Shares in PI group fall sharply after profit warning


Aspinall: Law firm has performed well

Shares in NAHL – the AIM-listed personal injury group – fell by 15% yesterday after it warned that revenue and profit this year would be “significantly lower than previously expected”.

It blamed both a reduction in demand from its law firm panel and increased costs of acquisition from Google as key drivers.

The group has three routes to place leads generated by its marketing arm, National Accident Helpline (NAL): its wholly owned alternative business structure (ABS), National Accident Law; a joint venture ABS, Law Together, with Manchester and Birmingham law firm Horwich Cohen Coghlan; and its traditional panel of law firms.

Placing leads with the panel helps NAHL’s cash flow, as it does not have to wait for a case to conclude to be paid, although the plan is to keep on growing NAL.

It was only last month that the group reported positive results for 2023, during which NAL continued to expand and the group continued to pay down its debt.

Revenue was only up 2% to £42m, however, with profit before tax of £600,000, as in 2022, which it attributed to continued investment in National Accident Law.

Speaking at the company’s annual general meeting yesterday, chair Tim Aspinall said NAL had performed well so far this year, settling 19% more claims than in the same period in 2023 and generating £3.3m of cash from settlements, a 56% increase.

However, in the first quarter of 2024,) – reduced the number of enquiries it generated by 30% to match an anticipated reduction in panel demand. This led to lower revenues than anticipated, offset in part by a 45% reduction in marketing spend.

Mr Aspinall said: “In Q2, NAH experienced a slower return in demand from its panel and consequently made the decision to place more work into Law Together, our joint venture.

“In addition, Google completed a significant organic search algorithm change, which led to paid search becoming disproportionately expensive.

“To support our brand and market position, National Accident Helpline continued to bid for enquiries at an elevated cost, while taking other actions to improve our Google search positioning.”

This has had the effect of “significantly increasing” average enquiry acquisition cost in the short term, Mr Aspinall said. As a result, National Accident Helpline generated approximately 9,700 enquiries in the first five months of 2024, 33% fewer than a year earlier.

“[It] had been forecasting a return to normalised levels of volume, cost and panel demand through June and July. However, recent results and additional external data are suggesting that this recovery will be slower and costs will remain higher for a longer period.

“While the board expects these headwinds to be short term in nature and that the personal injury business will at least be breakeven in 2024, its revenue and profit for the year are anticipated to be significantly lower than previously expected and will therefore have a material impact on current full year market expectations for the group.”

NAHL has previously announced that it was exploring the possible sale of its critical care business, Bush & Company Rehabilitation and Mr Aspinall said “we have seen encouraging levels of interest to date”.

The group’s share price had been on the up too. Having hit an all-time low of 28.5p in July 2022 but our annual review of listed legal businesses in January recorded a good 2023, jumping 77% to 62p. The shares reached a high of 77p last month following the results but have slipped since and yesterday’s fall took them back to 56p.




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