NAHL Group PLC Trading Update and Revised Banking Facility (8142T)
23 July 2020 - 4:00PM
UK Regulatory
TIDMNAH
RNS Number : 8142T
NAHL Group PLC
23 July 2020
This announcement is deemed to constitute inside information
stipulated under the Market Abuse Regulation (EU) No. 596/2014
23 July 2020
NAHL Group PLC
("NAHL" or the "Group")
Pre-Close Trading Update & Revised Banking Facility
NAHL (AIM: NAH), a leader in the UK consumer legal services
market, is today providing a trading update for the first half of
its current financial year, covering the six months to 30 June
2020.
Trading Update
The results for the first half are significantly impacted by
Covid-19. Despite this, the Group has responded well to the
challenges arising from the pandemic. Revenue for the period is
expected to be GBP20.4m (H1 2019: GBP25.8m) and underlying
earnings* are expected to be in the range GBP1.0m to GBP1.2m (H1
2019: GBP3.4m).
The Group has made good progress with its restructure, merging
its Personal Injury and Residential Property businesses into a new
Consumer Legal Services ("CLS") division. This, along with other
actions taken to reduce costs, has resulted in the identification
of over GBP1m of annualised savings.
Personal Injury enquiry volumes are gradually recovering albeit
they are currently at 50-60% of prior year levels. The number of
conveyancing instructions, which came to a standstill during April
and May, recovered quickly during June as the volumes in the UK
housing market returned to pre Covid-19 levels. Whilst the
Government's changes to stamp duty are welcome, the long-term
outlook for this sector remains uncertain. The Group's Critical
Care division has demonstrated a reasonable level of resilience
throughout the period, however there has been a noticeable slowing
of new enquiries as a result of a reduction in road traffic
accidents and medical negligence incidents.
Since the impact of the pandemic became clearer, management have
proactively taken steps to manage the Group's balance sheet and
maximise liquidity. As at 30 June 2020, net debt had been reduced
to GBP18.6m, which was better than management's expectations. This
provides the Group with GBP6.4m of liquidity in its GBP25m
revolving credit facility, the highest level of liquidity in the
last 12 months.
Revised Banking Facility
In the 2019 Final Results, the Group highlighted that it may
breach its banking covenants from Q2 2020 and that it was in
positive discussions with its lender, Yorkshire Bank, to remedy
this. The Board is pleased to announce that these discussions have
now concluded successfully and new covenants that provide
reasonable levels of headroom have been agreed. Importantly, the
Group has remained in full covenant compliance throughout this
period and we expect this to continue through to the end of the
facility term. As part of this agreement, Yorkshire Bank has also
agreed to extend the facility term for a further 12 months, through
to 31 December 2022.
NAHL will announce its results for the six months ended 30 June
2020 on 22 September 2020.
Russell Atkinson, CEO of NAHL, commented:
"The first half of the year has been the most challenging in the
Group's history, following the emergence of the Covid-19 pandemic
in the UK in late February. Despite the operational and demand
challenges that this situation imposed, the Group's swift response
enabled us to continue to support customers and clients across the
Group while keeping our employees safe.
"Whilst it remains to be seen whether there will be further
waves of Covid-19 in the UK that may have an impact on our
business, I am pleased with the resilience that the Group has
demonstrated in the first months of the pandemic and that the
discussions with our bank, including the extension of the facility
to December 2022, have concluded successfully.
"Throughout this period the health and wellbeing of our staff
has been our priority. My thanks go to the talented and committed
people that we employ across the Group whose dedication gives me
confidence that we will emerge from this situation as a strong and
growing business."
* Underlying earnings is based on profit attributable to
shareholders of NAHL (i.e. excluding profits attributable to
non-controlling interests) before the deduction of non-underlying
costs.
For further information please call:
NAHL Group PLC via FTI Consulting
Russell Atkinson (CEO) Tel: +44 (0) 20
James Saralis (CFO) 3727 1000
finnCap Ltd (NOMAD & Broker) Tel: +44 (0) 207
Julian Blunt/James Thompson (Corporate 220 0500
Finance)
Andrew Burdis (Corporate Broking)
FTI Consulting (Financial PR) Tel: +44 (0) 20
Alex Beagley 3727 1000
James Styles
Sam Macpherson
Notes to Editors
NAHL Group plc (AIM: NAH) is a leader in the Consumer Legal
Services ("CLS") market. The Group provides services and products
to individuals and businesses in the CLS market through its two
divisions:
-- Consumer Legal Services provides outsourced marketing
services to law firms through National Accident Helpline and
Homeward Legal; and claims processing and conveyancing services to
individuals through Your Law, Law Together, National Accident Law
and National Conveyancing Partners. In addition, it also provides
property searches through Searches UK.
-- Critical Care provides a range of specialist services in the
catastrophic and serious injury market to both claimants and
defendants through Bush & Co.
More information is available at www.nahlgroupplc.co.uk and
www.national-accident-helpline.co.uk .
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contact rns@lseg.com or visit www.rns.com.
END
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