The value of a leading claims firm dropped dramatically today following confirmation that underlying half-year profits and revenue have continued to fall this year.
Listed National Accident Helpline (NAHL) reported in its interim results to the London Stock Exchange that underlying operating profits fell 11% to £2.5m in the period ending 30 June – although the company also posted £600,000 profit before tax, having recorded a £400,000 loss for the first six months of 2020.
Shares in the company fell sharply in value following the announcement today, dropping 17.26% to 46.5p.
The group said trading continued to be impacted this year by lower enquiry generation due to Covid-19 restrictions. Profits attributable to the company’s joint-venture law firm partners were down 26% to £1.7m, down from £2.2m in the first half of 2020. These firms reported an 85% reduction in the placement of new enquiries as the UK spent most of the period in a tightly-restrictive lockdown resulting in fewer cars on the road.
The company said the ‘sustained impact’ of the pandemic was affecting personal injury claims, with the 14,000 enquiries generated during the period representing a 26% fall.
The strategic decision to grow its own personal injury business, National Accident Law, will generate a higher margin in the medium term but also a short-term reduction in profits, the company warned. The report added that revenues and underlying profits for the full year are likely to be lower than management’s previous expectations and are now expected to be lower than 2020.
James Saralis, group chief executive, was pleased to return the company to making a profit before tax but said the effect of the pandemic is being felt across its markets.
‘Covid-19 continues to impact our markets and the restrictions that were still in force across the UK in the period supressed accident numbers,’ he said. ‘This resulted in less work for our personal injury and critical care businesses, and inevitably has delayed our recovery.
‘Since the period end, we have seen improving trends in the leading indicators of accident numbers but this improvement is slower than we previously anticipated. We remain cautious about the speed and timing of the recovery and cognisant of the risk of further disruption to our markets should the government impose further restrictions over the winter months.’
The group confirmed its directors had recommended that no interim dividend be paid to shareholders – as also happened last year.