NAHL (LON:NAH)
Share Price 126.00p ( -3.6p or 2.7% today)
Market Cap €65.6m Bid/Offer 122.25p - 127p
About
the Company
NAHL is a leading UK consumer marketing business focused on the UK personal injury market, advertising through its core brand - National Accident Helpline. Having been established in 1993, the Group's business has grown to become the largest outsourced marketing services provider to the personal injury market.
NAHL's core business model is based on enquiry origination through direct response marketing, connecting claimants, who have been injured in non-fault accidents, with specialist law firms.
Regulations Concerns
I had unwisely thought that the main items to worry about in a particular share or sector, mainly came from the booms and bust of the business cycle, threathen trade barriers, interest rate changes and currency fluctuations etc.
Now, I'm now more mindful these years of government changes to a industry's regulations or the arrival of disruptive technologies. These new variables now appear to hold more danger to shareholder value than I had previously thought.
Business Model Challenge
NAHL has had 12 months or more to react to the Ministry of Justice proposed changes. The changes are now expected to be announced in March 2017 with the introduction at a later date. The changes will have an effect not only on NAHL but on their competitors as well.
The large drop in the volume of inquiries is evident already. Apparently, around 750,000 out of the 800,000 RTA annual cases involved a whiplash element in the claim. The size of claim in the future may be as low as £425 and require medical documentation to support any claim. The loss of so may clients with personal injury claims for NAHL business is a major investor concern.
"Personal Injury ("PI") claims following the comments made in the Autumn Statement of November 2015. The Government's proposals seek to restrict the ability for sufferers of minor whiplash injuries to claim compensation and to raise the upper limit for the small claims court for personal injury claims from £1,000 to £5,000."
Company's Reaction To Proposed Changes
The company proposes to take on board some of the funding costs in financing personal injury cases. Obviously, there is a risk involved and a short term loss in profitability until those cases can be settled, …
