Winn: Medium-term target is to grow EBITDA
Transport entrepreneur Sir Brian Souter has boosted his stake in top personal injury firm Winn Solicitors, along with founder Jeff Winn, after the other external backer sold up.
Mr Winn also told Legal Futures that a long-mooted public listing for the business is still an option for the future.
The Newcastle-based Winn Group is an accident management company that provides a one-stop shop of services.
These are made up of insurance-related products, vehicle hire and repair, recovery and storage, as well as personal injury advice, although the latter now accounts for only 7.2% of turnover.
In the year to 31 March, turnover increased by 139%, from £98m to £235m, having been £54m the year before. EBITDA in the last year was £24.7m, up from £15.8m.
JZ International (JZI) and Souter Investments – the private investment vehicle of Sir Brian, the co-founder of Stagecoach Group plc – took a 60% stake in the Winn Group back in 2013.
Mr Winn, who is the group’s chairman, told Legal Futures that, after the funds that JZI managed switched to A&M Investments, they decided to sell.
While JZI’s management has retained its own 4.5% stake, this left 31%, of which Souter Investments bought 20% and Mr Winn 11%.
Souter Investments now owns 42.8% of the group – of which almost half is held by the Souter Charitable Trust – and Mr Winn 42.9%. The firm’s management has 8.6%.
Mr Winn described the decision of JZI’s management to remain involved as a “statement of confidence”, while his decision to increase his own holding reflected the growth potential of the firm.
He said the group was now the country’s second biggest accident management company after Auxilis – owned by Redde Northgate, which in turn owns NewLaw Solicitors – and had moved from pitching to smaller brokers to being on the tender list of the big players.
“It only takes a couple to push us over £300m turnover and £85m EBDITDA,” he forecast.
He explained: “We can process claims from any part of the UK without the involvement of external third-party companies. This capability allows us to provide a seamless customer journey with no hand-offs, removing friction and delivering customer satisfaction.”
Chief executive Chris Birkett added that the firm’s 24/7 first notification of loss service has been “instrumental in establishing the company as a preferred partner to the insurance industry”, advising 60,000 customers in the year.
Winn Solicitors has a Trustpilot score of 4.8 from nearly 9,000 reviews – 87% of them gave five stars.
Mr Winn explained that the group’s success was in part down to the fact that it did not use the GTA – the General Terms of Agreement, a voluntary agreement on credit hire service standards and costs.
Instead, it works with 45% of insurers on bespoke protocols that enable rapid payment after he showed them “what we win at court and what they can save” by agreeing to a protocol.
One insurer was saving £2-3m a year on legal costs, Mr Winn said.
A further 15% of insurers had agreed informal protocols, while on the remaining 40% “we can push and issue much more quickly” than under the GTA.
He added: “Some of our competitors have signed up to deals where they effectively lose money. It drains their cash and they haven’t got a growth fund.”
Such has been the success, in fact, that Mr Winn’s planned expansion into commercial litigation has been put on hold “because we’ve had to move most of the lawyers back onto RTA”.
He attributed the massive turnover rise to higher volumes of business through its claims management contracts, as well as “market-driven increases in the cost of vehicle repair and hire charges”.
Mr Winn has previously spoken about listing the group on the stock exchange and he said this remained “likely” at some point.
Though Souter Investments was “very laid back”, he acknowledged that “at some point PE [private equity] wants an exit”.
“The feedback we’ve had is at the moment it doesn’t look a very good way to exit. It’s more likely that you bring on fresh PE.”
But the group could get to the stage where it was too big for many PE firms, “so we might have to look at flotation in two to three years’ time”.
Mr Winn added: “Our medium-term target is to markedly grow our EBITDA, which we have done successfully over the last two years. Whilst we do not rule out acquisitions, our primary focus is organic growth which delivers scale without significant injections of fresh capital. I believe the business is well placed to achieve its growth ambitions.”
Winn, which was established by the one-time criminal law solicitor in 2002, now employs 535 people (including 158 fee-earners) and intends to increase that to around 700 over the next 18 months.
The group’s brands are Winn Solicitors, Winn National Accident Specialists, Winn Legal, On Medical, On Hire, On Insurance and Onhealth.
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