More than a quarter of cases brought in by National Accident Helpline are now directed to its in-house law firm, the company said today as it hailed a year of “strategic progress”.
The effect of Covid reducing the number of personal injury claims meant that the listed group, NAHL plc, saw revenue in 2021 fall by 4.7% to £39m, while underlying operating profit dropped 26% to £4.2m.
Profit before tax was £200,000, compared to a loss of the same amount in 2020, while net debt on 31 December 2021 was nearly £1m lower at £15.5m.
Marketing activity produced 32,132 new PI cases, a drop of 11%. Of these, 26% were funnelled through NAHL’s alternative business structure, National Accident Law (NAL), compared to just 10% of new cases in 2020. The figure rose to 31% in the first two months of this year.
The expectation is that this figure will hit about 37% by 2025 – despite the higher returns from handling cases itself, the working capital required to build up the law firm and the need to provide a return to shareholders means that the group will continue to use its panel law firms for the majority of new cases.
There are also some areas of law, such as clinical negligence, that NAL does not currently handle.
Just 6% of cases in 2021 were directed to NAHL’s two joint venture ABSs – Your Law with NewLaw Solicitors, and Law Together with Manchester firm Horwich Cohen Coghlan – which was a drastic reduction on 2020.
The group expressed optimism for the year ahead, with PI enquiry volumes in the first two months of 2022 42% ahead of the same period last year
NAHL chief executive James Saralis called 2021 “a year of strategic progress” despite the continued difficulties presented by the pandemic.
“We progressed on our key objectives, increasing enquiries placed into NAL, reducing our reliance on joint-venture partnerships and growing our ongoing claims in NAL at year-end by 166%.”
The group’s critical care division saw revenues up 9% to £12.3m, although profits dipped 8% to £3.3m, with expert witness volumes increasing 21%.
Mr Saralis said the group had warned investors that they needed to be patient and expect “depressed” profits while it built NAL. That process was now complete – about 120 of the group’s 260 staff work for NAL – and the next task was to scale it up.
Profit, and returns to investors, should increase from next year, he predicted.
Last year, NAHL said it intended to explore a potential sale of its residential property business Homeward Legal.
Mr Saralis said: “While this initially attracted encouraging levels of interest from the focused group of potential buyers we engaged with, it proved very difficult to complete a deal due to external factors beyond our control.
“While we are not in negotiations with a buyer at present, we will look to explore a sale and consider our strategic options for this business in 2022.”
Homeward and Searches UK, its other property business, achieved turnover of £5.6m, down from £6.3m, but more than doubled its profit to £800,000.
However, Mr Saralis said a sale was still likely as “longer term I still don’t think it’s core to the business”. He said he was also mindful of the need to reduce the group’s debt.