TIDMNAH
RNS Number : 5962N
NAHL Group PLC
26 September 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.
26 September 2023
NAHL Group plc
("NAHL", the "Company" or the "Group")
Interim Results
Continued reduction in net debt and trading in line with
expectations
NAHL (AIM: NAH), a leading marketing and services business
focused on the UK consumer legal market, announces its interim
results for the six months ended 30 June 2023 (the "Period").
Financial Highlights
-- In line with expectations, revenue increased to GBP21.0m
(H1 2022: GBP20.7m)
-- Cash received from settled claims in the Group's fully integrated
law firm, National Accident Law ("NAL"), increased by 77%
to GBP2.7m during the Period
-- Operating profit decreased by 19% to GBP1.8m reflecting planned
investment in scaling NAL
-- Profit before tax was broadly breakeven, in line with expectations
(H1 2022: GBP0.1m)
-- Net debt further reduced by GBP1.8m to GBP11.5m from GBP13.3m
at 31 December 2022
Operational Highlights
Consumer Legal Services
-- Demonstrated maturity and momentum in Personal Injury business
and continued execution against our strategy of creating
a higher margin, integrated law firm underpinned by a flexible
business model which will drive higher returns in the medium
and long-term
-- NAL settled 178% more claims (1,738) than H1 2022 and almost
as many as all of 2022, demonstrating the rapid scale-up
of operations within the firm
-- 4,555 new enquiries placed into NAL (H1 2022: 4,531)
-- NAL had a book of 10,611 ongoing claims at 30 June 2023,
7% ahead of 30 June 2022
-- Ongoing claims in NAL expected to convert over coming years
into GBP9.9m of future revenue and future gross profit of
GBP8.6m
-- Recently upgraded the value of NAL's ongoing book of claims
mitigating the stagnation in the personal injury market
-- The Group's market-leading brand, National Accident Helpline,
continued to grow market share in a contracting personal
injury claims market, generating 17,559 new enquiries
-- Independent research in March 2023 revealed that the National
Accident Helpline brand continues to be the "first choice
for people who have had an accident and want legal representation"
Critical Care
-- Critical Care went from strength to strength growing the
number of expert witness reports it issued by 15% and
Initial Needs Assessment ("INA") reports by 5%
-- Strong pipeline of new work within the business with the
number of new instructions generated increasing by 2%
in expert witness services
-- Growing demand in the area of medical negligence with
recent data suggesting that the market is 27% larger than
in 2018/19
-- Bush & Co Care Solutions generated revenues of GBP248k,
a 41% increase on H1 2022
-- Critical Care recruited 40 new associates in key specialisms
and now works with 117 case managers and 146 expert witnesses
across the UK
Outlook
-- The Group continues to trade in line and is on track to meet
full year market expectations
-- In Consumer Legal Services, in July and August:
o The division delivered an encouraging 9% growth in
personal injury enquiry numbers compared to last year
o NAL collected GBP1m of cash from settlements, 67% more
than last year. Year to date collections as at 31 August
2023 was GBP3.7m (2022 full year: GBP3.5m)
-- In Critical Care, in July and August:
o The number of expert witness reports issued was 53%
ahead of last year and the number of instructions was
35% ahead
o The number of INA reports issued was 45% lower than
last year and instructions were 15% lower, albeit the
run-rates returned to normal in August after a slow
July
-- The Group remains committed to managing net debt and anticipates
it reducing further this year
James Saralis, CEO of NAHL, commented:
"We are very pleased with the performance of the Group in the
first half of the year both from a financial and operational
perspective. Trading was in line with our expectations and we made
great strides in both of our divisions. In Consumer Legal Services,
NAL settled 1,738 claims in the Period, an increase of 178% against
last year and generated GBP2.7m in cash, a 77% progression on H1
2022. These numbers clearly illustrate the growing maturity of the
firm and are materially contributing to the significant progress we
have made on reducing our net debt. Further, we are pleased our
market leading brand, National Accident Helpline, continues to grow
market share in a stagnated personal injury market.
Our Critical Care division had its strongest year since the
pandemic, growing revenues 9% to GBP7.3m and operating profit by
39% to GBP2.3m. Pleasingly, alongside the top line growth we have
seen margin expansion within the business from 24.5% in H1 2022 to
31.2% during the Period. We continue to see good results from our
business development initiatives and have significantly grown our
team to support the increased workload.
Based on our performance in H1, and early indications in H2, the
Board believes that it will deliver a full year outturn in line
with market expectations."
For further information:
NAHL Group PLC via FTI Consulting
James Saralis (CEO) Tel: +44 (0) 20 3727 1000
Chris Higham (CFO)
Allenby Capital (AIM Nominated Adviser Tel: +44 (0) 20 3328 5656
& Broker)
Jeremy Porter/Vivek Bhardwaj (Corporate
Finance)
Amrit Nahal/Stefano Aquilino (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 Consumer Legal
Services market. The Group provides services and products to
individuals and businesses in the through its two divisions:
-- Consumer Legal Services provides outsourced marketing
services to law firms through National Accident Helpline and claims
processing services to individuals through National Accident Law,
Law Together and Your 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 , www.national-accident-law.co.uk and www.bushco.co.uk .
Use of alternative performance measures
The commentary in the Interim Management Statement includes
alternative performance measures, which are not defined by
International Financial Reporting Standards. Definitions of these
measures can be found in the Strategic Report section of the 2022
Annual Report. The measures provide additional information for
users on underlying business trends and performance.
Interim Management Statement
I am pleased to report NAHL's Interim Results for the six months
ended 30 June 2023.
Overview
NAHL has continued to make good progress with its strategic
priorities in the first half of the year and its results were in
line with the board of Directors' (the "Board") expectations.
The Group has grown revenues in some challenging markets,
further strengthened its balance sheet and continued to carefully
invest to build a more profitable and sustainable business in the
medium-term. We have seen growing evidence of our stated strategy
paying off. Notable examples include a 178% growth in settlements
in our wholly owned law firm, National Accident Law ("NAL"), and a
39% growth in profits in Critical Care, whilst we have
simultaneously reduced the Group's net debt by GBP1.8m in the
Period.
Looking ahead, the Group started the second half of the year
positively and notwithstanding the difficult macro-economic
environment, we are seeing growing resilience in our businesses.
Accordingly, the Board expects the Group to meet market
expectations for the full year.
Group results
Revenue for the Period was GBP21.0m, which was 1% higher than
the first half of last year (H1 2022: GBP20.7m). Growth primarily
came from the Critical Care division which increased its revenues
by 9%, and whilst revenues in the Consumer Legal Services division
fell slightly, it made good progress in transitioning revenue
generation into our own consumer-focused law firm , NAL, from our
joint venture partnerships. This transitioning of revenue into NAL
will ultimately be more profitable for the Group.
The Group returned an operating profit of GBP1.8m, which was 19%
lower than last year (H1 2022: GBP2.3m). Operating profits in
Critical Care grew by 39%, as the business benefitted from ongoing
investments in people, business development and systems. Within
Consumer Legal Services, operating profit fell by 48% due to a
combination of a change in the mix of personal injury enquiries
generated in the first half, our investment in TV advertising to
enhance the National Accident Helpline brand, and a reduction in
profits from the division's Residential Property businesses. In
this respect, we also disposed of Homeward Legal Limited in the
Period and further details can be found below.
Due to our strategic decision to prioritise enquiry placement
into NAL and our panel, the profit attributable to members'
non-controlling interests in our joint venture LLPs was 30% lower
than last year at GBP1.4m (H1 2022: GBP1.9m).
Borrowing costs on the Group's GBP20.0m revolving credit
facility increased, due to higher UK interest rates. We accrue
interest at a rate of 2.25% over the Sterling Overnight Index
Average (SONIA), and SONIA has been rising in line with the Bank of
England base rate. As a result, and as we anticipated, our
financial expenses grew from GBP0.3m in H1 2022 to GBP0.6m in the
Period.
As planned, profit before tax was broadly breakeven at GBP0.0m
(H1 2022: GBP0.1m) and basic earnings per share on continuing
operations (EPS) were (0.1)p (H1 2022: (0.2)p).
The Group delivered strong growth in cash generation in the
Period, growing free cash flow(2) ("FCF") by 74% from GBP1.0m in H1
2022 to GBP1.8m. Operating cash conversion(3) was very strong at
270% (H1 2022: 152%). Cash generated by our Critical Care division
increased by 94% in the Period as we leveraged the benefits of our
investment in a new finance system and added additional credit
control resource. Consumer Legal Services also increased cash
generation, which included a 77% increase in cash received from
settlements to GBP2.7m (H1 2022: GBP1.5m).
One of the Group's strategic priorities for 2023 was to reduce
net debt whilst balancing investment in both divisions to enable
future growth, and I am pleased to report excellent progress in the
first half. Net debt at 30 June 2023 was GBP11.5m, down 13% from
GBP13.3m at 31 December 2022 and down 20% from GBP14.5m at 30 June
2022.
Consumer Legal Services
In our Consumer Legal Services division, revenue fell by 3% from
GBP14.1m to GBP13.7m in the Period. This was due to a 34% reduction
in revenues from the division's Residential Property businesses,
part of which was disposed of in April 2023. The Personal Injury
business grew its revenues by 4%.
Operating profit for the Period fell by 48% to GBP1.1m (H1 2022:
GBP2.1m). Approximately a quarter of this reduction was due to the
contraction in the Residential Property business, which delivered a
breakeven operating profit in the Period, with the remainder
arising in the Personal Inju ry business.
The division generated GBP3.0m of cash from operations in the
Period (H1 2022: GBP2.7m), and after deduction of drawings paid to
LLP partners both the Personal Injury (GBP0.7m) and Residential
Property (GBP0.2m) businesses were cash generative. Cash conversion
was 274% (H1 2022: 148%), although this measure is before drawings
paid to LLP members.
The personal injury market showed no growth in the Period, and
in fact, external data from the Compensation Recovery Unit ("CRU")
and Official Injury Claim ("OIC") portal shows that the number of
new UK personal injury claims registered in the 12 months to 30
June 2023 fell by 1% compared to 31 December 2022. We continue to
believe that the stagnation we have seen in the market since 2020
is due to three factors. Firstly, there are fewer accidents due to
changes in consumer behaviour that emerged during the COVID-19
pandemic which have now become embedded in working patterns;
secondly, the introduction of the Civil Liability Act 2018, which
reduced compensation levels for customers with low value road
traffic injury claims ("RTAs"); and finally a significant reduction
in victims' appetite to make a claim due to stigma and a lack of
understanding of the process, exacerbated by a reduction in
advertising by law firms since the pandemic.
Our strategy to grow in the personal injury market is to
increase the number of customer enquiries that we attract with our
National Accident Helpline brand and process more of those
enquiries through our own integrated law firm, NAL. By doing this
we will create a higher margin, sustainable business and we can
fund our growth through our agile and scalable placement model.
This is designed to balance the work we place with our panel of
third-party law firms, and joint venture partners for in-year
profit and cash, with the work we process ourselves for greater,
but deferred profit and cash.
In the first half of 2023, we continued to build momentum in
delivering this strategy and made good progress in reducing the
revenues generated in our joint-venture partnerships, in favour of
those generated in NAL, which generate higher returns in the
medium-term.
National Accident Helpline generated 17,559 enquiries in the
Period, which was in line with last year on a like-for-like
basis(1) (H1 2022: 17,630). Within this total, we attracted a
higher mix of RTA enquiries than last year, with RTA making up 25%
of all enquiries, non-RTA 48% and the remaining 27% being
specialist enquiries. Non-RTA comprises employers', public and
occupier liability claims. This mix compares to 22% RTA, 49%
non-RTA and 29% specialist in H1 2022.
In March 2023, independent research revealed that the National
Accident Helpline brand continues to be the "first choice for
people who have had an accident and want legal representation". We
invested GBP0.5m in TV advertising in the first half of the year to
strengthen our brand position, which contributed to a 3% increase
in our overall share of the personal injury market at 30 June 2023,
measured on a trailing 12-month basis. We continue to review the
return on investment generated by our TV advertising and, as part
of our strategic development, we continue to look at new ways of
both engaging with and educating potential customers.
Our website performed well during the Period and the share of
enquiries generated through organic (unpaid) leads grew by 3%
compared to last year.
We placed 4,555 new enquiries into NAL in the Period, which was
slightly more than last year (H1 2022: 4,531), and this cost us
GBP1.4m in marketing spend (H1 2022: GBP1.4m). Many of these
enquiries will not translate into winning claims this year but go
towards building the embedded value of NAL's book of claims, which
will lead to future profits and cash. We estimate that these
enquiries will be worth GBP3.4m in future revenues and cash by the
time they are mature.
Since the Group stopped processing the lowest value RTA claims
(so called "tariff-only" official injury claims (OIC) portal
claims) in February last year, our average revenue on RTA claims is
now significantly higher and not materially different to a typical
non-RTA claim, although RTA claims usually settle earlier. In the
first half of the year, the division did not have any placement
options on its panel for RTA enquiries and, hence, all RTA
enquiries were put into NAL which took up almost all the available
capacity. Since then, we have started to distribute some RTA
enquiries to panel firms which provides further flexibility for the
business.
NAL settled 1,738 claims in the Period, which was 178% more than
last year (H1 2022: 626) and almost as many as in whole of 2022,
demonstrating the rapid scale-up of operations within the firm.
These settled claims generated GBP2.7m of cash for NAL, which was
77% more than last year (H1 2022: GBP1.5m) and contributed to the
strong net debt reduction.
At 30 June 2023, NAL had 10,611 ongoing claims (31 December
2022: 10,860; 30 June 2022: 9,884) representing an embedded value
to the business, being the future profits and cash expected to be
generated by processing these cases through to settlement. This
embedded value has not yet been recognised in the financial
statements. At 30 June 2023, after expensing the marketing costs to
generate those claims and processing costs to date, we anticipate
that the ongoing claims will generate future revenue of GBP9.9m and
future gross profits of GBP8.6m. Following recent analysis, we
upgraded the value of our future book of claims by GBP1.6m due to
the higher revenue per claim we are seeing come through. The
increased revenue per claim is helping to offset the reduction in
enquiry volumes seen across the market caused by the factors set
out above.
The division made good use of its flexible placement model
during the Period and benefitted from consistent demand from its
panel of third-party law firms, providing us with good options for
short-term profit and cash generation. We also placed a modest
allocation of enquiries into Law Together LLP, one of our joint
venture partnerships, which performed well in the Period. We do not
intend to place any new enquiries into our other joint venture,
Your Law LLP, which is making good progress in settling its
historical book of claims.
Following investment over several years, the Group's joint
venture partnerships are returning strong levels of cash flow which
is helping us to manage the investment in growing NAL. In the first
six months of the year, they generated GBP2.0m of cash after
deducting our partners' drawings, compared to GBP1.8m last
year.
The division's Residential Property businesses, comprising
Homeward Legal and Searches UK, generated revenues of GBP1.5m (H1
2022: GBP2.4m) and operating profit before shared costs of GBP0.0m
(H1 2022: GBP0.3m). As previously announced, the Group disposed of
Homeward Legal in April 2023, which made a small loss in the
Period. Details of this transaction are presented in note 10 to the
interim results.
Critical Care
Our Critical Care division performed strongly in the Period,
increasing revenues by 9% from GBP6.7m to GBP7.3m, and operating
profit by 39% to GBP2.3m (H1 2022: GBP1.6m). Operating profit
margin expanded from 24.5% last year to 31.2% through a combination
of attracting a more profitable mix of work and by reducing
overheads.
The business generated GBP2.6m of cash from operations in the
Period (H1 2022: GBP1.4m) and cash conversion was strong at 117%
(H1 2022: 83%).
Bush & Co. operates in the catastrophic injury market with
most work arising from injuries suffered in serious RTAs or through
medical negligence. At 30 June 2023, the number of RTA claims
registered with the CRU in the preceding 12 month period has fallen
by 2% compared to the position six months prior. Furthermore, data
issued by the Department for Transport in May 2023 showed that the
number of serious RTAs has returned to its long-term trend of a
slow decline, and in 2022 was estimated to be 3% lower than in
2019. However, data presented by NHS Resolution suggests that the
medical negligence market has been growing steadily since 2019/20,
and in their most recent data, the number of new claims registered
in the financial year 2022/23 had increased by 27% since
2018/19.
Expert witness services had a particularly strong six months,
with revenues 34% higher than last year and the number of expert
witness reports completed and issued to customers in the Period
increased by 15% to 580 reports. The number of new instructions
generated increased by 2%, indicating a strong pipeline of work for
future periods.
In case management services, revenues were 2% lower than last
year. The business delivered 265 initial needs assessments ("INAs")
in the Period, which was 5% more than last year. Whilst instruction
numbers were 6% lower than last year at 268, the mix skewed towards
more complex cases in the Period which convert at a lower rate but
are worth more in future billings. We will continue to monitor this
to understand if it is a new trend. The business is servicing 1,369
ongoing case management clients (H1 2022: 1,284) that generate
recurring revenue.
In the first half of the year, Bush & Co. has been investing
to capitalise on market opportunities and made good progress with a
number of our strategic initiatives.
Firstly, we have grown the number of associates we work with
across a range of specialisms, geographies and case types, further
increasing our capacity and improving our offering. Most recently
we saw this growth across the children and young people clinicians,
paediatric care and midwifery teams that we work with. In the first
six months of the year, we recruited and trained 40 new associates,
comprising of 18 new case managers and 22 new expert witnesses and
we ended the Period working with a total of 117 case managers and
146 expert witnesses.
Secondly, we have continued our investment in growth initiatives
which are currently small but which I believe will generate
significant growth for the business in the coming years.
One of these is Bush & Co Care Solutions, a service that
provides a range of support solutions for clients who directly
employ support workers or care nurses. We have been successfully
leveraging our business development capabilities to grow the number
of care packages we provide and at 30 June 2023, the business was
engaged to deliver 12 ongoing care packages (H1 2022: 2), each
generating recurring revenue for the division. Bush & Co Care
Solutions generated revenues of GBP248k in the first half, which
was 41% more than the same period last year.
We also recruited three new colleagues to our growing team of 10
employed case managers. These colleagues deliver the same
first-class case management service to enhance our client's
rehabilitation as our associates, but through an in-house model
which allows us to better control resource levels. This is
anticipated to lead to margin expansion as the initiative
develops.
These initiatives have been well received by our customers and
end clients and I'm excited to see how they develop over the coming
years. Finally, we have been upgrading our internal systems which
have allowed us to manage increased demand and be more efficient.
In the first half of this year, we reduced our overhead costs as a
proportion of gross profit by 7ppts from 55.6% in 2022 to 47.9%,
despite high inflationary pressures.
Shared Services and other items
The costs of the Group's Shared Services function, including
plc-related costs and Other Items, which comprises share-based
payments and amortisation on business combinations, were both
unchanged from last year. These amounted to GBP0.9m and GBP0.6m in
the Period respectively.
Our people
We employed 288 people at 30 June 2023 which was an increase of
4% from the end of 2022 (December 2022: 278). The growth in staff
primarily arose in the operational teams within NAL and Bush &
Co.
Our focus on making NAHL a great place to work was recognised in
July with our best ever results in our annual staff engagement
survey, which returned an overall engagement score of 81% (2022:
79%). This was significantly higher than Gallup's UK average of
10%, and the 72% average of their best-practice organisations.
Summary and outlook
In summary, the results for the first half of 2023 were in line
with the Board's expectations and saw the Group deliver an
operating profit, generate cash and significantly reduce net debt.
Pleasingly, this momentum has continued into the second half of the
year and the Board expects the Group to meet market expectations
for the full year.
In July and August of this year, our Consumer Legal Services
division delivered 9% growth in personal injury enquiry numbers
compared to last year, suggesting continued share growth. Cash from
settlements in NAL has continued to gain momentum, and GBP1.0m was
collected across July and August, 67% more than last year. Year to
date collections as at 31 August 2023 was GBP3.7m (2022 full year:
GBP3.5m).
In Critical Care, the number of expert witness reports issued in
July and August was 53% ahead of last year. The number of INAs
issued was 45% lower than last year due to a slow July but,
pleasingly, numbers returned to normal in August. The business has
continued to benefit from encouraging levels of new instructions,
contributing to a strong pipeline of future work.
Cash generation has remained strong across the Group, and we
will continue to leverage our flexible placement model to drive
short-term cash flow and reduce net debt, given the high interest
rate environment we are operating in.
Finally, I'd like to thank all our people for their hard work
and dedication to our customers during the Period. We are making
good progress in executing our strategy across the Group and are
starting to see the benefits come through in the results.
James Saralis
Chief Executive Officer
26 September 2023
1 Like-for-like enquiry numbers exclude tariff-only road traffic
accident claims, which the Group ceased processing in February
2022.
2 Free cash flow is defined as net cash generated from operating
activities less net cash used in investing activities less payments
made to partner LLP members and less principal element of lease
payments. This measure provides management with an indication of
the amount of cash available for discretionary investing or
financing after removing material non-recurring expenditure that
does not reflect the underlying trading operations.
Unaudited Unaudited 6 months Audited 12 months
6 months ended ended
ended 30 June 31 December 2022
30 June 2022
2023
-------------------------------------------------------------- ---------- ------------------- ------------------
Statutory measure - net cash generated from operating
activities 4.2 3.1 6.0
--------------------------------------------------------------- ---------- ------------------- ------------------
Net cash used in investing activities (excluding disposal of
subsidiary) (0.1) (0.1) (0.3)
--------------------------------------------------------------- ---------- ------------------- ------------------
Principal elements of lease payments (0.2) (0.1) (0.3)
--------------------------------------------------------------- ---------- ------------------- ------------------
Drawings paid to LLP members (2.1) (1.9) (3.2)
--------------------------------------------------------------- ---------- ------------------- ------------------
Net cash used in financing activities (before borrowings) (2.3) (2.0) (3.5)
--------------------------------------------------------------- ---------- ------------------- ------------------
Free Cash Flow 1.8 1.0 2.2
--------------------------------------------------------------- ---------- ------------------- ------------------
3 Operating cash conversion is calculated as cash generated from
operations divided by operating profit. This measure allows
management to monitor the conversion of underlying operating profit
into operating cash.
Unaudited Unaudited 6 months Audited 12 months
6 months ended ended
ended 30 June 31 December 2022
30 June 2022
2023
----------------------------------------------------- ---------- ------------------- ------------------
Statutory measure - cash generation from operations 4.9 3.4 6.8
------------------------------------------------------ ---------- ------------------- ------------------
Statutory measure - operating profit 1.8 2.3 4.8
------------------------------------------------------ ---------- ------------------- ------------------
Operating cash conversion 269.6% 151.5% 142.9%
------------------------------------------------------ ---------- ------------------- ------------------
Consolidated statement of comprehensive income
for the 6 months ended 30 June 2023
Audited
Unaudited Unaudited 12 months
Note 6 months 6 months ended 31
ended 30 ended 30 December 2022
June 2023 June 2022 GBP000
GBP000 GBP000
Revenue 2 20,951 20,732 41,421
Cost of sales (12,021) (11,984) (23,586)
---------------------------------------------------------------- ------- ----------- ------------ ----------------
Gross profit 8,930 8,748 17,835
Administrative expenses (7,110) (6,493) (13,079)
---------------------------------------------------------------- ------- ----------- ------------ ----------------
Operating profit 2 1,820 2,255 4,756
Profit attributable to members' non-controlling interests in
LLPs (1,360) (1,935) (3,554)
Financial income 57 37 80
Financial expense 3 (560) (307) (713)
---------------------------------------------------------------- ------- ----------- ------------ ----------------
(Loss)/Profit before tax (43) 50 569
Taxation 4 (45) (48) (184)
---------------------------------------------------------------- ------- ----------- ------------ ----------------
(Loss)/Profit and total comprehensive income for the period (88) 2 385
---------------------------------------------------------------- ------- ----------- ------------ ----------------
(Loss)/Profit from discontinued operations for the period 10 (49) 75 13
---------------------------------------------------------------- ------- ----------- ------------ ----------------
(Loss)/Profit from continuing operations for the period (39) (73) 372
---------------------------------------------------------------- ------- ----------- ------------ ----------------
Unaudited Unaudited 6 months Audited 12 months
6 months ended ended
ended 30 June 31 December 2022
30 June 2022
Earnings per share (p) - Continuing operations 2023
-------------------------------------------------- ---------- ------------------- ------------------
Basic earnings per share 7 (0.1) (0.2) 0.8
-------------------------------------------------- ---------- ------------------- ------------------
Diluted earnings per share 7 (0.1) (0.2) 0.8
-------------------------------------------------- ---------- ------------------- ------------------
Unaudited Unaudited 6 months Audited 12 months
6 months ended ended
ended 30 June 31 December 2022
30 June 2022
Earnings per share (p) - Discontinued operations 2023
---------------------------------------------------- ---------- ------------------- ------------------
Basic earnings per share 7 (0.1) 0.2 0.0
---------------------------------------------------- ---------- ------------------- ------------------
Diluted earnings per share 7 (0.1) 0.2 0.0
---------------------------------------------------- ---------- ------------------- ------------------
Consolidated statement of financial position
At 30 June 2023
Unaudited as at
Unaudited as at 30 June 30 June Audited
2023 2022 as at 31 December 2022
Note GBP000 GBP000 GBP000
----------------------------------------- ----- ------------------------ ---------------- ------------------------
Non-current assets
Goodwill 55,489 55,489 55,489
Other intangible assets 2,238 3,156 2,714
Property, plant and equipment 365 440 392
Right of use assets 1,883 2,171 2,027
Deferred tax asset 49 23 50
----------------------------------------- ----- ------------------------ ---------------- ------------------------
60,024 61,279 60,672
----------------------------------------- ----- ------------------------ ---------------- ------------------------
Current assets
Trade and other receivables (including
GBP5,174,000 (June 2022: GBP4,692,000;
December 2022:
GBP5,312,000) due in more than one
year) 5 30,890 33,058 32,886
Cash and cash equivalents 2,422 1,974 2,654
33,312 35,032 35,540
----------------------------------------- ----- ------------------------ ---------------- ------------------------
Total assets 93,336 96,311 96,212
----------------------------------------- ----- ------------------------ ---------------- ------------------------
Current liabilities
Trade and other payables 6 (15,896) (16,096) (15,847)
Lease liabilities (238) (258) (263)
Member capital and current accounts (3,763) (4,232) (4,487)
Current tax liability (110) (74) (162)
(20,007) (20,660) (20,759)
----------------------------------------- ----- ------------------------ ---------------- ------------------------
Non-current liabilities
Lease liabilities (1,600) (1,885) (1,724)
Other interest-bearing loans and
borrowings (13,954) (16,424) (15,939)
Deferred tax liability (367) (546) (470)
----------------------------------------- ----- ------------------------ ---------------- ------------------------
(15,921) (18,855) (18,133)
----------------------------------------- ----- ------------------------ ---------------- ------------------------
Total liabilities (35,928) (39,515) (38,892)
----------------------------------------- ----- ------------------------ ---------------- ------------------------
Net assets 57,408 56,796 57,320
----------------------------------------- ----- ------------------------ ---------------- ------------------------
Equity
Share capital 117 116 116
Share option reserve 4,803 4,487 4,628
Share premium 14,595 14,595 14,595
Merger reserve (66,928) (66,928) (66,928)
Retained earnings 104,821 104,526 104,909
----------------------------------------- ----- ------------------------ ---------------- ------------------------
Capital and reserves attributable to the
owners of NAHL Group plc 57,408 56,796 57,320
----------------------------------------- ----- ------------------------ ---------------- ------------------------
Consolidated statement of changes in equity
for the 6 months ended 30 June 2023
Share
Share option Share Merger Retained Total
capital reserve premium reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Balance at 1 January 2023 116 4,628 14,595 (66,928) 104,909 57,320
Total comprehensive income for the period
Loss for the period - - - - (88) (88)
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Total comprehensive income - - - - (88) (88)
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Transactions with owners, recorded directly in equity
Issue of share capital 1 - - - - 1
Share-based payments - 175 - - - 175
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Total transactions with owners recorded directly in
equity 1 175 - - - 176
--------- --------- --------- --------- ---------- --------
Balance at 30 June 2023 117 4,803 14,595 (66,928) 104,821 57,408
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Balance at 1 January 2022 116 4,312 14,595 (66,928) 104,524 56,619
Total comprehensive income for the period
Profit for the period - - - - 2 2
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Total comprehensive income - - - - 2 2
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Transactions with owners, recorded directly in
equity
Share-based payments - 175 - - - 175
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Total transactions with owners recorded directly in
equity - 175 - - - 175
--------- --------- --------- --------- ---------- --------
Balance at 30 June 2022 116 4,487 14,595 (66,928) 104,526 56,796
---------------------------------------------------- --------- --------- --------- --------- ---------- --------
Balance at 1 January 2022 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 6 months ended 30 June 2023
Audited
Unaudited 6 months ended Unaudited 6 12 months ended 31 December
30 June 2023 months ended 2022
Note GBP000 30 June 2022 GBP000 GBP000
---------------------------- ------ --------------------------- --------------------- ----------------------------
Cash flows from operating
activities
(Loss)/Profit for the period (88) 2 385
Adjustments for:
Profit attributable to members'
non-controlling interests in LLPs 1,360 1,935 3,554
Property, plant and equipment
depreciation 69 91 168
Right of use asset depreciation 144 145 288
Amortisation of intangible assets 586 624 1,186
Financial income (57) (36) (80)
Financial expense 560 307 713
Share-based payments 175 175 316
Taxation 45 48 184
------------------------------------ --------------------------- --------------------- ----------------------------
2,794 3,291 6,714
Decrease in trade and other
receivables 1,896 240 448
Increase/(Decrease) in trade and
other payables 218 (115) (364)
Cash generation from operations 4,908 3,416 6,798
Interest paid (520) (267) (627)
Tax paid (201) (14) (165)
------------------------------------ --------------------------- --------------------- ----------------------------
Net cash generated from operating
activities 4,187 3,135 6,006
------------------------------------ --------------------------- --------------------- ----------------------------
Cash flows from investing
activities
Acquisition of property, plant and
equipment (42) (54) (83)
Acquisition of intangible assets (110) (79) (199)
Interest received 20 6 13
Disposal of subsidiary (30) - -
Net cash used in investing
activities (162) (127) (269)
------------------------------------ --------------------------- --------------------- ----------------------------
Cash flows from financing
activities
Repayment of borrowings (2,000) (1,500) (2,000)
Issue of share capital 1 - -
Principal element of lease payments (174) (80) (264)
Drawings paid to LLP members (2,084) (1,912) (3,277)
------------------------------------ --------------------------- --------------------- ----------------------------
Net cash used in financing
activities (4,257) (3,492) (5,541)
------------------------------------ --------------------------- --------------------- ----------------------------
Net (decrease)/increase in cash
and cash equivalents (232) (484) 196
Cash and cash equivalents at
beginning of period 2,654 2,458 2,458
Cash and cash equivalents at end of
period 2,422 1,974 2,654
------------------------------------ --------------------------- --------------------- ----------------------------
Notes to the financial statements
1. Accounting policies
General Information
The half year results for the current and comparative period to
30 June have not been audited or reviewed by auditors pursuant to
the Auditing Practices Board guidance of Review of Interim
Financial Information.
These half year results do not comprise statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2022 were
approved by the Board of Directors on 21 March 2023 and delivered
to the Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under Section 498 of
the Companies Act 2006.
In preparing the half year results, the Board has considered the
Group's ability to continue as a going concern. This assessment
included a review of management's financial forecasts, covering a
range of potential scenarios. 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 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 condensed set of financial statements was approved by the
Board of Directors on 25 September 2023.
Basis of preparation
Profit or loss and other comprehensive income of subsidiaries
acquired or disposed of during the year are recognised from the
effective date of acquisition, or up to the effective date of
disposal, as applicable.
Statement of compliance
The half year results for the current and comparative period to
30 June have been prepared in accordance with IAS 34 Interim
Financial Reporting applied in conformity with the requirements of
the Companies Act 2006 and the AIM Rules of UK companies. They do
not include all of the information required for full annual
financial statements and should be read in conjunction with the
financial statements of the Group for the year ended 31 December
2022, which have been prepared in accordance with International
Financial Reporting Standards ("IFRS") in conformity with the
requirements of the Companies Act 2006.
New and amended standards adopted by the Group
There are no new or amended standards applicable for the current
reporting period.
Use of judgements and estimates
The preparation of financial statements in conformity with IFRS
requires management to make judgements and estimates that affect
the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ
from these estimates. Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the year in which the estimates are revised and in
any future years affected.
In preparing the condensed set of financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were of the same type as those that applied to the financial
statements for the year ended 31 December 2022.
Significant accounting policies
The accounting policies used in the preparation of these interim
financial statements for the 6 months ended 30 June 2023 are the
accounting policies as applied to the Group's financial statements
for the year ended 31 December 2022.
Financial assets and liabilities
The Group's principal financial instruments comprise cash and
cash equivalents, trade and other receivables, trade and other
payables
and interest-bearing borrowings.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value. Subsequent to initial recognition, trade and other
receivables are stated at amortised cost using the effective
interest method, less any impairment losses calculated in line with
IFRS 9.
Trade and other payables
Trade and other payables are recognised initially at fair value.
Subsequent to initial recognition, trade and other payables are
stated at
amortised cost using the effective interest method.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances. Cash and cash
equivalents are repayable on demand and are recognised at their
carrying amount.
Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair
value less attributable transaction costs. Subsequent to initial
recognition,
interest-bearing borrowings are stated at amortised cost using
the effective interest method, less any impairment losses.
Recoverable disbursements and disbursements payable
Disbursement payables represent the balance of disbursements
incurred in the processing of personal injury claims. These
disbursements will ultimately be billed on settlement of a case or
recovered from insurance if a case should fail and so the
recoverable disbursements represents the value of disbursements
still to be billed. Disbursement payables and receivables are
recognised initially at fair value and subsequent to initial
recognition, are stated at amortised cost using the effective
interest method.
Member capital and current accounts
Member capital and current accounts represent the balances owed
to non-controlling members' in the LLPs. These consist of any
capital advances and unpaid allocated profits as at the period end.
Members capital and current accounts are classified as financial
liabilities and are recognised initially at fair value. Subsequent
to initial recognition, members capital and current accounts are
stated at amortised cost using the effective interest method.
2. Operating segments
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 the
prior 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.
Consumer Critical Care Shared Other items Eliminations(2) Total
Legal Services GBP000 services GBP000
GBP000 GBP000 GBP000
GBP000
6 months ended 30 June
2023
Revenue 13,688 7,263 - - - 20,951
Depreciation and
amortisation (127) (82) (177) (413) - (799)
Operating profit/(loss) 1,099 2,266 (924) (621) - 1,820
Profit attributable to
members'
non-controlling
interests in LLPs (1,360) - - - - (1,360)
Financial income 52 - 5 - - 57
Financial expenses - (1) (559) - - (560)
(Loss)/profit before tax (209) 2,265 (1,478) (621) - (43)
Trade receivables 2,840 5,617 - - - 8,457
Total assets(1) 27,086 6,874 76,882 - (17,506) 93,336
Segment liabilities(1) (16,912) (1,564) (3,021) - - (21,497)
Capital expenditure
(including intangibles) (36) (116) - - - (152)
------------------------- --------------- -------------- --------------- ------------ ---------------- ---------
6 months ended 30 June
2022
Revenue 14,061 6,671 - - - 20,732
Depreciation and
amortisation (129) (116) (179) (436) - (860)
Operating profit/(loss) 2,108 1,634 (876) (611) - 2,255
Profit attributable to
members'
non-controlling
interests in LLPs (1,935) - - - - (1,935)
Financial income 35 - 2 - - 37
Financial expenses - (3) (304) - - (307)
Profit/(loss) before tax 208 1,631 (1,178) (611) - 50
Trade receivables 2,726 5,567 - - - 8,293
Total assets(1) 29,106 6,585 78,126 - (17,506) 96,311
Segment liabilities(1) (15,824) (1,438) (5,208) - - (22,470)
Capital expenditure
(including intangibles) (59) (74) - - - (133)
------------------------- --------------- -------------- --------------- ------------ ---------------- ---------
12 months 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)
------------------------- --------------- -------------- --------------- ------------ ---------------- ---------
1. Total assets and segment liabilities exclude intercompany
loan balances as these are not included in the segment results
reviewed by the Chief Operating Decision Maker.
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.
3. Financial expense
Unaudited 6 months ended 30 Unaudited 6 months ended 30 Audited 12 months ended 31
June 2023 June 2022 December 2022
GBP000 GBP000 GBP000
Interest on bank loans 520 267 628
Amortisation of facility
arrangement fees 15 14 29
Interest on lease
liabilities 25 26 56
Total 560 307 713
---------------------------- ---------------------------- ---------------------------- ----------------------------
Interest on bank loans consists of interest incurred in respect
of a revolving credit facility of GBP20m which is due to terminate
on 31 December 2024. Interest is payable at 2.25% above SONIA per
annum. There have been no changes to the terms of the revolving
credit facility agreement since the year ended 31 December 2022 and
details of the amounts outstanding in respect of this facility are
given in Note 9.
4. Taxation
Unaudited 6 months ended 30 Unaudited 6 months Audited 12 months ended 31
June 2023 ended 30 June 2022 December 2022
GBP000 GBP000 GBP000
Current tax expense
Current tax on income for the
year 148 127 352
Adjustments in respect of
prior years - - 14
Total current tax 148 127 366
Deferred tax credit
Origination and reversal of
timing differences (103) (79) (182)
------------------------------- ------------------------------- -------------------- ------------------------------
Total deferred tax (103) (79) (182)
------------------------------- ------------------------------- -------------------- ------------------------------
Total expense in statement of
comprehensive income 45 48 184
------------------------------- ------------------------------- -------------------- ------------------------------
Total tax charge 45 48 184
------------------------------- ------------------------------- -------------------- ------------------------------
Reconciliation of effective tax rate:
Unaudited 6 months ended 30 Unaudited 6 months Audited 12 months ended 31
June 2023 ended 30 June 2022 December 2022
GBP000 GBP000 GBP000
(Loss)/Profit for the period (88) 2 385
Total tax expense 45 48 184
(Loss)/Profit before taxation (43) 50 569
Tax using the UK corporation
tax rate of 19.0%/25.0% (June
2022: 19.0%, December
2022:19.0%) 10 10 108
Non-deductible expenses 35 38 68
Adjustments in respect of
prior years - - 14
Short term timing differences
for which no deferred tax is
recognised - - (6)
------------------------------- ------------------------------- -------------------- ------------------------------
Total tax charge 45 48 184
------------------------------- ------------------------------- -------------------- ------------------------------
The Group's tax charge of GBP45,000 (June 2022: GBP48,000,
December 2022: GBP184,000) represents an effective tax rate of
104.7% (June 2022: 96.5%, December 2022: 32.3%). The effective tax
rate is higher than the standard corporation tax rate of 25.0% for
the reasons as set out above.
5. Trade and other receivables
Unaudited 6 months ended 30 Unaudited 6 months Audited 12 months ended 31
June 2023 ended 30 June 2022 December 2022
GBP000 GBP000 GBP000
Trade receivables: receivable
in less than one year 7,138 7,711 7,077
Trade receivables: receivable
in more than one year 1,319 820 1,165
Accrued income: receivable in
less than one year 9,925 11,356 11,137
Accrued income: receivable in
more than one year 3,855 3,872 4,147
Other receivables 103 14 26
Prepayments 781 934 954
Recoverable disbursements 7,769 8,351 8,380
------------------------------- ------------------------------- -------------------- ------------------------------
Total 30,890 33,058 32,886
------------------------------- ------------------------------- -------------------- ------------------------------
A provision against trade receivables and accrued income of
GBP464,000 (June 2022: GBP467,000, December 2022: GBP612,000) 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 some commercial agreements.
6. Trade and other payables
Unaudited Unaudited Audited 12 months ended 31 December 2022
6 months ended 30 6 months GBP000
June 2023 ended 30
GBP000 June 2022
GBP000
Trade payables 1,662 1,434 1,689
Disbursements payable 5,813 7,388 6,620
Other taxation and social security 1,763 1,299 1,231
Other payables, accruals and deferred
revenue 6,201 5,518 5,850
Customer deposits 457 457 457
----------------------------------------- ------------------- ----------- -----------------------------------------
Total 15,896 16,096 15,847
----------------------------------------- ------------------- ----------- -----------------------------------------
7. Earnings per share
The calculation of basic earnings per share at 30 June 2023 is
based on a loss attributable to ordinary shareholders of the parent
company of GBP88,000 (June 2022: profit of GBP2,000, December 2022:
profit of GBP385,000) and a weighted average number of Ordinary
Shares outstanding of 46,450,977 (June 2022: 46,325,222, December
2022: 46,325,222).
(Loss)/profit attributable to ordinary shareholders
Unaudited Unaudited Audited
6 months ended 30 June 2023 6 months ended 30 June 2022 12 months ended
GBP000 GBP000 31 December 2022
GBP000
(Loss)/profit for the period
from continuing operations (49) (73) 372
(Loss)/profit for the period
from discontinued operations (39) 75 13
--------------------------------- ------------------------------ ------------------------------ -------------------
(Loss)/profit for the period
attributable to the
shareholders (88) 2 385
--------------------------------- ------------------------------ ------------------------------ -------------------
Weighted average number of Ordinary Shares
Unaudited 6 months ended Unaudited 6 months ended 30 Audited 12
30 June 2023 June 2022 months ended
Number 31 December 2022
-------------------------------- --------------------------- ------------------------------- -------------------
Issued Ordinary Shares at start
of period 46,325,222 46,325,222 46,325,222
--------------------------------- --------------------------- ------------------------------- -------------------
Weighted average number of
Ordinary Shares at end of
period 46,450,977 46,325,222 46,325,222
--------------------------------- --------------------------- ------------------------------- -------------------
Basic earnings per share (p)
Unaudited 6 months ended 30 Unaudited 6 months ended 30 Audited 12
June 2023 June 2022 months ended
31 December 2022
Group (p) - continuing
operations (0.1) (0.2) 0.8
Group (p) - discontinued
operations (0.1) 0.2 0.0
-------------------------------- ------------------------------- ------------------------------- ------------------
Group (p) - total (0.2) 0.0 0.8
-------------------------------- ------------------------------- ------------------------------- ------------------
The Company operates a share-based payment schemes to reward
employees. In line with IAS 33, as the Group has a negative
earnings per share at 30 June 2023, it is assumed there are no
dilutive shares. As at 30 December 2022 and 30 June 2022, there
were potentially dilutive shares 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 as
at 30 June 2022 was 2,329,951 and as at 30 Dec 2022 was 2,329,951.
There are no other diluting items.
Diluted earnings per share (p)
Unaudited 6 months ended Unaudited 6 months Audited 12
30 June 2023 ended months
30 June 2022 ended
31 December 2022
Group (p) - continuing operations (0.1) (0.2) 0.8
Group (p) - discontinued operations (0.1) 0.2 0.0
------------------------------------- ------------------------- ------------------- ------------------
Group (p) - total (0.2) 0.0 0.8
------------------------------------- ------------------------- ------------------- ------------------
8. Dividends
No dividends were paid in 2022 and the Directors have
recommended an interim dividend in respect of 2023 of nil p (2022:
interim dividend of nil p).
9. Net debt
Net debt comprises cash and cash equivalents and secured bank
loans. Secured bank loans consist of a revolving credit facility of
GBP20m which is due to terminate on 31 December 2024. Repayments
are made periodically depending on the level of free cash flow
generated by the Group. Interest is payable at 2.25% above SONIA
per annum. There have been no changes to the terms of the revolving
credit facility agreement since the year ended 31 December
2022.
Unaudited Unaudited Audited
as at 30 as at 30 as at 31 December 2022
June 2023 June 2022 GBP000
GBP000 GBP000
--------------------------------------------- ----------- ----------- ------------------------
Cash and cash equivalents 2,422 1,974 2,654
Other interest-bearing loans and loan notes (13,954) (16,424) (15,939)
Net debt (11,532) (14,450) (13,285)
--------------------------------------------- ----------- ----------- ------------------------
Lease liabilities (1,838) (2,143) (1,987)
--------------------------------------------- ----------- ----------- ------------------------
Set out below is a reconciliation of movements in net debt
during the period.
Unaudited Unaudited Audited
as at 30 as at 30 as at 31 December 2022
June 2023 June 2022 GBP000
GBP000 GBP000
------------------------------------------------------------------ ----------- ----------- ------------------------
Net (decrease)/increase in cash and cash equivalents (232) (484) 196
Net decrease from repayment of debt and debt financing 2,000 1,500 2,000
------------------------------------------------------------------ ----------- ----------- ------------------------
Movement in net borrowings resulting from cash flows 1,768 1,016 2,196
Non-cash movements - net release of prepaid loan arrangement fees (15) (14) (29)
Net debt at beginning of period (13,285) (15,452) (15,452)
------------------------------------------------------------------ ----------- ----------- ------------------------
Net debt at end of period (11,532) (14,450) (13,285)
------------------------------------------------------------------ ----------- ----------- ------------------------
Set out below is a reconciliation of movements in lease
liabilities during the period.
Unaudited Unaudited Audited
as at 30 as at 30 as at 31 December 2022
June 2023 June 2022 GBP000
GBP000 GBP000
------------------------------------------------------------ ----------- ----------- ------------------------
Net outflow from decrease in lease liabilities 174 80 264
Movement in net borrowings resulting from cash flows 174 80 264
Non-cash movements arising from initial recognition of new
lease liabilities, revisions and interest charges (25) (28) (56)
Lease liabilities at beginning of the period (1,987) (2,195) (2,195)
------------------------------------------------------------ ----------- ----------- ------------------------
Lease liabilities at end of period (1,838) (2,143) (1,987)
------------------------------------------------------------ ----------- ----------- ------------------------
10. Discontinued Operations
On 25 April 2023, the Group announced the sale of its wholly
owned subsidiary Homeward Legal Limited. Homeward Legal utilises
online marketing to target homebuyers and sellers in England and
Wales to generate leads and instructions which it then passes to
panel law firms and surveyors in the conveyancing sector for a
fixed cost. The subsidiary is considered to be non-core to the
Group's principal operations.
Consideration for the sale was finalised at GBP117,000 which was
equivalent to the net asset value of Homeward Legal at the date of
sale. The Group incurred legal and consultancy costs amounting to
GBP55,000 in respect of the sale. The consideration is payable in
two annual instalments and additionally, the Group is entitled to
receive contingent consideration in each of the two years following
completion, contingent upon Homeward Legal achieving certain
performance milestones. The contingent consideration will be based
on a share of profits and trade debtors recovered above certain
amounts. The Board believes that the contingent consideration will
not be material and has estimated the fair value as nil.
At the date of disposal, the carrying amounts of Homeward
Legal's net assets were as follows:
GBP000
------------------------------- -------
Property, plant and equipment -
Deferred tax asset 1
Trade and other receivables 255
Cash and cash equivalents 30
------------------------------- -------
Total assets 286
------------------------------- -------
Trade and other creditors (169)
------------------------------- -------
Total liabilities (169)
------------------------------- -------
Net assets 117
------------------------------- -------
The gain on disposal is calculated as:
GBP000
---------------------------------------- -------
Consideration received or receivable:
Cash 117
Fair value of contingent consideration -
Total disposal consideration 117
Carrying amount of net assets sold (117)
---------------------------------------- -------
Gain on sale before income tax -
---------------------------------------- -------
Income tax expense on gain -
---------------------------------------- -------
Gain on sale after income tax -
---------------------------------------- -------
The results of these discontinued operations are included in the
2023 interim results up to the date of disposal, and are presented
as follows:
Consolidated statement of comprehensive income:
Unaudited Unaudited Audited
as at 30 as at 30 as at 31 December 2022
June 2023 June 2022 GBP000
GBP000 GBP000
------------------------------------------------------------------ ----------- ----------- ------------------------
Revenue 269 651 1,196
Expenses (318) (576) (1,183)
------------------------------------------------------------------ ----------- ----------- ------------------------
(Loss)/profit before taxation (49) 75 13
------------------------------------------------------------------ ----------- ----------- ------------------------
Taxation - - -
------------------------------------------------------------------ ----------- ----------- ------------------------
(Loss)/profit after taxation attributable to owners of the parent
company (49) 75 13
------------------------------------------------------------------ ----------- ----------- ------------------------
Consolidated cash flow statement:
Unaudited Unaudited Audited
as at 30 as at 30 as at 31 December 2022
June 2023 June 2022 GBP000
GBP000 GBP000
-------------------------------------- ----------- ----------- ------------------------
Cash flows from operating activities 23 187 41
Cash flows from investing activities - - -
Cash flows from financing activities - - -
Net cash inflow 23 187 41
-------------------------------------- ----------- ----------- ------------------------
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END
IR EAENSAFEDEAA
(END) Dow Jones Newswires
September 26, 2023 02:00 ET (06:00 GMT)
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