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Manolete profit drops 26% after UK government supresses insolvencies

Wed, 23rd Jun 2021

Litigation funder Manolete booked a 26% drop in annual profit, citing a UK government move to suppress insolvencies, drop in the value of in-process cases and higher staff costs. Manolete also announced the departure of chairman Peter Bertram, who would be replaced by senior director Howard Leigh after its annual general meeting. Pre-tax profit for the year through March declined to £7.0 million, down from £9.5 million year-on-year, even as revenue rose 49% to £27.8 million. The company declared a final dividend of 1p per share. Manolete said the fall in profit reflected, in part, a 'lower level of unrealised profits due to exceptional government measures'. The fall also was pinned on a more conservative assessment of the value of in-process cases against the background of the pandemic, and the full-year effect of an expanded staff network. The company's retained share of gross cash receipts from completed cases more than doubled to £6.8 million. 'Despite the UK government taking extraordinary action to temporarily suppress the number of insolvencies and levels of unemployment, we have delivered another set of strong financial and operating results,' chief executive Steven Cooklin said. "While the government's emergency suppression of insolvencies is currently still in place, having been extended before, those temporary measures are currently due to end on 30 September 2021.' 'However most commentators would agree that the government's restrictions cannot continue indefinitely and interestingly in May 2021 creditor voluntary liquidations were back to pre-Covid levels, even with those restrictions in place.' 'The insolvency process will play a critical role in allocating capital and resources to truly sustainable businesses in the post-pandemic UK economy.' 'With the widely reported large backlog of insolvency cases, we expect new case enquiries to increase over the foreseeable future and we will continue working hard to deliver outstanding returns to both the creditors of insolvent estates and our investors.' Story provided by

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