Anexo Group (ANX ) has increased its debt facilities to receive additional financing of £16m across the year which will enable it to fund growth within its credit hire and legal services divisions.
The specialist integrated credit hire and legal services provider said the increase follows discussions with the Company’s two major lenders, Secure Trust Bank and HSBC Bank.
Direct Accident Management (DAMS) and Professional and Legal Services (PALS), both subsidiaries of EDGE, Anexo’s credit hire division, use an invoice discounting facility provided by Secure Trust Bank which is secured on the respective trade receivables of each company.
Funding under these deals will now increase from £18.5m to £25m, split between £17m as a Credit Hire facility, £6.5m as a Credit Repair facility and £1.5m to support growth in PALS.
This initial increase will be followed by three quarterly increases of £2.5m, taking the overall facility to £32.5m. As a result, the overall facility limit will now be £36.5m, Anexo outlined. Additionally, the minimum period for the agreement has been extended to 31 December 2022.
Back in July 2020, DAMS ecured a £5m loan facility from Secure Trust Bank under the Government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS) scheme.
The loan was secured on a repayment basis over the three year period, with a three month capital repayment holiday, £2.0 million of which was to be paid as a final instalment.
Meanwhile, Bond Turner Limited, the Company’s legal services division, operates with a revolving credit facility provided by HSBC Bank Plc (HSBC). Anexo has now received approval from HSBC for an immediate increase in this facility from £8m to £10m, it said.
Alan Sellers, Executive Chairman of Anexo, said: “The agreements underline the strength of our relationships with our lenders and their confidence in our business model and growth aspirations. The new facilities will enable us to broaden our dual strategies of raising the number of vehicles on the road, while investing in legal staff and infrastructure to increase the level of cash collections. The Board believes that its policy of concentrating on growth will offer new opportunities for the Group and create long-term value for all our shareholders.”
In a recent research note, analysts at UK-based institute Arden Partners said they believe that ongoing investment into both Anexo’s credit hire and legal services divisions ‘will support growth and the capturing of excellent opportunities for the Company in the market.’
As a result of Anexo’s recent forecast, analysts had ‘nudged up’ their 2021/2022 earnings forecasts by around 4-5% which they say reflects ‘higher levels of credit hire activity vs. previous expectations, resulting in higher debt levels due to investment in working capital.’
Analysts said they expect momentum in the business and the acceleration of housing disrepair to underpin earnings and provide scope for upgrades as 2H21 progresses.
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