Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
ANX were the first company tipped by the IC's Simon Thompson last night in his Bargain Shares small cap update.
Nice reaction already on relatively small buying hopefully indicates a lack of available stock.
Nick Dashwood Brown sounds very bullish and discusses ANX's strong final results and the VW emissions case:
Https://www.**********.co.uk/articles/nick-dashwood-brown-of-anexo-discusses-their-strong-final-results-and-the-vw-emissions-case-0c7c1e3/
I note ANX are also presenting via webinar for Shares Magazine on June 15th - free registration here:
Https://www.sharesmagazine.co.uk/events/event/shares-investor-webinar-150622
Great indicative result from the first Dieselgate claim - can't be long before ANX's claim is settled too. Then it's on to Mercedes Benz....
The upside here is shown by Arden's raising their target price to 300p (from 280p).
They have 18.8p EPS forecast for this year, rising to 20.8p EPS next year. That's a forward P/E of just 6.2.
Plus there's a 1.6p dividend, rising to 1.8p.
Carcosa I agree that in any case the revenue which could be generated will be very meaningful.
I disagree. What the arden note is saying is:
Say each claimant gets £2100. Of that, 50% of that goes to Anexo £1100
Say each claimant costs £2000 in legal fees. 100% of that goes to Anexo, totalling £3100
3100 x 13000 claimants = £40.3m less £4m marketing fees, less £20m litigation funding (fees, interest and a share of the proceeds), leaves = £20.3m pre-tax for Anexo
This may be the figure they (Anexo) expected to get should they win in court, which is now looks highly likely they would. Expect VW to want a quick out of court settlement at less than this amount though. Hopefully still a very decent return on investment for Anexo.
According to the house broker Arden's note today they estimate...
"...£3-4k per claim to Anexo, or £39-52mn in total. This would result in an estimated £20-25mn to the business pre-tax after £4mn of admin (largely marketing) costs and repaying litigation funding."
So the legal costs appear to make up an awful lot of the award.
I would have thought the broker note was a little bit crazy with their estimate but considering this is Arden's house broker then it must be close to the final estimated figure.
See Arden's website for full report
Yes, we'll have to wait a little longer, but as Carcosa points out, Anexo have claims of up to 50%. That should push my estimate below up to around 13-14m, assuming this precedent now sets a benchmark for the other cases.
A precedent has been set.
Oh well, have to wait a bit longer then....
RNS:
"Anexo is involved in a separate class action which covers a second, although not subordinate tranche of claims against VW on similar grounds"
I refer you to http://bondturner.com/services/diesel-emissions-claims/vw-emissions/ "How much will it cost me to claim"..."You should however still receive 50%".
Implies Anexo/Bond Turner gets 50%
Anexo represent approx 13,000 claimants. Going by that report, each claimant is entitled to around £2120 so Anexo's claim is worth around £27.5m. Not sure Anexo have reported what % cut they will receive but I would hope around 33%, so approx 9m.
It appears that VW has settled British dieselgate claims which as per previous posts here on 13.5 should could have positive repercussions https://english.alarabiya.net/business/banking-and-finance/2022/05/25/Dieselgate-Volkswagen-settles-UK-emissions-class-action-for-193-million
What do you make of the current corporate action and the potential of de-listing? Surely this is the reason that the stock has dropped from its prior 135p-140p range? Its latest trading update and ST article did nothing to move the needle here - surprisingly. Is DBAY behind this?
Took a wee punt here today after my 120p alert was triggered. Just in time for the small dividend on 19th.
Continued:
"Investment in new cases explains why year-end net debt increased by half to £63mn, or two times current year operating profit estimates, despite cash collections rising by a fifth to £119mn. The group's post-tax return of 16.5 per cent on equity warrantsthe investment.
Interestingly, Anexo has been tapping new income streams, having invested £1.7mn in 2,000 cases last year for tenants makingclaims against landlords under The Homes(Fitness for Human Habitation) Act 2019.The Act came into force to make sure thatrented houses and flats are fit for humanhabitation. The unit delivered a tenth(£2.5mn) of group pre-tax profit, havingsettled a quarter of those cases with 1,500still ongoing. Investment in new housingclaims will be doubled this year, a sensible decision given the bumper profits to be made and the short working capital cycle tosettlement.
Anexo is also starting to actively sourceclaims against Mercedes Benz in relation tothe German group’s emission scandal.Sellers says that the market could be doublethat of VW, another positive for windfallgains. Analysts expect Anexo’s claim againstGerman carmaker Volkswagen on behalf of13,000 motorists (who suffered in theemissions scandal) to reach settlement wellbefore the year-end. Anexo couldpotentially earn £16mn of operating profitwhen these cases are settled, a hefty returnon its £4.5mn investment to date. This isnot embedded in Panmure’s current yearforecasts which point to group pre-taxprofit and earnings per share (EPS) rising afifth to £29mn and 19.9p, respectively, onsix per cent higher revenue of £125mn. Postresults, the brokerage also raised their 2023EPS forecast again by a further 10 per centto 22.6p.
On this basis, the shares are rated on acurrent year forward price/earnings (PE)ratio of 6.5, offer a prospective dividendyield of 1.4 per cent and are priced in linewith year-end net tangible asset estimatesof 129p a share. A cash windfall fromsettlement of the VW claims would not onlydeleverage Anexo’s balance sheet, but is anobvious catalyst for an overdue re-rating.Buy"
in the IC as follows:
"Bargain Shares: Priced to motor
Business is buoyant for a vehicle credit hire and legal services group and it could be in line for a windfall gain, too. That’s certainly not reflected in a current year PE ratio of 6.5.
May 11, 2022
By Simon Thompson
2021 pre-tax profit up 50 per cent to £24.1mn on 36 per cent higher revenue of £118mn
Cash from case settlements recycled into new claims to support ongoing growth
Potential for bumper windfall on emissions scandal claim against German carmaker Volkswagen
Analyst earnings upgrades post results
Liverpool-based Anexo (ANX:130p), a provider of a complete litigationclaims process focused on the recovery of credit hire and repair costs fo rthe impecunious non-fault motorist involved in a road traffic accident, has delivered a better than expected earnings recovery than I had anticipated when I included the shares, at 136.9p, in my market beating 2021 Bargain Shares 2021 Portfolio.
In fact, following a robust pre-close trading update in January, Panmure Gordon pushedthrough 11 per cent plus earnings per share(EPS) upgrades for the 2021 to 2023forecast period. More importantly, thestrong momentum shows no sign of abating.In fact, chairman Alan Sellers says theopportunities within the group’s credit hiredivision “have never been so strong”, andthat’s after the average number of vehiclesout for hire increased by a fifth to 1,834 lastyear. Currently, around 2,000 vehicles inthe fleet are being hired out.
The withdrawal of several competitors fromthe market and the introduction of the CivilLiabilities Act, which severely curtails the ability of personal injury solicitors torecover substantial legal costs, has certainlyplayed into Anexo’s hands. Moreover, byoffering both credit hire and legal services,Anexo is exploiting a competitive advantageover pure credit hire companies (who lackthe in-house capacity to litigate acustomer’s claim), and solicitors (who lacka vehicle fleet to offer to motorists).
True, a decline in road usage during national lockdowns still had an impact, but less so on Anexo given that a large numberof credit hire customers are classed as keyworkers, including couriers (who have beenextremely active throughout the pandemic)as well as health professionals, teachers,nursery staff, emergency workers andsupermarket personnel. In fact, despite thelockdown in the first half of 2021, Anexo’scredit hire division provided vehicles to10,625 individuals, a 36 per cent year-on-year increase.The group’s focus on motorcycle credit hire is worth noting, too. That’s because take-on costs are significantly less than for cars, but claims have a similar value, a positive for the working capital cycle and return on investment. Statistics show that motorcyclists are particularly vulnerable to personal injury in non-fault accidents."
Don't worry, with a 28.51% stake and Booard representation I'm pretty sure DBAY will be coming along with another bid at some stage if the share price continues to fail to reflect ANX's progress......
... and, as always, the market ignores because of the ongoing concern about cash, recoverable debts and transparency ;-)
I am holder but am often left to wonder why ;-)
And here's Progressive Equity's new summary FYI:
Https://progressive-research.com/company/anexo-group-plc/
"FY22E – Our revenue forecast is increased by 5% to £132.4m, reflecting the benefits of investment made in FY21 across all businesses. The expenses forecast is increased by 8% to £60.7m, reflecting a higher FY21 cost base and continued investment in FY22. As a result, operating profit and adjusted operating profit are increased by 7% to £32.1m and £32.8m, respectively. Profit before tax and adjusted profit before tax (before share-based payments) are broadly unchanged, reflecting increased finance costs, attributable to the levels of net debt discussed above.
Reported and adjusted EPS are maintained at 19.1p and 19.7p, respectively.
FY23E – New estimates for 2023 assume an 9% revenue increase and 4% administrative
expenses growth, resulting in 15% operating profit and adjusted operating profit growth compared with FY22. Higher finance costs attributable to higher net debt levels slightly temper profit before tax (reported and adjusted) growth rates to 13% in FY23. We forecast reported and adjusted EPS of 21.7p and 22.3p, respectively, 13% above FY22."
Arden today reiterate thier Buy and 280p target price following the excellent results.
They see 18.3p EPS this year and 20.1p EPS next year, with 1.6p and 1.8p dividends.
They summarise:
"Stronger than expected results:
Trading was robust last year, with FY21 group revenues +36.2% to £118.2mn. Anexo had guided in January that pre-tax profits would significantly exceed market expectations and adj. PBT of £24.1mn for the full year was +49.7% y/y, broadly in line with our revised forecast. This was even after significant investment across the group, which together with a favourable market backdrop, under-pins our FY22 forecasts, with an upward bias to FY23. Finally, we continue to expect Volkswagen AG to negotiate a settlement before the scheduled court hearing in January 2023. Reiterate Buy."
Progressive have today increased their operating profit forecast for 2022 by 7%.
They also now have an EPS forecast of 19.7p EPS, rising to 22.3p EPS next year.
Arden's last target price was 280p, so still a long way to go.
Debt.
Agreed - the resultslook excellent, being in line with previously upgraded forecasts.
The 16.8p EPS is bang in line with Progressive's forecasts, as is the £23.8m reported PBT. The 1.5p divi is slightly less than the 1.7p forecast, which I assume is due to the increased debt in turn resulting from the big investment in the various new and old divisions which took advantage of competitors' problems during Covid.
The outlook is confident, supported by the KPI's re cars on the road, number of fee earners etc, and targeting improved working capital with efficiencies in numbers of vehicles.
The VW Dieselgate case may well conclude this year bringing in a big lump sum, and it's good to see ANX initiating a similar case against Mercedes-Benz.
The forecast for this year is for 19.2p EPS, which makes ANX look absurdly good value.
PBT up over 50% from £15m to over £23m.
Seems a bargain at current its price. Hidden value in the VW and Mercedes case. The housing claims unit is already doing well too.