Manolete Partners (LSE:MANO) — Half Year Results

0:01 Good afternoon and welcome to the MANOLETE PARTNERS PLC Half Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company will review all questions submitted today and publish where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Steven Cookland, CEO. Good afternoon to you, sir.

0:34 Good afternoon. Thank you very much indeed, and welcome to everyone who's joined this video. I am here today with, our CFO, Mark Taverner, who I think a number of you have, seen before. I am Hi, everyone. I'm Stephen Cookin, the CEO and and founder of MANOLETE. Just a very brief introduction for those who don't know us. So MANOLETE is the leading operator in The UK insolvency litigation financing space, by far the number one operator. In their insolvency cases are the only cases we do, and the reason for that is it is the one area of the law where a third party such as MANOLETE can actually buy the case off the insolvent company by its liquidator or by its administrator.

1:29 So that gives us control of the cases, whereas we if we were just funding cases, we would not be in control. The claimant would be in control. It's a although it's a niche market, it's a it's a very big niche. There's been third party reports on the sector over the last five or six years by particularly by professor Peter Walton. So you have around £1,500,000,000 of headline claims in a normal year, of which roughly half gets recovered in actual cash. And as mister professor Wharton identified, MANOLETE was a 67% market leader in the third party funding segment of that market. But that market is still dominated by, lawyers operating on a no win, no fee basis.

2:20 There were two very important legal changes in the last few years. First of the Jackson reforms, which made that old way of doing it, that no win, no fee, very uneconomic for liquidators to operate Because as law justice Jackson found, the costs of using those cases was about 200% the size of the damages. And after his reforms, you could only recover those costs out of the damages. So, clearly, if this litigation was done by on behalf of creditors, if it all disappeared in fees to lawyers and premiums to insurance companies, there would be no benefit whatsoever to creditors. And creditors usually includes not only banks but also HMRC, which is our tax money as as UK residents.

3:12 So as you can see at the graph of the the table at the bottom of the page there on our most recent investments, 96% of our cases we own and control, just 4% funded. So though that four percent is usually personal bankruptcy claims. Our main area of claims are corporate claims, hence the, high proportion of purchase cases. This is our track record, our vintage table. And so if we just kind of run across the columns just so you understand, so this is by year that we've invested in the case. So as you can see, most recent years since IPO, we have increased the number of investments very substantially. Down in 2022 because the government changed the insolvency laws because of COVID, those are now back to normal. If we take twenty twenty one, just an example, we invested in a 198 cases. We've already completed 70% of those.

4:10 The costs of those completed cases was 4,100,000. The total recovered was 15,800,000. Very good year. And so the total gain was 11.7. So the creditors, HMRC, etcetera, get 6,000,000. MANOLETE's profit is 5.7. We also get back on costs as well, of course. So our total takeout of that would have been more like £11,000,000. We've completed those cases in that year in eleven months, making return on investment of a 139¢, 2.4 times the money that we put in, we got back, an internal rate of return of 203%. When you look at all those years, we've recovered over a £100,000,000 across 596 cases.

5:02 And the returns are very, very stable throughout those years. So on average, we're taking thirteen months, to complete those cases. Return on investment, 142%, and the IRR, internal wage of return, a 131%. Now what does that number mean? Is it good, or is it not very impressive? Well, through my investment banking career, the private equity market was born in the nineties in The UK, and a and a very attractive return on private equity and venture capital investments was 25 percent a year or even 30%. So this very consistent triple digit IRR returns, in my experience, is, unheard of in the financial markets.

5:52 That just summarizes the findings there. So looking at the first half of, the current financial year, there are two very opposing dynamics going on at the revenue line. We have a record number of completed cases, so 95 cases were completed in the six months. So if one stands back and thinks about that, MANOLETE was completing four cases, litigation claims every single week of that six month period, which is operationally a very impressive performance. I think most law firms, large and small, would be pleased to be completing almost a case a day.

6:38 So for a funder, that really is quite remarkable. And that really drives realized revenues, so completed legally binding revenues up to a record from seven 0.7 last year to 13,600,000 this year. And I was just looking at yesterday the Peel Hunt forecasts, our brokers forecast for next year, f y twenty four. And that 13,600,000 figure, achieved in just six months this year equates to the entire revenue forecast for next year that Hillhunt set down. We've then got two oddities for this year that have then brought the overall revenue down. This is all on the unrealized revenue line, which is the output of the difference in the valuation of our unfinished cases from the year end, last year end in March, to the interim period in September, the change in value of those unrealized cases.

7:39 So the reason for the decrease is twofold. Number one, we had a adverse and a very rare adverse decision in the high court on one of our large cases. We took a very prudent view to write that off. But since that time, the court of appeal has granted us leave to appeal. They haven't granted us a win of the case, but they've granted us a second chance. They've looked at the judgment, they agree it should be looked at again. So it's a sizable case The claims at HMRC are under that case of £42,000,000. The accountants for the defendants admitted at least £7,000,000 was owed, and the judge looked at data that supported around $3.54000000 pounds, but he awarded us just £200,000, hence the appeal.

8:32 So we're feeling fairly confident, that, that we've got good grounds to, to argue our case fresh at the court of appeal. The other factor that that affected the unrealized revenues was we looked at all the other 260 odd live cases, and we thought, well, what has changed between the last year end and now? And a lot has changed. The Ukraine war, inflation at double digits, interest rates rising sharply, cost of living crisis. And so we asked our legal team afresh to look at the valuation of the cases in the light of the new current economic environment and come to evaluations of their cases. And that resulted in a couple of million pair back to the portfolio, which combined with that one large case meant there was a large 5,500,000,000 negative movement on unrealized revenues.

9:29 Moving to the next slide. I think the standout point of this six months has been the cash generation. So a last financial year, we in the throughout the whole year, we we collected in 15,600,000 from our completed cases. In the first six months of this year, we beat that number, 15,700,000. And that generated after all overheads, corporation tax, legal costs, payments to creditors, a net cash inflow of 4,900,000, which comfortably covered investments in all all new cases and still left a couple of million over after that. So a strongly cash positive six month period.

10:18 And that continued into the October, month. Again, it's particularly strong. So by the time we got to the end of, October into early November, that 15,700,000 had risen to 19,000,000 of cash inflow. So, obviously, October was very, very strong, as well. So here you can see our cash inflows from settled cases over the years, but this bar here for the FY '23 is for just seven months compared to all the annual figures of the previous years. So very proud to show the cash generation engine of MANOLETE really coming to the fore now. So as I say, these are the first results since.

11:03 We were released from the suspension of many insolvency laws during COVID to protect employment, understandably,

11:11 to protect the SME and and large sector economy of The UK, but we've just started to to emerge from that. As you can see with those suspension of the insolvency laws in place, there was a dramatic decrease in the number of insolvencies, exactly what the government was trying to achieve. But since, those, insolvency rules were were reestablished back to normal, there's been a very strong recovery in the number of insolvencies. So from a low point of about 700, we're back up to some months of 2,000, 1,800, 1,700. So double, triple where we were last year. And that augurs very well for our future future numbers because there's a time delay that comes into effect. These are the companies going into insolvent. They said, we're liquidator appointed.

12:03 They need six, seven, eight, nine months, sometimes sooner, sometimes longer to investigate the claims in the company than to approach us to finance those claims. So this augurs well. This is a very good leading indicator of how our business should develop over the months and years to come. And here it is impacting our new case inquiries. So here, we've got the period of where the government suppressed the insolvency laws, a sharp decline in our case inquiries. And then as the laws were relaxed and brought back to normal, we are now above the COVID pre COVID period for numbers of inquiries, which is great to see. And, again, time lag factor comes in, then signing the cases because cases come to us once the inquiry comes in. We need to do our analysis, make the offer to the liquidator, maybe negotiate off, and then sign the case. So a flatter increase of cases. But, again, these should start to take the shape of the market that we looked at two slides ago.

13:05 And this, I thought it'd be helpful to put those three graphs on a single slide so you can see the market increasing sharply. Because the inquiries lag behind the market by about six months or so, that's a shallower curve. And because the new case investments, yet again, a time lag, that is yet again a a shallower curve. The thing that's driving all of this is this curve, the market. We then move on to the Barclays bounce back loan pilot, and you can see there, the impact it had, on our new case inquiries for October. And this is just a very small sample of Barclays cases. They have thousands of these cases that are now behind in paying back their balance back loans. So this was just the relatively small pilot study. But in terms of MANOLETE's numbers, it is, highly significant.

13:59 So what was the bounce back loan program? This was the government's response to COVID nineteen. So in between June, 2020 and September 2020, about £50,000,000,000 was released by the treasury through banking financial institutions in The UK to be loaned to SME businesses in The UK. Very few checks were done. A lot of it was self certified. You just you told the bank what your revenue was, and you got up to £50,000, and the money was put out very, very quickly indeed. You will have seen that, people like Lord Agnew, who was a business minister, resigned because he thought the the checks were too lax and and white scale fraud was perpetrated in this area, and no one denies that.

14:47 The estimates of that fraud are at the low end. They're about £1,000,000,000. At the high end, more like £10,000,000,000. Our working assumption is more like the the middle range of about 4 to 5,000,000,000 even if it's a low end with MANOLO getting an activity even on the 1,000,000,000 side size of things are are numbers that are very large compared to our our normal levels of addressable market. So Barclays approached us several months ago. We've been working with them very closely with the insolvency service, with the British business bank, and the British business bank approved a pilot scheme of a 120 companies

15:31 who were behind their payments where Barclays suspected fraud had been perpetrated. As I say, out of thousands of possible companies they could have chosen, and and we we entered into a pilot scheme. Those companies were, petitioned for compulsory liquidation through the courts. Immediately, 18 of those companies settled their bounce back loan in full immediately, generating hundreds of thousands of pounds for the treasury just on the pilot and covered all of the costs of the pilot and some. The 102 companies have now been compulsory liquidated. They're with the official receiver. Those cases will then very large be handed over to a private IP firm that can handle volumes like this. And then the vast majority of the cases will be assigned over to MANOLETE at a cost of 5,500 to MANOLETE per case, which will underwrite the costs effectively of the private liquidators work.

16:27 Then the recovery will be split once MANOLAY takes its 5,500 back. The remainder is split fifty fifty with MANOLAY. There is no cap on that at all. MANOLETE has a unique solution for this because of as we would all know from dealing with the legal profession, £50,000 claim in the hands of a lawyer with 80 insurance. The costs were to gobble up that 50,000 within just a few months of working on that claim. We will be handling this very straightforward legal work in house on almost all of these cases, thus maximizing the profit for MANOLACE shareholders and maximizing return for the treasury. I won't spend too much time on this slide. I've used it before, but many of you would have seen the predictions even by the government of now a two year long recession ahead of us, which we believe will and many others believe will lead to heightened levels of insolvency cases over the foreseeable future.

17:28 A quick word on the cartel cases. We're making a a very interesting point here. Just a reminder, these are about, the fact that the European Commission found that, truck manufacturers had been operating a price fixing cartel between nineteen ninety seven and two thousand eleven across Europe, including The UK. The manufacturers were received a record fine from the European Commission of €3,000,000,000. They are liable. There is no question that they have to pay for the damage that was done to all their customers. Of those, MANOLETE bought the claims of 22 companies that happened to have gone bust. Two of them were particularly large, CityLink, a famous courier company, and COMET, the famous high street retailing business that actually had its own large fleet of trucks bought from these manufacturers.

18:22 So we've got 22 of these claims. The two lead test cases have been rung by British Telecom and Royal Mail, so all other claims have been stayed. We've served our cases on the defendant, which have been accepted. But the judge has said, please wait for me to give my judgment on British Telecom and Royal Mail before progressing your cases. That suit gives us fine because it doesn't cost us any money while we wait to see what the judge says. Now those trials have completed, and our KC, King's Council, we have to call them now rather than Queen's Council, has advised us that we should get the judgment around about Christmas time this year, and that'll make very interesting reading and be highly instructive as to the valuation of the claims. At the moment, they're in our books at 13,200,000, including the costs we've spent on these cases, And that, valuation has been very much derived externally by a specialist, cartel claim valuation company called Fideres, who've set a range, and we've got under their low end of their range for setting our valuation of our cases.

19:30 I'll hand over to, Mark Taverner, our CFO. Alright. If I if I start off, with the the trading performance for the six months to September 30, if if everyone looks at the right hand column, that's the six months as shown there. We need to look at realized revenue and unrealized revenue separately because as Stephen mentioned earlier, they're two very different dynamics. Realized revenue was generated from 95 case completions. This is the actual settlement amount for those cases in the period, and that was a record number for the business in six month period. Unrealized revenue is the movement in the fair value investments held on the balance sheet, and we'll unpick that minus £8,100,000 number on the next slide.

20:21 So those two things moving in different directions. Just moving down the profits and loss. Administration expenses increased by 800,000 to 3.1 as a result of an increase in bad debt expense. We always prudently review our debtors and the small number of cases we were more concerned about for recoverability, so we wrote those off. So we reported an EBIT operating loss of £5,300,000 for the six month period.

20:52 Just also to note, the two graphs on the page are quite small. You might need to strain to see this, but the gross settlement value for each six month period, you see how that's increased in the recent period. And, also, the actual number of case completions, again, there's a nice upward trend there up to this six month period.

21:14 So I'll just go over the page. So this is unpicking the 8,100,000 fair value movement. There are essentially three movements that are posted through unrealized revenue, and they're all movements in the investment balance on the balance sheet. So addition of new cases is a positive that gets posted here. Removal of completions is a negative. And because we completed a lot of cases, that's a large negative coming out. Now, of course, that negative is replaced by the actual completion and realized revenue, which is usually a higher number because we've completed it at above our fair value valuation. And also an adjustment in value in the fair value for the existing cases, and we've separately shown the cartel cases that Steven touched on earlier. So we've taken a 1,000,000 uplift in valuation of those cartel cases just to recognize that they've reached the milestone of us tabling our cases with the defendants.

22:19 So I'll just go on to the next page. Again, if you look at the right hand side column, you'll see the balance sheet for the 09/30/2022. Just a few key numbers to pull out. The long term investment in cases, 13,200,000 is the valuation of the cartel cases. The valuation of all other cases are considered short term because we turn them over typically in twelve months, is the 22.9 investment in cases further down. Trade receivables were very stable at 22,300,000 compared to GBP 22,000,000 in the previous September. And we held cash on the balance sheet of GBP 400,000. We've drawn down a net GBP 9,800,000 of our HSBC loan facility.

23:09 We actually repaid 3,500,000 of the loan during the period. And I'll touch on the loan in a little bit more detail in a later slide.

23:20 Now the impact of completing so many cases in the six month period is that we've had a very strong cash flow generation for the period. Again, if you look at the right hand side column, you'll see that we had gross cash generated of 15,700,000, which, again, is a record for us in the six month period. After paying the IP share and external legal costs, that's a positive 7,600,000 to MANOLETE. We then invested 2,800,000 in new cases and legal costs on existing cases. We still had a net positive cash generation of 4,800,000. And before financing, you see there's a net cash positive of 1,900,000 after overheads.

24:07 We then use that cash to repay some of our borrowings. Turning the slide again. Just a couple of cash analysis slides. I won't I won't dwell on these as Steven's already covered them. Gross cash receipts for completed cases, you can see each half year, a very strong increasing trend. The cash collection profile, again, on the graph on the left hand side shows annual cash receipts. And the very last column on the left hand side is obviously only six months of FY '23 has taken place. So you'll see that in six months, we've collected slightly more cash than we did in the whole of the previous year.

24:54 The table on the right hand side shows how the cash, the 15,700,000,000 of cash that we've collected, in which year those cases completed. So it shows that some cases from previous years are continuing to pay cash into us as we often collect cash through repayment schedules. So there's a nice kind of latency cash collection profile there.

25:21 Just touching on aging of receivables. We showed the aging in two ways by settlement date on the left hand side and by due date on the right hand side. Now by settlement date, because as I just mentioned, many of our debtors pay according to to payment schedules, you would expect there to be a phased some older debtors there. However, when when you adjust for the the payment schedule and you look by due date, you see the vast majority of our debtors are not not yet due, and there's hardly any aged debtors there at all. Just to touch on the HSBC loan, those of you who have heard our presentations before will know story the of HSBC's support to the business starting in January 2018 with a £10,000,000 loan.

26:14 This was increased to 20,000,000 facility at the IPO, increased further to 25,000,000 in June 1. We have a uncommitted accordion of a further 10,000,000 available if if we wanted to apply for that. So 35,000,000 package together. The cost the interest cost is a maximum of 2.9% above Sonia. Sonia is a base rate measure. MANOLETE has recently extended the loan period to June 2025 as well. And I think I'll hand back to you now, Steven, for the summary. Capture the summary points. These are the first out of counts where you see the business's KPIs now strongly, emerging and improving from the extended period where the government had suppressed The UK insolvency market.

27:09 The first cases that came through after the restrictions were lifted, certainly with the smaller zombie companies as they're called by the financial press, what we've certainly seen in the last two,

27:20 three months is the much bigger claims, 6 figure claims, 7 figure claims, even 8 figure claims coming through as inquiries to us. So much more normal spread of, cases, now coming through the pipeline. October, as you saw, was very strong with the BBL cases, and November has started, very strongly indeed, maybe the best we've seen for maybe three years. We take a very prudent stance on that big case where we have the poor first instance judgment, which has now gone to the court of appeal. So we've taken a very prudent position on that now, obviously, and we are hopeful that we will, ultimately get a very good result on that case. And, of course, we've taken this one off reappraisal of the, book of cases to to reflect on what's happened since the last year end, and I think that's appropriate for any asset management company of any description.

28:16 Record number of cases, ninety five in sick in the last six month period, which is four cases a week, which from an operational, business traction standpoint is is, I think, very impressive. That led to a record number of realized revenues, 77% higher than last year at 13,600,000. And I'll repeat again, that equals the entirety of Peel Hunt's forecast for next year in total revenues. So that's jolly good. Cash generation, as Mark and I have obviously stressed, is exceptional at 19,000,000 year to date. So that seven months marks marks last graph was was just at the half year. I booked that up to date there. BT and Citi linked trials now done on the cartel cases. We await the decision.

29:03 New covenant package being done with HSBC. That should be finalized in the next few weeks. And then the BBL opportunity both with Barclays, And, of course, we're engaged with all the other leading BBL lenders. We are in active discussions with all of the large ones and a number of the challenger banks as well. They're all looking at the pilot. They're all waiting for the full results of the pilot to come. The end of the financial year would be the window for us to be engaging and hopefully running our programs with them. There can be no guarantee that that will happen, but we believe the data will speak for itself. That's it. We will now turn to q and a. Yes. Sorry.

29:49 Steven, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just using the q and a tab situated in the right hand corner of your screen. But just for the company to take a few moments to read those questions submitted today, I'd like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we've received a number of questions throughout today's presentation. And if I could just ask you to read out those questions and give responses where it's appropriate to do so, I'll pick up from you both at the end. Sure. So I'll just read down from the top. So Quentin b, thank you for your questions. He says it's fantastic to see the potential ramp up of the business for MANOLETE. But given it has high people based costs, I wonder what provision there is for reducing those costs as and when the volume of insolvencies reduces.

30:40 That's a very fair question. Brenton, I think we've had a very good run for a number of years now. I think this BBL BBL program itself, as the government has said, we've just at the start of the recovery process. There are potentially thousands of cases. I mean, the potential fraud here is, as I said, between 1 and 5,000,000,000 across a huge number of companies. And there's only so many that the courts and the courts have restricted us to 50 a day on this. And then there's only so many the insolvency service can manage. There's only so many the banks will want to finance going through that compulsive process at any one stage. So I expect this to run for a number of years and have and build up a very predictable earnings stream on on the back of that if we get the go ahead on those cases, of course.

31:31 The core business, I think we're only just seeing the emergence, out of the massive multi 100,000,000,000 support that was given to The UK, economy by the government. That is obviously all being stopped now, the furlough schemes, etcetera. So the cash reserves and the forecast number of insolvencies is forecast to be very high. That will persist for a number of periods. The government itself, of course, the prime minister has said that we're in for a two year recession, which is, to my memory, that's the longest recession I can recall. So I think, yes, increased staff numbers for for the core business. The BBL team will be on much more short rolling contracts. These are much more junior level, much cheaper staff going into there, so that wouldn't be a big restructuring cost at all if and when we have to wind that down.

32:31 Granted then also asked the BBL recovery program. It looks very exciting. What steps are you taking to make this process as streamlined and efficient as possible, and what capacity will you have to expand At MANOLETE, again, very good questions. So streamlining, we have set up a very streamlined process for assessing their network. This, in fact, the creditor banks are pre vetting a lot of that for us before it even comes to the compulsory liquidation process. So that is is something that usually have the benefit of. Then all the letters that go out to the companies are have been standardized. One literally needs to change two or three fields for each one so we think we can manage very large quantities at any one time.

33:21 And capacity, what we think the current capacity, MANOLETE can handle in terms of BBL, several 100 BBL cases a year. If we get into four figures and and beyond, this is where our plan a comes in with this separate team outside of London that will be assembled. But we'll have plenty of time to to put that together as as the data runs through. Damien says exciting news on Barclays Pilot and BBR month. How long does the pilot run? How many other lenders are you in dialogue with for pilots? So this pilot is is is it started. It's in full flow as I've described. We think the results should be coming in from our end of it by around March, April, May, June next year.

34:11 We'll be signing these cases up much earlier, December, January, so December 2022 and January 23. Other lenders, other pilots, well, they're all looking at this pilot, Damien. They they all I've I've learned to a whole new world. So there's these forums that all these banks sit around every week and is chaired in turn by various members of of various banks. And this is one of the hot topics that they're all looking at. So there's no need to to replicate the pilot. Everyone's looking at the Barclays pilot, and so far, the results have been stunning. We are Steven, is it is it worth saying that for for how long does the pilot run? It's not it's not a a length of time. It's more a specific number of cases and how how long it takes us. Exactly.

35:01 So Yeah. But I think we'll have meaningful data, as I say, by by May, June next year, we we should go through a number of them. We've done a whole bunch of BBL cases just in our normal course of work, and they tend to resolve in about four to five months, so much quicker even than our normal work. So Yeah. Yeah. Jason asks, why have you written down it's probably one for you, Mark. Why have you written down your expectations on your current cases? Is it because the value of the assets you recover has fallen, that the insolvent persons are poorer or something else? Have you ever written down cases before for macro reasons rather than specific individual circumstances? So, hopefully, I've I've explained if we were sat opposite of theoretical to Jason who owed 300,000 and we were having that settlement discussion in March on that case. So before Ukraine, before inquiry, before entry prices, we we and he might be willing to settle that for maybe 200,000.

35:58 If we were running that exact same scenario now, we're probably talking about a number at about 150,000,170,000. And it was that kind of thinking that we asked the legal team to go through in in reassessing the value of the cases. So really quite simple, what what can he afford to pay us? And and and realistically, what what can he pay us? It's and it's worth adding that we this has been a kind of bottom up process speaking to each of the legal team members about each of their cases and and what they thought the the recovery was. So you've kinda got the macroeconomic factors and and the feedback from from the team as well. From the cold face. Exactly. Yep.

36:43 And we're hoping that this is, you know, a one off adjustment just because so much happened in the six month period. We we we thought it was definitely an exercise worth doing. But, absent, you know, World War three or a new pandemic, I we don't see that this needs to be repeated because these cases are over very quickly at MANOLETE. So the new cases being taken on are completely cognizant of the current economic environment and the forecast for the next two, three years. So we we feel that those mark to markets are very much on the conservative side of the new cases. Another quick one from Jason. Have you seen any evidence that liquidators are prepared to accept lower bids because of the macro background? It's actually a very clever question. So while, the insolvency market was suppressed by the government during COVID, it not only suppressed our numbers, suppressed the cash flow for, for insolvency practitioners.

37:38 So we've certainly seen that they are much more willing, to sell cases, something got in there, sell cases, to us, not necessarily for lower number. We're not looking to to penny pinch. We know that usually their costs accrued, are around the kind of 5,000 level on a typical case. That's usually where we're pitching, but that could be covering a case that's where the claim values are £500,000, £1,000,000 on really big cases where we're offering more like £50,000 and then a, you know, $50.50 average split. That the the companies, a, weren't repaying their BBL, and there were there was evidence that the directors had pocketed the money personally.

38:41 That's who we're after. Jason, another one from Jason. What do you think is the best way to value your business? Earnings multiple obviously don't work. Is it price to book? We think it's we think it's earnings multiple, Jason, because unlike many other asset managers, we are completing cases so quickly. We're turning over the capital, recycling capital. So as I said, we we we're complete completing almost a case a day. We're getting new referrals in, sometimes 234 new cases a day. So for us, it's much more operational business rather than sit back hands off asset management business is our view. But people can look at cash flows and DCF and and also that's your job to value us half.

39:29 Paul asked us, possible to provide some guidance on revenue and EBIT target for h two two thousand three also for the next '24. Paul, with the greatest respect in the world, we're not gonna get into profit forecasts on this platform, if that's okay. I'm sure if permitted to disclose. Paul, you're obviously asking all the difficult questions. I'm sure if permitted to disclose, but what percentage success did Casey opine on appeal case outcome? Well, Paul, what I will say I don't think we did ask for a percentage, but what what I will say is that this Casey, for the first time in his career, when the judgment the initial judgment was handed down, rather than just correcting typos, which is his job for the judge, he actually said for the first time in in his career to the judge, would you like to rethink your conclusion?

40:21 That went down as well. You can imagine he didn't rethink his conclusion, but it just showed you what RKC thought of the initial, verdict on the case. And we were all we weren't surprised, but it's a high bar to get the court of appeal to agree to, to to review the case. So, we're we're back in the game. MS asks, I'm wondering how much spare capacity very good question. Your legal team currently has versus current potential future demand number of cases, and what the lead time would be to add to the team if demand will increase more strongly than expected. So we've got currently, I think, 14 lawyers or very seem to have 14 lawyers in the business MS. So, any one of those can can handle 30 to 40 cases at any one time. So that gives us capacity for about 400,500 live cases at any one time. At the moment, we're getting towards 300 live cases, so we've got plenty of capacity. There's a lot of business development work being done that other people can meet meet again, so people aren't sitting on their hands by any stretch. But but if people are absolutely flat out working cases, we we think we could handle between four and five hundred, which is in the in the scheme. We we signed up 83 mark, I think, in the first half. Yes. Absolutely. Yeah. 260 odd lives. So we've got plenty for the next leg up of cases.

41:46 The lead time for for new lawyers, that is that is a critical constraint. Except at the more senior end, you are looking at three to six months. So we are often looking in advance. We're almost always interviewing people to make sure we can react quickly. But on the BBL staff up, if we need to go to three, four, five, ten, maybe more people on the BBL department, you must be much more junior, and more new newly qualified lawyers, so the their lead time will be more than weeks than than months. What are questions here? Damian asked in the first six weeks of h two, can you give some insights into case inquiry numbers and cases taken on? Absolutely fine. So I've done the October numbers in my presentation, so I've answered that. November has been very strong. We were already in the first ten days, we've got in 26 cases with headline values of over 20,000,000.

42:38 And it's the kind of thing we're on top of almost every hour of a day. That's how I can pick the numbers off the top of my sleeve there. So if you if that's in the first ten days of I don't know if that run rate was to continue, we would be looking at maybe 70 odd cases inquiries for for this month, which is astonishing. And that's no BBL cases included in those numbers. These are just run of the mill cases. Cases taken on, as we've always said that there's a time lag there, so these are more old money. So at 1415. Pre COVID, we were more like 1718, 1920. So we're we're edging back towards that in the depths of COVID. We were, like, seven cases a month, 10 a month. So we're we're getting back to where we were when this business had an EBIT of of of 9,500,000.

43:30 Mark h asks, do you consider appropriate that mister Bastis still sits as a high court judge whilst being a director of MANO C Swindon Football Club. You own your own video a few weeks ago states that he promotes MANO as the solution that all liquidators should use as first choice. Well, Stephen Baster is, he's a deputy, high court judge now. He's no longer in charge of the, insolvency and bankruptcy courts. He sits, very seldom now. He retired from the bench. They've asked him to to stay on in a very minor role. His honest view is that this is the way that all insolvency litigation should be done. He's been in the market. He was a solicitor before he was a judge, and that is his honest view. And by all means, we have the phone he's the loviest guy in the world.

44:23 He is also the most ethical operator in the world. If at any stage he thought there was a conflict of interest on any of our cases or any case he was sitting on, he would recuse himself immediately, Mark. Moving on to the next question. Jason, where can we see Peel Hunt's forecast? The answer's in the question, Peel Hunt. We can't hand them out of all these method two things, so please do ask them. Gershun, I think this is the last, question that I can see. Are there Andrew Andrew Sheppard Brown is the contact of of Peel Hunt, if any Oh, yes. Andrew Sheppard Brown. Yeah. Yep. He's looking for that. Are there other banks that Berkeley that than Barclays that you could partner with on b BBLs? Absolutely right. Yeah, Sharon.

45:09 So as I said in the presentation, we are talking to all the big BBL lenders. They're all watching the Barclays pilot, and the Barclays pilot is being shared by Barclays with all of them. And we are engaging with them to explain the process and the legalities and the cash flows of how the pilot works with in one to one meetings with those banks. So fingers crossed. And this is the key thing, that they do the right thing. Yes. These were government guaranteed loans that the bank is not on the hook, but this is taxpayer money. And the right thing must be done to get as much money back as possible, particularly in these striking times. I think that's all the questions unless I've missed anything. Back to you, mister Kopech.

45:54 Steven, Mark, thank you very much. I think you actually managed to address every single question from investors. And, of course, the company will review all questions submitted today and will publish those responses on the investor meet company platform. But just before redirecting investors, to provide you with their feedback, which I know is particularly important for the company, Steven, could I just ask for a few closing comments? Yes. Thanks very much indeed, and thank you all for for spending time, and your support for for the company. I'd say particularly after the past two years where, Steve Baster actually described the legislation that the government passed to suppress insolvency as almost wartime like legislation to to to override the insolvency act 1986 to say to protect people's jobs, to protect families, and we don't argue with that at all.

46:41 That did delay a huge number of insolvencies. Those are coming through now. It's actually very, very important. If Britain is to be fit in in a post Brexit era era, then poorly performing companies need to go through insolvency. Those assets and those customer lists needs need to go to the fitter, better companies, and this is how capitalism works, and no one's invented a a better system to to my mind. So we're all playing, I think, a very important role. The money we we recover, half of it goes back to HMRC. If if it wasn't made and laid behind these cases, nothing would go back to HMRC. And we look forward to a very busy year. I thank you for your support, and we look forward to the journey with you. Thank you very much indeed.

47:29 Thank you. Steven, Mark, thanks once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team from MANOLETE PARTNERS PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.