Anexo Group plc (LON:ANX) Head of Investor Relations Nick Dashwood Brown caught up with DirectorsTalk for an exclusive interview to discuss record fleet numbers, motorcycle courier business, housing disrepair business and opportunities arising from the VW emissions case.
Q1: Nick, in Anexo Group’s update, you’ve said that fleet had reached record numbers in the second half of 2021. Why are the numbers so strong?
A1: Well, there’s a number of reasons for that. A lot of our business is in terms with motorcycles and specifically the motorcycle courier market, which has been very strong during the pandemic and certainly continued to be strong during the last part of 2021.
On top of that, we have seen some of the competition, and we don’t have a great deal of competition in what we do, they tend to be much smaller firms in terms of smaller high street solicitors., a lot of them withdrawing. This is partly as a consequence of COVID, but also partly because of the introduction to the civil liability act in May last year, which has restricted the amount of damages that people can get for whiplash claims.
On top of that, we’ve also got a deal with MCE, which is the largest motorcycle insurer in the UK, that’s our first direct referral deal and so we’re seeing some good quality cases coming through from those and they’re all motorcycle-driven.
Q2: So, is the motorcycle courier business still growing?
A2: It’s extremely strong and it’s been strong throughout the pandemic. I’m sure you are aware, both just what you can see and also anecdotally, the number of people getting things delivered has just exploded, that’s food, goods, whatever it may happen to be, online shopping, it’s very, very busy.
Interestingly, that’s not just in the urban areas, obviously we’re very strong in urban areas particularly in London but also you may have seen last year, sometime Deliveroo announced that they were expanding massively in provincial towns. So, anywhere where there’s people who want food delivered, whether that’s groceries or fast food or whatever it happens to be, all need deliveries from online shopping, there is demand there.
So yes, we think that’s a trend which is going to continue.
Q3: Did the closure of courts during the period have an impact on your business?
A3: It had an initial impact because obviously it took a while to get things up and running virtually. We found that most the court hearings can be heard either on the telephone or via Zoom, and that assumes that there’s technological capacity to do that.
I think where there may be difficulties where you’ve got a case where you need to have an expert witness, or you need an independent witness to attend, if you’ve got three-way or four-way conversations, that just becomes that little bit more difficult.
As the courts have been reopening, that has been very positive for our business, including that’s a trend that’s going to continue so I think we weathered it very well.
Q4: When we last spoke, we talked about the Housing Disrepair business. How has that developed since you announced it?
A4: It’s been extreme promising. Just a very quick statistic, you may be aware that there are about 4 million people living in social housing about, 4.4 million who are private renters, and this is a trend that’s going to increase clearly and has been increasing.
We’re very pleased with the progress that we’ve made and we announced it at the tail end of last year, and obviously we had a team already in place, but in terms of the cases we’ve got on the books, in terms of the settlements, those have both been very promising.
From an internal perspective, the amount of time it takes to settle the case is very encouraging, as is the relatively low amount of working capital, which it requires.
So, we think that this business is going to be a significant contributor to revenues in 2022 and beyond.
Q5: Are there other opportunities arising from the VW emissions case that Anexo Group was involved in?
A5: You’ll probably be aware that most major manufacturers are in a similar sort of position to VW and there is potentially litigation pending so we have been concentrating on the VW side of things, but we have been doing a lot of work on other manufacturers and those are all the main marks.
I would suggest that as the VW case moves through 2022 then certainly there are opportunities across the board to get involved in other manufacturers who were effectively doing the same thing as VW.
So, it’s something definitely that’s got a considerable amount of time to run and very significant opportunities for us.