REG - NAHL Group PLC - Year End Trading Update

NAHLAnnouncement

24/01/2024 07:15

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RNS Number : 6792A  NAHL Group PLC  24 January 2024

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 2019/310.
With the publication of this announcement, this information is now considered
to be in the public domain.

 

24 January 2024

NAHL Group PLC

("NAHL" or the "Group")

 

Year End Trading Update

 

 

Continued progress and significant reduction in net debt

 

The Board of NAHL (AIM: NAH), a leading UK marketing and services business
focused on the UK consumer legal market, is pleased to provide an update on
trading for the financial year ended 31 December 2023 (the "Period").

 

Highlights

 

·      Continued growth in Group revenues and profit before tax

·      73% increase in cash received from settlements, reflecting 92%
more claims settled in the Group's fully integrated law firm, National
Accident Law ("NAL")

·      Over 35,000 new enquiries generated by National Accident
Helpline, continuing its growth in market share

·      Strong performance from Bush & Co., achieving 11% growth in
revenue and operating profit margin increase of 400 bps to 30%

·      Net debt reduced by 27% to £9.7m (31 December 2022: £13.3m)

 

Group results

 

Based on unaudited results, the Board expects to report revenues for the
Period of approximately £42.2m (2022: £41.4m), 2% ahead of the prior year.
Operating profit is expected to be slightly ahead of market expectations at
approximately £4.1m (2022: £4.8m) and reflects the planned investment in
scaling NAL for greater returns in the medium to long term.

 

Profit before tax ("PBT") for the Period is expected to be in line with market
expectations at approximately £0.6m (2022: £0.6m). These statutory PBT
figures include approximately £0.8m of amortisation of intangible assets
related to business combinations. This amortisation will conclude in the
current year to 31 December 2024.

 

The Group continued to generate strong levels of cash flow through the second
half of the year and as a result has been able to significantly reduce net
debt, ahead of market expectation.  Net debt at 31 December 2023 was £9.7m,
down 16% from £11.5m at 30 June 2023 and down 27% from £13.3m at 31 December
2022. The market expectation was £10.3m at 31 December 2023.

 

Divisional performance

 

Revenues in the Consumer Legal Services division are expected to be 2% lower
than last year at approximately £27.6m (2022: £28.3m) and operating profit
33% lower at £2.8m (2022: £4.2m). This performance was anticipated due to
the continued investment in scaling NAL alongside a reduction in revenue and
operating profit from the joint ventures and a reduction in revenue from
Residential Property following the disposal of Homeward Legal in April 2023.
The personal injury business remained profitable after deducting members'
non-controlling interests in LLPs.

 

The personal injury market has remained subdued but National Accident Helpline
has continued to grow market share, generating over 35,000 enquiries in the
Period, which is 2% higher than the prior year(2).

 

The Group distributed 8,518 new enquiries into NAL in the Period.  Whilst
this is slightly less than the prior year (2022: 8,760), these enquiries
comprise a richer mix than 2022 and so are anticipated to generate a higher
return on settlement.  The firm ended the year processing 9,983 ongoing
claims (31 December 2022: 10,860) and NAL significantly increased cash from
settlements by 73% to £6.0m (2022: £3.5m), demonstrating the growing
maturity of the firm and contributing to the Group's overall reduction in net
debt.

 

The division continued to utilise its flexible placement model and enjoyed
ongoing demand for enquiries from its panel of third-party law firms,
benefitting cash flow.  The Group's mature joint venture partnerships
performed well, generating £4.4m of cash (2022: £3.3m), after deducting
drawings to LLP members.

 

In the Group's Critical Care division, Bush & Co. had a very strong year.
Revenues are expected to be 11% higher than last year at approximately £14.6m
(2022: £13.2m) and operating profit is expected to be 29% ahead at
approximately £4.4m (2022: £3.4m).

 

These results reflect an excellent year for expert witness services, in which
revenues grew by 35% due to an increase in the volume and value of reports
issued to customers.  Case management revenues for the Period were in line
with the prior year and Bush & Co. Care Solutions grew revenues by 39%. To
support this growth, Bush & Co. increased the number of case managers and
expert witnesses it works with by 23%.

 

James Saralis, CEO of NAHL, commented:

 

"2023 represented another year of solid progress and I am delighted to be
reporting a strong financial performance for NAHL.

 

"Whilst the personal injury market remained subdued, we have successfully
completed our transformation into an integrated law firm with improved cash
generation and NAL increased cash from settlements by 73% to £6.0m. Critical
Care has delivered a strong financial and operational performance and there is
an exciting opportunity to deliver further market share growth.

 

"The Group continued to generate high levels of cash and this led to a 27%
reduction in net debt to £9.7m, which was well ahead of market expectations.
The steps we have taken in recent years to enhance the Group have borne fruit
and NAHL ended its financial year in a robust position with cause to be
optimistic for the future."

 

 

Notes:

 

1)   All full year 2023 numbers remain subject to audit.

2)   Like-for-like enquiry numbers exclude tariff-only road traffic accident
claims, which the Group ceased to process in February 2022.

 

For further information:

 

 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) 20 3328 5656

 Jeremy Porter/Liz Kirchner (Corporate Finance)

 Amrit Nahal/Stefano Aquilino (Sales & Corporate Broking)

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

 Alex Beagley                                                   NAHL@fticonsulting.com

 Eleanor Purdon

 Amy Goldup

 

Notes to Editors

 

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

 

·      Consumer Legal Services provides outsourced marketing services
to law firms through National Accident Helpline and claims processing services
to individuals through National Accident Law, Law Together and Your 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/)
, www.national-accident-law.co.uk (http://www.national-accident-law.co.uk/)
 and www.bushco.co.uk (http://www.bushco.co.uk/) .

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