolvent estate is made. Revenues arising from funded cases and purchased cases are considered one business segment and are considered to be the one principal activity of the Company. All revenues are from continuing operations and are not seasonal in nature.

	6 months ended 30 Sept 2018 Unaudited		6 months ended 30 Sept 2017 Unaudited	Year Ended 31 March 2018 Audited
	£		£	£
Net realised gains on investments in cases	4,261,590		3,647,028	6,725,264
Fair value movements (net of transfers to realisations)	2,236,500		1,300,010	3,905,000
Revenue	6,498,090		4,947,038	10,630,264

	6 months ended 30 Sept 2018 Unaudited		6 months ended 30 Sept 2017 Unaudited	Year Ended 31 March 2018 Audited
	£		£	£
Arising from
Funded Cases	1,982,105		1,128,743	2,744,403
Purchased Cases	4,515,985		3,818,295	7,885,861
	6,498,090		4,947,038	10,630,264

4    Analysis of expenses by nature

         The breakdown by nature of administrative expenses is as follows:

	6 months ended 30 Sept 2018 Unaudited		6 months ended 30 Sept 2017 Unaudited	Year Ended 31 March 2018 Audited
	£		£	£
Staff Costs	710,014		423,268	1,175,239
Office costs	113,312		71,227	184,532
Other costs, inc. marketing costs and doubtful debt charges	354,510		456,515	1,359,798
Total administrative expenses	1,177,836		951,010	2,719,569

5      Non-recurring item-IPO costs

	6 months ended 30 Sept 2018 Unaudited		6 months ended 30 Sept 2017 Unaudited	Year Ended 31 March 2018 Audited
	£		£	£
IPO costs	20,527		-	-

The Company's shares were admitted to trading on the Alternative Investment Market (AIM) on 14 December 2018 in an Initial Public Offering (see note 9). The Company incurred some preliminary costs in the first half of the financial year on this IPO.

6     Finance income

	6 months ended 30 Sept 2018 Unaudited		6 months ended 30 Sept 2017 Unaudited	Year Ended 31 March 2018 Audited
	£		£	£
Bank interest	384		148	554
Other loan interest	-		-	961
Total finance income	384		148	1,515

7     Finance costs

	6 months ended 30 Sept 2018 Unaudited		6 months ended 30 Sept 2017 Unaudited	Year Ended 31 March 2018 Audited
	£		£	£
Other loan interest	-		197,926	288,596
Bank loan interest	133,005		-	14,724
Amortisation of HSBC facility set-up costs	86,167		-	28,722
Bank loan charges	-		-	47,500
	219,172		197,926	379,542

8     Investments

Current asset investments comprise the costs incurred in bringing funded and purchased cases to the position that they have reached at the balance sheet date. In addition, where an event has occurred that causes the Directors to revalue the amount invested, a fair value adjustment is made by the Directors based on Counsel's and the Directors' opinion, which can either be positive or negative.

Any change in value is taken to other reserves as an unrealised gain or loss.

	6 months ended 30 Sept 2018 Unaudited		6 months ended 30 Sept 2017 Unaudited	Year Ended 31 March 2018 Audited
	£		£	£
As at 1 April 2018	10,554,544		6,704,967	6,704,967
Additions	1,622,770		754,274	1,336,628
Realisations	(485,746)		(799,697)	(1,392,051)
Fair value movement (net of transfers to realisations)	2,236,500		1,300,010	3,905,000
As at 30 Sept 2018	13,928,068		7,959,554	10,554,544

 9   Post balance sheet subsequent events

On 14 December 2018, the Company completed an Initial Public Offering and its shares were listed on the Alternative Investment Market. The Company's shares in issue were sub-divided and consolidated from 99,600 shares of £1 each to 34,285,711 shares of £0.004 each and the Company issued 9,285,714 new shares of £0.004 each. This amounts to 43,571,425 shares in total. The new shares were issued at £1.75 per share to investors, which raised c, £14.7m after expenses.

At the same date, the Company's bankers, HSBC, increased the Revolving Credit Facility, signed on 29 January 2018, from £10m to £20m for a new four-year term on broadly the same terms as the original facility.

10    Proforma earnings per share

	6 months ended 30 Sept 2018 Unaudited	6 months ended 30 Sept 2017 Unaudited	12 months Ended 31 March 2018 Audited
	£	£	£
Profit and total comprehensive income for the period attributable to the equity owners of the company	2,458,497	1,565,883	3,260,794
Shares in issue post-IPO (see note 9)	43,571,425	43,571,425	43,571,425
Proforma earnings per share	5.6p	3.6p	7.5p

Fully diluted shares in issue post-IPO	44,272,558	44,272,558	44,272,558
Proforma fully diluted earnings per share	5.6p	3.6p	7.4p

 

END

 

 

IR FKFDDFBDDOBD