Manolete Partners Plc

FY2026 realized revenue was almost GBP 28 million, slightly down year over year because one significant case moved into FY2027. Adjusted realized PBT was GBP 100,000, impacted by a GBP 1.8 million specific bad debt provision tied to two debtor payments that were delayed; excluding that provision, adjusted realized PBT would have been GBP 1.9 million versus GBP 800,000 the year before. Gross cash receipts were GBP 26.6 million, up GBP 1 million year over year, gross margin improved to 37% from 32%, and net debt increased slightly to GBP 11.5 million against a GBP 17.5 million HSBC RCF limit. Overdue debtors fell 18% to GBP 12.3 million, investment in cases rose to GBP 46 million, and net asset value increased 3%. Looking ahead, management expects average realized revenue per completed case to rise from GBP 93,000 in FY2026 to GBP 150,000 over the medium term, with average revenue per lawyer rising from GBP 1.9 million to GBP 2.3 million. The forward book ended at GBP 67 million excluding cartel cases, with GBP 32 million in cases of at least GBP 0.5 million expected revenue value.

Mena Halton framed the year as a transition to a clearer, more financially disciplined strategy after a difficult period for investors. She emphasized that Manolete remains the market leader, with a Band 1 Chambers ranking for a sixth straight year, and said the business is targeting more higher-value claims, better portfolio quality, and stronger operational efficiency. Her tone was defensive but confident, repeatedly stressing transparency, shareholder focus, and the ability to monetize the enlarged forward book.

Will Sawyer focused on realized revenue, realized profit, cash generation, and the forward book as the key measures of performance. He highlighted the GBP 1.8 million specific bad debt provision, the GBP 3.6 million total ECL charge, the GBP 700,000 of overhead and finance cost savings excluding one-offs and non-cash items, and the GBP 800,000 board restructuring cost tied to former leadership changes. He also pointed to reduced finance costs after a new RCF facility and lower interest rates, net debt of GBP 11.5 million, gross cash receipts of GBP 26.6 million, and GBP 7.2 million invested in new and ongoing cases. On capital allocation, he said current priorities are investing in cases and the platform, maintaining leverage under 50% of gross cash receipts, and that buybacks are not planned right now.

Analysts pressed management on the two large unpaid debts, the GBP 3.6 million ECL charge, and why no share buybacks are being considered despite the stock trading at a steep discount. Management said the two biggest debtors are being pursued through enforcement action, that GBP 1.8 million of the ECL was specific to those names while another GBP 1.8 million was spread across the portfolio, and that the overall overdue debtor balance has fallen. On buybacks, management said capital should first be used to unlock value in the current forward book and invest in new cases, with buybacks only becoming more relevant once debt and balance sheet headroom improve. They also said the company does not expect to need external financing over the next three years, though it would review that if needed to accelerate growth.