New WH Ireland research note - 263p target price21 Jun 2022 12:52
WH Ireland issued an update note yesterday commenting on how the upcoming Housing Disrepair Bill is a "major opportunity" for ANX.
They have a 263p target price, and forecast 19.3p EPS this year - a P/E of just 6.6:
Extracts:
"Housing Disrepair – White Paper highlights major opportunity for ANX
We view last week’s White Paper as underlining again the significant opportunity for ANX’s Housing Disrepair business, which started operations last year and has already enjoyed notable success, as reflected in last Thursday’s AGM update. The White Paper is a harbinger of the much-touted Housing Reform Bill, announced in the May 2022 Queen’s Speech, having been delayed by the pandemic. Given its well-established pedigree in litigating on behalf of the impecunious, ANX is extremely well positioned to support tenants in recovering their rights when faced with disrepair issues such as damp, electrical hazards, roof leaks, and unstable structures. While accepting that the course of legislation is always uncertain as an act progresses through Parliament, we view this bill as starkly highlighting the problems facing hundreds of thousands of tenants – problems for which ANX can already provide redress as tenants become more aware of their rights."
"More than this, we believe the Bill will serve a fundamental purpose in alerting tenants to their existing as well as proposed new rights, and on both of these scores, this is supportive of ANX’s model, since it is likely to bring more claimants to them, given the base ANX has already established in the claims litigation market."
"Strong FY21 results and FY22E off to a good start Strong results on May 11th saw FY21A sales up 36% YoY, at £118.2m, and adj. operating profit of £27.7m, 48.1% ahead YoY. The company also saw its best ever level of vehicles on the road in Q4 2021 – and last week’s update shows that FY2022E got off to a good start with numbers strong in the first four months. With good momentum on both sides of the business in the current year, we are encouraged by recent progress. With a 263p target price, we believe the shares have a lot further to run and see current levels as a buying opportunity. We also note the recent VW / Therium settlement – LFL, we believe this implies a potential cash injection of as much as £20-25m for ANX, with further significant potential in Mercedes and other emissions scandal opportunities."
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