Leading claims management company National Accident Helpline Limited (NAHL) has announced its intention to float on AIM, in a move which it hopes will value the business at £100m. The IPO is expected next month.
NAHL describes itself as the “largest outsourced marketing services provider to the personal injury market”, which it says is worth £3bn in fees, generated mainly by law firms.
In a statement to potential investors, the group said it had generated revenues of £39.7m in the last calendar year and operating profits of £9.8m, excluding commission received from a discontinued ATE insurance product of £9.4m).
Since its launch in 1993, NAHL – originally the brainchild of Northamptonshire law firm Tollers – has spent more than £200m on marketing, and £23m in 2013 alone, starring its ‘Underdog’ character. It said research ranked the NAH brand as the most recognised, most search for and most trusted brand in the personal injury market.
The group said that over 72% of the enquiries it generated for law firms were in the faster growing non-RTA and medical negligence sectors, and it would focus its efforts on these areas. Last year NAHL received 230,000 contacts from the public, but its vetting processes meant that only 73,000 were passed on to its 53 panel firms.
“In addition, NAHL believes that further consolidation could occur as a result of non-compliant and marginally profitable claims management companies and marketing services providers leaving the industry. NAHL’s strong market position makes it ideally placed to benefit from continued consolidation.
“NAHL also believes that geographic opportunities exist to increase volume in specific regions, for example Scotland.”
The group said there were at other opportunities to offer accident management and post-settlement support services, while it is developing a new “enhanced medical negligence screening service” and could offer panel firms process outsourcing.
NAHL is funded by law firms, ATE insurers, medical reporting agencies and other providers of ancillary products. The statement said its directors intended to “target a dividend of approximately 66% of retained profits in each financial year, including the year ending 31 December 2014”.
Chief executive Russell Atkinson told Legal Futures that PPI Claimline, which together with NAHL forms the Consumer Champion Group, has been demerged, meaning it is only the personal injury business going on AIM. “It’s a different type of business at a different stage of its development – they don’t have much in common,” he explained.
Floating for £100m would raise about £50m, which would in part realise some of the existing funders’ investment – the current owner is private equity firm Inflexion – and also provide “a more flexible capital structure” to take advantage of consolidation in the market.
Mr Atkinson said there were no plans to become an alternative business structure and start providing legal services directly.