A litigation funding company focused on the insolvency sector has said that government measures to prop up businesses were the cause of profits tumbling this year.

Manolete Partners plc today published its unaudited accounts for the six months ending 30 September, describing them as ‘resilient results produced against a back-drop of an extraordinary market’. Operating profit before non-recurring items decreased by 52% to £3.2m in the period. 

Total revenues of £10.2m were a 15% increase on the previous six months - but 46% below the same period in 2020. Manolete said last year’s figures benefitted from an ‘exceptionally large’ case settlement of £9.3m.

Gross profit increased by 38% to £5.4m compared with the previous half-year, but was 43% below the first six months of 2020/21. 

Steven Cooklin, chief executive, said the UK insolvency market was ‘artificially suppressed’ throughout the period this year by temporary government measures.

Cooklin added: ‘With the extraordinary temporary government measures ended from 1 October the market is beginning to recover to pre-pandemic levels and we are seeing a sharp increase in both case enquires and signed cases. Manolete grew strongly up to the imposition of the temporary government measures and with these measures now retired we expect that strong growth momentum to return.’

Net assets by the end of September were £41.2m after a 5% increase in investments, while net debt was £10.3m.

The company proposed interim dividends of 0.39p per share, down from 1.17p per share this time last year. Manolete Partners shares on the London Stock Exchange fell 6.45% to 297.5p on the announcement.