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Ken Wotton of Gresham House is very keen on ANX per this interview (50.55 minutes in).
Great to hear his view that the VW case could be settled as soon as early this summer - this would be highly material for ANX:
Https://www.**********.co.uk/articles/q-a-with-ken-wotton-managing-director-at-gresham-house-156eee8/
ANX are presenting on Thursday for free via Shares Mag/AJ Bell:
Https://uk.advfn.com/stock-market/london/anexo-ANX/share-news/Anexo-Group-PLC-SHARES-MAGAZINE-AJ-BELL-Investor-E/87217532
Rivaldo, The last bit of the article for Anexo is "I continue to see upside to my 200p fair value target, having included the shares, at 136.9p, in my market beating 2021 Bargain Shares Portfolio." (The rest of the article is about other shares.)
Here's the full tip:
"Questor: Anexo helps drivers involved in accidents so more traffic boosts business, but a low valuation also offers protection
This column continues to cast around for companies that could benefit from an end to lockdowns and restrictions and what just might be a return to a degree of normality – all while seeking some protection from falls should a new variant emerge to confound everyone’s best-laid plans.
Legal services and credit hire for motorists might not seem like an obvious choice but that is one reason why Anexo has the potential to deliver some positive surprises, while its undemanding valuation offers some protection.
First researched some 16 months ago, Anexo helps drivers who are involved in car accidents that were not their fault by handling legal claims and replacement vehicles, which are charged to the at-fault drivers’ insurers.
Business levels dipped in 2020 as lockdowns meant there were fewer drivers on the road, fewer accidents and thus less need for the company’s assistance. But a trading update last week said revenues were better than expected and profits would come in “materially higher” than analysts’ forecasts for 2021.
Moreover, the three positive trends that are driving that improvement should continue in 2022. The number of cars back on the road should continue to recover this year and that is likely to mean more claims from fault-free drivers.
Meanwhile a surge in second-hand car prices means claim values are rising and a gradual reopening of the courts is allowing more cases to be heard and settled. Improved case resolution should in turn help cash flow, which has been crimped by higher trade receivables (hence the weak cash conversion).
December’s announcement of a new service for people who live in substandard housing adds another string to Anexo’s bow, while the firm continues to represent some 15,000 claims from Volkswagen drivers in a class action suit over the “dieselgate” emissions scandal. A verdict in favour of the claimants would further boost Anexo’s earnings, although analysts are sensibly not including this in their forecasts.
Even without any success in the VW case, Anexo’s shares hardly look expensive on less than 10 times earnings for 2021, a multiple that consensus profit forecasts of a one-fifth increase in earnings per share suggest could fall to barely eight in 2022.
Such a tempting price tag may explain why asset manager DBay Advisors, a shareholder with a 29pc stake, tried to buy the whole firm at 150p a share last summer, albeit without success.
DBay’s holding, coupled with the 38pc stake held by three senior executives, may make the shares less liquid than some and the spread between brokers’ buying and selling prices (2pc at the time of writing) could be wider than investors are used to, especially for larger stocks.
However, we already have a double-digit percentage paper gain on Anexo and there could be more to come. Hold."
ANX have also been tipped overnight by Simon Thompson in the IC - though it's another article I can't read!
Here's the opening bit which is free to read:
Https://www.investorschronicle.co.uk/ideas/2022/01/24/bargain-shares-on-the-results-and-m-a-beat/
"Our small-cap stockpicking expert highlights four investment opportunities including two bid targets
January 24, 2022
By Simon Thompson
One of the strongest drivers of share prices is positive earnings momentum.
Liverpool-based Anexo (ANX:146p), a provider of a litigation claims processing focused on the recovery of credit hire and repair costs for impecunious non-fault motorists involved in road traffic accidents, fits the bill. Analysts not only upgraded full-year earnings estimates ahead of the half-year results last September, but a bullish pre-close update has prompted low double-digit earnings per share (EPS) upgrades to 16.7p, 19.9p and 20.6p for the 2021 to 2023 financial years, too.
A sustained recovery in Anexo’s core credit hire division (driven by strong growth in motorcycle courier market and withdrawal of rivals due to Covid), and the reopening of courts (which has enabled faster settlement of claims) means both units are trading well ahead of previous runs rates. The group is also actively engaged with 15,000 claimants who are pursuing claims against German carmaker VW in relation to the emissions scandal. Panmure Gordon estimate these claims could generate £16m of operating profit for Anexo, a sum that’s not embedded in forecasts for the £172m market capitalisation company.
etc"
Looks like a positive review for ANX in today's Questor column in the Telegraph - subscriber-only though so I can't access:
Https://www.telegraph.co.uk/investing/shares/questor-stock-should-prosper-reopening-hold-against-new-variant/
"The Telegraph
Questor: this stock should prosper from reopening...
Questor share tips: Anexo helps drivers involved in accidents so more traffic boosts business, but a low valuation also offers prote....."
https://www.**********.co.uk/articles/stocks-to-follow-on-vox-markets-21-12-21-5a3485d/
Anexo covered by Paul Hill and Justin Thingamebob
They don't mention Anexo's new foray into addressing substandard housing - but otherwise a reasonable write up. Anexo is growth at a reasonable price plus potential for a 20%-50% special dividend potential for the VW award (using the comparative settlements in other countries as a guide). The fact that Courts are reopened and catching up on cases, and the fact that some of the competition have left the market over the past 2 years are 2 strong tailwinds for Anexo, which they don't touch on either.
Here's a link - should be free to read:
hTTps://www.sharesmagazine.co.uk/article/discover-the-cheap-aim-stocks-offering-sustainable-growth
The new issue of Shares Magazine today features three AIM stocks " which we think the market is undervaluing given their growth potential". The first to be mentioned is ANX....
Progressive have also nicely raised their forecasts. They now see historic 16.7p EPS and 19.2p EPS this year - almost the same as Arden's.
They conclude:
Https://www.progressive-research.com/research/strong-trading-update-for-2021/
"Forecast revisions. 2021: Our revenue forecast is increased by 6% to £109.8m (from £103.7m) reflecting higher average vehicles on the road. Combined with lower VW Emissions case costs than originally forecast, we now forecast reported profit before tax of £23.8m, some 23% above our previous forecast of £19.3m. 2022: A higher average vehicle count, combined with an uplift in performance for Bond Turner and a strong start from the Housing Disrepair Team, underpins an 11% revenue forecast increase to £125.9m (from £113.9m) and a 29% uplift in reported profit
before tax to £27.5m (from £21.4m)."
Arden have today heavily increased their forecasts, by 13% and 17% for last year and this year respectively.
They now see a historic 16.8p EPS, and 19.3p EPS this year - a P/E of just 7.3 (with 2.3p and 2.6p dividends on top).
They retain their Buy and 280p price target.
Bet you there's a ST update later today. It's felt obvious to me that this one would re-rate given the traffic levels, increasing numbers of motorcycle deliveries and more recently the state of some rented housing. The fact that the shares barely responded when VW's counter claim was thrown out "without merit". Cenkos don't say how much of that 280p rerating includes their assessment of the Dieselgate pay out (should ANX win of course). It's looking increasingly likely. The UK would be unusual to not award when other common law countries (like Canada) have found VW liable. The other question is how generous will the award be as there's wide disparity from Country to Country. Anyway lots of reasons to be positive about being invested here.
He didn't have a scooby, Scooby :)
The phrase I love to hear...."profit before tax will be significantly ahead of market expectations" :o))
All sorts of goodies in today's news which will continue to benefit ANX going forward, including:
- record numbers of vehicles on the road
- strong growth in the motorcycle courier market
- reduction in competition
- implementation of the Civil Liability Act
There should be a good run-up to the results from here - will the 280p broker price target be increased even further?
Https://uk.advfn.com/stock-market/london/anexo-ANX/share-news/Anexo-Group-PLC-FY-2021-Trading-Update/87033425
Up another 4% already, and moving up almost every day now - nice start to the week.
Moving up again - hopefully about to break upwards.
Arden Partners have today issued a Research note detailing their "Best Ideas for 2022".
ANX is one of them, with a Buy and a 280p target price.
Here's their summary:
"Opportunity for 2022 – we believe that 2022 should be the year that Anexo’s key drivers align positively for the Group with recovery and substantial market share gains in credit hire, the expansion of housing disrepair claims (currently over 1600), accelerating cash collections from Bond Turner and a possible conclusion of the VW emissions claims. These factors will highlight an earnings profile and valuation which is mispriced by the market and should result in a substantial re-rating.
Substantial core business growth – Anexo’s credit hire business has expanded to well over 2000 vehicles on the road, taking market share from smaller fragmented players that have come under funding pressure during the restrictions of the past 2 years. We expect more of the same in 2022 as rivals retrench further. Anexo’s access to capital has allowed it to capture a high quality credit hire case load to feed the significant settlement capacity in Bond Turner to drive cash collections.
Emissions litigation increasingly positive – The recent decision against Volkswagen in emissions litigation is a positive development for Anexo which we believe is a further significant step towards a material settlement. Anexo currently has approximately 15,000 VW emissions claims being handled by Bond Turner and could be worth upwards of £30m to Anexo based on similar claims settled in other jurisdictions.
Catalysts to watch for – Key catalysts for the year include confirmation of a settlement from VW, potentially initiating emissions claims action against other auto manufacturers, demonstration of substantial credit hire market share gains and rapidly accelerating cash collections building on the ongoing investment in Bond Turner.
Investment thesis and valuation - Anexo trades on 9.2x P/E and 6.8x EBITDA. As we discussed previously, the market provides very little value for the 20,000 case backlog and the investments made in legal services to drive settlements with very little value recognised for potential emissions claims. In our view, the market does not grasp the impact of COVID, accelerating scale and the pent-up settlement potential in the Group which will ultimately release shareholder value."
Good to see the bounce here continuing steadily, with small daily price rises before the year end trading update coming soon - last year's was 25th January.
A reminder of the positive outlook from the interims:
"Trading Outlook
Current activity levels indicate a strong second half performance for the Credit Hire division. The number of vehicles on the road is consistently reaching record levels and, as of 7 September 2021, stands at 2,023. The outlook for the Legal Services division is also strongly positive, with case settlements and consequent cash collections set to increase as the courts re-open fully and the backlog of cases diminishes.
The Group's finance providers have proposed increases in our debt facilities and the Board anticipates that agreements will be concluded shortly. Current market conditions offer significant opportunities and the Board believes that reaffirming its growth strategy will benefit both the Credit Hire and Legal Services divisions and contribute to the creation of value for all our shareholders. The Board looks to the second half of 2021 and beyond with renewed optimism."
Graking - what was the news?
Great news announced post trading today. Positive effect on price anticipated
Arden today reiterate their Buy and 280p target price. They currently forecast 14.8p EPS for the year about to end, and 18p EPS for the year starting next month.
And that excludes anything received from the VW claim.
They conclude:
"Investment thesis and valuation - Anexo trades on 8.6x P/E and 6.5x EBITDA. As we discussed previously, the market provides very little value for the 20,000 case backlog and the investments made in legal services to drive settlements with very little value recognised for potential emissions claims. In our view, the market does not grasp the impact of COVID, accelerating scale and the pent-up settlement potential in the Group which will ultimately release shareholder value. Reiterate Buy"
Per IC Feb '21 - ST writes
Anexo has been actively investing in marketing to attract claimants to pursue a claim against VW, noting that VW has being settling legal actions involving emissions in multiple jurisdictions. In Germany, settlements to car owners have ranged from £1,190 to £5,540 depending on the age, model and cost of the vehicle. Last year Anexo incurred £2.9m in marketing and staff costs to drive VW claimant counts and analysts pencilled in a further £2.7m investment this year.
It’s well worth doing. That’s because based on an average claim size of £3,000 with Anexo taking a 50 per cent commission, then the 14,356 claimants Anexo has so far recruited could generate the company an operating profit of £16m after accounting for all costs. The respective potential operating profits are £23m for 20,000 claims, and £34m for 30,000 claims. These are sizeable one-off profits for a £155m market capitalisation company and are not embedded in Panmure’s forecasts.
and gratified to see today's news that the VW case continues to go well - should be extremely material if successful, and I suspect the denouement is getting closer and closer:
Https://uk.advfn.com/stock-market/london/anexo-ANX/share-news/Anexo-Group-PLC-High-Court-Judgment-re-Volkswagen/86869706
Doubt DBay will sell any shares. They opportunistically tried to buy the company on the cheap in a tough time, but it wasn’t to be. They still have a large holding in a company that they presumably think will increase in value over the next couple of years, so I think they will hold on. This could even be taken out by private equity and if the price is right DBay will accept ie proactis. Share price might dip tomorrow but note trading statement highlights that trading is slightly ahead of expectations.