(Alliance News) - Manolete Partners PLC on Friday said it has received a "rare adverse decision" on one of its larger cases from the UK High Court, forcing it to write down GBP2.3 million.
Shares in the London-based insolvency litigation financing company were down 15% to 214.00 pence each in London on Friday morning.
Manolete said that it has applied for permission to appeal the High Court's decision, but it has decided to write down the full value of the case in its forthcoming results for the six months ended September 30.
The impact of the write-down will be a GBP2.3 million reduction to pretax profit, of which the cash paid out on this case to date is GBP636,756.
Separately, the company said it will take a more prudent view of the company, due to the challenging macroeconomic climate in the UK.
Manolete expects to report a pretax loss of around GBP5 million in its financial year 2023 interim results, as a result of these two factors.
However, the company said that it continues to "operate well", with gross cash generation from completed cases in the first five months of the financial year at a "record" GBP15 million. This compares to GBP15.6 million for the entire year ended March 31.
Further, it said that revenue, from completed cases, for the first five months of financial year 2023 more than doubled to GBP10.6 million, compared to GBP3.9 million in the same period last year.
Chief Executive Steven Cooklin said: "The board and our legal advisers were surprised and disappointed by the very rare adverse initial judgment that we received on one of our larger cases, a case that we originally signed up in 2019. For the first time in our 13-year history, we have applied for permission to appeal that decision to the Court of Appeal.
"We have taken a cautious stance by reducing the carrying value of that case to zero until we know the final outcome of the appeal process."
By Sophie Rose; sophierose@alliancenews.com
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Manolete Partn. (MANO)