Listed UK businesses with a strong legal element have proven good investments over the past year, outperforming the FTSE indicies, a Legal Futures analysis has found.
While both the FTSE 100 and FTSE All-Share indicies fell a little during 2015, by far the best legal performer was Redde plc, the accident management business that owns NewLaw Solicitors. It saw its share price rise by 123% during 2015 to 206p.
It recovered strongly after taking a hit in November following the Autumn Statement, which outlined significant curbs on claimant personal injury work, with a positive trading statement in mid-December boosting confidence. Like all the other legal businesses, it is listed on AIM.
Investors in third-party litigation funder Burford Capital also saw an impressive performance, with its share price up 60% to 193p by the end of 2015.
Fairpoint Group – which owns national law firm Simpson Millar and during 2015 bought Colemans-ctts, meaning legal services is now its main service line – was harder hit by the Autumn Statement announcement, finishing the year on 136p, having reached a high of 195p shortly before Chancellor George Osborne’s announcement.
However, it performed positively over the whole of 2015, recording a 15% increase in its share price.
Leading claims management company National Accident Helpline suffered even more from the Autumn Statement, but still ended up slightly ahead of where it began 2015. Having started on 220p, it reached a peak of 420p during the year, but fell back to 225p by the end.
Gateley, the first listed law firm, has inched up since its admission in June at 95p. The shares ended the year on 102p.
Even Quindell turned out to be a decent investment in 2015, although that of course followed a disastrous 2014 in which its share price collapsed spectacularly.
It began the year on 54p and at the time the shares were suspended late last year – pending court approval of a capital return worth 90p a share following the sale of its legal business to Slater & Gordon – they had reached 98p. Since trading restarted in mid-December, the share price of the renamed Watchstone Group has soared, closing yesterday at 318p.
The one UK legal investment that has gone down is third-party funder Juridica, which went from 129p to 43p during a year that saw some adverse rulings in the cases it had backed. In November the company put itself into run-off, citing a lack of scale, but as part of this process it will be returning capital to investors following the completion of cases.
Juridica has so far returned 64p to shareholders over the life of the company, which was admitted to AIM in December 2007.
Beyond the UK, as recorded on this site in recent months, Slater & Gordon’s share price has plummeted on the back of various issues, most notably the acquisition from Quindell. Overall, it fell 87% during 2015.
Australia’s other listed law firm, personal injury practice Shine, also had a bad year, with its share price sliding 36% during 2015.
Integrated Legal Holdings, which listed in Australia in 2007 shortly after Slater & Gordon, went into administration in late 2014.