Anexo Group Reports 35.7% Drop in Profit Amid Court Delays and Challenging Conditions
Why we think this is bad
The financial results paint a concerning picture for Anexo Group. A 35.7% decrease in profit before tax and a significant drop in basic EPS from 12.8p to 9.9p are major red flags. The operating profit margin has taken a substantial hit, falling from 27.8% to 18.0%. While revenue only slightly decreased by 1.0%, the company's cash position has worsened, with net debt increasing and a shift from positive to negative operating cash flow. The ongoing disruptions in the court system and economic uncertainties add further pressure. Despite some positive aspects like improved cash collections and growth in the Credit Hire division, these are overshadowed by the overall financial decline and challenging market conditions.
Key Points
- Profit before tax decreased by 35.7% to £14.8 million
- Basic EPS fell from 12.8p to 9.9p
- Group revenue slightly decreased by 1.0% to £141.9 million
- Credit Hire revenues increased by 22.9%, while Legal Services revenues decreased by 16.9%
- Operating profit margin declined from 27.8% to 18.0%
- Net debt increased to £81.6 million from £67.9 million
- Net cash outflow from operating activities of £4.9 million, compared to a net inflow in 2023
- Cash collections improved from £163.5 million to £169.7 million
- Ongoing disruptions in the court system impacting performance
- Focus on diversifying credit hire book and investing in growth areas
Summary
Anexo Group's final results for 2024 reveal a challenging year marked by significant financial declines. Profit before tax fell 35.7% to £14.8 million, while basic EPS dropped from 12.8p to 9.9p. The company's operating profit margin saw a substantial decrease from 27.8% to 18.0%. Despite a slight 1.0% decrease in group revenue to £141.9 million, the Credit Hire division showed growth with a 22.9% increase in revenues. However, this was offset by a 16.9% decrease in Legal Services revenues. The company's cash position has deteriorated, with net debt increasing to £81.6 million and a shift to a net cash outflow from operating activities of £4.9 million. Anexo faces ongoing challenges from court system disruptions and economic uncertainties, which are impacting its performance. The company is focusing on diversifying its credit hire book and investing in growth areas, but these efforts are yet to offset the broader financial pressures.