REG - NAHL Group PLC - Year End Trading Update and Notice of Results

NAHLAnnouncement

24/01/2023 07:00

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RNS Number : 6130N  NAHL Group PLC  24 January 2023

Prior to publication, the information contained within this announcement was
deemed by the Group to constitute inside information for the purposes of
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations (SI
2019/310). With the publication of this announcement, this information is now
considered to be in the public domain.

 

24 January 2023

NAHL Group PLC

("NAHL" or the "Group")

 

Year End Trading Update and

Notice of Results

 

Return to growth, reduction in net debt and continued strategic advancements

 

The Board of NAHL (AIM: NAH), a leading UK marketing and services business
focused on the UK consumer legal market, is pleased to provide a trading
update for the financial year ended 31 December 2022 (the "Period").

 

Group financial highlights

 

 Year ended 31 December  FY2022   FY2021   Change
 Group Revenue           £41.5m   £38.9m   6.5%
 Operating Profit        £4.8m    £4.2m    15.7%
 Profit Before Tax       £0.6m    £0.2m    163.8%
 Net Debt                £13.3m   £15.5m   -14.1%

 

Group results

 

Based on unaudited results, the Board expects to report revenues for the
Period of £41.5m (2021: £38.9m), 7% ahead of the prior year, and operating
profit is expected to be in line with market expectations at approximately
£4.8m (2021: £4.2m), representing growth of more than 15%.

 

Profit before tax for the Period is expected to be approximately £0.6m (2021:
£0.2m).  This is ahead of market expectations, albeit from a low base, due
to lower than expected profit attributable to non-controlling interests in our
LLPs, offset by an increase in borrowing costs due to higher UK interest rates
and which the Board expects will continue to have an impact in 2023.

 

Pleasingly, the Group generated strong levels of cash flow throughout the
Period and as a result has been able to significantly reduce net debt from
£15.5m at 31 December 2021 (30 June 2022: £14.5m) to £13.3m at 31 December
2022, which is ahead of market expectations of £14.1m.

 

Divisional performance

 

Consumer Legal Services

 

Revenues in the Consumer Legal Services division are expected to be 6% higher
than last year at approximately £28.3m (2021: £26.6m) and operating profit
12% higher at £4.2m (2021: £3.7m). These positive results were driven by a
strong performance in the Personal Injury business, which grew revenues by 14%
year-on-year and operating profit by 17%.  Further, the Personal Injury
business returned to profit after deducting members' non-controlling interests
in LLPs, giving the Board confidence that the Group is on track to build a
more sustainable and profitable business in the medium-term.

 

Throughout the second half of the year, the personal injury market remained
subdued but National Accident Helpline continued to take market share and
generated nearly 35,000 enquiries in the Period.  This was 9% more than the
prior year and comprised a more profitable mix than in 2021 resulting from the
division's strategy to focus on higher value claims.

 

In line with its stated strategy, the Group continued to grow its fully
integrated law firm, National Accident Law ("NAL"), and invested £2.7m in the
Period in 8,760 new enquiries, which was 6% more than in 2021.  NAL ended the
year with a book of 10,860 ongoing claims, 37% ahead of the prior year (2021:
7,918).  NAL also collected £3.5m in cash from settlements in the Period, an
increase of 65% on the prior year (2021: £2.1m), further demonstrating the
growing maturity of the firm.

 

The division continued to utilise its flexible placement model and enjoyed
strong demand for enquiries from its panel of third-party law firms,
benefitting cash flow.  The Group's joint venture partnerships, which are now
mature, performed well and the business distributed a modest number of
enquiries into Law Together LLP and no new enquiries into Your Law LLP as
planned.  Following investment over a number of years, these relationships
continue to generate good levels of cash flow and delivered £3.3m in the
Period (2021: £3.6m), after deducting drawings to LLP members.

 

The Consumer Legal Services' Residential Property businesses experienced a
slowdown from the second quarter of 2022, in line with the wider market, and
revenues were over 20% lower than prior year.  Management acted to reduce the
cost base in the year, and the business is expected to return a modest profit
contribution for 2022.

 

Critical Care

 

Revenues in the Critical Care division (Bush & Co.) are expected to be 7%
higher than last year at approximately £13.2m (2021: £12.3m) and operating
profit for the year is expected to be approximately £3.5m, 6% ahead of the
prior year (2021: £3.3m).

 

This result includes a strong performance in expert witness services, which
generated 14% revenue growth.  In case management, revenue growth was lower
than expected at 3%, partly due to a continuation of lower average revenues
per client.  As previously highlighted, this results from changes in service
delivery practices implemented during the pandemic which meant many of our
support meetings went online, and this trend has since become the norm.

 

Bush Care Solutions, a support and management service for employing care
staff, delivered revenue growth of 24% and, whilst currently modest in
quantum, management are pleased with the customer response to this new
service.  Bush & Co. continued to develop its range of specialisms and in
2022 it recruited 61 new associates to support its growth and enhance its
proposition.

 

Notice of final results

 

NAHL intends to announce its final results for the year ended 31 December 2022
on 22 March 2023.

 

James Saralis, CEO of NAHL, commented:

 

"Despite the well-documented headwinds across the economy, I'm really pleased
with the financial performance of the Group during the year.  NAHL returned
to growth, with revenues increasing by 7% and operating profit by 14%, and we
continued to invest for the future whilst significantly reducing our debt,
which exited 2022 at £13.3m.  Both our Consumer Legal Services and Critical
Care divisions advanced their strategies, with our Personal Injury business
returning to profit.  This is an important milestone in our plan to build a
more sustainable and profitable business in the medium-term.

 

"Looking ahead, whilst the personal injury market remains subdued, we are
cautiously optimistic that the investments we are making leave us well placed
to continue our growth and strong cash generation in 2023.  Finally, I would
like to take this opportunity to thank all of our people who worked tirelessly
throughout the year to strive for the best results for all of our
stakeholders."

 

Notes:

 

1)         All full year 2022 numbers remain subject to audit.

 

 

For further information please call:

 NAHL Group PLC                                        via FTI Consulting

 James Saralis (CEO)                                   Tel: +44 (0) 20 3727 1000

 Chris Higham (CFO)

 Allenby Capital (AIM Nominated Adviser & Broker)      Tel: +44 (0) 207 220 0500

 Jeremy Porter / Vivek Bhardwaj (Corporate Finance)

 Amrit Nahal (Sales & Corporate Broking)

 FTI Consulting (Financial PR)                         Tel: +44 (0) 20 3727 1000

 Alex Beagley

 Sam Macpherson

 Amy Goldup

Notes to Editors

NAHL Group plc (AIM: NAH) is a leader in the Consumer Legal Services (CLS)
market. The Group provides services and products to individuals and businesses
in the CLS market through its two divisions:

 

·      Consumer Legal Services provides outsourced marketing services
to law firms through National Accident Helpline and Homeward Legal; and claims
processing services to individuals through Your Law, Law Together and National
Accident Law.  In addition, it also provides property searches through
Searches UK.

 

·      Critical Care provides a range of specialist services in the
catastrophic and serious injury market to both claimants and defendants
through Bush & Co.

 

More information is available at www.nahlgroupplc.co.uk
(http://www.nahlgroupplc.co.uk/) , www.national-accident-helpline.co.uk
(http://www.national-accident-helpline.co.uk/) and www.bushco.co.uk
(http://www.bushco.co.uk) .

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