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AIM-listed legal marketing business eyes up further acquisitions as it unveils strong results

The Underdog: pulling in enquiries [1]

The Underdog: pulling in enquiries

National Accident Helpline today reported strong first-half results as it looks for further acquisitions in both the personal injury and conveyancing markets.

The AIM-listed legal marketing business – known for the ‘Underdog’ character in its advertising – said revenue was up 15% to £25.4m for the first six months of 2015, with operating profit increasing 21% to £6.5m.

Chairman Steve Halbert told the stock exchange that enquiry growth up 9.4% in the period, with core personal injury enquiries up 5.8% and medical negligence enquiries up 23.9%, resulting in income from solicitors increasing by 10.5%. NAH’s profit on solicitor income was up 21% to £5.1m

Around three-quarters of enquiries are derived from higher-margin non-road traffic and medical negligence cases. There are currently 56 firms on NAH’s panel, of which 40 deal with personal injury and medical negligence.

Mr Halbert said: “These volume increases are pleasing, although we have experienced some increase in marketing costs, primarily driven by advertising rates and increased online bidding in a competitive marketplace which has resulted in cost per enquiry rising by 1%.

“NAH has gained further market share in the period reflecting the continued strength of our brand, and we continue to adapt well to changing consumer behaviours such as an increasing trend towards enquiries driven by social media.

“Whilst this type of case can be more challenging to convert into a running case for our panel law firms, coping with emerging trends is one of NAH’s strengths and our conversion rate of clean leads to enquiries remains above 70%.” In all NAH receives around 300,000 consumer contacts a year.

The introduction of the MedCo system for sourcing medical reports on injured people hit NAH’s revenue from the sale of products to solicitors, which fell 8% to £2.4m. “However, we are encouraged by the market penetration of our recently launched non-medical negligence ATE product,” said Mr Halbert, who predicted that product revenues would “stabilize” in the second half of 2015 and return to growth during 2016.

Last year NAH entered the conveyancing leads market by buying Fitzalan, and in the first half it delivered a 21.4% operating margin on revenue of £1.5m. “We expect this contribution to grow in the second half, as the leadership changes we introduced at the point of acquisition mature, and additional staff resources, coupled with new products, become established.”

The report also showed that in June it made a minor acquisition of another conveyancing leads business, Best Value Conveyancing for £222,000.

Mr Halbert added: “We continue to see and assess potential further complementary acquisitions in both PI and conveyancing and believe the strength of our balance sheet alongside our market leading positions means the group is well positioned to take advantage of opportunities.”

Yesterday we reported on an opinion poll [2] that said the increase in advertising legal services is having a negative effect on the justice system.