New Zeus research - P/E is only 4.3 (part 2)3 May 2024 09:15
Continued...
""Significant pipeline of demand
Credit Hire division provides an essential service to “impecunious” individuals who would be otherwise unable to fund repairs or a replacement vehicle. According to recent research published by the House of Commons Library, 11 million adults do not have a credit card (without which It is impossible to hire a car) and 16 million adults do not have the reserves to meet an unexpected bill of £300. In addition, the Money and Pensions Service has found 8 million adults are in need of
professional advice on their debts and 12 million people are “on the edge” of serious debt problems. These statistics illustrate the level of need for the services Anexo provides in our view.
We believe an increase in ‘gig-economy’ drivers, where access to a vehicle is essential, combined with the impact of the consumer crisis on individuals’ accessible funds will drive demand for Credit Hire in the near term. There are currently 7.2m gig workers of which 3.7m, or >50% are drivers, forecast to grow at 7% per annum. Rigorous screening means Anexo has a >98% success rate at trial, with most cases settled outside court.
High growth Housing Disrepair division: The Group’s Housing Disrepair division was established in FY20 following the passing of The Homes (Fitness for Human Habitation) Act 2019. An estimated 12% of social housing (480,000 homes) and 25% of private rented housing (1,150,000 homes) fail to meet the Decent Homes Standard, whilst an estimated 5% of social housing (200,000 homes) and 14% of private rented housing (644,000 homes) have hazardous levels of damp and mould growth. The HDR claims cycle is shorter (typically 7-9 months), more profitable and generates a higher return on capital vs. Credit Hire. Assuming c.25% of those eligible go on to
pursue a claim implies a total of 600,000 claims. Anexo has c.3,900 active claims at the 31 December 2023, indicating significant growth potential in this division.
Emissions litigation has potential to generate meaningful cash returns: the Group believes there is potential for further cash generative agreements through pursing additional, selective emissions litigation claims, with up to 11 million vehicles impacted in the UK. This includes the ongoing Mercedes Benz Emissions Claim, with a total of 12,000 claimants now signed up and forming part of the wider group litigation action. Mercedes Benz agreed to pay 250,000 American consumers an average of $3,290 each after a similar group claim in the United States. The UK
Mercedes Benz claim has been valued at up to £1bn by some experts. Further actions against Vauxhall, BMW/Mini, Peugeot/Citroen and Renault/Nissan is also underway with c22,000 confirmed claims."