Profits at listed insolvency specialist Manolete Partners have been hit by government measures to protect businesses and employment during the pandemic. However, the litigation funder predicted that its caseload will spring back once government support is withdrawn at the end of September.
Audited results for the year ended 31 March 2021 show pre-tax profits down 26% at £7.4m. The firm attributed the fall to government measures, a more conservative assessment of the value of its in-process cases, and a larger staff network.
The board has recommended a final dividend of 1p per share – down from 3p last year – giving a total dividend for the year of 2.17p per share, compared with 4.17p in 2020.
Peter Bertram, chairman, said the number of new cases has been negatively impacted by the government’s measures but when these end the business is 'very well-positioned in the insolvency litigation financing market for long-term profitable growth’.
Total UK corporate insolvencies in the year ended 31 March 2021 were 11,661 compared with 18,194 for the prior year: a decrease of 35.9%.
Manolete chief executive Steven Cooklin said: ‘Most commentators would agree that the government’s restrictions cannot continue indefinitely and interestingly in May 2021 creditor voluntary liquidations (by far the most common type of company insolvency) were back to pre-Covid levels, even with those restrictions in place. The insolvency process will play a critical role in allocating capital and resources to truly sustainable businesses in the post-pandemic UK economy. With the widely reported large backlog of insolvency cases, we expect new case enquiries to increase over the foreseeable future and we will continue working hard to deliver outstanding returns to both the creditors of insolvent estates and our investors.’
The funders total revenues increased by 49% to £27.8m in FY2021, while realised revenues increased by 214% to £24.4m. The company also reported 135 case completions – its highest number yet.
Manolete Partners shares opened 0.5% up, at 241.3p.