Anexo Group (ANX ) has acknowledged a statement released today by Volkswagen in which the German carmaker says it will pay £193m to over 90,000 drivers in England and Wales.
Volkswagen, which settled this High Court claim over the installation of emissions cheating devices in its vehicles, has already paid out more than £26 billion to drivers worldwide. The scandal, which originally erupted in 2015, has led to VW facing litigation in several countries.
The use of “defeat devices” meant that Volkswagen’s cars were certified as conforming to EU pollution standards when they were actually emitting up to 40 times the legally permitted amount of nitrogen dioxide - a pollutant linked to respiratory diseases and premature death.
About 11 million vehicles worldwide, including nearly 1.2 million in the UK, were affected, and payouts to date have included fines, compensation, civil settlements and buyback schemes.
Ben Smyth, Investment Officer at Therium Capital Management, a provider of investment capital which funded today’s claim against Volkswagen, said that “taking legal action was the only way to ensure that VW would be held to account for allegedly misleading their customers and cheating emissions guidelines to the detriment of air quality and human health”.
He told The Times that today’s settlement is “a victory for affected car owners” but that more widely, “the impact that this legal action has had on corporate governance on the one hand and the importance of access to justice for consumers on the other cannot be overstated”.
Today, Anexo Group, the London-listed legal services provider which represents 13,000 claimants in the Volkswagen emissions case and which is about to begin a £3m marketing campaign targeting owners of Mercedes Benz cars for similar litigation, welcomed the news.
A number of the claimants represented by Anexo were acquired through their status as past customers of the Group and others have contacted Bond Turner following a marketing campaign which was predominantly conducted through social media channels. Some of the costs involved in the acquisition of claimants were covered by specialist litigation funding.
While today’s settlement relates to the first tranche of claims against VW of which Anexo is not involved, the firm nonetheless acknowledges the payout as a step in the right direction.
Anexo’s separate class action covers a second, ‘although not subordinate’, tranche of claims against VW on similar grounds. It said a further announcement will be made ‘in due course.’
Addressing shareholders today, the group said it continues to pursue other emissions cases, particularly in relation to Mercedes Benz, for which it has secured additional litigation funding.
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Earlier this month, Anexo Group stated that its FY21 reflected “the resilience of its business model” in the year to 31
December 2021, after revenues jumped by over a third from FY20.
In the past year, it seems Anexo Group’s growth strategy has been supported by a sustained recovery in its core business amid the easing of the second national lockdown in March 2021.
In fact, the number of vehicles on the road within the company’s credit hire division, EDGE, reached ‘record numbers’ in the second half of 2021 (‘2H21’), peaking at around 2,500 in December 2021, while the number of vehicles on the road currently stands at 2,300.
This strong performance has been underpinned by a number of factors, including strong growth in the motorcycle courier market and the withdrawal of competitors due to Covid.
Importantly, the implementation of the Civil Liability Act in May 2021 as well as the deal with MCE previously announced on 25 November 2021 has also contributed to revenue growth.
Beyond this, continued growth has also permeated the company’s other divisions. Just last month, Anexo Group said its legal division, Bond Turner, was continuing to benefit from the re-opening of the court system, a trend that is expected to continue throughout the year.
Notably, the re-opening enabled litigators to increase case settlements and cash collection to support more investment in new cases, the specialist integrated credit hire and legal services provider told investors. Anexo said cash collections are therefore running “at record levels.”
Following the successful launch of the MCE insurance contract back in November 2021, the Company has also modified its approach to vehicle funding with its new strategy including a sustained continued focus on quality claims, high service standards and high success rates.
Anexo’s new Housing Disrepair team also continues to perform strongly; it is currently dealing with approximately 1,800 cases and since inception it has settled approximately 850 cases.
As a result, the Board believes the prospects for growth within this division are very positive and it expects the division to become “a significant contributor” to future company revenues.
Earlier this month, analysts at Arden Research reiterated Anexo as a ‘buy’ stock with a current target price of 280p. The stock’s performance to date, together with a favourable market backdrop, under-pinned the broker’s FY22 forecasts, “with an upward bias to FY23.”
Today, following the announcement, analysts at Arden raised their forecasts +1.6% in FY22 and by +3.5% in FY23, with the Price Target raised from 280p to 300p. Buy maintained.
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