Manolete, which finances or buys insolvency claims, has reported a strong upturn in performance arising partly from business collapses returning to levels not seen since the 2008 financial crisis.

In half-year results to 30 September, the listed litigation funder today reported revenues of £11.2m, a 104% rise on the same period in 2022 which included a significant fair value writedown.

Profit before interest and tax of £1.6m compares with a loss of £5.3m last time, ‘a turnaround of £6.9m’, the company stressed. First-half profit before tax totalled £900,000, compared with a loss of £5.4m on the equivalent period in 2022. Gross settlement proceeds were 142% higher.

Manolete said it had signed up 179 new cases in the first half, up from 83 last year, ‘as the higher level of insolvencies in the economy translated to higher new cases signed’.

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The company also credited pilot work it has undertaken for Barclays Bank on a range of defaulted Covid bounce back loans (BBLs). By 30 September, Manolete had taken on 80 BBL cases and completed 27. Talks are under way on extending the Barclays tieup and Manolete is ‘hopeful’ that it will soon begin a similar pilot with another bank.

Chief executive Steven Cooklin said he expects the firm’s cases to get bigger and potentially more lucrative, with the market returning to normal as the impact of Covid support packages recedes.

‘The first wave of insolvencies after April 2022 was driven by the sharply rising and sustained increase in company voluntary liquidations,’ he said in a statement. ‘These generally represent smaller companies and, therefore, typically, smaller claim values. It is only in the last seven months that the UK insolvency market has seen any sustained recovery to pre-pandemic levels of administration appointments. As the market develops, the directors anticipate a return to higher case sizes, reflecting a greater mix of larger company insolvencies.’

Manolete did not propose an interim dividend. Shares in Manolete Partners plc climbed 4% this morning to 190p.

 

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