Saralis: 2025 has started well
Listed business NAHL issued bullish predictions for its future yesterday after a “challenging year” that saw falls in revenue and the number of personal injury claims generated.
The “structural changes” in the injury market have also led it to write off the entire £40m of goodwill that was in its accounts.
The group is to reintroduce its animated ‘Underdog’ character to its advertising, after an absence of nine years, as part of a marketing refresh.
As forecast in a trading update issued in January, NAHL reported revenue down 8% to £38.8m and underlying operating profit down 4% to £3.9m, although the non-cash impairment charge of £39.9m, plus other exceptional costs, led to a statutory operating loss of £36.5m.
Strong cash generation meant that net debt – once an area of concern for investors – fell another 27% in the year to £7.1m, down from a high of £21m in 2019.
Chief executive James Saralis said: “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.”
Google’s launch of ‘AI Overviews’ has had “a significant impact on the organic search results for firms across the sector”, meaning more investment in paid search, which raised the cost of it for all.
National Accident Helpline generated a “disappointing” 19,744 enquiries in 2024, 45% lower than in 2023. There was a 70% reduction in enquiries placed with the panel to just 4,426.
As a result, the number of cases placed with Law Together, the group’s joint venture law firm operated with HCC Solicitors, rose by 55% in the year to 3,903.
Using the panel and Law Together allows NAHL to generate more immediate cash and profit than the cases it runs through its own law firm, National Accident Law.
Mr Saralis said the group has also been investing in business development activity and was planning to “onboard a number of new panel firms for small-scale trials” this year.
The group said it expected lower enquiry volumes to persist and so has been “right sizing” National Accident Helpline – although overall, there has been no change in staff numbers at the group, at 279.
Mr Saralis suggested that the 2021 whiplash reforms and insurers’ rhetoric has made claiming for injuries “more of a stigma”. There was also “consumer confusion about what they’re entitled to”.
NAHL placed 30% of enquiries into National Accident Law, up from 24% in 2023 in percentage terms, if fewer in actual number at 5,892. It rose to 37% in the first quarter of this year.
Mr Saralis said: “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.”
NAHL’s critical care business, Bush & Co, saw revenues rise by 9% and operating profit by 10%, although its sale remains a possibility.
Mr Saralis said NAHL has “started 2025 well, reducing personal injury acquisition cost, generating further efficiencies and reducing net debt”.
On the reintroduction of Underdog, he said: “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.”
In a note for investors, NAHL’s broker and nomad, Allenby Capital, said it expected 2025 to be “an exceptionally strong year”, with profit before tax expected to grow by over 130% to £5.1m and net debt falling further to £3m.
NAHL’s share price was unchanged yesterday at 60p.
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