NAHL – the listed company that owns National Accident Helpline – announced yesterday that it has furloughed a third of its staff amid a fall in personal injury enquiries.
Directors and management have also taken wage cuts, but though the board stressed it expected the group to continue as a “sustainable business” once the coronavirus crisis eases, its shares still fell 12.5%.
An update to investors said it was too early to quantify the full impact of Covid-19 “with any degree of certainty”.
While its critical care business has “remained resilient”, with only a modest level of impact to date, NAHL said its personal injury division “has suffered a more significant reduction in enquiries”, while its residential property division has suffered in line with the UK property market, which has come to a standstill.
“These challenges will impact the business in both the short and long-term.”
It has furloughed around a third of staff. Members of the leadership team have “voluntarily” taken a temporary salary cut of 10-20%, the board has taken a 20% reduction in salaries or fees, and the group has deferred its annual salary review.
The update said: “The board is extremely grateful for the sacrifices made by its employees in the current crisis and greatly appreciates the positive attitude shown by all staff.”
In a bid to make further cash savings, the board has reduced property and lease costs, leveraged IT “to support broader-based home working”, delayed capital expenditure and “optimis[ed] the structure of the business to maximise efficiencies”.
At 31 December 2019, NAHL had net debt of £21m, with a £25m revolving credit facility committed until December 2021. At 31 March 2020, net debt remained at £21m “and we believe that the group will be able to manage net debt within the current headroom”.
Having last month delayed publication of its 2019 final results, NAHL is now planning to publish them next week.
The update concluded: “Given its experience in navigating change in difficult markets, the board remains confident in the group’s ability to emerge from this period as a sustainable business.”
NAHL’s shares crashed in February after it said uncertainty in the PI market would significantly affect its performance in 2020, meaning it had to suspend paying any dividends.
NAHL’s share price ended 2019 on 100p, down 7% on the year, and a long way from its 2015 peak of 404p.
It then fell to 56p on the back of the February announcement and went as low as 34p as the whole market dived in response to the pandemic. The price recovered a little to 43.5p last week, but fell back yesterday to 37.6p following the update.
We revealed earlier this month that National Accident Helpline was giving up its authorisation as a claims management company and will in future be overseen by the Solicitors Regulation Authority.