Saralis: Lots of interest in Bush & Co
The personal injury (PI) market has contracted further this year, with business made harder by changes in the Google algorithm, listed business NAHL said today to explain a drop in turnover.
As foreshadowed in a warning issued in June, revenue for the first six months of 2024 was £19.4m, 7% lower than the same period last year. Operating profit stayed steady at £1.8m.
This was due “challenges in lead generation and lower levels of panel placement” in the PI business.
Revenue in the consumer legal services division was £11.4m, down 17%, thanks to a 20% reduction in revenues from PI, buffered by a 6% rise in its small residential property arm.
The group’s critical care division – which provides specialist services to both claimants and defendants for catastrophic and serious injuries through Bush & Co – grew revenues by 11% to £8m.
“Market conditions made progress difficult in the first half as the UK personal injury market contracted further,” said chief executive James Saralis – official figures showed that the number of road traffic accident (RTA) claims fell by 4% in 2023, and the number of employer’s, public and occupier liability claims dropped by 5%.
“It is, however, worth noting that since the end of the first half, there was some improvement in the July figures for RTA claims.”
Mr Saralis continued: “During the period… Google completed a significant organic search algorithm change. Whilst [National Accident Helpline] adapted well to the change and held its search ranking position, several competitors responded by investing heavily in paid search.
“This led to an extremely competitive paid search environment which made lead acquisition disproportionally expensive, and as a result NAH acquired fewer enquiries and experienced significantly elevated enquiry acquisition costs.
“The paid search environment remains competitive albeit there have been some signs of improvement.”
More positively, strong cash generation meant net debt as at 30 June was £9m, down 7% from the end of last year and 22% from a year ago.
Mr Saralis said the group was maintaining its strategy of increasing the number of customer enquiries attracted through National Accident Helpline and then processing more of them through its law firm, National Accident Law.
“By doing this we are creating a higher margin, sustainable business and we can fund our growth through our agile and scalable placement model.
“This is designed to balance the work we place with our panel of third-party law firms and joint venture partners for in-year profit and cash, with the work we process ourselves for greater, but deferred profit and cash.”
In total, NAH generated 11,304 enquiries, 36% fewer than in the first half of 2023. The mix was 28% RTA, 43% non-RTA and 29% specialist, compared to 25%, 48% and 27% last year.
Of these enquiries, 3,072 were passed to National Accident Law for processing, a slightly higher proportion of the total than last year but lower overall (4,555 in 2023) due to fewer total enquiries being generated.
NAHL announced in April that it was exploring a potential sale of Bush & Co. Mr Saralis said: “Whilst there can be no certainty that a sale will occur, the board has experienced strong levels of interest from a wide variety of potential buyers and is currently negotiating terms with a select number of highly engaged parties.”
The group’s share price had been on the up too. The shares reached a high of 77p in May following publication of the 2023 results but have slipped since and the fall in the wake of June’s warning took them back to 56p. They fell as low as 49p in the days after but have recovered to some extent and indeed were up 11% in early trading today to 64.5p.
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