Atkinson: strategic diversification
NAHL Group plc – the AIM-listed legal marketing and services business that owns National Accident Helpline (NAH) – expects to play a “more pro-active role in the entire conduct and financing of a PI case” following the government’s next round of reforms, it told the stock exchange today.
Issuing its results for the first six months of the year, NAHL said revenue was up 1.3% to £25.8m, with operating profit up 25% to £8.8m and profit before tax rising 17% to £7.5m, meaning it declared an interim dividend of 6.35p per share.
Chairman Steve Halbert told the stock exchange that NAH has “purposefully reduced case volumes, whilst the current regulatory uncertainty causes law firms to consider more carefully how much they invest in new PI cases”.
He continued: “It is encouraging to note that the reduction in activity by our panel law firms (PLFs) has been in line with our expectations and demand appears to have stabilised through the period. In reducing our case volumes, we have proactively focused on a higher value blend of cases, which are attractive to our PLFs.
“As a result while our revenue has reduced, as planned, by 33.7%, margins have been strengthened and operating profits are only 6.8% lower [at £7m] than the same period last year. This is a creditable performance given the regulatory backdrop. We plan to maintain the current levels of operating performance in the second half of this financial year.”
He added that the company continued to plan for a range of potential outcomes from the whiplash reform, which it did not expect to be implemented in the second half of 2017 at the earliest.
“As part of our planning, we are building closer relationships with our key PLFs, and would expect that the new regulatory environment, when it emerges, will give us the opportunity to play a more pro-active role in the entire conduct and financing of a PI case.
“We intend to trial an initial small proportion of our enquiries in the final quarter of 2016 through different commercial and structural arrangements to those we normally deploy and will provide an update on this initiative at the group’s full-year results.”
However, a spokesman would not elaborate on what these plans were.
Mr Halbert told investors that the group’s “strategic decision to focus on higher-value cases within NAH as well as our digital expertise, market leadership and brand recognition, means we remain well placed to capitalise on any emerging opportunities to ensure consumers continue to access justice fairly and cost effectively”.
Fitzalan, the group’s conveyancing division, recorded good growth in the first half of 2016 – strengthened by the performance of Searches UK, which was acquired in January – and “is well placed to grow as consumer habits for procuring legal services continue to change”.
Rehabilitation company Bush, NAHL’s critical care division, traded ahead of plan during the period, the statement added, delivering £1.8m in profit that was not there in the first half of 2015 (Bush was only acquired a year ago).
Russell Atkinson, chief executive of NAHL, said: “The underlying performance of the group continues to benefit from our strategic diversification into complementary legal services markets and we have continued to make good progress on achieving our vision of being the UK’s leading marketing and services provider in our chosen legal markets.
“The group continues to deliver good levels of cash generation and the board remains committed to a progressive dividend policy. Second-half trading has commenced in line with our expectations.”
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