Year End Trading Update

NAHL Group PLC

24 January 2024

 

Prior to publication, the information contained within this announcement was deemed by the Group to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication of this announcement, this information is now considered to be in the public domain.

24 January 2024

NAHL Group PLC

("NAHL" or the "Group")

Year End Trading Update

Continued progress and significant reduction in net debt

The Board of NAHL (AIM: NAH), a leading UK marketing and services business focused on the UK consumer legal market, is pleased to provide an update on trading for the financial year ended 31 December 2023 (the "Period").

Highlights

·      Continued growth in Group revenues and profit before tax

·      73% increase in cash received from settlements, reflecting 92% more claims settled in the Group's fully integrated law firm, National Accident Law ("NAL")

·      Over 35,000 new enquiries generated by National Accident Helpline, continuing its growth in market share

·      Strong performance from Bush & Co., achieving 11% growth in revenue and operating profit margin increase of 400 bps to 30%

·      Net debt reduced by 27% to £9.7m (31 December 2022: £13.3m)

Group results

Based on unaudited results, the Board expects to report revenues for the Period of approximately £42.2m (2022: £41.4m), 2% ahead of the prior year. Operating profit is expected to be slightly ahead of market expectations at approximately £4.1m (2022: £4.8m) and reflects the planned investment in scaling NAL for greater returns in the medium to long term.

Profit before tax ("PBT") for the Period is expected to be in line with market expectations at approximately £0.6m (2022: £0.6m). These statutory PBT figures include approximately £0.8m of amortisation of intangible assets related to business combinations. This amortisation will conclude in the current year to 31 December 2024.

The Group continued to generate strong levels of cash flow through the second half of the year and as a result has been able to significantly reduce net debt, ahead of market expectation.  Net debt at 31 December 2023 was £9.7m, down 16% from £11.5m at 30 June 2023 and down 27% from £13.3m at 31 December 2022. The market expectation was £10.3m at 31 December 2023.

Divisional performance

Revenues in the Consumer Legal Services division are expected to be 2% lower than last year at approximately £27.6m (2022: £28.3m) and operating profit 33% lower at £2.8m (2022: £4.2m). This performance was anticipated due to the continued investment in scaling NAL alongside a reduction in revenue and operating profit from the joint ventures and a reduction in revenue from Residential Property following the disposal of Homeward Legal in April 2023. The personal injury business remained profitable after deducting members' non-controlling interests in LLPs. 

The personal injury market has remained subdued but National Accident Helpline has continued to grow market share, generating over 35,000 enquiries in the Period, which is 2% higher than the prior year².

The Group distributed 8,518 new enquiries into NAL in the Period.  Whilst this is slightly less than the prior year (2022: 8,760), these enquiries comprise a richer mix than 2022 and so are anticipated to generate a higher return on settlement.  The firm ended the year processing 9,983 ongoing claims (31 December 2022: 10,860) and NAL significantly increased cash from settlements by 73% to £6.0m (2022: £3.5m), demonstrating the growing maturity of the firm and contributing to the Group's overall reduction in net debt.

The division continued to utilise its flexible placement model and enjoyed ongoing demand for enquiries from its panel of third-party law firms, benefitting cash flow.  The Group's mature joint venture partnerships performed well, generating £4.4m of cash (2022: £3.3m), after deducting drawings to LLP members.

In the Group's Critical Care division, Bush & Co. had a very strong year. Revenues are expected to be 11% higher than last year at approximately £14.6m (2022: £13.2m) and operating profit is expected to be 29% ahead at approximately £4.4m (2022: £3.4m). 

These results reflect an excellent year for expert witness services, in which revenues grew by 35% due to an increase in the volume and value of reports issued to customers.  Case management revenues for the Period were in line with the prior year and Bush & Co. Care Solutions grew revenues by 39%. To support this growth, Bush & Co. increased the number of case managers and expert witnesses it works with by 23%.

James Saralis, CEO of NAHL, commented:

"2023 represented another year of solid progress and I am delighted to be reporting a strong financial performance for NAHL.

"Whilst the personal injury market remained subdued, we have successfully completed our transformation into an integrated law firm with improved cash generation and NAL increased cash from settlements by 73% to £6.0m. Critical Care has delivered a strong financial and operational performance and there is an exciting opportunity to deliver further market share growth.

"The Group continued to generate high levels of cash and this led to a 27% reduction in net debt to £9.7m, which was well ahead of market expectations. The steps we have taken in recent years to enhance the Group have borne fruit and NAHL ended its financial year in a robust position with cause to be optimistic for the future."

Notes:

1)   All full year 2023 numbers remain subject to audit.

2)   Like-for-like enquiry numbers exclude tariff-only road traffic accident claims, which the Group ceased to process in February 2022. 

For further information:

NAHL Group PLC James Saralis (CEO) Chris Higham (CFO)	via FTI Consulting Tel: [phone]
Allenby Capital (AIM Nominated Adviser & Broker) Jeremy Porter/Liz Kirchner (Corporate Finance) Amrit Nahal/Stefano Aquilino (Sales & Corporate Broking)	Tel: [phone]
FTI Consulting (Financial PR) Alex Beagley Eleanor Purdon Amy Goldup	Tel: [phone] [e-mail]

Notes to Editors

NAHL Group plc (AIM: NAH) is a leader in the Consumer Legal Services market. The Group provides services and products to individuals and businesses in the through its two divisions:

·      Consumer Legal Services provides outsourced marketing services to law firms through National Accident Helpline and claims processing services to individuals through National Accident Law, Law Together and Your Law.  In addition, it also provides property searches through Searches UK.

·      Critical Care provides a range of specialist services in the catastrophic and serious injury market to both claimants and defendants through Bush & Co.

More information is available at www.nahlgroupplc.co.uk, www.national-accident-helpline.co.uk, www.national-accident-law.co.uk and www.bushco.co.uk.

 

END