A listed legal and credit hire business has pumped £3m in the last year to secure thousands of housing disrepair claims, with the prospect of further investment to come.
Anexo Group plc revealed in its results for the year ended 31 December 2022 that it had successfully settled 2,000 claims and had another 3,000 ongoing cases.
Some £3m was invested in marketing costs during the year – up from £1.8m in 2021 – and housing disrepair is now seen as a ‘significant contributor’ to earnings.
Housing disrepair brought in revenues of £9.3m during the year of which £4.7m was reported as profit before tax. This income stream now accounts for more than one-fifth of the company’s annual profits, up from around one-tenth of profits a year earlier.
Anexo, which owns the legal brand Bond Turner, has also spent £4m in lead generation fees and staffing relating to group litigation against Mercedes Benz. In March, the High Court handed down a judgment granting a group litigation order and the Anexo board resolved last month to pursue litigation against the car manufacturer for alleged cheating on emissions tests. Mercedes Benz has said the claims are without merit and will be vigorously defended.
Around 12,000 claimants have been sourced and the group claim will be formally served in early summer.
Anexo’s net debt had increased by 18% to £73.1m at the end of 2022 as it borrowed to fund the housing disrepair and vehicle emissions claims.
During the last year, Blazehill Capital Limited lent the company £15m to go alongside a revolving credit facility of £10m with HSBC (due for repayment next year) and an invoice discounting facility of £40m with Secure Trust Bank plc, due for renewal in December 2024.
The total number of legal staff grew by 7% to 678, with the number of senior fee earners increasing at a similar rate to 253.
The company said the continued growth of its Bolton office, which has now been operational for four years, the opening of a Leeds office and the expansion of the core office in Liverpool into new ancillary premises have provided ‘considerable opportunities’ for recruitment.
During 2022, the group said, it was boosted by the withdrawal of a number of competitors from the market following the introduction of the Civil Liabilities Act, which severely curtailed their ability to recover legal costs.
Alan Sellers, executive chairman, said: ‘During the pandemic, and following the implementation of the Civil Liabilities Act 2021, the group has seen a number of personal injury solicitors withdrawing from the market and embarking on a run-off strategy. Taking advantage of these recruitment opportunities has resulted in staff numbers rising at all levels, with the ability to retrain solicitors in the fields of credit hire and housing disrepair for suitable placement within Bond Turner.’
While the legal side of the business grew, Anexo said it had taken action to ‘actively limit’ the number of credit hire claims accepted in 2022 with a view to reducing net debt.
Shares in Anexo Group plc fell 7% to 93p following the results announcement.
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