[1]Atkinson: excellent trading performance
National Accident Helpline (NAH) has today unveiled a 26% jump in profits, in the first financial results released since the personal injury marketing business listed on AIM in May.
In the six months ended 30 June 2014, NAH recorded a 6% rise in revenue to £22.1m – after pre-LASPO commission from after-the-event insurance sales is stripped out of the 2013 figures – with profits up from £4.8m in the first half of 2013 to £6.1m this year.
Enquiries increased by 10.6% compared to the first half of 2013, with similar growth in the “higher value non-RTA and medical negligence sectors”. Three-quarters of enquiries generated for its panel law firms are in these segments, NAH said.
The company ascribed this in part to a “positive regulatory environment driving industry consolidation”, noting a 41% reduction in the number of regulated claims management companies as at 31 March 2014.
With LASPO enacted on 1 April 2013, the comparative period straddles two regulatory regimes and NAH estimated “the underlying rate of growth in enquiries in the post-LASPO environment to be materially higher than in the pre-LASPO period”.
NAH attributed much of the increased profit to its new pricing model for solicitor introduced on 1April 2013. “Although the group’s income per enquiry has reduced from £490 to £470, reflecting better-value enquiries delivered to our panel law firms, we have seen an overall 34.4% increase in solicitor income profitability to £4.2m.
“With our product income profitability also enjoying a 9.4% increase to £2.6m, a continued firm control over administrative and other expenses as well as continually monitoring and controlling the mix of enquiries passed to the panel law firms, our overall operating profit margin from continuing items has increased to 27.4% (2013 H1: 23.1%) and we expect to deliver further improvement as enquiry numbers increase.”
Chief executive Russell Atkinson said: “We are pleased to report a strong set of maiden interim results as a listed company following our successful IPO in May, with continued growth in enquiries, revenue and profit. The results reflect an excellent trading performance, both in terms of the group’s enquiry generation and our panel law firm strategy, which has seen us focus on large, robust, efficient firms.”
NAH plans to pay dividends of around 66% of retained profits in each financial year, “reflecting the group’s high cash conversion ratio and strong balance sheet”, and declared an interim dividend of 5p per share.