Specialist litigation funder Manolete has posted an upbeat set of half-year results, as it prepares for a surge in work as the government withdraws emergency support for businesses.
The London stock exchange-listed business, which funds and buys insolvency claims, said profit after tax is up 49% compared with the first half of 2020 at £5.2m.
Figures for the six months ended 30 September also revealed that revenue is up 153% at £19m and basic earnings per share rose by 49% to 11.8p. The firm completed 52 cases in the six-month period.
Manolete floated on the junior AIM market in December 2018. The company’s shares edged up this morning to 300p, after peaking at 585p in mid-May.
Chief executive Steven Cooklin told the Gazette that the firm would be kept ‘awfully busy over the next two to three years’.
‘Where I think we will benefit - in a slightly morbid way - is in the sectors of the UK economy which are on life support system with the furlough scheme,' he said.
‘I think yesterday’s amazing Pfizer news will lead to a normalisation in the next few months. The government has to withdraw the enormous and fantastic support it has given to the economy, and that will expose a lot of companies within these sectors which are just not viable. They will enter into an insolvency process.’
Cooklin added that Manolete had embraced online dispute resolution during lockdown. ‘97% of our cases settle at mediation and that moved seamlessly onto the new software platforms like Zoom and Teams…It took the emotional energy out of the process which was welcome. I suspect that will be something we continue with.’
On the rise of in-house litigation funders, Cooklin said most law firms are focusing on ‘much larger commercial, cross-border litigation matters, which is notoriously the most expensive end of the market’, as opposed to insolvency claims.
He added that law firms would struggle to finance insolvency claims because of conflict of interest issues. ‘Firms have made noises but we can’t see anything on the ground that concerns us at the moment,’ Cooklin said.