TIDMNAH
RNS Number : 2141U
NAHL Group PLC
24 March 2023
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information for the purposes of Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310. With the publication of
this announcement, this information is now considered to be in the
public domain.
24 March 2023
The following announcement replaces the 'Final Results'
announcement released on 22 March 2023 at 0700 under RNS No 7839T.
A full statement has now been included under the heading
'CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2022',
which was previously missing. All other details remain unchanged.
The full amended text is shown below.
NAHL Group plc
("NAHL", the "Company" or the "Group")
Final Results
Realising returns on strategic investments and building solid
foundations for future growth
NAHL, a leading UK marketing and services business focused on
the consumer legal services market, announces its Final Results for
the year ended 31 December 2022.
Financial Highlights
Year ended 31 December FY2022 FY2021 Change
Group Revenue GBP41.4m GBP38.9m 6.4%
--------- --------- ------
Operating Profit GBP4.8m GBP4.2m 14.4%
--------- --------- ------
Profit Before Tax GBP0.6m GBP0.2m 142.1%
--------- --------- ------
Net Debt GBP13.3m GBP15.5m -14.0%
--------- --------- ------
-- Group Revenue increased by 6.4% to GBP41.4m (2021: GBP38.9m),
reflecting good progress made across the Group
-- Cash received from settled claims in National Accident Law
(NAL) increased by 67% to GBP3.5m (2021: GBP2.1m)
-- Significant reduction in net debt at 31 December 2022 to GBP13.3m
(2021: GBP15.5m)
-- Strong levels of cash generation resulting in free cash flow
increasing from GBP0.8m in 2021 to GBP2.2m
-- Operating profit increased to GBP4.8m (2021: GBP4.2m) in line
with recently upgraded market expectations
-- Profit before tax increased to GBP0.6m (2021: GBP0.2m) due
to lower-than-expected profit attributable to non-controlling
interests in our LLPs, offset by an increase in borrowing costs
due to higher UK interest rates
-- Basic EPS of 0.8p (2021: 0.3p)
Operational Highlights
-- Both the Consumer Legal Services and Critical Care divisions
advanced their respective growth strategies in the year
-- Continued to rapidly scale NAL and grew headcount to 147 people
(2021: 129 people)
o NAL won 1,894 claims, 60% more than the prior year (2021:
1,187)
o At 31 December 2022, NAL had grown its book of ongoing claims
by 37% to 10,860 (2021: 7,918)
o These claims have an estimated future cash value to NAL (before
processing costs) of GBP11.2m, and an estimated future revenue
of GBP8.2m
-- National Accident Helpline (NAH), generated 34,905 personal
injury enquiries in the year, an increase of 9% over 2021 despite
the wider market remaining subdued, further evidence of its
strong brand and effective marketing strategy
-- NAH also successfully returned to TV advertising in June 2022
and exited the year with its highest share of the non-RTA market
since early 2020
-- Critical Care increased the number of Expert Witness reports
it issued by 10%, whilst investments in marketing and business
development resulted in a 14% increase in the number of new
instructions for Initial Needs Assessments (INA)
-- Further encouraging results in Bush Care Solutions, which was
launched in 2021 and delivered revenue growth of 24% to GBP0.4m
in 2022
-- Critical Care recruited 61 new associates in 2022 to support
its growth and enhance its proposition
Outlook
-- The Group entered 2023 with momentum and the Board are cautiously
optimistic that the Group is well placed to continue its growth
and strong cash generation
-- In Personal Injury, following a successful return to TV advertising
in 2022, the Board plan on increasing advertising investment
in 2023 to gain further market share
-- In the first two months of 2023:
o enquiry numbers are 3% higher than the equivalent period
in 2022, after excluding tariff-only RTA enquiries which are
no longer targeted
o NAL has collected GBP0.6m cash from settlements, 89% more
than the same period last year
o Critical Care Expert Witness and INA reports issued were
27% and 9% ahead of the same period last year respectively
o Expert Witness instructions were 21% higher and INA instructions
were flat compared to the same period last year, due to a
slow start in January
-- Given the persistently high levels of inflation in the UK,
the Board expects UK interest rates to remain at higher levels
in 2023 leading to higher borrowing costs for the Group
-- In response, the Group plans to accelerate cash collection
and further reduce net debt by utilising its flexible placement
model, its maturing book of claims in NAL and the strong levels
of cash originating from its joint ventures and Critical Care
division
James Saralis, CEO of NAHL, commented:
"I am pleased with the financial performance of the Group in
2022. To deliver a significant reduction in net debt, return our
Personal Injury business to profit and continue our growth in
Critical Care, despite the wide-ranging macroeconomic factors
working against both our sector and the economy is testament to our
people and the investments we have made over the last few
years.
"In line with our strategy, we continued to grow our book of
claims in NAL, which now stand at 10,860, 37% ahead of the same
time last year. The Group also collected GBP3.5m of cash from
settlements during the year, up from GBP2.1m in 2021, illustrating
the growing maturity of our claims book. These maturing claims
along with the flexibility of our placement model were instrumental
in the Group being able to reduce its net debt during the year.
"Simultaneously, Critical Care recruited 61 new associates in
2022 to support its growth and further enhance its offering whilst
also investing in its new proposition Bush Care Solutions which
will access adjacent markets and be a key growth enabler for the
future.
"Finally, I would like to reiterate my gratitude to our
employees for their hard work, support and commitment throughout
the year. Without their unwavering dedication, we would not have
had the successes we did in 2022 and I very much look forward to
2023 as we continue to build on the strong foundations we have set
for future growth ."
The Annual Report and notice of Annual General Meeting will be
available by the end of April 2023.
Enquiries:
NAHL Group plc via FTI Consulting
James Saralis (CEO) Tel: +44 (0) 20 3727 1000
Chris Higham (CFO)
Allenby Capital (AIM Nominated Adviser & Broker) Tel: +44 (0) 20 3328 5656
Jeremy Porter / Vivek Bhardwaj (Corporate Finance)
Amrit Nahal (Sales & Corporate Broking)
FTI Consulting (Financial PR) Tel: +44 (0) 20 3727 1000
Alex Beagley NAHL@fticonsulting.com
Sam Macpherson
Amy Goldup
Notes to Editors
NAHL Group plc (AIM: NAH) is a leader in the UK 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 services to individuals
through Your Law, Law Together and National Accident Law. 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 ,
www.national-accident-helpline.co.uk and www.bushco.co.uk
Throughout this document, references to 'joint venture' law firm
relate to our law firms Your Law LLP and Law Together LLP which we
operate in partnership with a minority member. The term 'joint
venture' does not relate to the UK-adopted International Accounting
Standards (IFRS) definition. These law firms are accounted for as
subsidiary undertakings.
Chair's Report
The Group returned to growth in 2022 and delivered results in
line with recently upgraded market expectations, despite a
challenging macro-economic environment. We saw good progress across
the Group with increased revenues and profit and a further
reduction in debt in 2022. Significantly our Personal Injury
business started repaying the investment we have made in its
transformation, and not only returned to growth but was cash
positive and grew market share.
We completed the year with revenues of GBP41.4m (2021:
GBP38.9m), a profit before tax of GBP0.6m (2021: GBP0.2m), and a
further reduction in debt to GBP13.3m (31 December 2021:
GBP15.5m).
Consumer Legal Services
Overall, revenues in the Consumer Legal Services division grew
by 6% to GBP28.3m and operating profit by 12% to GBP4.2m.
These results were driven by a strong performance in our
Personal Injury business which was profitable and cash positive
again following several years of investment into our own law firm
National Accident Law (NAL). NAL now employs 147 people (2021: 129
people) and remains central to the Group's future success by
enabling us to process claims ourselves and keep more of the profit
from those claims. It is beginning to pay back on the investment we
have made in it and for the first time we were able to fund the
working capital cost of NAL from cash generated in the Personal
Injury business itself.
Settlements and the resulting cash receipts in NAL increased in
2022 as claims, started in earlier years, matured. NAL collected
GBP3.5m in cash from settlements made during the year, compared
with GBP2.1m in 2021, representing a 67% increase.
NAL has not yet reached maturity, when the number of cases
starting broadly equals the number of cases concluding in any year,
and we continue to invest in it. During 2022, 8,760 new enquiries
went into NAL which was an increase of 6% compared with 2021.
These new enquiries represent a future pipeline of value for
NAL. By the end of 2022, NAL had increased the volume of ongoing
claims by over 37% to 10,860. These claims have an estimated future
cash value to NAL (before processing costs) of GBP11.2m, and an
estimated future revenue of GBP8.2m. Putting more enquiries into
NAL also has the effect of reducing future payments to our Joint
Venture partners.
Most of the enquiries that did not go to NAL went to our panel
firms who pay for them. This placement model enables us to manage
our cash requirements flexibly as evidenced by our strong reduction
in net debt during the period.
Overall, the Personal Injury business increased the number of
enquiries it generated by around 9% to 34,905 despite the number of
Personal Injury claims in the market remaining flat. This was
achieved through our strong brand and effective marketing, and our
return to television advertising in 2022 after an absence of over
two years due to COVID-19. Our market share in non-RTA enquiries
(the majority of our book) rose to 16.8%, its highest level since
2020, and although our share of RTA enquiries remained relatively
flat at 1.3%, we saw an increasing proportion of higher value
claims in that mix.
Our Residential Property business was impacted by the widely
reported slowdown in the property market due to higher interest
rates, but still contributed a small profit for the year.
Critical Care
Bush & Co (Bush) has continued to invest in its back office
and technology. This investment cycle is coming to an end and these
enhancements should see efficiency gains and margin improvements in
the future as well as providing a more resilient platform for
growth. Bush has also strengthened its marketing and business
development offering.
Case management remains the largest revenue stream in Critical
Care providing support to individuals who have suffered
catastrophic personal injuries. The number of ongoing cases grew by
11% during 2022 and Bush increased the number of employed case
managers to help drive margin improvement. Expert witness services
also saw strong revenue growth in 2022 and now accounts for 36% of
our total revenue compared to 32% in 2019.
Bush Care Solutions was created in 2021 to offer nurse-led care
management services. This is an adjacent market to case management
and enables us to offer a fully managed solution. Revenues grew by
24% in 2022 to GBP0.4m. Although still relatively small, Bush Care
Solutions offers significant opportunity for further growth in this
adjacent market.
Overall revenues in Bush grew by 6% to GBP13.1m and its
operating profit by 4% to GBP3.4m.
Summary
I would like to thank all our employees for their continued
commitment and hard work over the last year. Our people and our
culture are essential to our future success. I would also like to
congratulate Chris Higham who was appointed as a director of the
Company and Group Chief Financial Officer (CFO) during the year,
having previously been acting CFO since August 2021.
I believe we are making good progress across the Group with an
increase in revenue and profit and a further reduction in debt. The
Personal Injury business has returned to growth, is cash positive
and winning more market share. NAL is beginning to pay back on the
investment we have made and at the end of 2022 had nearly 11,000
cases underway that represent a strong pipeline of future value.
Critical Care continues to grow revenues and profit and has
invested to drive future margin improvement. Bush Care Solutions is
not yet two years old but is already showing its potential,
offering the opportunity for growth in an adjacent market.
The Group has created a platform for success and is on track to
build a sustainable and profitable business in the medium term.
Tim Aspinall
Chair
CEO Report
2022 was an important year for NAHL and I'm proud to report on
the progress that our team has delivered.
Overview
Despite the well-documented headwinds across the economy and
specific challenges within our own markets, NAHL achieved its
financial goals in 2022 and returned to growth. The Group increased
revenues by 6% and operating profit by 14%, and we continued to
invest for the future. We have strengthened our financial position,
reducing our debt which ended the year at GBP13.3m. This was a
priority given the challenging and unpredictable macro-economic
environment in the UK.
Both our Consumer Legal Services and Critical Care divisions
advanced their strategies in the year. Our Personal Injury business
returned to profit and was cash generative in 2022 - an important
milestone in our plans. We continue to grow market share in
Personal Injury and our law firm, National Accident Law, is
demonstrating signs of growing maturity. In our Critical Care
division, we have developed our services in the year, added new
specialisms and experienced encouraging early growth in our new
care proposition, Bush Care Solutions.
Whilst these successes demonstrate good progress made in 2022,
there is more to do and we must stay on track if we are to deliver
on our ambitions and build a more sustainable and profitable
business over the next few years. Our strategy for each of our
divisions remains on track and unchanged and we will continue to
invest for future growth.
Financial performance
Group revenue increased by 6% in the year to GBP41.4m (2021:
GBP38.9m) following growth in both of our trading divisions.
Operating profit grew 14% during the year to GBP4.8m (2021:
GBP4.2m) and was in line with recently upgraded market
expectations. Our Consumer Legal Services division grew operating
profit by 12% and our Critical Care division by 4%. As we started
to realise the benefit of past investments in our Personal Injury
business, the Group's operating profit margin increased by 0.8 ppts
from 10.7% in 2021 to 11.5% during the period.
Profit before tax was GBP0.6m (2021: GBP0.2m), which was in line
with recently upgraded market expectations, albeit from a low base.
This was due to lower-than-expected profit attributable to
non-controlling interests in LLPs but offset by an increase in
borrowing costs due to the higher UK interest rates.
Pleasingly, the Group generated strong levels of cash flow
throughout the year with free cash flow increasing from GBP0.8m in
2021 to GBP2.2m in the year. As a result, the Group has reduced net
debt from GBP15.5m at 31 December 2021 to GBP13.3m at 31 December
2022, which was in line with recently upgraded market
expectations.
The Board does not believe that it is appropriate to reinstate
dividends at this time and the Directors have recommended that no
final dividend payment be made in respect of 2022.
Consumer Legal Services
Financial performance
Our Consumer Legal Services division performed well during the
year, delivering a 6% increase in revenues to GBP28.3m (2021:
GBP26.6m) and operating profit increased by 12% to GBP4.2m (2021:
GBP3.7m). This result was driven by a strong performance in our
Personal Injury business, which grew its revenues by 14% to
GBP24.0m (2021: GBP21.0m) and operating profit by 17% to GBP3.9m
(2021: GBP3.4m).
Whilst not a statutory measure, it was particularly pleasing to
see the Personal Injury business return a profit after deducting
members' non-controlling interests in LLPs, which was GBP0.4m in
2022 compared to a loss of GBP0.1m in the prior year. I believe
that this clearly demonstrates the sustainability of this business
and the positive progress that the team have made over the past 18
months.
Market conditions
The UK personal injury market was subdued through the COVID-19
pandemic and this continued into 2022.
According to industry data from the Claims Recovery Unit of the
Ministry of Justice (CRU) and the Official Injury Claim portal for
small claims (OIC), the number of claims registered in 2022 for
road traffic accidents (RTAs) was down 7% compared to the prior
year at c. 371,000 claims, and down 43% compared to the last full
year prior to the pandemic (2019). Our internal analysis estimates
the claimant-side personal injury market to be worth GBP1.1bn in
2021/22 compared with an estimated value of GBP1.6bn in 2019/20(1)
.
This reduction contrasts with traffic volumes on the roads,
which moved closer to pre-pandemic levels in 2022. Government
estimates(2) show motor vehicles travelled 318.6bn vehicle miles in
Great Britain for the year ended March 2022, which was 30% more
than that in the year ended March 2021, but still 6% lower than
pre-pandemic levels (year ended December 2019). Whilst the
equivalent data for the remainder of 2022 is yet to be released, it
is likely that traffic levels had gone on to exceed pre-pandemic
levels by the end of the year. For non-RTA claims, such as
employers' liability, public liability, and occupiers' liability,
claim volumes registered with the CRU in 2022 were broadly flat
compared to that in 2021 at c.95,000 claims (-2%), which was 42%
lower than 2019.
We believe that the cause of this trend of lower claim numbers
is due to the following three factors, which have fundamentally
reset the size of the market during the past 24 months:
1) Firstly, the COVID-19 pandemic resulted in significant
behavioural changes amongst the UK population. This included
changes to working practices and transport usage, including many
more people choosing to work remotely or on a hybrid basis for part
of the week. This has contributed to fewer accidents occurring
during travel time, in workplaces, surrounding shops and urban
areas.
2) Secondly, the implementation of the Civil Liability Act 2018
(Whiplash Reforms) significantly reduced compensation tariffs for
most RTA claims worth GBP5,000 or less and eliminated cost awards
for successful claims. Rather than encouraging victims to manage
their own claims through the OIC portal, the overly complex and
burdensome portal resulted in fewer than 10% of litigants pursuing
a claim themselves and for those relying on a solicitor to support
them, the legislation removed most of the value for the firm,
resulting in many firms withdrawing from the market. We believe
that the significant reduction in compensation combined with the
difficulty of the process has resulted in a lower appetite from
accident victims to make such a claim.
3) Thirdly, research that we commissioned in December indicated
that at least GBP1.4bn(3) of potential personal injury settlements
were unclaimed in 2022 because of people's reluctance to make a
claim. An independent organisation spoke to 2,500 members of the
public, of which 500 people had suffered an accident in the last
three years, and the results were very insightful:
While 11% of people had suffered a no-fault accident in the last
three years, only 50% of these attempted to make a claim and only
half of those went ahead. We found that a quarter of those who
could have made a claim had 'no idea' they were entitled to
compensation, while a similar number did not pursue a claim because
they thought the process 'felt too complicated'. Other reasons for
not claiming included the cost of making a claim, the stigma
associated with claiming and worries about the process and any
potential impact on their job.
We believe that this reluctance to make a claim and the lack of
understanding surrounding the claim process is a result of a
reduction in advertising by firms since the start of the
pandemic.
Our analysis of these three factors leads us to conclude that
whilst the size of the market is smaller now than before the
pandemic, the opportunity remains very significant and there is a
large latent demand that could be unlocked by a firm who can
stimulate the market, educate customers on their rights and change
the perception of claiming.
Strategic progress
Our strategy to succeed in the personal injury market is to grow
the number of accident victims that we can support by leveraging
the strength of the National Accident Helpline brand and processing
an increasing number of those enquiries through our own
consumer-focused law firm, National Accident Law. This will enable
us to develop a sustainable, higher margin business. We will fund
this through our agile and scalable placement model which is
designed to balance the work we place with our panel, and joint
venture partner for in-year profit and cash, with the work we
process ourselves for greater, but deferred profit and cash.
I'm pleased to report that we made clear progress with this
strategy in 2022.
National Accident Helpline generated 34,905 personal injury
enquiries in the year, which was an increase of 9% over 2021. This
number would have been higher had it not been for our decision to
stop targeting tariff-only RTA claims, from February 2022, to focus
on higher-value opportunities. The brand continues to be the "first
choice for people who have had an accident and want legal
representation", according to independent research.
The category mix of enquiries generated was broadly consistent
with last year, with 22% RTA claims, 51% non-RTA and 27% specialist
claims, which we don't process in NAL. Pleasingly, the RTA claims
that we attracted should ultimately be more profitable than last
year, as they comprised a far lower proportion of low value
tariff-only claims.
In June 2022, the business returned to TV advertising for the
first time since January 2020 with its #TellYourStory campaign,
giving accident victims a platform to speak up and feel listened
to. Whilst brand advertising on TV is intended to develop long-term
awareness, the in-year performance of the campaign was encouraging
and it resulted in growth in lead numbers and improved conversion.
Our high-performance digital marketing and conversion-optimised
website also delivered good results in the year and the number of
organic (unpaid) leads to our website increased by 9% compared to
2021.
This activity helped to generate market share gains and in our
key category of non-RTA claims, we consistently grew our trailing
12-month market share from 15.0% on 1 January 2022 to 16.8% by
year-end. This is our highest share of the market since early 2020
and gives me confidence that our marketing investments are
delivering. Furthermore, we remain optimistic about the potential
for additional opportunities when the market begins to grow
again.
In line with our strategy, we continued to rapidly scale NAL
during the year. We allocated 8,760 new enquiries to NAL in 2022,
which was 6% more than in 2021. These enquiries cost GBP2.7m to
generate and our proven model estimates that these will be worth
GBP5.9m in future revenue and cash.
NAL won 1,894 claims in the year, 60% more than prior year
(2021: 1,187) and this generated GBP3.5m in cash from settlements.
This was an increase of 67% (2021: GBP2.1m), further demonstrating
the growing maturity of the firm.
At 31 December 2022, NAL had grown its book of ongoing claims by
37% to 10,860 (2021: 7,918). This book of existing claims has an
embedded value, being the future profits and cash expected to be
generated by processing these claims through to settlement. At 31
December 2022, after already expensing the marketing costs to
generate those claims and processing costs to that date, we
anticipated that the ongoing claims will generate future revenue of
GBP8.2m and future gross profit of GBP7.1m.
The division continued to utilise its flexible placement model
to good effect and enjoyed strong demand for enquiries from its
panel of third-party law firms, increasing its allocation by 7%.
The Group's joint venture law firms, which are now mature, also
performed well during the year. Over the past three years, the
Group has significantly reduced the allocation of new enquiries to
its joint ventures, as growth in NAL has been prioritised in order
to increase profitability over the medium term. In 2022,
approximately 3,000 enquiries were distributed to Law Together LLP
with no new enquiries into Your Law LLP, as planned. Following
investment over a number of years, these relationships continue to
generate good levels of cash flow and delivered GBP3.3m in the year
(2021: GBP3.6m), after deducting drawings to LLP members.
Residential Property
The division's Residential Property business, comprising
Homeward Legal and Searches UK, generated revenues of GBP4.3m,
which was 23% lower than prior year (2021: GBP5.6m). Operating
profit was GBP0.3m (2021: GBP0.4m).
The business experienced a slowdown from the second quarter of
2022, in line with the wider market, and accordingly, Homeward
Legal generated 33% fewer conveyancing instructions than the prior
year. Searches UK proved to be more resilient and the number of
search packs its generated was just 10% lower than the previous
year, reflecting several new customer mandates.
Critical Care
Financial performance
Our Critical Care division, operating as Bush & Co.,
increased its revenues by 6% to GBP13.1m (2021: GBP12.3m).
Operating profit increased by 4% to GBP3.4m (2021: GBP3.3m) and the
business generated GBP3.1m of cash from operations in the year.
Market conditions
Bush & Co. operates in the catastrophic injury market, with
most of the work arising from serious RTA injuries and medical
negligence. Whilst there is no official definition, we categorise
catastrophic injuries as those resulting in damages worth
GBP500,000 or more.
There were fewer serious RTA claims during the COVID-19 pandemic
due to a reduction in traffic on the roads, but this was a
temporary feature. Recent data from the Department for Transport
showed that the number of seriously injured casualties on roads in
Great Britain in the year to June 2022 increased by 18% in the
period but was 6% lower than before the pandemic (2019). Due to the
severity of the victims' injuries, this market is not affected by
the Whiplash Reforms nor any reluctance to claim, as is the case in
our Consumer Legal Services business.
For medical negligence claims, data from NHS Resolution shows
that the number of clinical claims for catastrophic injury made
against the NHS in 2021/22 was slightly down on 2020/21 (-7%).
However, this was 24% more than the average number in each of the
preceding four years, indicating that there has been a step change
in the number of medical negligence claims since 2019/20.
Building on our platform for growth
Our strategy in Bush & Co. is to grow share in our market by
appealing to a broader customer base, extending our competencies
and specialisms and to be more efficient at what we do through the
use of technology.
In 2022, we continued to make good progress with this
strategy.
Revenues from the division's case management service grew by 3%
in the year, and it issued 529 initial needs assessments (INAs),
which was 5% more than the prior year. The business supported 1,354
ongoing case management clients during the year, generating
recurring revenue, although at a lower average revenue per client
than before the pandemic. This is a permanent change because some
of our client support team meetings transitioned online during the
pandemic, which has since become normal practice across the
industry, meaning less time and travel costs becoming
chargeable.
Our investments in marketing and business development resulted
in a 14% increase in the number of new instructions for INAs to 557
(2021: 490).
We started the year trialling a new initiative in which the
business delivered case management services for less complex cases
through a team of three in-house, employed case managers. The
results were encouraging and by the end of the year we had grown
the team to seven employed case managers, operating at a higher
utilisation rate, resulting in enhanced profit margins. We hope to
support more customers with this service in 2023 and grow the team
further.
Our expert witness service had a very strong year in 2022, and
increased revenues by 13%. The business issued 974 reports, which
was 10% more than in 2021, and the average revenue per report
increased due to a favourable mix and additional elements being
required by customers. Instruction numbers increased 7% (1,044
compared to 973 in 2021) to historically high levels.
Finally, I am pleased to report very encouraging results in Bush
Care Solutions, which was launched in 2021. This proposition
provides a support and management service for employing care staff,
which complements our existing case management service and also
attracts standalone work. Bush Care Solutions delivered revenue
growth of 24% to GBP0.4m in 2022, delivering 10 ongoing care
packages at year-end. Whilst currently modest in size, this service
looks to be an important growth driver over the next few years. I
am particularly proud of the excellent job the team have done in
developing this service, which has been well received by customers
as evidenced by its nomination for the Supporting the Industry
award at the 2022 PI Awards.
Bush & Co. continued to develop its range of specialisms in
the year and recruited 61 new associates in 2022 to support its
growth and enhance its proposition. At 31 December 2022, the
business works with 96 associate case managers and 129 expert
witnesses, in addition to its in-house teams.
Our people, culture and communities
At NAHL, we aim to build a sustainable business for the
long-term gain of all our stakeholders. For us, this includes being
a great company to work for, creating long-term value for our
shareholders and also contributing to our communities and the
environment.
The Group employed 283 people at 31 December 2022, which was an
increase of 10% on last year. Much of the growth in employee
numbers has arisen in NAL and, as we look to scale the business, we
have further invested in experienced people in technical areas of
the law firm to support our growth. We also revitalised our
marketing team in Consumer Legal Services during the year,
recruiting a Marketing and Brand Director and several other new
members of the team. I look forward to this investment helping to
take our marketing performance to the next level and build on the
growth in market share that we have been able to generate to date.
Other areas of our recruitment focus have been employing case
managers and care managers in Bush & Co. to facilitate our
growth.
Due to the functionality provided by previous investments in our
systems, 33% of our people now work remotely and 49% on a hybrid
basis. This has been of significant benefit to our business,
opening up new recruitment opportunities and expanding our access
to technical legal talent to support the scaling up of NAL, as well
as offering more choice and improved work-life balance for our
people.
As well as recruiting the best talent available, our People Team
added significant value through the delivery of several in- house
training courses in the year. In addition to courses focused on
developing personal strengths, dealing with imposter syndrome and
developing remote management skills, the team prepared 13 employees
for a leadership role in our year- long Pathway to Leadership
programme. In total, 246 hours of training and coaching were
delivered in 2022.
We also made some changes to our Board in the year. On 30
September 2022, Gillian Kent decided to step down as a Non-
Executive Director after eight years in the role. I'd like to thank
Gillian for her support and wise counsel over the years and wish
her the best of luck in her future endeavours.
Also in September, I was delighted to welcome Chris Higham to
the Board as an Executive Director when he was appointed to the
role of CFO on a permanent basis. Chris has been with the Group for
16 years and his experience, through the IPO and the subsequent
transformation of the Personal Injury business has proved
invaluable. I look forward to continuing to work closely with Chris
as we realise our vision for the Group. With these changes, the
Directors believe that the Board composition is suitable for the
Group in its current state.
Through our company culture, we aim to maintain a high-trust
environment for the benefit of everyone, irrespective of who an
individual is or what they do for the Group. Our people are
recruited to join our teams from a diverse range of backgrounds and
experience as we believe that makes us better able to serve our
customers; and we expect our leaders to engender trust with all our
stakeholders by demonstrating their ability, integrity and
benevolence. When we surveyed our people during the year, 93% said
that they believed that everyone in our business is treated fairly
regardless of race, gender, ethnicity, disability, sexual
orientation or other differences, a result I am very proud of.
As at 31 December 2022, the gender split across the Group was
72% female and 28% male. At a Board level, the Board was 20% female
and 80% male.
The Group's values of Driven, Curious, Passionate and Unified
continue to guide how we do things at NAHL. In June 2022, our
annual employee survey demonstrated the progress we are making with
the culture and the strong levels of employee engagement within the
Group. Our overall engagement score was 78%, which was a 3 ppt
improvement on the previous year and significantly higher than the
UK average of 14%(5) . Significant improvements compared to 2021
were identified in communication and our contribution to our
communities. In December 2022, Investors in People reaccredited our
Personal Injury business with a Gold award to add to the Gold award
held by our Critical Care division and Silver award held by
Residential Property.
We were pleased to support a number of separate charities during
the year by fundraising over GBP50,000 and giving up our time to
help with a number of worthy causes. This included supporting the
Child Brain Injury Trust, Kettering and Daventry foodbanks, and the
DEC's Ukraine Appeal. We continued our work to support the
environment, donating 120 hours of volunteering at the Green Patch
community project in Kettering, and continuing our pledge to fund
the planting of a tree for every new employee that joins the Group.
By 31 December 2022 we had a total of 463 mangrove trees growing in
our forest in Madagascar, which will sequester approximately 139
tonnes of CO2 over their lifetime.
Current trading and outlook
In 2022, in spite of subdued market conditions, we achieved our
financial goals and returned the Group to growth. After several
years of transformation, we delivered a profit before tax in our
Personal Injury business and we can now start to realise a return
on our investments. We also continued to build a strong platform in
our Critical Care business, from which we can grow and expand into
adjacent markets. Pleasingly, we finished the year strongly and
this gave us momentum as we went into 2023.
For these reasons, as I look ahead to 2023 and beyond, I am
cautiously optimistic that the Group is well placed to continue its
growth and strong cash generation.
In our Personal Injury business, we plan to increase our
advertising spend in 2023 to try to win further market share. We
aim to continue to grow the embedded value of our ongoing claims
and win more settlements in NAL, driving cash generation. In the
first two months of the year, we are on track to deliver these
plans. Excluding tariff-only RTA claims, which are no longer being
targeted, enquiry numbers are 3% higher than the equivalent period
in 2022 driven by strong levels of RTA leads. In NAL, we have
collected GBP0.6m of cash from settlements, 89% more than in the
same period in 2022.
In Critical Care, we expect to see continued strong growth in
expert witness services and Bush Care Solutions, with continued,
but modest, growth in case management. Our upgrades to the case
management and finance technology systems are due to be implemented
this year, which should drive improvements in future operating
profit margin over the coming years. In the first two months of
2023, the case management team delivered 83 INAs, which was 9% more
than the same period in the prior year, although instruction
numbers were flat compared to last year. In expert witness, 197
reports were issued in January and February, which was 27% more
than the same period in the prior year, and instructions were up
21%.
Given the persistently high levels of inflation in the UK, the
Board expects UK interest rates to remain at higher levels in 2023
leading to higher borrowing costs for the Group. In response, the
Group will continue to leverage its flexible placement model to
drive short-term cash flow. This, in addition to its maturing book
of claims in NAL and the strong levels of cash originating from its
joint ventures and Critical Care division, will enable the Group to
accelerate cash collection in 2023 and further reduce net debt.
Finally, I want to take this opportunity to pay tribute to our
people who go above and beyond to deliver to the best of their
ability for our customers. I'm proud to be leading such a talented
and committed team and look forward to delivering on our
commitments to our customers and shareholders and continuing to
improve our performance.
James Saralis
Chief Executive Officer
Footnotes:
1. Internal research produced during the year
2. Department for Transport, reported road casualties by
severity and road user type: Great Britain
3. Independent research produced by Censuswide Limited, December 2022
4. Independent Research by The Nursery Research & Planning Ltd, March 2023
5. Gallup 'State of the Global Workplace 2022 Report'
CFO Report
Overview
The year saw the business return to growth and reduce its net
debt. This was despite volumes in our markets remaining subdued, a
pattern we have seen continue since the COVID-19 pandemic.
Our wholly owned law firm, National Accident Law (NAL),
continues to scale and is now generating significant cash receipts
as the book of cases continues to mature.
We continued to invest in new technologies in the Critical Care
division. This investment is now largely complete, setting the
business up for future growth.
From an operational perspective, revenue grew by 6.4% to
GBP41.4m (2021: GBP38.9m) and operating profit grew by 14.4% to
GBP4.8m (2021: GBP4.2m) with growth seen across both divisions.
Review of income statement
2022 2021 Change Change
GBPm GBPm GBPm %
========================================= ======= ======= ======= =======
Consumer Legal Services 28.3 26.6 1.7 6.3%
Critical Care 13.1 12.3 0.8 6.4%
========================================= ======= ======= ======= =======
Revenue 41.4 38.9 2.5 6.4%
========================================= ======= ======= ======= =======
Consumer Legal Services 4.2 3.7 0.5 12.2%
Critical Care 3.4 3.3 0.1 4.3%
Shared Services (1.7) (1.6) (0.1) 5.9%
Other items (1.1) (1.2) 0.1 -10.2%
========================================= ======= ======= ======= =======
Operating Profit 4.8 4.2 0.6 14.4%
========================================= ======= ======= ======= =======
Profit attributable to non-controlling
interest in LLPs (3.6) (3.5) (0.1) 3.0%
Financial income 0.1 0.1 (0.0) -6.3%
Financial expense (0.7) (0.6) (0.1) 28.6%
========================================= ======= ======= ======= =======
Profit before tax 0.6 0.2 0.4 142.1%
========================================= ======= ======= ======= =======
Taxation (0.2) 0.0 (0.2) 132.9%
========================================= ======= ======= ======= =======
Profit and total comprehensive
income for the year 0.4 0.2 0.2 146.8%
========================================= ======= ======= ======= =======
Consumer Legal Services
The Consumer Legal Services division increased revenue by 6% to
GBP28.3m (2021: GBP26.6m) and operating profit grew by 12% to
GBP4.2m (2021: GBP3.7m). Enquiry numbers grew by 9% to 34,905
(2021: 32,132) despite the personal injury market remaining
subdued, as discussed in the CEO report and our strategic decision
to stop accepting low value soft-tissue injury Road Traffic
Accident (RTA) claims in the first quarter of 2022.
The number of enquiries passed across to our wholly owned law
firm, NAL, increased by 6% and the law firm continues to process
all the RTA enquiries generated for accidents in England and Wales.
These enquiries represented an investment of GBP2.7m when taking
into account the cost of advertising and overheads related to the
generation of these enquiries.
The enquiries processed by NAL have a longer revenue cycle than
the panel relationships. The cases can take a number of years to
conclude, and NAL first recognises revenue from a case when an
admission of liability has been received from the defendant. The
enquiries passed to NAL in the year are expected to generate
c.GBP5.9m (2021: GBP6.0m) in revenue across their life cycle.
By the end of the period, NAL was processing 10,860 open cases
(2021: 7,918), an increase of 37% as the law firm continues to
mature. These ongoing cases are expected to contribute c.GBP8.2m
(2021: GBP6.7m) in future revenue and c.GBP11.2m of future cash
receipts (2021: GBP8.4m).
The law firm is yet to reach maturity but cash receipts from
settled cases give an indication of the progress made. Cash
receipts from cases settled grew by 67% to GBP3.5m in the year
(2021: GBP2.1m) and the total cash receipts from settled cases
since inception of the law firm is GBP7.0m. Once the law firm is
fully mature we would expect cash receipts in a period to largely
match the expected revenue from new enquiries added.
The Residential Property business generated a positive
contribution to profit of GBP0.3m (2021: GBP0.4m) after allocation
of shared costs. The business was negatively impacted by the end of
the Stamp Duty Land Tax holiday on properties valued up to
GBP500,000 as well as rising consumer borrowing costs towards the
end of the year.
Critical Care
The Critical Care division grew revenue by 6% to GBP13.1m (2021:
GBP12.3m) with operating profit increasing by 4% to GBP3.4m (2021:
GBP3.3m).
The division benefitted from investment in business development
activity contributing to a 7% increase to expert witness
instructions and a 14% increase in Initial Need Assessment (INA)
instructions. Average revenues per instruction on expert witness
increased in the year due to mix and additional work requested by
customers. Average revenues per instruction for case management has
continued to be impacted by the changes in working practices
brought about by the pandemic. These new patterns are expected to
continue going forward.
The business also saw an encouraging performance from Bush Care
Solutions which delivered GBP0.4m of revenue in the year following
its launch towards the latter part of 2021. Although still
relatively small, Bush Care Solutions offers the opportunity for
further growth in an adjacent market.
Shared Services and other items
The costs for the Group's Shared Services functions increased by
GBP0.1m to GBP1.7m (2021: GBP1.6m) and other items which include
share-based payments and amortisation fell to GBP1.1m (2021:
GBP1.2m).
Financial expense
Costs relating to the financing of debt increased to GBP0.7m in
the year (2021: GBP0.6m) despite net debt falling. This is due to
rising interest rates during the year. Our debt is linked to the
Sterling Overnight Index Average (SONIA) plus 2.25%.
Exceptional and non-underlying items
The Group did not incur any exceptional costs in the year (2021:
GBP0.0m).
Taxation
The Group's tax charge of GBP184,000 (2021: GBP79,000)
represents an effective tax charge of 32.4% (2021: 33.6%). The tax
charge is higher than the standard corporation tax rate of 19% for
the reasons set out in note 3. The deferred tax credit originates
from temporary differences in intangible assets acquired on
business combinations.
Earnings per share (EPS) and dividend
Basic EPS for the year were 0.8p (2021: 0.3p) and the diluted
EPS were 0.8p (2021: 0.3p), reflecting the impact of share options
due to vest in future years.
The Board does not believe it is appropriate to re-instate
dividends at this time and the Directors have recommended that no
final dividend be paid in respect of 2022 (2021: nil).
Review of the statement of financial position
In reviewing the statement of financial position, I consider the
significant items to be working capital, defined as trade and other
receivables less trade and other payables, and net debt.
Working Capital
Trade and other receivables less trade and other payables
totalled GBP17.1m at year end (2021: GBP17.2m).
Trade receivables and accrued income balances related to the
processing of personal injury claims increased to GBP7.5m (2021:
GBP6.9m). The increase is due to cases settling in the more mature
joint ventures offset by a growing claims book in NAL, which is yet
to reach full maturity. Accrued income on open cases in NAL within
this balance was GBP2.7m (2021: GBP1.7m). These claims are yet to
reach the settlement stage but have received an admission of
liability from the defendant. This is in line with the Group's
accounting policy for legal services revenue.
There remains a significant element of uncertainty in estimating
this accrued income. The Directors believe that the assumptions
adopted are appropriate and based on historical experience of
claims processed in our law firms and by our panel. In practice it
is rare for accrued income to be downgraded once an admission of
liability has been received. These assumptions are updated with
actual results as claims settle.
Disbursement receivables remained relatively flat at GBP8.4m
(2021: GBP8.3m).
Receivables not relating to the law firms decreased from
GBP18.2m to GBP17.0m. This is largely due to clearing a historic
GBP1.4m debt owed on a settlement relating to the termination of
National Law Partners, as agreed in 2019.
Payables reduced from GBP16.2m on 31 December 2021 to GBP15.8m
at the balance sheet date largely due to a reduction in
disbursements payable as mature cases settling in the joint
ventures were partly offset by immature cases in NAL.
Net debt and bank facilities
We carefully managed our cash resources during the year to
balance an investment in processing personal injury cases with a
desire to reduce net debt, particularly in light of rising interest
costs towards the end of the year. As a result, net debt fell from
GBP15.5m on 31 December 2021 to GBP13.3m at year-end. Net debt is
defined in note 8 and is comprised of GBP2.6m of cash (2021:
GBP2.5m) offset by borrowings of GBP15.9m (2021: GBP17.9m).
The borrowings represent a balance on the Group's GBP20.0m
Revolving Credit Facility with its lender, Yorkshire Bank. The
facility is in place to run through to 31 December 2024.
Review of the cash flow statement
2022 2021 Change Change
GBPm GBPm GBPm %
======================================= ===== ======= ====== =========
Net cash generated from operating
activities 6.0 5.1 0.9 16.9%
======================================= ===== ======= ====== =========
Net cash used in investing activities (0.3) (0.6) 0.3 56.4%
======================================= ===== ======= ====== =========
Facility arrangement fees 0.0 (0.1) 0.1 -100.0%
Principal element on lease payments (0.3) (0.2) (0.1) -59.0%
Drawings paid to LLP members (3.2) (3.4) 0.2 4.1%
======================================= ===== ======= ====== =========
Net cash using in financing activities
(before borrowings) (3.5) (3.7) 0.2 -2.3%
======================================= ===== ======= ====== =========
Free cash flow 2.2 0.8 1.4 158.7%
======================================= ===== ======= ====== =========
Repayment of borrowings (2.0) (2.0) 0.0 0.0%
======================================= ===== ======= ====== =========
Net increase/(decrease) in cash
and cash equivalents 0.2 (1.2) 1.4 117.1%
======================================= ===== ======= ====== =========
The Group's cash and cash equivalents increased by GBP0.2m in
the year (2021: reduction of GBP1.2m). The significant items in the
consolidated cash flow statement are net cash from operating
activities, drawings paid to LLP members and the repayment of
borrowings.
Net cash from operating activities increased from GBP5.1m to
GBP6.0m. This was driven by maturing receipts from settled cases in
both NAL and the joint venture relationships, generating GBP3.5m
and GBP3.3m respectively. This was partly offset by the continuing
investment of new cases to NAL as the law firm continues to scale
as well as interest payments of GBP0.6m (2021: GBP0.4m).
The Group paid GBP3.2m (2021: GBP3.4m) of drawings to its
partners in the joint venture law firms during the year, under the
terms of our agreements. This reflects the continuing closure of
claims won and settled during the year. The Group also acquired
GBP0.2m (2021: GBP0.3m) of intangible assets in the year as it
continued to improve its technological offering in Critical
Care.
The Group repaid GBP2.0m (2021: GBP2.0m) of borrowings in the
year on its Revolving Credit Facility.
Free Cash Flow (FCF) is the Group's KPI with regards to cash
flow. FCF in 2022 was GBP2.2m compared to GBP0.8m in 2021. The
primary reason for this increase is an increase in personal injury
cash receipts on settled cases as more cases settle in NAL and the
joint venture partnerships. Personal Injury is now entirely
self-funding investment into new cases.
The Group also monitors operating cash conversion. This was 143%
in the year (2021: 150%), a direct reflection of the movements
outlined above.
Conclusion
In conclusion, despite headwinds in our markets and the wider
economy, we have continued to make progress with our strategy,
investing in both divisions to deliver growth whilst continuing to
manage down our debt.
Chris Higham
Chief Financial Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 DECEMBER 2022
2022 2021
Note GBP000 GBP000
Revenue 1,2 41,421 38,947
Cost of sales (23,586) (21,352)
------------------------------------------------ ---- -------- --------
Gross profit 17,835 17,595
Administrative expenses (13,079) (13,439)
------------------------------------------------ ---- -------- --------
Operating Profit 4,756 4,156
Profit attributable to members' non-controlling
interests in LLPs 2 (3,554) (3,451)
Financial income 80 85
Financial expense (713) (555)
------------------------------------------------ ---- -------- --------
Profit before tax 569 235
Taxation 3 (184) (79)
------------------------------------------------ ---- -------- --------
Profit and total comprehensive income for
the year 385 156
------------------------------------------------ ---- -------- --------
All profits and losses and total comprehensive income are
attributable to the owners of the Company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2022
2022 2021
Note GBP000 GBP000
Non-current assets
Goodwill 55,489 55,489
Other intangible assets 2,714 3,701
Property, plant and equipment 392 477
Right of use assets 2,027 2,315
Deferred tax asset 50 23
---------------------------------------------------- ---- -------- --------
60,672 62,005
---------------------------------------------------- ---- -------- --------
Current assets
Trade and other receivables (including GBP5,312,000
(2021: GBP4,557,000) due in more than one year) 4 32,886 33,404
Cash and cash equivalents 2,654 2,458
35,540 35,862
---------------------------------------------------- ---- -------- --------
Total assets 96,212 97,867
---------------------------------------------------- ---- -------- --------
Current liabilities
Trade and other payables 5 (15,847) (16,211)
Lease liabilities (263) (242)
Member capital accounts (4,487) (4,210)
Current tax liability (162) (97)
---------------------------------------------------- ---- -------- --------
(20,759) (20,760)
---------------------------------------------------- ---- -------- --------
Non-current liabilities
Lease liabilities (1,724) (1,953)
Other interest-bearing loans and borrowings (15,939) (17,910)
Deferred tax liability (470) (625)
---------------------------------------------------- ---- -------- --------
(18,133) (20,488)
---------------------------------------------------- ---- -------- --------
Total liabilities (38,892) (41,248)
---------------------------------------------------- ---- -------- --------
Net assets 57,320 56,619
---------------------------------------------------- ---- -------- --------
Equity
Share capital 116 116
Share option reserve 4,628 4,312
Share premium 14,595 14,595
Merger reserve (66,928) (66,928)
Retained earnings 104,909 104,524
---------------------------------------------------- ---- -------- --------
Capital and reserves attributable to the owners
of NAHL Group plc 57,320 56,619
---------------------------------------------------- ---- -------- --------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 DECEMBER 2022
Capital and
reserves
attributable
Share to
the owners
Share option Share Merger Retained of
NAHL Group
capital reserve premium reserve earnings plc
Note GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January 2021 115 3,912 14,595 (66,928) 104,368 56,062
Total comprehensive income
for the year
Profit for the year - - - - 156 156
Total comprehensive income - - - - 156 156
Transactions with owners,
recorded directly in equity
Issue of new Ordinary Shares 1 - - - - 1
Share-based payments - 400 - - - 400
Total transactions with owners,
recorded
directly in equity 1 400 - - - 401
Balance at 31 December 2021 116 4,312 14,595 (66,928) 104,524 56,619
Total comprehensive income
for the year
Profit for the year - - - - 385 385
Total comprehensive income - - - - 385 385
Transactions with owners,
recorded directly in equity
Share-based payments - 316 - - - 316
Total transactions with owners,
recorded
directly in equity - 316 - - - 316
Balance at 31 December 2022 116 4,628 14,595 (66,928) 104,909 57,320
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEARED 31 DECEMBER 2022
2022 2021
GBP000 GBP000
Cash flows from operating activities
Profit for the year 385 156
Adjustments for:
Profit attributable to members' non-controlling
interests in LLPs 3,554 3,451
Property, plant and equipment Depreciation 168 171
Right of use asset depreciation 288 306
Amortisation of intangible assets 1,186 1,195
Financial income (80) (85)
Financial expense 713 555
Share-based payments 316 400
Taxation 184 79
------------------------------------------------------ ------- -------
6,714 6,228
Decrease in trade and other receivables 448 1,012
Decrease in trade and other payables (364) (1,337)
------------------------------------------------------ ------- -------
Cash generated from operations 6,798 5,903
Interest paid (627) (398)
Tax paid (165) (365)
------------------------------------------------------ ------- -------
Net cash generated from operating activities 6,006 5,140
------------------------------------------------------ ------- -------
Cash flows from investing activities
Acquisition of property, plant and equipment (83) (281)
Acquisition of intangible assets (199) (339)
Interest received 13 2
------------------------------------------------------ ------- -------
Net cash used in investing activities (269) (618)
------------------------------------------------------ ------- -------
Cash flows from financing activities
Repayment of borrowings (2,000) (2,000)
Issue of share capital - 1
Facility arrangement fees - (90)
Principal element of lease payments (264) (166)
Drawings paid to LLP members (3,277) (3,418)
------------------------------------------------------ ------- -------
Net cash used in financing activities (5,541) (5,673)
------------------------------------------------------ ------- -------
Net increase/(decrease) in cash and cash equivalents 196 (1,151)
Cash and cash equivalents at 1 January 2,458 3,609
------------------------------------------------------ ------- -------
Cash and cash equivalents at 31 December 2,654 2,458
------------------------------------------------------ ------- -------
NOTES TO THE FINANCIAL STATEMENTS
1 Accounting policies
Basis of preparation
Consolidated Financial Statements
The preliminary financial statements do not constitute statutory
accounts for NAHL Group plc within the meaning of section 434 of
the Companies Act 2006 but do represent extracts from those
accounts.
The statutory accounts will be delivered to the Registrar of
Companies in due course. The auditors' have reported on those
accounts. Their report was unqualified. The auditors' report does
not contain a statement under either section 498(2) of Companies
Act 2006 (accounting records or returns inadequate or accounts not
agreeing with records and returns), or section 498(3) of Companies
Act 2006 (failure to obtain necessary information and
explanations).
The Group's financial statements have been prepared in
accordance with UK-adopted International Accounting Standards
(IFRS) in conformity with the Companies Act 2006, IFRIC
interpretations and under the historical cost convention.
Going Concern
In determining the appropriate basis of preparation of the
financial statements, the Directors are required to consider
whether the Company and Group can continue in operational existence
for the foreseeable future.
The Audit and Risk Committee has reviewed the Going Concern
assessment prepared by management. The assessment includes detailed
financial forecasts covering the Group's adopted strategy and
considers a range of sensitivities. These forecasts consist of the
2023 budget and extended forecasts and the period considered for
the going concern review is to the end of March 2024, being
approximately 12 months from the date of signing of the 2022 Annual
Report and financial statements. The key assumption in the forecast
is the growth of the Personal Injury division's self- processing
operations as this growth is the key driver for both profitability
and cash going forward. The going concern assessment focuses on two
key areas, being the ability of the Group to meet its debts as they
fall due and being able to operate within its banking facility.
The Group refinanced its banking facilities in December 2021 and
has access to a GBP20.0m revolving credit facility (RCF) with its
bankers. In all of the scenarios the Group has modelled it would
have sufficient liquidity within its current RCF to meet its
liabilities as they fall due and would not need to access
additional funding.
The Group's RCF is subject to quarterly covenant testing and all
of the scenarios modelled suggest that the Group will continue to
operate within its covenants for the foreseeable future.
Considering the above, the Directors have a reasonable
expectation that the Company and Group have adequate resources to
continue in existence for the foreseeable future and have concluded
it is appropriate to adopt the going concern basis of accounting in
the preparation of the financial statements.
New standards and amendments adopted by the Group
There are no new or amended standards applicable for the current
reporting period.
New standards, interpretations and amendments not yet
effective
There are no new standards, interpretations and amendments that
are not yet effective and that would be expected to have a material
impact on the Group in the current or future reporting periods and
on foreseeable future transactions.
2 Operating segments
Consumer Critical Shared Other
Legal Services Care Services items Eliminations(2) Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Year ended 31 December
2022
Revenue 28,264 13,157 - - - 41,421
Depreciation and
amortisation (257) (201) (358) (826) - (1,642)
Operating profit/(loss) 4,179 3,434 (1,715) (1,142) - 4,756
Profit attributable
to non-controlling
interest members
in LLPs (3,554) - - - (3,554)
Financial income 77 - 3 - - 80
Financial expenses - (5) (708) - - (713)
Profit/(Loss) before
tax 702 3,429 (2,420) (1,142) - 569
Trade receivables 2,632 5,610 - - - 8,242
Total assets(1) 29,222 6,780 77,716 - (17,506) 96,212
Segment liabilities(1) (17,874) (1,258) (3,189) - - (22,321)
Capital expenditure
(including intangibles) 95 187 - - - 282
------------------------- -------------- -------- -------- ------- --------------- --------
Year ended 31 December
2021
Revenue 26,583 12,364 - - - 38,947
Depreciation and
amortisation (272) (166) (363) (871) - (1,672)
Operating profit/(loss) 3,726 3,293 (1,592) (1,271) - 4,156
Profit attributable
to non-controlling
interest members
in LLPs (3,451) - - - (3,451)
Financial income 85 - - - - 85
Financial expenses - (10) (545) - - (555)
Profit/(Loss) before
tax 360 3,283 (2,137) (1,271) - 235
Trade receivables 2,999 4,896 - - - 7,895
Total assets(1) 29,625 6,335 79,413 - (17,506) 97,867
Segment liabilities(1) (17,754) (1,306) (3,556) - - (22,616)
Capital expenditure
(including intangibles) 60 326 234 - - 620
------------------------- -------------- -------- -------- ------- --------------- --------
1. Total assets and segment liabilities exclude intercompany
loan balances as these do not form part of the operating activities
of the segment.
2. Eliminations represents the difference between the cost of
subsidiary investments included in the total assets figure for each
segment and the value of goodwill arising on consolidation.
Significant customers
One customer in the Consumer Legal Services segment accounted
for 10.0% of the total Group revenue. No other customers accounted
for greater than 10% of the total Group revenue (2021: no
customers).
Geographic information
All revenue and assets of the Group are based in the UK.
Operating segments
The activities of the Group are managed by the Board, which is
deemed to be the chief operating decision maker (CODM). The CODM
has identified the following segments for the purpose of
performance assessment and resource allocation decisions. These
segments are split along product lines and are consistent with
those reported last year.
Consumer Legal services - Revenue is split along 3 separate
streams being: a) Panel - revenue from the provision of personal
injury and conveyancing enquiries to the Panel Law Firms, based on
a cost plus margin model b) Products - consisting of commissions
received from providers for the sale of additional products by them
to the Panel Law Firms, surveys and the provision of conveyancing
searches and c) Processing - in the case of our ABSs and self-
processing operations, revenue receivable from clients for the
provision of legal services.
Critical Care - Revenue from the provision of expert witness
reports and case management support within the medico-legal
framework for multi-track cases.
Shared Services - Costs that are incurred in managing Group
activities or not specifically related to a product.
Other items - Other items represent share-based payment charges
and amortisation charges on intangible assets recognised as part of
business combinations.
3 Taxation
Recognised in the consolidated statement of comprehensive
income
2022 2021
GBP000 GBP000
Current tax expense
Current tax on income for the year 352 276
Adjustments in respect of prior years 14 13
Total current tax 366 289
Deferred tax credit
Origination and reversal of timing differences (182) (210)
Total deferred tax (182) (210)
Tax expense in statement of comprehensive income 184 79
Total tax charge 184 79
Reconciliation of effective tax rate
2022 2021
GBP000 GBP000
Profit for the year 385 156
Total tax expense 184 79
Profit before taxation 569 235
Tax using the UK corporation tax rate of 19.00%
(2021: 19.00%) 108 45
Non-deductible expenses 68 97
Adjustments in respect of prior years 14 13
Share scheme deductions - (8)
Short-term timing differences (6) (68)
Total tax charge 184 79
------------------------------------------------- ------ ------
Changes in tax rates and factors affecting the future tax
charge
The UK Government announced in the 2021 budget that from 1 April
2023, the rate of corporation tax in the United Kingdom will
increase from 19% to 25%. This was substantively enacted at the
reporting date and so the effects are included within these
financial statements.
4 Trade and other receivables
2022 2021
GBP000 GBP000
Trade receivables: receivable in less than one
year 7,077 7,056
Trade receivables: receivable in more than one
year 1,165 839
Accrued income: receivable in less than one
year 11,137 12,414
Accrued income: receivable in more than one
year 4,147 3,718
Other receivables 26 21
Prepayments 954 913
Corporation tax - 136
Recoverable disbursements 8,380 8,307
Total trade and other receivables 32,886 33,404
------------------------------------------------ ------ ------
A provision against trade receivables and accrued income of
GBP612,000 (2021: GBP740,000) is included in the figures above.
Trade receivables and accrued income receivable in greater than one
year are classified as current assets as the Group's working
capital cycle is considered to be up to 36 months as extended
credit terms are offered as part of commercial agreements.
5 Trade and other payables
Amounts due within one year: 2022 2021
GBP000 GBP000
Trade payables 1,689 1,452
Disbursements payable 6,620 7,222
Other taxation and social security 1,231 1,216
Other payables, accruals and deferred revenue 5,850 5,864
Customer deposits 457 457
------------------------------------------------- ---------------- ------
Total trade and other payables 15,847 16,211
------------------------------------------------- ---------------- ------
6 Earnings per share
The calculation of basic earnings per share at 31 December 2022
is based on the profit attributable to ordinary shareholders of the
parent company of GBP385,000 (2021: profit of GBP156,000) and a
weighted average number of Ordinary Shares outstanding of
46,325,222 (2021: 46,245,345).
Profit attributable to ordinary shareholders
GBP000 2022 2021
Profit for the year attributable to the
shareholders 385 156
-------------------------------------------- ---------- -----------
Weighted average number of ordinary shares
Number 2022 2021
Issued Ordinary Shares at 1 January 46,325,222 46,240,222
Weighted average number of Ordinary Shares
at 31 December 46,325,222 46,245,345
Basic Earnings per share (p)
2022 2021
Group 0.8 0.3
-------------------------------------------- ---------- -----------
The Group has in place share-based payment schemes to reward
employees. At 31 December 2022, there were potentially dilutive
share options under the Group's share option schemes. The total
number of options available for these schemes included in the
diluted earnings per share calculation is 2,329,951 (2021:
1,315,881). There are no other diluting items.
Diluted Earnings per share (p)
2022 2021
Group 0.8 0.3
------ ---- ----
7 Dividends
No dividends were paid in 2022 or 2021.
8 Net debt and changes in liabilities arising from
financing activities
Net debt includes cash and cash equivalents and other
interest-bearing loans and borrowings.
2022 2021
GBP000 GBP000
Cash and cash equivalents 2,654 2,458
Other interest-bearing loans and borrowings (15,939) (17,910)
Net debt (13,285) (15,452)
Lease liabilities (1,987) (2,195)
Set out below is a reconciliation of movements in
net debt during the period.
2022 2021
GBP000 GBP000
Net increase/(decrease) in cash and cash equivalents 196 (1,151)
Net inflow from decrease in debt and debt financing 2,000 2,000
Movement in net borrowings resulting from cash flows 2,196 849
Non-cash movements - net release of prepaid loan arrangement
fees (29) (9)
Net debt at beginning of period (15,452) (16,292)
------------------------------------------------------------- -------- --------
Net debt at end of period (13,285) (15,452)
------------------------------------------------------------- -------- --------
Set out below is a reconciliation of movements in lease
liabilities arising from financing activities:
2022 2021
GBP000 GBP000
Net outflow from decrease in lease liabilities 264 166
Movement in lease liabilities resulting from cash flows 264 166
Non-cash movements arising from initial recognition of
new lease liabilities, revisions and interest charges (56) 82
Lease liabilities at beginning of period (2,195) (2,443)
-------------------------------------------------------- ------- -------
Lease liabilities at end of period (1,987) (2,195)
-------------------------------------------------------- ------- -------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCUSVNRONUOUAR
(END) Dow Jones Newswires
March 24, 2023 12:59 ET (16:59 GMT)
Nahl (LSE:NAH)
Historical Stock Chart
From Jan 2025 to Feb 2025
Nahl (LSE:NAH)
Historical Stock Chart
From Feb 2024 to Feb 2025
