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NAHL reports expected profits dip as it prepares for PI reforms

Atkinson: performance in line with expectations

NAHL plc, the marketing and services business that owns National Accident Helpline, has announced a small dip in revenue and profits for the first half of 2017.

The company warned investors last year that work to reshape its personal injury offering, in light of the upcoming government reforms, would lead to a temporary dampening of cash generation and profits.

It reported revenue of £24.9m, down from £25.8m in the same period for 2016, with the underlying operating profit dropping from £8.8m to £7.3m. That meant an underlying operating profit margin of 29.5%, down from 34%.

Profit before tax, taking into account a £1m charge for the rebrand of National Accident Helpline in the summer, was £5.3m, compared to £7.5m last year.

NAHL has announced an interim dividend of 5.3p per share – it was 6.35p this time last year.

As well as the rebrand, NAHL launched an alternative business structure [1] with Cardiff firm NewLaw, and is working on a second one [2].

Chief executive Russell Atkinson said: “The first half of 2017 has been a busy period for the group across all of its divisions and performance is in line with our expectations.

“The group’s residential property and critical care divisions have made good progress year-on-year and we expect this to continue through the second half.

“Second half trading has continued in line with our expectations. We will further develop our PI proposition and explore enhanced panel law firm arrangements, driving increased volumes with our refreshed marketing plans.

“As previously reported, we expect both 2017 and 2018 to be years of transition in PI however we expect this to be complemented by growth in both residential property and critical care.”

In his chairman’s statement, Steve Halbert said the company anticipated that the government reforms would not happen in October 2018, as currently scheduled.

He added: “Investment in cases with panel law firms and through our ABS ventures changes our medium-term profit and cash profiles as we build the number of cases in progress, and is the primary reason behind the reduction in group profits in the current year.”

Fitzalan, the residential property division, delivered revenue of £4.5m, down 3.1% on 2016m, “reflecting challenging market conditions”, but profit before tax increased 18% to £800,000.

Mr Halbert said: “Whilst residential property markets remain challenging in volume terms, the division has delivered a strong performance with its mix of conveyancing, surveys and searches, and a focus on cost and efficiency of delivery has improved overall margins.”

Bush, the critical care division, reported revenue of £5.6m, up 6.3%, with profit before tax of £2m, up 10%.

“Enquiry volumes have remained strong and we have a number of interesting strategic business development opportunities,” said Mr Halbert.