The listed company that owns NewLaw Solicitors has announced strong annual results, with the law firm reducing its focus on road traffic accident claims.
Accident management group Redde plc recorded an 11.6% increase in turnover to £527m, with adjusted profit before tax up 15% to £46m.
Redde’s shares are currently 174p, about halfway between the highest and lowest points the price has been in recent years.
It told the stock exchange that work volume increased in part because of the long winter and ‘Beast from the East’, “which resulted in the increased claims and costs referred to by many insurers in announcing their own results for the relevant period”.
Redde recorded a 19% growth in credit hire cases, and 3.4% increase in number of repair cases.
The group has also continued to build its range of legal services and last summer NewLaw entered into an additional joint venture alternative business structure named Your Law in conjunction with National Accident Helpline.
The report to investors said: “Your Law has made an encouraging start in its first year of operations and represents an exciting growth potential for the group.”
Income from NewLaw’s various joint venture ABSs has increased 50% from £1.5m to £2.2m.
Redde’s other ABS, Principia, “again made good progress increasing its activity and revenues”, the report said. Principia focuses on credit hire cases.
“In addition, the group has continued to see a further increase in NewLaw’s employers’ liability and medical negligence practice; these cases will take longer to settle than road traffic accident claims which continue to represent a reducing proportion of the group’s business in this area.”
NewLaw’s operations are being consolidated into its Cardiff headquarters after more space became available. As a result, its main Bristol office is being run down and will close at the end of this month.
Redde reported that it has enhanced its claims settlement protocols by developing “a bespoke, digital, protocol portal link direct to participating insurers”.
It explained: “Protocols demonstrably provide better outcomes in net cost terms for both parties including the reduction of associated administrative costs.
“During the year, the group has also pioneered enhancements to existing protocol arrangements with certain insurers by participating in the use of robotics in the processing of claims for the benefit of both parties.”
However, it terminated a protocol with one “large” insurer “which sought to take the benefits of the greater discount offered under protocol but failed to adhere to the associated contracted terms of early settlement”.
Using a non-protocol model instead results in slower cash realisation, and consequently higher debtor days, but “does yield better margins”.