Anexo Group plc (LON:ANX) is the topic of conversation when Arden Partners’ Head of Research Andrew Simms caught up with DirectorsTalk for an exclusive interview.
Q1: Andy, Anexo Group has reported good 2020 results with a solid performance despite COVID, what were the key takeaways in your view?
A1: The Group has continued to invest in the credit hire and legal services businesses and the benefits of this should become much more clear as the COVID restrictions are removed. The exit from the credit hire market by competitors and the impending whiplash reforms provide potential market share gains and accelerating cash settlements from the legal services side will provide the capital to invest further in this growth.
Q2: How do you view the outlook and forecast for the company?
A2: The outlook appears robust, assuming an orderly exit from current and recent restrictions. The group’s credit hire business appears to be accelerating through 2021 and the increase in court proceedings and overall processing efficiency will enable increased activity through the second half of 2021 and in to 2022.
Q3: In terms of a valuation how would you describe Anexo Group?
A3: The stock trades on 9.2x P/E and only 1.2x P/BV which is effectively the value of the current backlog of credit hire cases the Group has on its books. This provides very little value for growth opportunities which the company can take advantage of, either in Credit Hire or adjacent areas, while the scale and financial outcome of the VW emissions cases remains unclear but represents a potential positive going forward.
