NewLaw owner unveils strong results as it strengthens law firm’s non-RTA business

Stock exchange: listed law firm owner on the up

Redde, the AIM-listed accident management company that owns two law firms has recorded strong annual results, with turnover up 25% and profits increasing 16%.

It also laid out how it is growing the services offered by its main firm, pioneering alternative business structure (ABS) NewLaw Solicitors, into areas other than road traffic-related claims.

Redde’s share price has been on a downward trend for much of the past 12 months, from a high of 203p a year ago to 145p last month, but it is now steadily recovering and yesterday’s results sent the shares up to 170p.

Its turnover in the year to 30 June 2017 was £472m. The 25% increase was in part due to the acquisition of fleet accident management group FMG in 2015, but represented a like-for-like increase of 19%.

Both profit before tax and EBIT were up 16% to £40m, with a recommended final dividend of 5.6p an 8.7% increase on the previous year. The five joint venture ABSs of which NewLaw is the minority owner contributed £1.5m of the profit.

The other law firm Redde owns is specialist credit hire ABS Principia Law, and the company recorded a 21% growth in credit hire cases over the year.

On its legal offering, chief executive Martin Ward said road traffic cases represented a reducing proportion of NewLaw’s caseload: “The group has continued to build its range of legal services and has also pursued the additional opportunities available to it.

“In support of this during the year, the group has made investment, and strengthened its teams, in its employment law practice and also in its private client practice dealing with wills, probate and trusts. In addition the Group has seen further growth in those areas of its practice dealing with employers’ liability and medical negligence and has increased its professional staff in these areas.”

A sixth joint venture ABS, Your Law, with National Accident Helpline, started trading after the end of the financial year: “[It] represents an exciting growth potential for the group.”

More generally, Mr Ward said: “Redde is a well-positioned business with unique capabilities and a growing presence in its markets. This year has seen another solid performance with significant revenue and profit growth mainly from new business take-up.

“The strength and predictability of our income continues to support a full dividend payout and, subject to shareholder approval, this will represent our twelfth consecutive dividend. Since June 2013 the group, including the recommended final dividend, will have paid out £105m (38p per share) to shareholders and the group continues to build momentum.”

Mr Ward said Redde’s one-stop shop approach “provides the potential to grow and develop more vehicle incident and accident management services to both business and insurance customers, supporting the group’s position as a leader in vehicle mobility, rapid roadside recovery, repair, legal and other support services”.

Meanwhile, NAHL plc, the AIM-listed company that owns National Accident Helpline, today announced new, increased banking facilities with Yorkshire Bank.

The facility comprises a £25m revolving credit facility (RCF), which will be used to repay the current £9.4m term loan and replace the existing £5m RCF.

It can be used for general business purposes, including working capital and paying dividends.

NAHL told investors: “The facility will support the group’s long-term business strategy. The increased RCF meets the immediate needs of the group as well as providing sufficient headroom to allow the business to invest for growth and to fund investment in cases in the personal injury division.”

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