Response to Government Consultation
1 December 2016
NAHL Group PLC
("NAHL" or the "Group")
Response to Government Consultation
Following publication by the Ministry of Justice (MoJ) of its consultation regarding Personal Injury ("PI") claims on 17 November 2016, the Board of NAHL (AIM: NAH), the leading UK marketing and services business focused on the UK consumer legal market, has had the opportunity to consider the proposals further and provides the following update.
The Group announced with its Interim Results in September 2016, that the Board has commenced a trial of an initial small proportion of its enquiries through different commercial and structural arrangements to those it normally deploys, which involves the Group playing a more proactive role in the entire conduct and financing of a PI case. Whilst the measures proposed within the MoJ's consultation are consistent with the Group's expectations, discussions with Panel Law Firms has led the Board to believe it would be prudent to accelerate investment in cases under these alternative commercial and structural arrangements. This will mean committing further investment during 2017 and will also result in a deferment of profit and cash flow. The Board anticipates a reduction in 2017 Operating Profit compared with its previous expectations in NAH, the Group's PI subsidiary, of approximately £4.0 million which should be returned over future years as cases settle. It is anticipated that such investment will be a continuing feature of NAH's business model.
To position the Group for this different commercial and structural approach to funding and processing enquiries, the Board anticipates making an exceptional investment of £1.7m by the end of 2017 to ensure its brand positioning and processes are aligned to the requirements of the new regulatory environment. The Board intends £0.5m of this investment to be incurred in 2016, with the remainder during the course of 2017. This will be offset by an exceptional credit of approximately £1.0m in 2016 related to the resolution of cases covered by pre-LASPO ATE insurance provisions, relating to the period prior to March 2013. This represents a reduction of the provision, which is treated as part of the Group's net debt.
The longer term impact of the regulatory changes will be contingent on the outcome of the MoJ's response to the consultation, which is due to be published in April 2017. The Board believes that the actions it has taken and now intends to accelerate will enable NAH to maintain its position as the leading provider of access to justice for those seeking redress under any new regulatory regime.
The Group confirms that its expectations for 2016 remain unchanged and that it is committed to its dividend policy of paying two thirds of its retained earnings.
For further information please call:
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NAHL Group plc Russell Atkinson (CEO) Steve Dolton (CFO)
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via FTI Consulting Tel: +44 (0) 20 3727 1000 |
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Investec Bank plc (NOMAD & Broker) Garry Levin David Flin James Ireland David Anderson William Godfrey
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Tel: +44 (0) 20 7597 5970 |
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FTI Consulting (Financial PR) Oliver Winters Alex Beagley James Styles |
Tel: +44 (0) 20 3727 1000 |
Notes to Editors
NAHL Group
NAHL Group plc is a leading UK consumer marketing business focused on the UK legal services market. The Group comprises three companies: National Accident Helpline (NAH), Fitzalan Partners (Fitzalan) and Bush & Company Rehabilitation (Bush). NAH provides outsourced marketing services in the personal injury market, Fitzalan, which includes Searches UK a leading conveyancing search provider, provides marketing services in the property market and Bush provides a range of specialist services in the catastrophic injury market.
More information is available at www.nahlgroupplc.co.uk and www.national-accident-helpline.co.uk.
This information is provided by RNS
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