REG - NAHL Group PLC - Year End Trading Update

NAHLAnnouncement

29/01/2025 07:00

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RNS Number : 0318V  NAHL Group PLC  29 January 2025

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.

 

29 January 2025

NAHL Group PLC

("NAHL" or the "Group")

 

Year End Trading Update

 

2024 performance in line with expectations

 

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 2024 (the "Period").

 

Group results

 

Since the Interim Results on 24 September 2024, the Group has traded in line
with the Board's expectations.  Based on unaudited results, the Board expects
to report revenues for the Period of approximately £38.8m (2023: £42.2m).
 This is in line with market expectations and 8% lower than last year due to
the anticipated reduction in revenues from the Personal Injury business.
Underlying operating profit is expected to be approximately £3.9m (2023:
£4.4m), after the deduction of £0.6m exceptional costs associated with the
potential disposal of the Group's Critical Care business (£0.4m) and the
associated restructure of the Group's Personal Injury business (£0.2m).

 

Profit before tax ("PBT") for the Period is expected to increase 23% to £0.8m
(2023: £0.6m). This statutory PBT figure includes approximately £0.8m of
amortisation of intangible assets related to business combinations and £0.6m
of aforementioned exceptional costs, the exclusion of which would provide an
adjusted PBT of approximately £2.2m, in line with market expectations. The
annual amortisation charge concluded in the Period. Profit attributable to
members' non-controlling interests in LLPs fell by 26% to £1.9m (2023:
£2.5m).

 

The Group continued to generate strong levels of cash flow with cash
conversion over 170% and as a result has significantly reduced net debt, ahead
of market expectation. Net debt at 31 December 2023 was £7.1m, down 27% from
£9.7m at 31 December 2023. The market expectation was £7.9m at 31 December
2024.

 

Divisional performance

 

In the Group's Consumer Legal Services division, revenues are expected to be
approximately £22.9m (2023: £27.6m), primarily due to a reduction in the
number of enquiries placed into panel firms in the Personal Injury business.
Underlying operating profit is expected to be approximately £2.0m (2023:
£2.8m).

 

National Accident Law ("NAL"), the Group's fully integrated law firm,
performed well during the year, delivering growth in claim settlements and
cash generation. 5,892 new enquiries were allocated to NAL, which the Group
estimates to be worth £5.2m in future revenues and cash by the time they
mature (2023: 8,518 enquiries worth £6.6m). This represented 30% of the total
number of enquiries generated in the Period (2023: 24%).  NAL generated
£8.5m in cash from settlements (2023: £6.6m), 29% higher than prior year.

 

National Accident Helpline ("NAH"), the Group's Personal Injury lead
generation business, generated 19,744 new enquiries (2023: 35,643). NAH faced
several challenges in 2024, namely adapting to significant changes in Google's
search algorithms, the resultant high levels of competition in paid search,
and industry consolidation causing reduced panel demand for the Group's
enquiries. It has become clear that these challenges are neither short-term in
nature, nor unique to the Group's business. In large part, they have resulted
from several years of regulatory reforms and lower levels of investment in
advertising, resulting in a contraction in the size of the personal injury
claims market.

 

However, the actions that management have taken to improve marketing
efficiency, and reduce overheads, had a positive effect in the second half of
the year. By the end of the year, the average cost of acquisition of new
enquiries fell by c. 30% compared to the peak in September 2024 and cost
reduction initiatives have resulted in £1.2m of annualised cost savings
across the business.

 

The division's residential property business, Searches UK, had a particularly
strong year, growing revenues by 28% and contributing £0.4m of operating
profit (2023: £0.2m).

 

In the Group's Critical Care division, Bush & Co. delivered another strong
performance.  Revenues are expected to be approximately £15.9m (2023:
£14.6m), 9% ahead of prior year, and operating profit is expected to be
approximately £4.9m (2023: £4.2m), 10% ahead of prior year.

 

The Critical Care business grew expert witness revenues by 19%, driven by 18%
growth in report volumes. Whilst case management revenues were marginally
lower than prior year, those in Bush & Co. Care Solutions grew revenues by
37%.

 

Potential disposal of Bush & Co

 

Further to the announcement on 23 December 2024, the Board confirms that it is
in exclusive discussions with a potential buyer for Bush & Co. and due
diligence and negotiations have moved to the next stage.  The Board is
seeking to conclude the process as soon as possible and will update
shareholders as appropriate.

 

As with any such process, there can be no certainty that the discussions will
lead to a transaction, nor as to its final terms or timing.

 

Outlook

 

In January, the Personal Injury business has experienced further stabilisation
in lead generation, albeit with volumes at lower than historical levels.
Overall, the Group is performing in line with market expectations.

 

NAHL intends to announce its final results for the year ended 31 December 2024
in May 2025.

 

All figures stated in this announcement are subject to audit.

 

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

 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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