REG - NAHL Group PLC - Final Results and Investor Presentation
07/05/2025 07:00
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RNS Number : 5815H NAHL Group PLC 07 May 2025
7 May 2025
NAHL Group plc
("NAHL", the "Company" or the "Group")
Final Results and Investor Presentation
Despite the challenging trading environment in Personal Injury, NAHL delivered
underlying operating profit in line with market expectations and strong cash
performance enabled further reduction in net debt
NAHL, a leading marketing and services business focused on the UK consumer
legal market, is pleased to announce its audited results for the year ended 31
December 2024.
Highlights
Financial Performance
Year ended 31 December FY2024 FY2023 Change
Group Revenue £38.8m £42.2m - 8%
Underlying Operating Profit £3.9m £4.1m -4%
Operating (Loss)/Profit £(36.5)m £4.1m -
Underlying Profit Before Tax £1.4m £0.6m +113%
(Loss)/Profit Before Tax £(39.1)m £0.6m -
Net Debt £7.1m £9.7m - 27%
· Group Revenue decreased by 8% to £38.8m (2023: £42.2m), reflecting
challenging conditions faced by the Consumer Legal Services division.
· National Accident Law (NAL), the Group's fully integrated law firm, increased
processing revenues by 20% to £8.4m (2023: £7.0m) and collected £8.5m of
cash from settlements, 43% higher than the prior year (2023: £6.0m), a clear
sign of its growing maturity.
· Group generated £2.6m of free cash flow in the year (2023: £3.6m), with
underlying operating cash conversion of c.170%. As a result, net debt was
reduced by 27% to £7.1m (31 December 2023: £9.7m), down from a high of
£21.0m in 2019.
· Underlying operating profit slightly down at £3.9m (2023: £4.1m) and
underlying PBT increased to £1.4m (2023: £0.6m).
· Statutory operating loss for the year of £36.5m (2023: profit of £4.1m),
largely due to £39.9m exceptional non-cash impairment charge on goodwill
relating to Personal Injury business, and after recognising £0.6m of
exceptional costs relating to the potential disposal of Critical Care and the
associated restructure of Consumer Legal Services.
Operational Update
· Revenue in our Consumer Legal Services division decreased by 17% to £22.9m,
primarily driven by our Personal Injury business which reduced 21%
year-on-year due to a 70% reduction in enquiries placed into our panel of
third-party law firms.
· In line with our long-term strategy, we can now say with confidence that we
have grown NAL to be a mature, efficient law firm that is delivering on its
goals at current enquiry levels.
o 5,892 new enquiries placed into NAL (2023: 8,518). This was lower than prior
year due to the reduction in total enquiries generated but represented a
higher proportion of total enquiries (2024: 30%; 2023: 24%).
o We estimate these new enquiries will be worth £6.2m in future revenue and
cash.
o NAL settled 3,558 claims in the year (2023: 3,633) and the average revenue per
claim was higher than 2023, demonstrating the firm's maturity. These claims
generated £8.5m of cash from settlements, 43% higher than the previous year
(2023: £6.0m).
o At 31 December 2024, NAL was processing 8,457 ongoing claims (31 December
2023: 9,983 ongoing claims). We estimate after expensing marketing and
processing costs to date, our book of ongoing claims will generate future
revenues of £10.5m, future gross profits of £8.5m, and future cash of
£14.4m.
· National Accident Helpline (NAH) generated 19,744 enquiries in the year
(2023:35,643), albeit with a higher proportion of RTA work.
· NAH dealt well with fluctuations in organic search results driven by Google's
algorithm changes in Q1, however the paid search environment became
increasingly competitive through the remainder of the year due to several
competitors investing aggressively in paid search. In response to these
challenges, we have invested in our internal marketing which is already having
a positive impact.
· Our Residential Property business, Searches UK, performed well, growing
revenues by 29%.
· Critical Care had another strong year, with revenues increasing 9% to £15.9m
(2023: £14.6m).
o Operating profit increased by 10% to £4.9m (2023: £4.4m) and operating
profit margins increased by 30 bps to 30.6%.
o The business generated £5.4m of cash from operations, an increase of 10% on
the prior year (2023: £4.9m).
o In Bush & Co, our low-risk, low-cost strategy has focused on delivering
further growth in expert witness and case management and accelerated growth
from care solutions reflecting the relatively small size of the business and
the scale of market opportunity. This strategy continues to deliver results.
o Expert witness services grew revenues by 19% and the team delivered 1,335
reports to customers, an increase of 18% on the prior year (2023: 1,136). The
number of instructions for new reports also increased by 18%, demonstrating a
strong pipeline of work.
o Our Bush & Co. Care Solutions service is now well established. Revenues
increased by 37% to £0.7m (2023: £0.5m), all of which is recurring revenue.
Current Trading and Outlook
· The Group finished FY24 strongly, reducing enquiry acquisition cost and
delivering efficient, profitable growth through our mature law firm, NAL.
· The Group has started 2025 well, building on the momentum at the end of FY24
by further reducing personal injury acquisition cost and generating additional
efficiencies whilst continuing to reduce net debt.
· Bush & Co continues to perform well with consistent growth and a strong
margin. We remain engaged in productive discussions regarding the potential
sale of the business and look forward to updating the market on progress in
due course.
· Investments made in case processing in NAL and in our Expert Witness
proposition in Critical Care continue to deliver strong results and give us
confidence in delivering a positive result in FY25.
· Today we are also pleased to announce plans to re-launch our Underdog brand
based on the well-known animated character that represented National Accident
Helpline from 2010-2016. We believe this can help boost enquiry volumes
through our digital channels, supporting our efforts to unlock latent demand
in the market.
· In February 2024, the Group successfully extended its banking facility with
Clydesdale Bank/Virgin Money. The existing £20m revolving credit facility,
which was due to expire on 31 December 2024, was reduced to a £15m facility
running to 31 December 2025. Post year-end, in April 2025, the Group further
extended its facility to 31 December 2026 and reduced it again, to £11m.
James Saralis, CEO of NAHL, commented:
"2024 was a challenging year for NAHL, with a difficult marketing environment
hampering lead generation from our National Accident Helpline brand
compounding a lack of demand for work from panel firms in the Personal Injury
business. Despite these challenges, and thanks to the hard work of our people
and resilience of our business model, the Group delivered growth in underlying
profit before tax and another significant reduction in net debt.
"Throughout the year, the Board remained focused on exploring options to
accelerate growth in value for shareholders and we continue to actively
progress the potential sale of our Critical Care division. Adjacent to this,
the Board is also developing its future strategy for the remainder of the
Group and has been encouraged by trading in the first quarter of FY25.
Finally, I'm pleased to share that we are preparing to re-launch our much
loved Underdog brand in the coming weeks. This is an exciting milestone for
the Group and one which we are optimistic will help to unlock greater demand
through our digital channels."
The Annual Report and notice of Annual General Meeting will be available by
the end of May 2025.
Investor Meet Company Presentation - 13 May 2025
James Saralis CEO and Chris Higham CFO will provide a live presentation via
Investor Meet Company at 14:00 BST on 13 May 2025. The presentation is open to
all existing and potential shareholders. Questions can be submitted pre-event
via your Investor Meet Company dashboard up until 09:00 BST the day before the
meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free and add to meet NAHL
GROUP PLC via:
https://www.investormeetcompany.com/nahl-group-plc/register-investor
(https://www.investormeetcompany.com/nahl-group-plc/register-investor) .
Investors who already follow NAHL GROUP PLC on the Investor Meet Company
platform will automatically be invited.
Enquiries:
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/Daniel Dearden-Williams (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 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 and Law Together. 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/) .
Throughout this document, references to 'joint venture' law firm relate to our
law firms Your Law LLP and Law Together LLP which we operate in partnership
with a minority member. The term 'joint venture' does not relate to the
UK-adopted International Accounting Standards (IFRS) definition. These law
firms are accounted for as subsidiary undertakings.
Chair's Report
I am pleased to report that the Group closed out the year in line with revised
market expectations with another strong performance from Bush & Co and
National Accident Law (NAL). Disappointingly, though, a difficult marketing
environment during the year had an adverse impact on the number of personal
injury enquiries generated in the Consumer Legal Services division that
coincided with reduced demand from panel firms.
As a result of actions taken in response to all this, the Group has started
2025 well, reducing personal injury acquisition cost, generating further
efficiencies and reducing net debt.
Financial results
Group revenues were £38.8m (2023: £42.2m) and underlying operating profit,
before exceptional costs was £3.9m (2023: £4.1m). An exceptional, non-cash,
impairment charge of £39.9m was made on personal injury goodwill as a result
of the reduction in personal injury enquiries and panel demand, which is
discussed further in the CEO and CFO reports. There were also £0.6m of other
exceptional costs mainly related to the potential disposal of Bush & Co.
After exceptionals, therefore, the Group's operating loss was £36.5m (2023:
£4.1m profit) and its loss after tax was £39.3m (2023: £0.6m profit), of
which £43.8m related to continuing operations and a profit of £4.5m to
discontinued operations. The discontinued operations relate to the results of
Critical Care given its designation as Held for Sale as at the year end.
The Group maintained its focus on delivering strong cash generation and as a
result, net debt reduced to £7.1m (2023: £9.7m), down from a high of £21m
in 2019.
Consumer Legal Services
Within the Group's Consumer Legal Services division, our personal injury
business experienced a challenging trading environment in 2024.
The Government's whiplash reforms (introduced in 2021) continued to have had a
detrimental effect on the number of claims in the market and the number of
firms practicing personal injury, either through consolidation or exiting the
market. At the same time, a series of major changes to Google's search
algorithms that resulted in increased competition for enquiry generation, with
some competitors ramping up spend aggressively.
This resulted in increased competition leading to an unusually high average
cost per enquiry (CPE) and lower volume whilst demand from panel firms fell.
This is a continuation of a trend experienced in recent years.
The Group had anticipated falling panel demand and created NAL in 2019 so we
could process claims ourselves. Since then, NAL has grown and matured. It
produces more profit per enquiry than a placement with a panel firm or an
enquiry placed into our joint venture law firm, Law Together, and it continued
to perform successfully in 2024.
We placed 30% of enquiries into NAL during 2024 (2023: 24%) which, although a
greater percentage, was fewer in number than the previous year due to the
overall reduction in enquiry numbers.
NAL settled broadly the same number of claims as it did in 2023, but revenue
per settled case increased as more complex, longer duration cases concluded.
Cash generated from these settlements was £8.5m compared with £6.0m in 2023
and £3.5m in 2022.
NAL is now a proven success, and it has shown it delivers the best returns on
enquiries invested in it. It remains central to our future success and will
become an increasingly important part of the business in future.
Towards the end of last year we concluded that the lower personal injury
enquiry volumes we experienced in 2024 will persist. Consequently, we began
implementing £1.2m of annualised savings towards the end of 2024 to "right
size" the National Accident Helpline (NAH) area of the business in 2025. NAL
remains largely unaffected by these savings although it has been working on
improving its processes to deliver further efficiencies and capacity.
We have reset the target for personal injury enquiry numbers in 2025 to a
lower level reflecting the changed market. We have also strengthened our
in-house marketing team to improve our search performance and reduce CPE back
to 2023 averages, and we have changed our external marketing agency. These
changes are already having a positive impact on CPE in 2025 and have created a
platform for future growth in the new environment.
Critical Care
Bush & Co had another strong year growing revenues and profit.
Revenues were up 9% and operating profit was up 10%. Growth was driven mainly
by Expert Witness which now accounts for 49% (2023:45%) of Bush & Co
revenues. Demand for our services remains strong so we expect to see further
growth in future and continue to recruit new experts to meet it.
Case Management revenues were broadly flat and continue to provide a high
proportion of recurring revenues. The business enjoys a strong reputation
amongst all the leading law firms in the catastrophic and serious injury
market.
Bush & Co Care Solutions, created towards the end of 2021, has already
established its reputation in the market and with a high proportion of
recurring revenues shows excellent potential for the future.
Our investment in improving the infrastructure at Bush & Co over the last
few years to drive efficiencies, and in developing our expert witness and care
solutions offerings, has created a highly profitable business, with a strong
record of growth and a platform for future success.
Summary
In summary, although NAL performed strongly, it hasn't been an easy year for
the personal injury business as enquiry numbers fell and panel demand reduced.
We have right sized the business and changed our approach given the new
landscape to focus on winning a smaller (but growing) base of enquiries, with
a lower CPE.
NAL has demonstrated its success in processing claims effectively and
profitably and remains cash generative. It will continue to become an
increasingly important part of our business in future, as panel firms continue
to exit the market, and take an increasing number of enquires. So will
maintaining the flexibility that our joint venture law firm, Law Together,
provides.
Bush & Co continues to perform well with consistent revenue growth and a
strong margin. The investments we've made over the past few years have
positioned the business for further growth.
As we have previously announced we are currently engaged in talks to dispose
of Bush & Co but there is no certainty that there will be any transaction
nor as to the timing or terms of any such sale.
Finally, I'd like to thank all our people for their continuing contribution to
the Group.
Tim Aspinall
Chair
1. Throughout this document, references to 'joint
venture' law firm relate to our law firms Your Law LLP and Law Together LLP
which we operate in partnership with a minority member. The term 'joint
venture' does not relate to the UK-adopted International Accounting Standards
(IFRS) definition. These law firms are accounted for as subsidiary
undertakings.
CEO Report
Overview
2024 was a challenging year for NAHL, with a difficult marketing environment
hampering lead generation from our National Accident Helpline brand; a lack of
demand for work from panel firms in the personal injury business; and the
distraction of a potential sale process for our people in Bush & Co. to
deal with. Despite these challenges, and thanks to the hard work of our
people and resilience in our business model, the Group still delivered growth
in underlying profit before tax and another significant reduction in net
debt.
Throughout the year, the Board remained focused on exploring options to
accelerate growth in value for shareholders and we continue to progress a sale
of our Critical Care division. The Board is also developing its future
strategy for the remainder of the Group and has been encouraged by trading in
the first quarter of 2025.
Financial performance
Group revenue reduced by 8% in the year, to £38.8m (2023: £42.2m),
reflecting the challenging conditions faced by our Consumer Legal Services
division. Revenues in this division fell by 17%, while those in Critical
Care grew by 9%.
The Group achieved an underlying operating profit of £3.9m (2023: £4.1m) and
a statutory operating loss for the year of £36.5m (2023: profit of £4.1m),
largely due to a £39.9m exceptional non cash impairment charge on goodwill
relating to its Personal Injury business, and after recognising £0.6m of
exceptional costs relating to the potential disposal of Critical Care and the
associated restructure of Consumer Legal Services. The resulting loss after
tax for the year was £39.3m (2023: £0.4m profit) of which a loss of £43.8m
was in relation to continuing operations and a profit of £4.5m was in
relation to discontinued operations. The discontinued operations in 2024
relate solely to Critical Care which was designated as held for sale as at 31
December 2024. The decision to present the division in this way was made in
conjunction with the Group's auditors, but should not be taken as a sign of
certainty of a future transaction.
The impairment charge reflects the impact of the changing dynamics in the
personal injury market, which were heightened in 2024 and further detail is
provided in the CFO Report and in note 5.
Throughout the year, the Group experienced a further reduction in demand for
work from its panel of third-party law firms. This is the continuation of a
trend due to lower claim numbers, largely caused by the introduction of the
Government's whiplash reforms in 2021 but also exacerbated by recent market
consolidation.
The Group also experienced increased competition in enquiry generation, and a
changing digital search environment, which resulted in fewer enquiries being
generated at a significantly increased average enquiry acquisition cost.
The consequence of placing less work in our panel was that the Group generated
lower levels of short-term profit and cash generation. Back in 2019, the
Group responded to this trend by launching its own integrated law firm,
National Accident Law (NAL). I am pleased to report that this business is
trading well and is now mature based on current enquiry levels. The Board
intends to grow the level of work processed in NAL, which is more profitable
than work placed in the panel.
The Board has concluded that it is prudent to plan for a lower level of
enquiries placed into the panel in future years, and for the current level of
high competition in enquiry generation to persist. As a result, the Group
has impaired its goodwill relating to the Personal Injury business from
£39.9m to nil.
Excluding these exceptional costs, underlying operating profit was in line
with revised market expectations at £3.9m, and only 4% lower than last year.
Profit attributable to members' non-controlling interests in LLPs was 26%
lower than last year at £1.9m (2023: £2.5m). This reflects the shift of
the past few years away from processing our own work in joint venture
partnerships in favour of investing in our own integrated law firm, National
Accident Law.
Borrowing costs on the Group's revolving credit facility fell by 18% to
£0.9m, reflecting the significant reduction in borrowings as a result of the
Group's continued strong cash generation. In February 2024, the Group
reduced the size of its revolving credit facility from £20m to £15m and we
aim to continue reducing our net debt and borrowing costs.
Underlying profit before tax was £1.4m, which was 113% higher than last year
(2023: £0.6m). It is worth noting that underlying profit before tax was net
of £0.8m of amortisation of intangible assets previously acquired on business
combinations which have now been fully amortised and there will be no such
charges against future profits. Basic underlying loss per share on
continuing operations (EPS) decreased to (7.0)p from (7.6)p last year.
The Group generated £2.6m of free cash flow (FCF) in the year (2023: £3.6m),
with underlying operating cash conversion over 170%. As a result, we have
reduced net debt by 27%, from £9.7m at 31 December 2023 to £7.1m at 31
December 2024.
Divisional performance
Consumer Legal Services
In our Consumer Legal Services division, revenue decreased by 17% to £22.9m
in the year. This reduction was primarily driven by our personal injury
business, which reduced by 21% year-on-year due to a 70% reduction in
enquiries placed into our panel of third-party law firms. Our residential
property business, Searches UK, did well in the year and grew revenues by
29%. The 2023 results also include £0.3m of revenue from our Homeward Legal
residential property business, which was disposed of in April 2023.
Underlying operating profit for the division decreased by 29%, from £2.8m to
£2.0m. Again, this was driven by our Personal Injury business which
suffered from a lack of panel demand and an unusually high acquisition cost
for new enquiries, resulting in underlying operating profit reducing by 40%
to £1.6m. Searches UK increased operating profit from £0.2m to £0.4m in
the year.
The division generated £1.1m of cash from operations in the year (2023:
£2.1m). After deducting drawings paid to LLP members, both the Personal
Injury (2024: £0.7m; 2023: £1.6m) and Residential Property (2024: £0.4m;
2023: £0.5m) businesses were cash generative.
Personal Injury
Our strategy to create a more profitable PI business is clear. We aim to
grow the number of accident victims that we support by growing enquiry
numbers. We then want to grow the value of enquiries that we process
ourselves, in our consumer-focused law firm, NAL. By doing so, we will
create a more sustainable firm in the medium term and generate more profit per
enquiry. By developing best-in-class processes and workflows, and using
technology appropriately, we can generate operational leverage and provide a
great service to our customers. To support our investment in NAL, we place a
proportion of our enquiries with a panel of third-party law firms and joint
venture partners for in-year profit and cash, as opposed to the enquiries we
place in NAL for greater, but deferred, profit and cash.
1. Grow the number of accident victims that we support by growing enquiry
numbers
Since 2018/19, the total number of PI claims registered with the Claims
Compensation Recovery Unit of the Ministry of Justice (CRU) has fallen
year-on-year(1). Motor-related claims dominate the market, representing 73%
of all PI claims in 2023/24. However, this was 5% lower than the previous
year, which was 5% lower than the year before that. Whilst significantly
smaller, employer liability and public liability claims actually increased by
2% and 10% respectively. Over the past five years, claim numbers for
clinical negligence have fluctuated around the 14k-16k level.
Road traffic accidents (RTA) and employer liability claims continue to track
well below pre-pandemic levels. In 2023/24, RTA was 53% below pre-pandemic
levels, whilst employer liability was 56% below.
For some time, we have believed that there is a significant untapped market
for PI claims. In Q4 2023, we commissioned research that indicated that at
least £1.6bn(2) of personal injury settlements were unclaimed in 2023 because
of accident victim's reluctance to make a claim. More recent research by the
Association of Personal Injury Lawyers (APIL) shows that one in five UK
adults(3) said they had been injured or become ill because of others'
negligence, but that 41%(3) of these had not claimed compensation. This
suggests that there are around 4.3 million potential victims of negligence who
have not gone on to make a claim.
We believe that this reluctance to make a claim, and the lack of understanding
surrounding the claim process, is a result of a reduction in advertising by
firms since the start of the pandemic. There is clearly a significant latent
demand that could be unlocked by a firm who can stimulate the market, educate
accident victims on their rights and change the perception of claiming.
National Accident Helpline generated 19,744 enquiries in 2024 (2023: 35,643).
These results were disappointing. The mix of work changed slightly in the
year, with a higher proportion of RTA work being generated. In total RTA
made up 27% of the total enquiries (2023: 25%), non-RTA 45% (2023: 47%) and
other claim types unchanged at 28%.
In the first quarter of the year, a conscious decision was taken to reduce the
volume of enquiries generated to reflect a lower demand for work from the
panel. This coincided with the first of a series of major changes to
Google's search algorithms, predominantly related to the launch of AI
Overviews, which had a significant impact on the organic search results for
firms across the sector. NAH fared well through these changes and held its
search ranking positions, however, several competitors responded by
aggressively investing in paid search. This led to an extremely competitive
paid search environment, allied to inflation acquisition costs with a number
of lead provider partners, which made lead acquisition disproportionally
expensive. As a result, NAH acquired fewer enquiries and experienced
significantly elevated enquiry acquisition costs.
In response to these challenges, we have invested in our internal marketing
team and recruited a Senior PPC Manager, who started in July 2024, and an
Interim Marketing Director who started in January 2025. These individuals
are already having a positive impact on our lead generation. We have also
changed the marketing agency that supports our internal team with paid
advertising, invested in data enhancements and conversion rate optimisation,
and are working to broaden our channel mix.
Whilst there is no silver bullet, the changes made appear to have had a
positive effect and, 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.
2. Grow the value of enquiries that we process ourselves in NAL
NAL performed well during the year increasing processing revenues by 20% to
£8.4m (2023: £7.0m). We can now say with confidence that we have grown NAL
to be a mature, efficient law firm, that is delivering on its goals based on
current enquiry levels.
In 2024, 5,892 new enquiries were placed into NAL (2023: 8,518). This was
lower than last year because of the reduction in total enquiries generated,
but this placement into NAL represented a higher proportion of the total
enquiries (2024: 30%; 2023: 24%). These claims cost £3.0m in marketing
costs, in line with 2023 (2023: £3.0m). Our proven model estimates that
these new enquiries will be worth £6.2m (2023: £6.6m) in future revenue and
cash by the time they mature.
NAL settled 3,558 claims in the year. This was 2% lower than the previous
year (2023: 3,633) but the average revenue per claim was higher, demonstrating
the maturity of the law firm. These claims generated £8.5m of cash from
settlements for NAL, 43% higher than the previous year (2023: £6.0m).
At 31 December 2024, NAL was processing 8,457 ongoing claims (31 December
2023: 9,983 ongoing claims). These claims represent an embedded value to the
business, being the future profits and cash to be generated by processing them
to settlement. We continue to review the assumptions that drive the
valuation of the claims book and this year this resulted in an increase in the
value of the book by £2.8m. This includes uplifts relating to Hassam vs
Rabot, a long running case which concluded in the Supreme Court in March 2024,
providing clarity on valuations where claimants in the small claims track have
multiple injuries, meaning those injuries should be valued separately.
Separately, a multi-year inflationary increase to damages was confirmed in
March 2024 benefitting most of the open cases that we are processing. This is
the first year since the inception of the law firm that the cash generated
from settlements has exceeded the value of new enquiries placed into NAL.
Despite this, due to the revaluation of the underlying assumptions, the value
of the book has increased slightly in the year.
We estimate that after expensing the marketing costs to generate these claims
and processing costs to date, our book of ongoing claims will generate future
revenues of £10.5m, future gross profits of £8.5m, and future cash of
£14.4m.
3. Continuously review and improve processes to realise efficiencies gains
and a better customer experience
Throughout the year, the management team developed its processes to create
further efficiencies in both NAH and NAL. We delivered improvements in
processing performance and productivity, including improving the litigation
processes within NAL which resulted in an 34% increase in the number of cases
issued in 2024 compared to 2023; developed incentivisation schemes for fee
earners to further accelerate case progression; and created a dedicated client
support team which has improved client communications. Further improvements
were made to our claims submissions process, which resulted in a 31%
improvement in client sign up rates for non-RTA sign up and, importantly, 51%
for high value cases, which will ultimately lead to improved average win
rates. Restructuring our management information and web development teams
has also led to further efficiencies.
Furthermore, in light of the challenging market conditions which resulted in
NAH operating at a lower level of enquiries, we implemented certain cost
saving measures including a restructure of the management team. This
resulted in £1.2m of annualised cost savings of which £0.3m benefited 2024
(net of £0.1m implementation costs presented in exceptional costs). These
savings are primarily in the NAH business and we continue to explore further
cost saving opportunities that will lead to further operating efficiencies.
As previously announced, we experienced weak demand for new enquiries from our
panel of third-party law firms throughout 2024. The panel provide a good
service for our customers and have the benefit of generating in year profit
and cash flow for the Group. In total, 4,426 RTA and non-RTA enquiries were
placed into the panel in 2024. This represented a reduction of 70% on the
14,629 placed into the panel in the previous year.
Several factors, including market consolidation, increased regulation and a
requirement for increased investment in technology, have contributed to a
significant decline in the number of firms operating in the PI sector. The
number of SRA regulated law firms which generated 50% or more of their
turnover from PI fell to 467(3) in 2023-24. This is down 9% in the year and
has fallen from 723(3) in 2018-19.
Law Together LLP, our joint venture law firm, which is operated in partnership
with HCC Solicitors, performed well in the year. Given the reduction in
panel demand, we increased placement by 55% in the year to 3,903 new
enquiries. Revenues from admissions and settlements increased by 14% in 2024
and it generated £1.7m of cash (net of member drawings) in the year.
Residential Property
The division's Residential Property business, Searches UK, generated revenues
of £3.4m (2023: £2.7m) and operating profit of £0.4m (2023: £0.2m). The
business generated £0.4m of cash from operations in the year (2023: £0.5m).
The UK residential property market was buoyant in 2024, supported by a number
of changes that encouraged buyer confidence. The General Election in July
provided some stability for buyers and this was followed by the Bank of
England cutting interest rates in August 2024 for the first time since
December 2021, leading to lower mortgage rates. Then, the Autumn budget
signalled a reduction in stamp duty thresholds which provided a further
incentive for buyers to complete purchases.
This translated into a 21% growth in the number of search packs ordered by our
customers which, combined with a stronger mix of search types, resulted in a
29% increase in revenue.
Management continued to control costs carefully and increased operating profit
margin from 7% to 11%.
Critical Care
The Group's Critical Care business had another strong year. Revenues
increased by 9% to £15.9m (2023: £14.6m), of which 45% was recurring.
Operating profit increased by 10% to £4.9m (2023: £4.4m) and operating
profit margins increased by 30 bps to 30.6%. The business generated £5.4m
of cash from operations, an increase of 10% on the prior year (2023: £4.9m).
Bush & Co. operates in the catastrophic injury and care markets, where
claims are typically valued at over £500,000. Management estimate that over
80% of case management revenue is linked to the RTA injury claims market and
the c.24-30k killed or seriously injured (KSI) casualties that arise each
year. Whilst RTA claims have fallen by almost half since 2019, the number of
KSI injuries is growing back in line with pre-pandemic data.
The business also works in the high value clinical negligence claims market
which cost the NHS £2.8bn(4) in compensation and associated costs in 2023/4.
Bush & Co. works on a wide variety of high value clinical negligence
claims and the data from NHS Resolution shows that the volume of such claims
has increased by 29% over the past five years.
In Bush & Co, our low-risk, low-cost strategy for growth has been to
deliver further growth in expert witness and case management and accelerated
growth from care solutions reflecting the relatively small size of the
business and the scale of the market opportunity. We have sought to expand
profit margins through the use of technology and the utilisation of employed
case managers which reduces delivery costs. We have also been working to
expand the associate network of expert witnesses to broaden our geographical
reach and expand specialisms and capabilities to meet the expected increase in
demand.
In 2024, we successfully delivered against the majority of those objectives.
Expert witness services had another strong year, growing revenues by 19%.
The team delivered 1,335 reports to customers, an increase of 18% on the prior
year (2023: 1,136), and the number of instructions for new reports also
increased by 18%, demonstrating a strong pipeline of future work.
In case management services, revenues were 1% lower year-on-year. The
business delivered 490 initial needs assessment (INA) reports, which was 9%
lower than last year. This service line saw a reduction of 13% in the number
of new instructions received in the year. Bush & Co. is servicing 1,335
ongoing case management clients (2023: 1,406) that generate recurring revenue
for the Group through our claimant, defendant and insurer relationships.
These services are billed on a regular basis depending on the level of support
required.
Our investment in the recruitment of new associates has proven key to the
growth in revenue in this division. We onboarded 75 new associates in the
year and grew expert witness and case management associate numbers by 24% and
13% respectively. We ended the year with 196 expert witness associates and
132 case management associates.
We also continued to grow our team of employed case managers, which enables us
to process less complex work at a higher utilisation rate, thereby increasing
margins. The team increased from nine employees at the start of the year to
11 by the end of 2024.
Our Bush & Co. Care Solutions service is now well established and had
another strong year. Revenues increased by 37% to £0.7m (2023: £0.5m), all
of which is recurring revenue. This service line complements our case
management proposition and allows us to expand into the adjacent care market,
and this is the second consecutive year of over 35% growth. The team are
building a great reputation in the marketplace and in 2024 received industry
recognition by winning the Supporting the Industry Award at the PI Awards.
Our people and culture
At NAHL, we are building a sustainable business for the long-term gain of all
our stakeholders. To us, this starts with a focus on maintaining a
progressive, inclusive culture so that we can attract and retain the very best
people, whilst also being mindful of our impact on the planet and our local
communities. This enables us to provide a great service to our customers, in
addition to creating long-term value for our shareholders. The Group's
values of Driven, Curious, Passionate and Unified continue to guide how we do
things at NAHL.
The Group employed 279 people at 31 December 2024, which was consistent with
the prior year (31 December 2023: 280).
We have embraced the benefits of remote working at NAHL, which provide us with
greater access to highly skilled colleagues from across the UK. Approximately
23% of our colleagues operate permanently from one of our offices, 43% on a
hybrid basis, and 34% are fully remote. We are mindful of the challenges
that working from home can present, and so we provide training, and regular
in-person meetings and events aimed at improving working relationships,
productivity and promoting collaboration between our people. Our employees
value the support and flexibility that we offer and this helped to reduce our
staff turnover by 7 percentage points in the year.
Our people come from a diverse range of backgrounds and experience as we
believe that makes us better able to serve our customers; and we expect our
leaders to engender trust with all our stakeholders by demonstrating their
ability, integrity and benevolence. When we surveyed our people during the
year, 94% said that they believed that everyone in our business is treated
fairly, regardless of race, gender, ethnicity, disability, sexual orientation
or other differences.
The gender split across the Group remained broadly consistent with 2023 with
70% female and 30% male, and on the Board it was 20% female and 80% male.
Developing our people is also an important part of our culture, and we
invested in almost 1,500 hours of training and development across the Group in
2024. This included our very successful Pathway to Leadership programme for
aspiring managers, and our Commercial Leadership Academy which is designed to
expose our senior managers to commercial opportunities and growth
initiatives.
Our employees are also passionate about the communities in which we operate
and in 2024, the Group and its employees raised over £10,000 for a variety of
charities and volunteered 105 hours of their time to working in our local
communities.
Every year we measure the engagement levels of our people through a survey
which is based on the Gallup(5) Q12 Survey. I'm proud to report that in
2024, we achieved our highest ever score and fourth consecutive year of
growth, with 82% engagement (2023: 81%). This is an outstanding result that
sets us apart from other employers. To put this in context, according to
Gallup, the average engagement score of other UK companies is just 10%; and in
Gallup's best performing cohort of companies globally, who are awarded
Exceptional Workplaces status, the average is 70%.
This is all summarised in the statistic that 86% of our people said that they
would recommend the Group as a good place to work. As a leadership team, we
are very proud of our employee culture, and we remain committed to ensuring
that NAHL remains a good place to work and develop a career.
Extended banking facilities
In February 2024, the Group successfully extended its banking facility with
Clydesdale Bank/Virgin Money. Our existing £20m revolving credit facility,
which was due to expire on 31 December 2024, was reduced to a £15m facility
which runs to 31 December 2025. Following the year-end, in April 2025 the
Group further extended its facility to 31 December 2026 and took the
opportunity to reduce its size further, to £11m.
The Board determined that this lower facility is adequate for the Group's
needs as it continues to deleverage, and it will enable us to save on finance
costs.
Current trading and outlook
To summarise, 2024 was a challenging year for the Group as it adapted to a
difficult marketing environment in its Personal Injury business. However, we
finished the year strongly, reducing acquisition cost and NAL really came of
age in the year. Our Critical Care business delivered strong growth, despite
the uncertainty that the potential sale of Bush & Co. created for our
people. We hope to resolve this uncertainty this year.
The Group has started 2025 well, reducing personal injury acquisition cost,
generating further efficiencies and reducing net debt. Pleasingly, the
investments we have made in case processing in NAL and in our Expert Witness
proposition in Critical Care continue to deliver strong results for us and
give us cause for optimism in 2025.
In Consumer Legal Services, the first quarter of 2025, saw the Group generate
3,513 personal injury enquiries, which was in line with the previous
quarter. The actions that our marketing team have been taking to restructure
our paid search account, improve our website, and develop other lead sources
have had a positive effect, and the average cost of acquiring new enquiries
reduced by 22% compared to the previous quarter, and by 34% compared to the
peak in September 2024.
I'm excited to announce that we are preparing to re-launch our Underdog brand
in the coming weeks. Underdog was an animated character that National
Accident Helpline used between 2010 and 2016 to advertise the brand online and
on TV. We believe that with a modest initial investment, Underdog could
generate incremental enquiry volume for us through our digital channels and
help to unlock the latent demand that we believe exists in our market.
Whilst the business continued to experience weak demand from its panel,
management have been investing in business development activity and is
planning to onboard a number of new panel firms for small scale trials in
2025.
NAL continued to perform well in 2025. 37% of the new enquiries generated
were placed into NAL (Q1 2024: 26%) and 950 existing cases were settled, which
was 8% fewer than the equivalent period last year but a 10% improvement on the
previous quarter. In total, these settlements generated £2.8m of cash,
which was 34% higher than Q1 2024, demonstrating the maturity of the law firm
and the benefit of inflationary increases in settlement values.
In Critical Care, Bush & Co. has experienced lower growth in Q1 2025 but
the trends within the business persist. Demand for our Expert Witness
proposition remains very strong, and the team have delivered 10% growth in the
number of reports issued in Q1 2025 compared to the prior year.
Encouragingly, levels of recruitment of new Expert Witness associates has been
particularly strong, which should support further growth later in the year.
Case Management remains more challenging and the number of INAs issued in Q1
2025 was 9% lower than prior year, although this was 7% more than the
preceding quarter. Pleasingly, the Care proposition continues to grow
strongly. The business continues to receive excellent feedback from
customers and total instruction numbers increased from the preceding quarter.
The Group continued its strong cash collection profile and reduced net debt
further to £6.0m at 31 March 2025, 15% lower than year-end and 38% lower than
12 months prior.
Finally, I'd like to thank all of our people for their hard work and
dedication over the past year. Whilst challenges remain in some of our
markets, we are making progress and seeing sustained growth in several areas
of the Group, which is encouraging for the year ahead.
James Saralis
Chief Executive Officer
1. Compensation Recovery Unit performance data - Gov.UK, number of cases
registered to CRU 2019/2020 - 2023/2024.
2. Independent research produced by Censuswide Limited, December 2022, sample
size 2,500 adults
3. APIL UK Personal Injury Market Briefing, January 2025
4. NHS Resolution Annual report and accounts 2023/24
5. State of the Global Workplace Report 2024 - Gallup
CFO Report
Overview
The year saw the Group reduce its net debt further, the Critical Care division
continued to grow, despite the distraction of a potential sale process, and
enquiry processing in National Accident Law (NAL) reached maturity. The
Personal Injury business had a challenging year overall, where a difficult
marketing environment restricted the generation of new enquiry volumes.
Revenue reduced by 8% to £38.8m (2023: £42.2m). The Group made an operating
loss of £36.5m (2023: profit of £4.1m) owing to a £39.9m non-cash
exceptional goodwill impairment charge (2023: nil) relating to the personal
injury business, further details of which are set out below, and £0.6m of
exceptional costs related to the potential disposal of the Critical Care
business and management restructuring costs within Personal Injury. Underlying
operating profit fell by 4% to £3.9m (2023: £4.1m). Underlying operating
profit also included a £0.8m (2023: £0.8m) amortisation charge on business
combinations. This has now been fully amortised in the year. The reduction in
underlying operating profit was offset by lower profits attributable to
non-controlling interests which reduced to £1.9m (2023: £2.5m). The
resulting loss after tax was £39.3m of which a loss of £43.8m was attributed
to continuing operations and a profit of £4.5m to discontinued operations.
The discontinued operations relate solely to the results of Critical Care in
2024 which was designated as held for sale as at 31 December 2024 and to
Critical Care and Homeward Legal combined in 2023.
Review of income statement
Consumer Legal Services
Revenue in the Consumer Legal Services division fell by 17% to £22.9m (2023:
£27.6m). Operating profit fell by 29% to £2.0m (2023: £2.8m). The division
was adversely impacted by challenges within enquiry generation which impact
volume and advertising costs whilst also seeing lower demand from solicitor
firms on the panel. The division made a profit of £0.2m (2023: £0.3m) after
deducting non-controlling interests.
As a result of the enquiry generation challenges, enquiry volumes were 45%
lower than last year at 19,744 (2023: 35,643), and a total of 5,892 enquiries
were placed into NAL, which although an increase in percentage terms to 30% of
total enquiries (2023: 24%), was a reduction compared to the 8,518 placed in
2023. These new cases were originally expected to generate future revenue
and cash of £5.2m (2023: £6.6m) across the life cycle but was this was later
uplifted to £6.2m following a review of historical case performance.
Case processing within NAL has now reached maturity. By the end of the period,
NAL was processing 8,457 open cases (2023: 9,983). The overall value of the
book of open cases has increased slightly on last year to £10.5m of future
revenue (2023: £9.9m) and £14.4m of future cash (2023: £13.9m) despite
fewer enquiries being placed into NAL against those settling. The increase is
due to a £2.8m positive revaluation primarily relating to the Hassam vs Rabot
Supreme Court ruling from March 2024, which underpinned an increase to the
damages value for small claims cases with multiple injuries, meaning those
injuries should be valued separately, and a multi-year inflationary increase
to damages values positively impacting most cases settling from March 2024
onwards.
Profit attributable to non-controlling interests fell by 26% in the year to
£1.9m (2023: £2.5m). This was expected as an increasing percentage of
enquiries has been placed with NAL compared to the joint ventures in recent
years.
The Residential Property business generated a positive contribution to profit
of £0.4m (2023: £0.1m) after allocation of shared costs.
Critical Care
The Critical Care division had another strong year, growing revenues by 9% to
£15.9m (2023: £14.6m) with operating profit increasing by 10% to £4.9m
(2023: £4.4m) and operating margins grew slightly to 30.6% (2023: 30.3%).
The business continues to benefit from previous investment into business
development, contributing to an 18% increase in expert witness reports in the
year.
Bush & Co. Care Solutions continued to show growth, delivering revenues of
£0.7m in the year (2023: £0.5m) following its launch towards the end of
2021.
Shared Services and other items
The costs for the Group's Shared Services functions fell by £0.2m to £1.7m
(2023: £1.9m) largely due to no bonus payments in the year reducing staff
costs. Other items which include share-based payments and amortisation
increased by £0.1m to £1.3m (2023: £1.2m). Amortisation of £0.8m was
recognised on business combinations (2023: £0.8m). This balance has now been
fully amortised.
Financial expense
Costs relating to the financing of debt reduced to £1.0m in the year (2023:
£1.1m) with net debt falling by £2.6m. Average interest rates were higher
due to the full year impact of Bank of England base rate rises in 2023. In
2024, the facility was linked to the Sterling Overnight Index Average (SONIA)
plus a margin of 2.25%.
Exceptional and non-underlying items
The Group's policy is to separately identify exceptional and non-underlying
items and exclude them from underlying performance measures, providing readers
with a consistent basis on which to assess the core trading performance.
The Group incurred £0.6m (2023: nil) in exceptional costs during the year.
£0.4m of this related to costs linked to the potential disposal of the
Critical Care business whilst £0.2m related to management restructuring costs
within the Personal Injury business.
Goodwill impairment charge
Goodwill is tested annually for impairment. In undertaking the review in the
current year, the Directors have given careful consideration to the
performance of the Group's Personal Injury business and the ongoing impact of
structural changes in the personal injury market over the past few years.
The Government's whiplash reforms (introduced in 2021) and the COVID-19
pandemic have had a detrimental effect on the number of claims in the market,
which has not recovered to pre-pandemic levels. Indeed, the Directors now
believe the current market levels appear to be the new base.
These challenges exacerbated throughout 2024 as further market consolidation
was witnessed towards the end of the year and manifested themselves in our
business as lower demand from panel firms, lower enquiry volumes overall and
increased competition leading to higher marketing costs.
Whilst management had success in addressing some of these challenges, such as
driving a reduction in average enquiry costs, the Directors anticipate supply
of enquiries recovering more slowly and that no meaningful recovery in panel
demand will be seen. This will require a greater proportion of enquiries being
placed into NAL and further investment in the medium term due to the longer
case cycle, however, enquiries processed in NAL generate higher margins.
The Directors have considered a number of scenarios but in light of the
volatility experienced in recent years, have adopted a prudent approach
resulting in a non-cash impairment charge of £39.9m to write down the
carrying value of the goodwill in the Personal Injury cash generating unit
from £39.9m to nil. This goodwill arose from the acquisition of the
Personal Injury business in 2014, prior to the announcement of the whiplash
reforms. Further details are provided in note 5.
An impairment review was also conducted on the Critical Care business. No
impairment was required.
Taxation
The Group's tax charge of £0.2m (2023: £0.3m) represents an effective tax
charge of 14.1% of underlying profit before tax (2023: 40.9%). This is lower
than the standard corporation tax rate of 25%, due to the reasons set out in
note 4. The deferred tax credit originates from temporary differences in
intangible assets acquired on business combinations.
Earnings per share (EPS) and dividend
Basic EPS for the year was -83.1p (2023: 0.8p) and Basic EPS for continuing
operations was -92.6p (2023: -7.6p). On an underlying basis, Basic underlying
EPS for continuing operations was -7.0p (2023: -7.6p).
The Board does not believe it is appropriate to re-instate dividends at this
time and the Directors have recommended that no final dividend be paid in
respect of 2024 (2023: nil).
Review of the statement of financial position
In reviewing the statement of financial position, I consider the significant
items to be working capital, defined as trade and other receivables less trade
and other payables, net debt and goodwill.
Working Capital
Trade and other receivables less trade and other payables totalled £13.1m at
year end (2023: £14.3m). The reduction is primarily due to collection of
deferred receipts due under the arrangements with joint venture partners which
moved from £3.4m to £1.1m.
Also, within trade receivables and accrued income, balances related to the
processing of personal injury claims fell to £6.5m (2023: £7.4m), due to the
continued winding down of Your Law LLP.
There remains a significant element of uncertainty in estimating this accrued
income. Management review historical case performance to inform the
assumptions adopted. The Directors believe that the assumptions adopted are
appropriate. In practice, it is rare for accrued income to be downgraded once
an admission of liability has been received. These assumptions are updated
with actual results as claims settle.
Disbursement receivables increased to £9.9m (2023: £9.0m). This is driven by
an increase in the number of litigated cases which take longer to settle.
Payables fell from £16.2m on 31 December 2023 to £14.8m at the balance sheet
date partly due to lower accrued management bonuses as well as lower payables
in Personal Injury due to reduced volume.
Net debt and bank facilities
Despite the enquiry generation challenges in the personal injury business and
increased exceptional costs relating to the potential disposal of the Critical
Care business, reducing net debt has remained a key focus particularly given
that high interest costs persist. We managed our cash resources well during
the year, helped by the maturity of the existing book of work in NAL. As a
result, net debt fell from £9.7m on 31 December 2023 to £7.1m at year-end.
Net debt is defined below and is comprised of £1.9m of cash (2023: £2.0m)
offset by borrowings of £9.0m (2023: £11.7m).
The borrowings represent a balance on the Group's Revolving Credit Facility
with its lender, Clydesdale Bank/Virgin Money. On 30th April 2025, the group
further extended the facility through to 31st December 2026 and reduced the
size of the facility to £11m.
Review of the cash flow statement
The Group's cash and cash equivalents reduced by £0.2m in the year (2023:
decrease of £0.6m). The significant items in the consolidated cash flow
statement are net cash from operating activities, drawings paid to LLP members
and the repayment of borrowings.
Net cash from operating activities reduced from £7.5m to £5.1m. This was
partly due to lower enquiry activity in the Personal Injury business whilst
marketing costs remained higher than expected. This was partially offset by
strong cash collection from 3,558 settled cases in NAL (2023: 3,633), which
generated £8.5m in receipts (2023: £6.0m). A further £2.1m of cash was
received from joint venture relationships (2023: £4.4m). This reduction was
expected as the Group has placed more work into NAL in recent years while one
of the joint venture relationships has been in run off.
In addition to this, the Critical Care division generated £5.4m of cash
before payments for capital expenditure and taxation (2023: £4.9m).
Net Bank interest payments totalled £0.7m (2023: £1.0m).
The Group paid £2.1m (2023: £3.3m) of drawings to its partners in the joint
venture law firms during the year, under the terms of our agreements. This
reflects the continuing closure of claims won and settled during the year. The
Group also acquired £0.1m (2023: £0.2m) of intangible assets in the year as
it completed technology upgrades in Critical Care.
The Group repaid £2.8m (2023: £4.3m) of borrowings in the year on its
Revolving Credit Facility.
Free Cash Flow (FCF) is the Group's KPI with regards to cash flow. FCF in 2024
was £2.6m compared to £3.6m in 2023.
The Group also monitors underlying operating cash conversion. This was 173% in
the year (2023: 217%), a direct reflection of the movements outlined above.
Summary
In summary, despite a challenging trading environment within the Personal
Injury business, the Group has delivered underlying operating profits in line
with the revised market expectations set during the year, whilst a strong cash
performance has enabled net debt to reduce further.
Chris Higham
Chief Financial Officer
Alternative performance measures
Management monitors a number of non-statutory, alternative performance
measures (APMs) as part of its internal performance monitoring and when
assessing the future impact of operating decisions. The APMs allow a
year-on-year comparison of the underlying performance of the business by
removing the impact of items occurring either outside the normal course of
operations or as a result of intermittent activities, such as acquisitions or
strategic projects. The Directors have presented these APMs in the Strategic
Report because they believe they provide additional useful information for
shareholders on underlying business trends and performance. As these APMs are
not defined by UK-adopted International Accounting Standards (IFRS), they may
not be directly comparable to other companies' APMs. They are not intended to
be a substitute for, or superior to, UK-adopted International Accounting
Standards (IFRS) measurements and the Directors recommend that the UK-adopted
International Accounting Standards (IFRS) measures should also be used when
users of this document assess the performance of the Group. The APMs used in
the Strategic Report are defined below.
Underlying operating profit
Allows management and users of the financial statements to assess the
underlying trading results after removing material, non-recurring items that
are not reflective of the core trading activities and allows comparability of
core trading performance year-on-year.
.
Underlying profit before tax and underlying EPS - total, continuing and
discontinued operations
As above, these measures allows management and users of the financial
statements to assess the final trading results prior to tax charges and after
removing material, non-recurring items that are not reflective of the core
trading activities and allows comparability of core trading performance
year-on-year. The current year figures have been split into continuing and
discontinued operations to allow for transparency into the ongoing underlying
trading performance.
Free Cash Flow
Calculated as net cash generated from operating activities less net cash used
in investing activities less payments made to partner LLP members and less
principal element of lease payments. This measure provides management with an
indication of the amount of cash available for discretionary investing or
financing after removing material non-recurring expenditure that does not
reflect the underlying trading operations.
Underlying operating cash conversion
Calculated as cash generated from operations excluding cash flows relating to
exceptional items divided by underlying operating profit. This measure allows
management to monitor the conversion of underlying operating profit into
operating cash. From 2023, there were no exceptional cash flows.
Net debt
Net debt is defined as cash and cash equivalents less interest-bearing
borrowings net of loan arrangement fees. Net debt allows management to monitor
the overall level of debt in the business. As stated in the strategic report,
managing the level of net debt is a key strategic objective for the Group.
Working capital
Working capital is defined by management as being trade and other receivables
less trade and other payables. It allows management to assess the short-term
cash flows from movements in the more liquid assets.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
Note £000 £000
Revenue 1,2 38,805 42,193
Cost of sales (20,432) (23,480)
Gross profit 18,373 18,713
Administrative expenses before exceptionals (14,431) (14,595)
Underlying operating profit 3,942 4,118
Exceptional items
Impairment of goodwill 3,5 (39,897) -
Transaction costs 3 (397) -
Restructuring costs 3 (185) -
Operating (loss)/profit (36,537) 4,118
Profit attributable to members' non-controlling interests in LLPs 2 (1,850) (2,506)
Financial income 250 158
Financial expense (958) (1,121)
(Loss)/Profit before tax (39,095) 649
Taxation 4 (195) (265)
(Loss)/Profit and total comprehensive income for the year (39,290) 384
(Loss) from continuing operations for the period (43,791) (3,537)
Profit from discontinued operations for the period 11 4,501 3,921
All profits and losses and total comprehensive income are attributable to the
owners of the Company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2024
2024 2023
Note £000 £000
Non-current assets
Goodwill 5 - 55,489
Other intangible assets 177 1,784
Property, plant and equipment 236 328
Right of use assets 1,488 1,751
Deferred tax asset 20 25
1,921 59,377
Current assets
Assets classified as held for sale 11 22,377 -
Trade and other receivables (including £2,443,000 (2023: £5,312,000) due in 6 21,750 30,526
more than one year)
Cash and cash equivalents 1,855 2,011
45,982 32,537
Total assets 47,903 91,914
Current liabilities
Liabilities directly associated with the assets held for sale 11 (1,813) -
Trade and other payables 7 (12,975) (16,246)
Lease liabilities (252) (244)
Member capital accounts (3,492) (3,692)
Current tax liability - (210)
(18,532) (20,392)
Non-current liabilities
Lease liabilities (1,225) (1,478)
Other interest-bearing loans and borrowings (8,966) (11,719)
Deferred tax liability (52) (263)
(10,243) (13,460)
Total liabilities (28,775) (33,852)
Net assets 19,128 58,062
Equity
Share capital 119 117
Share option reserve 5,339 4,985
Share premium 14,595 14,595
Merger reserve (66,928) (66,928)
Retained earnings 66,003 105,293
Capital and reserves attributable to the owners of NAHL Group plc 19,128 58,062
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
Capital and
reserves
attributable to
the owners of
NAHL Group plc
Share
option
reserve
Share Share Merger Retained
capital premium reserve earnings
Note £000 £000 £000 £000 £000 £000
Balance at 1 January 2023 116 4,628 14,595 (66,928) 104,909 57,320
Total comprehensive income for the year
Profit for the year - - - - 384 384
Total comprehensive income - - - - 384 384
Transactions with owners, recorded directly in equity
Share-based payments - 357 - - - 357
Issue of share capital 1 - - - - 1
Total transactions with owners, recorded directly
in equity 1 357 - - - 358
Balance at 31 December 2023 117 4,985 14,595 (66,928) 105,293 58,062
Total comprehensive income for the year
Loss for the year - - - - (39,290) (39,290)
Total comprehensive income - - - - (39,290) (39,290)
Transactions with owners, recorded directly in equity
Share-based payments - 354 - - - 354
Issue of share capital 2 - - - - 2
Total transactions with owners, recorded directly in equity 2 354 - - - 356
Balance at 31 December 2024 119 5,339 14,595 (66,928) 66,003 19,128
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
2024 2023
£000 £000
Cash flows from operating activities
(Loss)/Profit for the year (39,290) 384
Adjustments for:
Profit attributable to members' non-controlling interests in LLPs 1,850 2,506
Property, plant and equipment Depreciation 115 126
Right of use asset depreciation 264 276
Amortisation of intangible assets 1,110 1,177
Impairment of goodwill 39,897 -
Financial income (250) (158)
Financial expense 958 1,121
Share-based payments 354 357
Taxation 195 265
5,203 6,054
Decrease in trade and other receivables 2,871 2,297
(Decrease)/Increase in trade and other payables (1,460) 569
Cash generated from operations 6,614 8,920
Interest paid (896) (1,090)
Interest received 181 84
Tax paid (817) (402)
Net cash generated from operating activities 5,082 7,512
Cash flows from investing activities
Acquisition of property, plant and equipment (78) (62)
Acquisition of intangible assets (111) (247)
Disposal of subsidiary 59 (30)
Net cash used in investing activities (130) (339)
Cash flows from financing activities
Repayment of borrowings (2,750) (4,250)
Loan arrangement fees (65) -
Issue of share capital 2 1
Lease payments (245) (266)
Drawings paid to LLP members (2,050) (3,301)
Net cash used in financing activities (5,108) (7,816)
Net decrease in cash and cash equivalents (156) (643)
Cash and cash equivalents at 1 January 2,011 2,654
Cash and cash equivalents at 31 December 1,855 2,011
NOTES TO THE FINANCIAL STATEMENTS
1 Accounting policies
Basis of preparation
Consolidated Financial Statements
The preliminary financial statements do not constitute statutory accounts for
NAHL Group plc within the meaning of section 434 of the Companies Act 2006 but
do represent extracts from those accounts.
The statutory accounts will be delivered to the Registrar of Companies in due
course. The auditors' have reported on those accounts. Their report was
unqualified. The auditors' report does not contain a statement under either
section 498(2) of Companies Act 2006 (accounting records or returns inadequate
or accounts not agreeing with records and returns), or section 498(3) of
Companies Act 2006 (failure to obtain necessary information and explanations).
The Group's financial statements have been prepared in accordance with
UK-adopted International Accounting Standards (IFRS) in conformity with the
Companies Act 2006, IFRIC interpretations and under the historical cost
convention.
Going Concern
In determining the appropriate basis of preparation of the financial
statements, the Directors are required to consider whether the Company and
Group can continue in operational existence for the foreseeable future.
The assessment includes detailed financial forecasts covering the Group's
adopted strategy and considers a range of sensitivities. The period considered
for the going concern review is to the end of June 2026, being approximately
12 months from the date of signing of the 2024 Annual Report and financial
statements. The going concern assessment focuses on two key areas, being the
ability of the Group to meet its debts as they fall due and being able to
operate within its banking facility. The Group refinanced its banking
facilities post year end in April 2025 and has access to an £11.0m revolving
credit facility (RCF) with its bankers which is due to mature on 31 December
2026. At the year end, the Group had drawn £9.0m under this facility.
Given the ongoing Critical Care sales process, the Going Concern review has
considered two scenarios being 1. Critical Care remains in the Group for 2025
and 2026 and 2. Critical Care is sold in 2025. Sensitivities have then been
considered as discussed below.
Under scenario 1, the forecasts indicate that the Group will have sufficient
liquidity within the RCF to meet its liabilities as they fall due and would
not need to access additional funding throughout the period of review. It
would also be able to adhere to its financial covenants in every quarter.
Under scenario 2, it is assumed that any proceeds from the sale of Critical
Care would be used to repay the RCF in full and therefore there would be no
covenants to adhere to after the point of sale. Under this scenario, the
remainder of the Group would generate a small cash inflow over the reminder of
the forecast period, indicating that it can meet its debts as they fall due.
Any sensitivities run on this scenario would lead to a negative cash flow.
Whilst management have not yet determined the financing structure of the Group
post any sale that may occur, the Group would have options open to it e.g.
retaining some sales proceeds as a working capital safety net or taking out an
overdraft facility. These options would allow it to access additional cash and
meet its debts as they fall due.
The principal risks and uncertainties impacting the Going Concern assessment
are the accuracy of business model assumptions and working capital management.
These have been considered as part of the sensitivity review by considering
the key assumptions behind the business models.
The key inputs into the going concern review are the growth in both profits
and cash flows in Personal Injury (scenarios 1 and 2) and cash generation in
Critical Care (scenario 1). The key assumption behind the Personal Injury
profit and cash growth is the stabilisation and subsequent reduction in cost
per enquiry which is assumed to reduce back to normalised levels in 2025. The
key assumption for Critical Care is that it can continue to generate operating
cash flows in excess of 90% of profits.
Sensitivities have been considered on these inputs by modelling scenarios in
which cost per enquiry is maintained at higher levels rather than reducing
over the forecast period and Critical Care cash is 10% lower than the base
forecasts. Under these scenarios, over the two year period, profits would be
c. £2.2m lower than the base scenario and cashflows would be c. £1.9m lower
but the Group would still be able to adhere to its financial covenants and
meet its debts as they fall due.
Management have not considered any climate-related factors in the assessment
of Going Concern as these do not present a material business risk to the
Group.
Considering the above, the Directors have a reasonable expectation that the
Company and Group have adequate resources to continue in existence for the
foreseeable future and have concluded it is appropriate to adopt the going
concern basis of accounting in the preparation of the financial statements.
Held for sale assets
A non-current asset or a group of assets containing a non-current asset (a
disposal group) is classified as held for sale if its carrying amount will be
recovered principally through sale rather than through continuing use, it is
available for immediate sale and a sale is highly probable within one year.
On initial classification as held for sale, non-current assets and disposal
groups are measured at the lower of previous carrying amount and fair value
less costs to sell with any adjustments taken to profit or loss. The same
applies to gains and losses on subsequent remeasurement although gains are not
recognised in excess of any cumulative impairment loss. Any impairment loss
on a disposal group first is allocated to goodwill, and then to remaining
assets and liabilities on pro rata basis, except that no loss is allocated to
financial assets or deferred tax assets, which continue to be measured in
accordance with the Company's accounting policies. Intangible assets and
property, plant and equipment once classified as held for sale or distribution
are not amortised or depreciated.
A discontinued operation is a component of the Company's business that
represents a separate major line of business or geographical area of
operations that has been disposed of or is held for sale, or is a subsidiary
acquired exclusively with a view to resale. Classification as a discontinued
operation occurs upon disposal or when the operation meets the criteria to be
classified as held for sale, if earlier. When an operation is classified as
a discontinued operation, the comparative income statement is restated as if
the operation has been discontinued from the start of the comparative period.
New standards and amendments adopted by the Group
The following new or amended standards are applicable to the Group for the
current reporting period:
Amendments to IAS 1 - Classification of Liabilities as Current or Non-current
Amendments to IAS 1 - Non-current Liabilities with Covenants
Amendments to IFRS 16 - Lease Liability in a Sale and Leaseback
Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements
None of the amendments above have had a material effect on the amounts
reported or disclosures included in the 2024 financial statements.
New standards, interpretations and amendments not yet effective
There are no new standards, interpretations and amendments that are not yet
effective and that would be expected to have a material impact on the Group in
the current or future reporting periods and on foreseeable future
transactions.
2 Operating segments
Consumer Critical Shared Other
Legal Services Care Services(1) Items(1) Eliminations(2) Total
£000 £000 £000 £000 £000 £000
Year ended 31 December 2024
Revenue 22,918 15,887 - - - 38,805
Depreciation and amortisation (202) (166) (339) (782) - (1,489)
Underlying operating profit/(loss) 2,004 4,862 (1,659) (1,265) - 3,942
Impairment (39,897) - - - - (39,897)
Exceptional items (185) - (397) - - (582)
Operating profit/(loss) (38,078) 4,862 (2,056) (1,265) - (36,537)
Profit attributable to non-controlling interest members in LLPs (1,850) - - - - (1,850)
Financial income 189 42 19 - - 250
Financial expenses - - (958) - - (958)
Profit/(Loss) before tax (39,739) 4,904 (2,995) (1,265) - (39,095)
Trade receivables 1,625 5,537 - - - 7,162
Total assets(3) 22,835 7,410 17,658 - 47,903
Segment liabilities(3) (15,277) (1,809) (2,667) - - (19,753)
Capital expenditure (including intangibles) 68 121 - - - 189
Year ended 31 December 2023
Revenue 27,582 14,611 - - - 42,193
Depreciation and amortisation (251) (154) (348) (826) - (1,579)
Operating profit/(loss) 2,805 4,421 (1,924) (1,184) - 4,118
Profit attributable to non-controlling interest members in LLPs (2,506) - - - (2,506)
Financial income 145 - 13 - - 158
Financial expenses - (1) (1,120) - - (1,121)
Profit/(Loss) before tax 444 4,420 (3,031) (1,184) - 649
Trade receivables 2,446 5,728 - - - 8,174
Total assets(3) 25,935 7,262 76,223 - (17,506) 91,914
Segment liabilities(3) (17,021) (1,479) (3,160) - - (21,660)
Capital expenditure (including intangibles) 77 232 - - - 309
1. Shared services and Other items do not form part of the operating
segments of the Group. They include expenses incurred that cannot be
attributable to an operating segment.
2. Eliminations represents the difference between the cost of subsidiary
investments included in the total assets figure for each segment and the value
of goodwill arising on consolidation.
3. Total assets and segment liabilities exclude intercompany loan balances
as these are not included in the segment results reviewed by the chief
operating decision maker. Segment liabilities comprise trade and other
payables (2024: £12,975,000, 2023: £16,246,000), current lease liabilities
(2024: £252,000, 2023: £244,000), non-current lease liabilities (2024:
£1,225,000, 2023: £1,478,000) and member capital accounts (2024:
£3,492,000, 2023: £3,692,000). Amounts included under the Critical Care
segment in the table above are included within 'Assets classified as held for
sale' on the statement of financial position.
Significant customers
No customer accounted for 10.0% or more of the total Group revenue (2023: no
customer accounted for 10.0% or more of the total Group revenue).
Geographic information
All revenue and assets of the Group are based in the UK.
Operating segments
The activities of the Group are managed by the Board, which is deemed to be
the chief operating decision maker (CODM). The CODM has identified the
following segments for the purpose of performance assessment and resource
allocation decisions. These segments are split along product lines and are
consistent with those reported last year.
Consumer Legal services - Revenue is derived from two divisions being Personal
Injury and Residential Property.
Within Personal Injury, revenue is generated from:
a) Marketing services - revenue from the provision of marketing activities to
generate enquiries which are panelled to our panel law firms, based on a cost
plus margin model.
b) Product Provision - consisting of commissions received from product
providers for the sale of additional products by them to the panel law firms.
c) Service provision (legal services) - in the case of our ABS law firms and
self- processing operation, National Accident Law, revenue receivable from
clients for the provision of legal services.
Within Residential Property, revenue is generated from:
a) Marketing services - up until April 2023, Homeward Legal provided marketing
services to generate residential conveyancing and survey enquiries for
solicitors and surveyors
b) Expert Reports - Searches UK provides search reports.
Critical Care - Revenue from the provision of expert witness reports and case
management support within the medico-legal framework for multi-track cases.
Shared services - Costs that are incurred in managing Group activities or not
specifically related to a product.
Other items - Other items represent share-based payment charges and
amortisation charges on intangible assets recognised as part of business
combinations.
Exceptional items - items that are non-recurring and that are material by
nature and separately identified to allow for greater comparability of
underlying Group operating results year-on-year. Details of exceptional items
incurred in the current year are given in Note 3.
Disaggregation of revenue
The CODM monitors revenue on a divisional basis. A breakdown of revenue by
each division is as follows:
2024 2023
£000 £000
Personal Injury 19,487 24,649
Residential Property 3,431 2,933
Critical Care 15,887 14,611
Total 38,805 42,193
3 Exceptional items
Exceptional items included in the statement of comprehensive income are
summarised below:
2024 2023
£000 £000
Goodwill impairment(1) 39,897 -
Transaction costs for potential Critical Care disposal(2) 397 -
Personal Injury restructure(3) 185 -
40,479 -
1. Impairment of the Goodwill allocated to the Personal Injury
cash generating unit. See Note 5 for further details.
2. Costs incurred to date in relation to the disposal of Critical
Care. These include external legal and consultancy costs.
3. Costs incurred in respect of payments for loss of office as
part of a management restructure in Personal Injury.
4 Taxation
Recognised in the consolidated statement of comprehensive income:
2024 2023
£000 £000
Current tax expense
Current tax on income for the year 475 462
Adjustments in respect of prior years (79) (14)
Total current tax 396 448
Deferred tax credit
Origination and reversal of timing differences (201) (183)
Total deferred tax (201) (183)
Tax expense in statement of comprehensive income 195 265
Total tax charge 195 265
Reconciliation of effective tax rate
2024 2023
£000 £000
(Loss)/Profit for the year (39,290) 384
Total tax expense 195 265
(Loss)/Profit before taxation (39,095) 649
Tax using the UK corporation tax rate of 25.00% (2023: 23.5%) (9,774) 161
Non-deductible expenses 10,162 154
Adjustments in respect of prior years (79) (14)
Share scheme deductions (114) (56)
De-recognition of deferred tax asset - 20
Total tax charge 195 265
Changes in tax rates and factors affecting the future tax charge
There are currently no factors that are expected to affect the future tax
charge.
5 Goodwill
Personal Injury Critical Care Residential Property £000
£000 £000 Total
£000
Cost
At 1 January 2023 39,897 15,592 4,873 60,362
Disposal - - (3,749) (3,749)
At 31 December 2023 39,897 15,592 1,124 56,613
Reclassified as Held for sale (15,592) - (15,592)
At 31 December 2024 39,897 - 1,124 41,021
Impairment
At 1 January 2023 (4,873) (4,873)
- -
Disposal - - 3,749 3,749
At 31 December 2023 - - (1,124) (1,124)
Charge for the year (39,897) - - (39,897)
At 31 December 2024 (39,897) - (1,124) (41,021)
Net book value
At 31 December 2023 39,897 15,592 - 55,489
At 31 December 2024 - - - -
The impairment charge for the year of £39,897,000 has been recognised
separately on the face of the statement of comprehensive income.
Where goodwill arose as part of a business acquisition, it forms part of the
CGU's asset carrying value which is tested for impairment annually. The Group
has determined that for the purposes of impairment testing, there are three
CGUs being Personal Injury, Critical Care and Residential Property. The
goodwill in respect of Critical Care and Residential Property arose on
separate acquisitions. Critical Care operates independently from the rest of
the Group with very little overlap of shared resource and its cashflows can be
easily separated.
In 2020 the Group undertook a review of its operations and merged the Personal
Injury and Residential Property cash generating units (CGUs) into one segment,
Consumer Legal Services. For the purposes of allocating goodwill, the goodwill
relating to Personal Injury and Residential Property was allocated prior to
this merger when the two businesses operated as separate CGUs. The impairment
of the residential property CGU took place in 2019, prior to the restructure.
The disposal of goodwill during 2023 relates to goodwill arising in respect of
Homeward Legal. Homeward Legal was disposed of in April 2023. The goodwill
relating to Homeward Legal was impaired in full in 2019 and the remaining
goodwill balance is in relation to Searches UK Limited.
Goodwill of £15.6m attributable to Critical Care has been reclassified to
assets classified as held for sale. See note 11 for further details.
The recoverable amounts for the CGUs are based on value in use which is
calculated on the operating cash flows expected to be generated by the
division using forecasts for the next five years.
These cash flows are discounted at a weighted average cost of capital (WACC)
of 10.4% (2023: 10.9%).
A terminal value is included within each forecast which represents the cash
flows of the CGU into perpetuity. A 2% terminal growth rate has been assumed
(2023: 2%), as permitted under IAS36 Impairment of Assets.
Value in use results
Personal Injury
Events and circumstances resulting in impairment loss
The Directors have given careful consideration to the performance of the
Group's Personal Injury business and the ongoing impact of structural changes
in the personal injury market over the past few years. The Government's
whiplash reforms (introduced in 2021) and the COVID-19 pandemic have had a
detrimental effect on the number of claims in the market, which has not
recovered to pre-pandemic levels and the Directors now believe the current
market levels appear to be the new base.
These challenges exacerbated throughout 2024 as further market consolidation
was witnessed towards the end of the year and manifested themselves in the
Personal Injury CGU as lower demand from panel firms, lower enquiry volumes
overall and increased competition leading to higher marketing costs.
Whilst there has been some success in addressing some of these challenges, the
Directors anticipate that the supply of enquiries will recover more slowly and
that no meaningful recovery in panel demand will be seen. This will require a
greater proportion of enquiries being placed into NAL and further investment
in the medium term due to the longer case cycle. In turn, this means that
profits and cash flows are deferred into the latter years of the forecast
period with NAL unlikely to be fully mature on increased enquiry levels within
the forecast period under review.
As a result of the above challenges, the Directors have considered a number of
scenarios and in light of the volatility experienced in recent years, have
adopted a prudent approach resulting in an impairment charge of £39.9m.
Key assumptions
Discount rate
Management consider the key variables to the WACC calculation (including the
risk-free rate, market risk premium and beta) using a range of external
sources.
Given the current economic uncertainties in the wider markets, there is
inherent uncertainty as to whether the rate will increase or decrease in the
short to medium term. This could in turn lead to a higher or lower WACC for
the Group.
Growth rate assumptions
The key growth assumptions in the Personal Injury forecasts are the number of
enquiries generated and the cost of generation.
The forecasts assume that an increasing number of enquiries can be generated
through recovery of market share and of these enquiries, an increasing
proportion are to be self-processed through NAL. The Group retains a higher
proportion of profits from NAL than it does from passing enquiries to its
panel law firms or joint venture law firm partners but as these enquiries take
longer to process, there is a shift from short term to long term profits and
cash flows.
Operating cash flows are based on the operating profits of the CGU adjusted
for changes in working capital movements.
No sensitivity analysis is provided as the goodwill has been fully impaired in
the current year.
6 Trade and other receivables
2024 2023
£000 £000
Trade receivables: receivable in less than one year 1,625 6,546
Trade receivables: receivable in more than one year - 1,628
Contract assets: receivable in less than one year 7,092 8,706
Contract assets: receivable in more than one year 2,443 3,684
Other receivables 70 134
Prepayments 647 798
Recoverable disbursements 9,873 9,030
Total trade and other receivables 21,750 30,526
A provision against trade receivables and accrued income of £479,000 (2023:
£502,000) is included in the figures above.
Trade receivables and contract assets receivable in greater than one year are
classified as current assets as the Group's working capital cycle is
considered to be up to 36 months as extended credit terms are offered as part
of commercial agreements.
Contract assets consist of a) balances of £4,137,000 (2023: £6,337,000) in
respect of amounts due under contracts with customers that have not yet been
invoiced but where there is a contractual obligation to settle funds once they
become due. These amounts are increased as performance obligations are
satisfied being the provision of marketing services and generation of
enquiries to panel law firms and reduced by the subsequent raising of invoices
and payments when the balances are due for payment; and b) law firm contact
assets. These consist of estimated balances due under 'no win, no fee'
agreements where liability has been admitted. These balances increase as
liability is admitted on more claims underway and decrease either due to
amounts being invoiced and paid on claims that have settled during the year
or, in a small number of cases, where claims are subsequently abandoned prior
to settlement.
7 Trade and other payables
Amounts due within one year: 2024 2023
£000 £000
Trade payables 507 1,723
Disbursements payable 6,297 6,559
Other taxation and social security 720 1,376
Other payables, accruals and deferred revenue 5,287 6,131
Customer deposits 164 457
Total trade and other payables 12,975 16,246
8 Earnings per share
The calculation of basic earnings per share at 31 December 2024 is based on
the loss attributable to ordinary shareholders of the parent company of
£39,290,000 (2023: profit of £384,000) and a weighted average number of
Ordinary Shares outstanding of 47,283,991 (2023: 46,674,661).
Profit attributable to ordinary shareholders
£000 2024 2023
Loss for the year from continuing operations (43,791) (3,537)
Profit for the year from discontinued operations 4,501 3,921
Loss for the year attributable to the shareholders (39,290) 384
Weighted average number of ordinary shares
Number 2024 2023
Issued Ordinary Shares at 1 January 46,894,697 46,325,222
Weighted average number of Ordinary Shares at 31 December 47,283,991 46,674,661
Basic Earnings per share (p)
2024 2023
Group - continuing operations (92.6) (7.6)
Group - discontinued operations 9.5 8.4
Group - total (83.1) 0.8
The Group has in place share-based payment schemes to reward employees. In
line with IAS 33, as the group has a negative earnings per share for 2024, the
effect of potential ordinary shares is anti-dilutive. At 31 December 2023,
there were 2,672,476 potentially dilutive share options under the Group's
share option schemes. There are no other diluting items.
Diluted Earnings per share (p)
2024 2023
Group - continuing (92.6) (7.6)
Group - discontinued 9.5 8.4
Group - total (83.1) 0.8
9 Dividends
No dividends were paid in 2023 and none are proposed for the 2024 financial
year.
10 Changes in liabilities arising from financing activities
Set out below is a reconciliation of movements in in interest-bearing loans
and borrowings arising from financing activities:
2024 2023
£000 £000
Net inflow from decrease in debt and debt financing 2,750 4,250
Loan arrangement fees 65 -
Movement in net borrowings resulting from cash flows 2,815 4,250
Non-cash movements - net release of prepaid loan arrangement fees (62) (30)
Interest bearing loans and borrowings at beginning of period (11,719) (15,939)
Interest bearing loans and borrowings at end of period (8,966) (11,719)
Set out below is a reconciliation of movements in lease liabilities arising
from financing activities:
2024 2023
£000 £000
Net outflow from decrease in lease liabilities 285 312
Movement in lease liabilities resulting from cash flows 285 312
Non-cash movements arising from initial recognition of new lease liabilities, (40) (47)
revisions and interest charges
Lease liabilities at beginning of period (1,722) (1,987)
Lease liabilities at end of period (1,477) (1,722)
Set out below is a reconciliation of movements in member capital accounts
arising from financing activities:
2024 2023
£000 £000
Movement in member capital liabilities resulting from cash flows 2,050 3,301
Non-cash movements: allocation of profits for the year (1,850) (2,506)
Member capital liabilities at beginning of period (3,692) (4,487)
Member capital liabilities at end of period (3,492) (3,692)
11 Discontinued Operations
Bush & Company
In 2024, the Board announced its intention to explore a potential sale of Bush
and Company which makes up its Critical Care operating segment and cash
generating unit. The Board has considered the progress of the sales process
with reference to IFRS 5, Non-current assets held for sale and discontinued
operations, and has determined that the business meets the criteria as held
for sale as at 31 December 2024. It has therefore been presented as a
discontinued operation in the statement of financial position with the results
for the year as follows:
Consolidated statement of comprehensive income:
2024 2023
£000 £000
Revenue 15,887 14,611
Expenses (11,025) (10,190)
Finance income/(expense) 42 (1)
Profit before taxation 4,904 4,420
Taxation (403) (450)
Profit after taxation attributable to owners of the parent company 4,501 3,970
Consolidated cash flow statement:
2024 2023
£000 £000
Cash flows from operating activities 4,676 4,376
Cash flows from investing activities (82) (232)
Cash flows from financing activities - -
Net cash inflow 4,594 4,144
Assets and liabilities of the disposal group held for sale:
31
December
2024
£000
Assets classified as held for sale
Goodwill 15,592
Property, plant and equipment 55
Intangible assets 608
Trade and other receivables 6,122
Cash and cash equivalents -
Total assets of disposal group held for sale 22,377
Liabilities directly associated with assets classified as held for sale
Trade and other creditors (1,809)
Deferred tax liability (4)
Total liabilities of disposal group held for sale (1,813)
Homeward Legal
On 25 April 2023, the Group announced the sale of its wholly owned subsidiary
Homeward Legal Limited. Homeward Legal utilises online marketing to target
homebuyers and sellers in England and Wales to generate leads and instructions
which it then passes to panel law firms and surveyors in the conveyancing
sector for a fixed cost. The subsidiary is considered to be non-core to the
Group's principal operations.
Consideration for the sale was finalised at £117,000 which was equivalent to
the net asset value of Homeward Legal at the date of sale. The Group incurred
legal and consultancy costs amounting to £55,000 in respect of the sale. The
consideration is payable in two annual instalments in each of the two years
following completion and additionally, the Group is entitled to receive
contingent consideration, contingent upon Homeward Legal achieving certain
performance milestones. The contingent consideration will be based on a share
of profits and trade debtors recovered above certain amounts. The Board
believes that the contingent consideration will not be material and has
estimated the fair value as nil.
At the date of disposal, the carrying amounts of Homeward Legal's net assets
were as follows:
£000
Property, plant and equipment -
Deferred tax asset 1
Trade and other receivables 255
Cash and cash equivalents 30
Total assets 286
Trade and other creditors (169)
Total liabilities (169)
Net assets 117
The gain on disposal is calculated as:
£000
Consideration received or receivable:
Cash 117
Fair value of contingent consideration -
Total disposal consideration 117
Carrying amount of net assets sold (117)
Gain on sale before income tax -
Income tax expense on gain -
Gain on sale after income tax -
The results of these discontinued operations are included in the 2023 results
up to the date of disposal, and are presented as follows:
Consolidated statement of comprehensive income:
31 31
December December 2023
2024 £000
£000
Revenue - 269
Expenses - (318)
(Loss)/profit before taxation - (49)
Taxation - -
(Loss)/profit after taxation attributable to owners of the parent company - (49)
Consolidated cash flow statement:
31 31
December December 2023
2024 £000
£000
Cash flows from operating activities - 23
Cash flows from investing activities - -
Cash flows from financing activities - -
Net cash inflow - 23
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